UPDATED: 31st MARCH 2020
1. The news says that the government will help business. How do I get cash from the government into my business?
This includes a package of measures to support businesses including:
- Payment of wages through a coronavirus job retention scheme
- a grant of up to £2,500 a month to cover 80% of salary for those retained but not working
- VAT for all businesses deferred until end of June and the business loan scheme will now be interest free for 12 months
- a statutory sick pay relief package for SMEs
- a 12-month business rates holiday for all retail, hospitality and leisure businesses in England
- small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
- grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
- the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
- a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
- the HMRC Time To Pay Scheme
- self-employed will get full Universal Credit at a rate equivalent to statutory sick pay, and a further £1bn to cover 30% of house rental costs
- universal Credit allowance increases £1,000 a year and the next tax self assessments will be deferred until start of next year
Details of how these will be paid are being developed as quickly as possible.
2. Do I have to pay the cash back?
Grant Payments will not need to be repaid, but loans will. The amount you will repay will be clearly explained to you before you enter into a loan.
3. How do I access the £10,000 grant I have heard on the news?
The government will provide additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR). This will provide a one-off grant of £10,000 to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs
If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority – you do not need to apply.
Funding for the scheme will be provided to local authorities by government in early April. Guidance for local authorities on the scheme will be provided shortly.
4. What businesses get the £25,000 grant? Is it just retail, hospitality and leisure?
Grant funding of £25,000 will be made available for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000. The mechanism for the payment of this grant is still being determined along with the details of exactly which businesses will benefit.
5. Are businesses eligible for more than one Small Business/Retail, Leisure grants?
- Businesses can only fit one criteria – The Small Business Rate Relief (SBRR) grant is first for all those businesses receiving SBRR. The lower Retail grant (£10,000) is then only available for those who don't get SBRR (e.g. multiple properties etc). The larger grant of £25,000 is for those businesses with a rateable value of £15,000 to £51,000
- Whilst a business cannot qualify for more than one grant for the same hereditament, a ratepayer might have multiple properties, and might in this situation be entitled to receive more than 1 grant, but for different properties
6. The government said we can access a Coronavirus Business Interruption Loan Scheme. This sounds like debt to me so what are the interest payments and when will we be expected to start paying the monthly payments if we take this up?
A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch next week to support primarily small and medium sized businesses to access bank lending and overdrafts. The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value. Businesses can access the first 6 months of that finance interest free, as government will cover the first 6 months of interest payments. Further details, including on the lenders providing access to this scheme will be announced in the coming days, and the scheme will be available from early week commencing 23 March 2020.
7. My biggest cost is staff – and payroll – how can the government help me?
As well as the grant and loan funding measures the following are also available:
a: Support for businesses who are paying sick pay to employees
We will bring forward legislation to allow small- and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:
- this refund will cover up to 2 weeks' SSP per eligible employee who has been off work because of COVID-19
- employers with fewer than 250 employees will be eligible - the size of an employer will be determined by the number of people they employed as of 28 February 2020
- employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
- employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note
- eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to those staying at home comes into force
- the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible
b: Support for businesses paying tax
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC's Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
If you are concerned about being able to pay your tax due to COVID-19, call HMRC's dedicated helpline on 0800 0159 559.
c: Can I claim on my business insurance?
The Government's current medical advice is sufficient to enable businesses which have insurance policy that covers both pandemics and Government ordered closure to make a claim. To make arrangements, contact your own business insurance provider.
8. Filing of Accounts
From 25th March - Businesses will be given an additional 3 months to file accounts with Companies House to help companies avoid penalties as they deal with the impact of COVID-19. This is a joint initiative between the government and Companies House and will mean businesses can prioritise managing the impact of Coronavirus. Companies will still have to apply for the 3-month extension to be granted however those citing issues around COVID-19 will be automatically and immediately granted an extension. Applications can be made through a fast-tracked online system which will take just 15 minutes to complete. https://www.gov.uk/guidance/apply-for-more-time-to-file-your-companys-accounts
9. Can my business stay open?
On 23 March the Government, stepped up measures to prevent the spread of coronavirus and save lives. All non-essential premises must now close. Takeaway and delivery services may remain open and operational in line with guidance on Friday 20 March. Online retail is still open and encouraged and postal and delivery service will run as normal.
The following businesses and premises must remain closed:
- Cafes, including workplace canteens
- Public Houses
- Bars and nightclubs, including bars in hotels or members' clubs
- Hair, beauty and nail salons, including piercing and tattoo parlours
- All retail with notable exceptions e.g. Supermarkets and other food shops, health shops, pharmacies including non-dispensing pharmacies
- Outdoor/indoor markets
- Auction Houses
- Car Showrooms
- Hotels, hostels, B&Bs, campsites and boarding houses for commercial use (Where people live in these as interim abodes whilst their primary residence is unavailable they may continue to do so and Key workers can continue to stay in hotels or similar where required.)
- Various assembly and leisure facilities e.g. Museums and galleries, Fitness studios, gyms, swimming pools or other indoor leisure centres
The list is continually being updated and therefore it is important to check whether your business is included. For a full list of businesses and exceptions please see https://www.gov.uk/government/publications/further-businesses-and-premises-to-close
10. What happens if I can't pay my business rent?
Commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction. The first thing to do is talk to your landlord as many businesses already have voluntary arrangements about rental payments. There is an emergency Coronavirus Bill currently going through Parliament which will mean no business will be forced out of their premises if they miss a payment in the next 3 months. As a commercial tenant you will still be liable for the rent after this period.
Got a question? Please email your enquiries to The Business Lincolnshire Team.