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Coronavirus business support available

coronavirus-business-support-availableThis page details all of the coronavirus (COVID-19) business support available to help mitigate the impact of the outbreak. We will keep it updated as more information is announced by government.

You can access the government’s “support finder” tool, which helps businesses and self employed people across the UK to quickly and easily determine what financial support is available to them.

Our daily coronavirus update page has all the detail you need.

Coronavirus Job Retention Scheme

Under the Coronavirus Job Retention Scheme, all UK employers impacted by coronavirus will be able to access support to continue paying part of their employees’ salary. All UK businesses are eligible.

Following new guidance published on 29 May, the scheme has now been extended until the end of October, with furloughed workers able to return to work part-time from August. Employers will be asked to pay a percentage of furloughed workers’ salaries from that point onwards- beginning at 10% in September and rising to 20% in October. Employers will also be responsible for workers’ national insurance and pension contributions from the start of August.

You will need to:

  • Designate affected employees as “furloughed workers” and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal 
  • HMRC will reimburse 80 per cent of furloughed workers wage costs, up to a cap of £2,500 per month, with this amount reducing to 70% and 60% in September and October respectively. Grants should come directly from HMRC, with more information on application and payments detailed on their specific webpage

Coronavirus Business Interruption Loan Scheme

A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank (BBB), will primarily support small and medium-sized businesses in accessing bank lending and overdrafts.

This scheme will help any viable business with a turnover of up to £45m to access government-backed finance of up to £5m. Interest payments and any lender-levied fees for businesses will be covered by the government for an initial period of up to twelve months. The government will provide lenders with a guarantee of 80 per cent on each facility to give lenders further confidence in continuing to provide finance to SMEs. The scheme is available through more than 40 accredited lenders.

To be eligible for support via CBILS, the small business must:

  • Be UK based in its business activity, with turnover of no more than £41m per annum
  • Operate within an eligible industrial sector (a small number of industrial sectors are not eligible for support – have a look at BBB’s eligibility criteria)
  • Be able to confirm that they have not received de minimis state aid beyond €200,000 equivalent over the current and previous two fiscal years
  • Have a sound borrowing proposal, but insufficient security to meet the lender’s requirements

Changes announced on 2 April mean:

  • Personal guarantees cannot be taken for any facilities below £250,000
  • Insufficient security is no longer a condition to access the scheme
  • Personal guarantees may be required for facilities over £250,000 but are capped at 20 per cent of the outstanding balance after business asset recoveries
  • Access to the scheme has been opened up to more businesses which would have previously met the requirements for a commercial facility

The BBB will not provide CBILS loans directly to small businesses that are affected by coronavirus. The BBB will facilitate the provision of CBILS loans by accredited lenders. Businesses affected by coronavirus which wish to apply for a CBILS loan will therefore need to make an application to a participating lender. These lenders range from high-street banks, to challenger banks, asset-based lenders and smaller specialist local lenders.

Whether a lender requires a personal guarantee for a loan of more than £250,000 supported by the Coronavirus Business Interruption Loan Scheme is at the discretion of the lender, who is accredited by the BBB to benefit from the guarantee the scheme provides. Personal guarantees required on facilities above 250,000 are also capped at 20 per cent of the outstanding balance after business asset recoveries.

If a personal guarantee is required under the lender’s credit policy, it cannot be taken against the borrower’s home. The BBB’s website outlines further details on the eligibility criteria, how you can access the scheme and the types of finance available.

Bounce Back Loans scheme

From May, small businesses will be able to access a new fast-track finance scheme providing loans of up to £50,000. The scheme has been designed to ensure that small firms needing cash injections to keep operating can get finance in a matter of days.

  • Businesses will be able to borrow between £2,000 and £50,000 and can apply online through a standardised online application
  • Loans will be interest free for the first 12 months and 100 per cent backed by the government
  • Loan terms will be up to six years and no repayments will be due during the first 12 months

The scheme will launch for applications on 4 May and more information on it can be found here. The government has said it will work with lenders to ensure loans delivered through the scheme are advanced as quickly as possible and agree a low standardised level of interest for the remaining period of the loan.

You can apply for a loan if your business:

  • Is based in the UK
  • Has been negatively affected by coronavirus
  • Was not an “undertaking in difficulty” on 31 December 2019

The following businesses are not eligible:

  • Banks, insurers and reinsurers (but not insurance brokers)
  • Public sector bodies
  • Further education establishments, if they are grant-funded
  • State-funded primary and secondary schools

Coronavirus Future Fund

The Future Fund provides government loans to UK-based companies ranging from £125,000 to £5m, subject to at least equal match funding from private investors. These convertible loans may be a suitable option for businesses that rely on equity investment and are unable to access the Coronavirus Business Interruption Loan Scheme. The scheme will be delivered in partnership with the British Business Bank.

You are eligible for this scheme if your business is based in the UK, can attract the equivalent match funding from third-party private investors and institutions and has previously raised at least £250,000 in equity investment from third-party investors in the last five years. The government will be publishing further eligibility criteria in due course. You can view the terms of these loans, which include the right for the government to convert them into discounted equity stakes if they’re not repaid, here.

In addition to the Future Fund, the government has made £750m in grants and loans to smaller businesses focused on research and development.

Coronavirus business support for  larger firms through the COVID-19 Corporate Financing Facility

To support larger firms, the Bank of England has announced a new lending facility (the COVID-19 Corporate Financing Facility) to provide a quick and cost-effective way to raise working capital via the purchase of short-term debt. This will support companies which are fundamentally strong, but have been affected by a short-term funding squeeze, enabling each to continue financing short-term liabilities. It will also support corporate finance markets overall and ease the supply of credit to all firms.

The scheme will be funded by central bank reserves – in line with other Bank of England market operations. It will operate for at least 12 months, and for as long as steps are needed to relieve cash flow pressures on firms that make a material contribution to the UK economy.

The scheme is open to firms that can demonstrate that they were in sound financial health prior to the impact of coronavirus. Companies who wish to use the scheme do not need to have issued commercial paper before.

In order to access the CCFF, you will need to contact your bank. It is important to note that not all banks issue commercial paper. If your bank does not issue commercial paper, UK Finance will provide a list of banks that are able to assist. Further details, including practical steps your firm needs to take in order to access the CCFF, as well as other frequently asked questions can be found on the Bank of England’s website.

Want to learn more about your options during the coronavirus crisis? We talked to business owners and directors across the country to find out the steps they’re taking with customers, cash flow and more. Here’s what they had to say.

Support for businesses and individuals paying tax

The government will defer VAT payments in financial quarter running from April-June and businesses will have until the end of the tax year to repay those bills.

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.

To support the self-employed, the government will suspend the minimum income floor to access universal credit at a rate equivalent to Statutory Sick Pay for employees and defer the next self-assessment payments to January 2021. As of August, HMRC has also extended the dedicated Self-Employed Support Scheme, meaning applicants can claim a further taxable grant of up to £6,570 for lost income. This scheme will close to applicants on 19 October 2020.

If you are concerned about being able to pay your tax due to coronavirus, you can call HMRC’s dedicated helpline on 0800 0159 559.

Insurance

Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres, etc, is sufficient to make a claim.

Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.

Support for retail, hospitality and leisure sector

Firms in retail, leisure and hospitality sectors will now have a 12-month business rates holiday irrespective of the rateable value of the property

Eligibility:

You are eligible for the business rates holiday if:

  • Your business is based in England
  • Your business is in the retail, hospitality and/or leisure sector

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

  • As shops, restaurants, cafes, drinking establishments, cinemas and live music venues
  • For assembly and leisure
  • As hotels, guest and boarding premises and self-catering accommodation

How to access the scheme:

There is no action to take. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible.

Firms in the retail/hospitality/leisure sector without insurance and with a rateable value of  between £15,000 and £51,000 will be eligible for a cash grant of up to £25,000. Local Authorities will write to all eligible businesses with information on how to claim this grant. Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant Local Authority.

The government have made a further £617 million available for small businesses with ongoing fixed property related costs. Eligible businesses must be small, under 50 employees, and they must also be able to demonstrate that they have seen a significant drop of income due to coronavirus restriction measures.

Support for small businesses

A £10,000 cash grant is available from Local Authorities announced for businesses in receipt of Small Business Rates Relief.

You will be eligible if:

  • Your business is based in England
  • You are a small business and already receive SBRR and/or RRR
  • You are a business that occupies property
  • Your property’s rateable value is less than £15,000
  • Your Local Authority will write to you if you are eligible for this grant. To find out what your local authority is, use the GOV.UK checker 

Rent payments

The government has also introduced measures to protect high street stores and other rental premises from aggressive rent collection, asking businesses to pay what they can during the pandemic. These measures, announced on 23 April, apply for the period to 30 June 2020.

The new temporary measures include voiding statutory demands and petitions to commercial tenants, as well as changing the terms of Commercial Rent Arrears Recovery. Following a statement from Business Secretary Alok Sharma on 23 April 2020, stores will be asked to pay what they can towards their rent.

The government is also drafting secondary legislation to provide tenants with greater flexibility in their rent payments and further banning commercial landlords from using the Commercial Rent Arrears Recovery, unless they are owed 90 days of unpaid rent.

More information on the scheme is available on Gov.uk 

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