Government support for UK businesses
Michael Chadwick, founding Director at Chadwick & Company, summarises the Governments’s coronavirus package of support.
This advice includes brief details of the financial measures and concessions which have been put forward to assist in keeping small businesses afloat. By all means come back to us if you need any further details on any aspect.
We are endeavouring to offer a continuing service at our normal levels, but please bear with us if, through staff rotation or illness, we occasionally take longer to respond to your queries and otherwise.
We will keep you up to date on Government developments as they progress, and we are always here to provide advice and support for your business in the months ahead.
Covid-19 – Emergency measures announced
In the last few days, the Government has made major announcements about help for small businesses and individuals affected by coronavirus. Below is a summary of the significant points, although details are awaited as to how some of these schemes may be accessed.
- On Friday 20 March, the Government announced a comprehensive job retention scheme to protect people’s jobs. The Government urges employers to check this package before laying off staff. The package includes a grant for private companies covering 80% of employee wages up to £2,500. This is for employers paying workers through the PAYE system who would otherwise be laid off. It will be backdated to 1 March 2020, then will continue for three months and will be extended if necessary. Employers need to contact HMRC to get these grants.
- Statutory Sick Pay (SSP) to be paid from the first day of absence, not the fourth, where people have the virus or have to self-isolate, or care for such people.
- Full funding of the cost of two weeks’ SSP for small and medium-sized employers whose workers have claimed SSP as a result of coronavirus.
- Support through Universal Credit and Employment and Support Allowance for self-employed people and others not entitled to SSP. Universal Credit has been increased by £1,000 a year and Working Tax Credits have also been increased by £1,000 a year. The Government states that this means claimants will receive financial support that is roughly equivalent to SSP. The Government is also suspending the minimum income level to make these benefits easier to claim.
- Businesses and self-employed individuals in financial distress will be able to negotiate ‘time to pay’ arrangements with HMRC without incurring late payment penalties.
- July self assessment payments on account have been deferred until January 2021.
- VAT payments for the next quarter have been deferred until January 2021.
The following additional measures have also been announced:
- Any business that needs access to cash to pay their rent, salaries, suppliers, or to purchase stock, will be able to access a government-backed loan.
- That support will be delivered to small and medium businesses via the new Business Interruption Loan Scheme (announced at the Budget), which will now provide loans of up to £5 million, with no interest due for the first twelve months.
- The scheme will be up and running by Monday 23 March.
Retail, hospitality and leisure sectors
- Business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year. Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.
- Businesses in these sectors with a rateable value of under £15,000 will receive a cash grant of £10,000.
- Businesses in these sectors with a rateable value of between £15,001 and £51,000 will receive a cash grant of £25,000.
Support for businesses that pay little or no business rates
- The 700,000 or so small businesses that are already eligible for 100% business rates relief will receive a grant of £10,000 (not £3,000, as previously announced) to help with business costs.
For those individuals in difficulty due to coronavirus, mortgage lenders will offer at least a three-month mortgage holiday, so that people will not have to pay a penny towards their mortgage while they get back on their feet.
Separately, speaking in Parliament on Tuesday evening, Chief Secretary to the Treasury Steve Barclay said: “The government is postponing the reforms to the off-payroll working rules, IR35, from 6 April 2020 to 6 April 2021.”
You can find further information about the Government support package available here.