You will no doubt be aware that the Prime Minister and Chancellor of the Exchequer announced this week a huge package of financial measures designed to assist all businesses to manage their way through the Coronavirus crisis. Whilst specific details regarding distribution and access to these funding streams are still forthcoming, a summary of what we do know is as follows:
Time to Pay Arrangements with HM Revenue and Customs
The Government have set up a dedicated helpline to assist businesses and self-employed individuals with outstanding tax liabilities who are struggling to pay as a result of the impact of the coronavirus. Via this helpline, it will very likely be possible to agree a ‘time to pay’ arrangement for HMRC debts including VAT, PAYE, Corporation Tax and Income Tax.
If you have concerns over your ability to pay your tax liabilities call 0800 0159 559. Operating hours are Monday – Friday 8am to 8pm and Saturday 8am to 4pm.
Our experience of using this helpline has been very positive and HMRC were very understanding of cashflow concerns. We strongly advise you to speak to HMRC before paying any further tax liabilities from this point forward.
Government Backed Loans
The chancellor pledged to make available an initial £330 billion of loans and guarantees to British businesses to help them manage cashflows through the period and stated he would take further necessary action as the situation develops.
Large firms will be supported with liquidity issues by funding distributed by the Bank of England.
Small and medium sized businesses will be supported mainly by an extension to the Business Interruption Loan Scheme, administered through the British Business Bank alongside other participating providers. The maximum limit that can be borrowed under this scheme has been increased from £1.2m to £5m for companies with a turnover of less than £41m. The first 6 months of interest will be covered by the Government and the Government have also pledged to guarantee up to 80% of the debt. More details on this scheme can be found here.
Our previous experience of this scheme is that eligibility criteria can be quite stringent but whilst we have no further information at this point, it is hoped that the Chancellor announces some relaxation to the qualifying criteria in the coming days. Also, recent changes announced in the budget mean that banks are in a much better position to provide additional credit to smaller businesses.
Cash grants for small businesses
There will be a cash grant of £10,000 made available to the smallest businesses, delivered by local authorities. Small businesses that pay little or no business rates and are eligible for small business rate relief will apparently be contacted by their local authority and the latest guidance is that you do not need to directly apply for this grant. This funding is expected to be available in early April and information is regularly updated on your local authority website.
Relief for businesses in the retail, hospitality and leisure sectors
A £25,000 cash grant will be provided to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value between £15,000 and £51,000. Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority. Guidance for local authorities on the business rates holiday will apparently be published by 20 March.
All businesses in the retail, hospitality and leisure sectors, irrespective of size, will benefit from a 12 month rates holiday from April 2020 and will pay no rates at all.
For businesses with fewer than 250 employees, the cost of providing 14 days of Statutory Sick Pay per employee will be refunded by the government in full. This will provide 2 million businesses with up to £2 billion to cover the costs of large-scale sick leave. This will cover those employees in self-isolation.
· the government’s coronavirus action plan provides detailed information about the government’s response
· the government has put a range of support in place for those who do not receive Statutory Sick Pay, including Universal Credit and contributory Employment and Support Allowance
· ACAS has published information for employees and employers, including simple steps to help protect the health and safety of staff
· a number of private lenders are also making funds available to small businesses impacted by COVID-19, including £2 billion from Lloyds Banking Group and £5 billion from NatWest
As your primary provider of business support and guidance we can assure you that we are doing our upmost to stay abreast of developments. Details of the various avenues of support are still being discussed and refined by the Government but as soon as further details are released, we will be ready to take your calls and email queries and provide any assistance in obtaining access to this support.