Coronavirus: financial support for businesses summary

The Government has announced further support for businesses and employees through a package of measures during this period of unprecedented disruption.

The Business Support website contains information about the Business Interruption Loan Scheme, Job Retention Scheme, Small Business Grant Funding, Time to Pay Service, Corporate Financing Facility, VAT deferral, and others. A short summary of the key points is below.

Coronavirus Job Retention Scheme
The Scheme allows all UK employers with a PAYE scheme to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis. This applies to employees who have been asked to stop working, but who are being kept on the pay roll, otherwise described as ‘furloughed workers’. This is to safeguard workers from being made redundant.

From 1 July employers will be able to bring back employees part-time. This is a month earlier than previously announced and it will be up to the employer to decide the hours and shift patterns of these workers. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

During June and July the government will continue to pay 80% of employees salaries up to a cap of £2,500 per month, as well as employer national insurance and pension contributions.

From 1 August employees will continue to receive 80% of their salary (plus the employer may wish to top this up to 100%). The government will continue to pay 80% of employees salaries up to a cap of £2,500 per month, however employers will be required to pay employer national insurance and pension contributions.

From 1 September employees will continue to receive 80% of their salary (plus the employer may wish to top this up to 100%). The government will pay up to 70% of people’s salaries up to a cap of £2,287.50 per month, however employers will be required to pay employer national insurance and pension contributions, plus 10% of the employees salary.

From 1 October employees will continue to receive 80% of their salary (plus the employer may wish to top this up to 100%). The government will pay up to 60% of people’s salaries up to a cap of £1,875 per month, however employers will be required to pay employer national insurance and pension contributions, plus 20% of the employees salary.

Claims from 1 July onwards will be restricted to employers currently using the scheme and previously furloughed employees, meaning the last three-week furlough period this must have commenced by no later than 10 June. The Scheme will close completely at the end of October.

For those who are self-employed, the Self-Employment Income Support Scheme will be extended, with those eligible able to claim a second and final grant worth 70% of the average monthly trading profits, capped at £6,570.

Bounce Back Loans

Businesses can apply for the new Bounce Back Loans here up to a maximum of £50,000, or 25% of turnover, with the government paying the interest for the first 12 months. The Government will support lending by guaranteeing 100% of the loan and businesses can apply online by completing a short form and the loan should reach you within days.

Business Interruption Loan Scheme
The temporary Scheme will support small and medium-sized businesses (those with a turnover under £45M per year) with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to six years.

The Government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.

The scheme is now open for applications. To apply, you should talk to your bank or one of the 40 accredited finance providers (not the British Business Bank) as soon as possible, to discuss your business plan.

Statutory Sick Pay Rebate
The Government will bring forward legislation to allow small and medium-sized businesses to reclaim Statutory Sick Pay (SSP) paid for staff sickness absence due to coronavirus. This refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of coronavirus. All businesses who are UK based, are small or medium sized, and employ fewer than 250 employees as of 28 February are eligible. A rebate scheme is being developed, further details will be provided by Government in due course.

Covid-19 Corporate Financing Facility (CCFF)
The CCFF is designed to support liquidity among larger firms, helping them to bridge coronavirus disruption to their cash flows through the purchase of short-term debt in the form of commercial paper. The CCFF application documents can now be downloaded here and more information is here.

Coronavirus Large Business Interruption Loan Scheme (CLBILS)
The Scheme has now been expanded so that all viable businesses with a turnover of more than £45m will now be able to apply for government-backed support. Businesses with turnover of more than £500 million were originally not eligible for the Scheme, which is being set up to help firms who do not qualify for the existing Coronavirus Business Interruption Loan Scheme – for small and medium sized businesses - and the Bank of England Coronavirus Corporate Financing Facility – for investment grade companies.

VAT Deferral
Government are supporting businesses by deferring VAT payments for 3 months. All VAT-registered UK businesses are eligible and this is an automatic offer with no applications required.

Time to Pay
Businesses can apply to HMRC for “time to pay” for any tax bill if they can demonstrate that there is a genuine cash flow problem, either now or forecasted. Businesses should forecast their cashflow position as accurately as possible covering the next 3 or 4 months before paying a current tax bill from funds which are available now.

HMRC Coronavirus Helpline
Telephone: 0800 024 1222
Monday to Friday, 8am to 8pm
Saturday, 8am to 4pm

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