Government Financial Support During COVID-19 – Latest
- Bounce back loan scheme. Small and medium businesses can borrow up to £50,000 with 100% Government guarantee.
- Business rates relief. Every retail outlet can benefit from business rates relief and every car showroom will qualify. If your aftersales services are on the same site, your local authority should be exempting the entire premises from rate in the 2020/21 tax year.
- Coronavirus job retention scheme. Through HMRC, the government will pay up to 80% of furloughed workers’ wages, up to a total of £2,500 per worker each month, with tapering employer contributions starting from August. These payments will be backdated to 1st March. This applies to members of the workforce who remain on the payroll but are temporarily not working during the coronavirus outbreak. Every employer in the country is eligible for the scheme. In July, the Chancellor announced that employers may be eligible for a ‘Job Retention Bonus’, a one-off payment to employers of £1,000 for every employee who they previously claimed for under the scheme, and who remains continuously employed through to 31 January 2021.
- Statutory sick pay relief. If your business has less than 250 employees, then you are able to claim a refund for Statutory Sick Pay payments made for cases of coronavirus.
- VAT deferment. If you are a UK VAT-registered business, VAT bills from now until the end of June will be deferred until the end of the tax year (April 2021).
- Delayed tax payments. If you need to delay existing tax liabilities, then a Time to Pay tax service is being run by HMRC. Income tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
- Coronavirus Business Interruption Loan scheme (CBILS). If your dealership turnover is less than £45 million, you may be eligible for interest free loans for the first twelve months, delivered by the British Business Bank.
- Coronavirus Large Business Interruption Loan Scheme (CLBILS). For larger businesses which exceed the turnover requirements of CBILS. Firms can access loans of up to £25 million if their turnover is between £45 million and £250 million, and up to £50 million for firms with turnover greater than £250 million.
- Covid-19 corporate financing facility. For groups with a turnover of more than £41 million, the Bank of England is providing a corporate financing facility.
- Additional funding for apprenticeships. Employers who hire an apprentice between 1 August 2020 and 31 January 2021 will receive a grant of up to £2,000 per apprentice.
Bounce Back Loan Scheme
Launched on 4 May 2020, the Bounce Back Loan Scheme provides fast access to capital for small and medium sized firms.
Firms can borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000.
The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.
Full information on Bounce Back Loans: https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan
Business Rates Support and Grant Funding
The collection of Business Rates is handled differently in each nation of the UK, and as such different support packages are on offer to businesses – please consult the following websites for Business Rates support and grant funding in England, Scotland, Wales and Northern Ireland.
Coronavirus Job Retention Scheme
If an employer cannot cover staff costs due to COVID-19, they may be able to access support to continue paying part of staff wages, to avoid redundancies.
HMRC will reimburse 80% of ‘furloughed workers’ wage costs, up to a cap of £2,500 per month.
From 1 July, businesses will be allowed to bring furloughed employees back part-time, a month earlier than previously announced. Firms will be able to set the hours and shift patterns staff will work when they return, but will have to pay wages while they're in work.
From August, employer contributions to the scheme will be tapered month by month, as follows:
- August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay employer National Insurance (ER NICS) and pension contributions.
- September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.
- October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.
The scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30 June. This means that the final date by which an employer can furlough an employee for the first time will be the 10 June, in order for the current three-week furlough period to be completed by 30 June. Employers will have until 31st July to make any claims in respect of the period to 30 June.
The Government’s CJRS factsheet can be found here
Full Government CJRS guidance collection here
Job Retention Bonus
In July, the Chancellor announced a new Job Retention Bonus to provide additional support to employers who keep on their furloughed employees in meaningful employment.
The bonus is a one-off payment to employers of £1,000 for every employee who they previously claimed for under the scheme, and who remains continuously employed through to 31 January 2021. Eligible employees must earn at least £520 a month on average between the 1 November 2020 and 31 January 2021. Employers will be able to claim the Job Retention Bonus after they have filed PAYE for January and payments will be made to employers from February 2021.
All employers will be eligible for the scheme. Full details on the applications process will be published by the end of September 2020.
Job Retention Bonus Information here.
Statutory Sick Pay (SSP)
Businesses with fewer than 250 employees may be eligible to claim a refund on SSP for up to two weeks per eligible employee who are either ill or been told to self-isolate because of COVID-19.
Employers should maintain records of staff absences, but employees will not need to provide a GP fit note. The eligible period for the scheme began on 13 March
Please consult the MILS HR & Employment section for further details.
Statutory Sick Pay Rebate System Now Active
The Government has launched the online service that will be used to repay employers the Statutory Sick Pay (SSP) paid to current or former employees.
You can use the scheme as an employer if:
- you’re claiming for an employee who’s eligible for sick pay due to coronavirus
- you have a PAYE payroll scheme that was created and started on or before 28 February 2020
- you had fewer than 250 employees on 28 February 2020 across all your PAYE payroll schemes
The scheme covers all types of employment contracts, including:
- full-time employees
- part-time employees
- employees on agency contracts
- employees on flexible or zero-hour contracts
- fixed term contracts (until the date their contract ends)
The rebate service can be accessed here
The Chancellor has announced that all VAT payments will be deferred, between 20 March 2020 until 30 June 2020.
This action will be automatically administered by Government and businesses do not need to take any action to access the deferral.
Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.
Delayed Tax Payments – HMRC ‘Time to Pay’
HMRC has announced that ‘Time to Pay’ arrangements can be made for firms and self-employed individuals with outstanding tax liabilities.
Time to Pay is an existing scheme to support businesses and self-employed individuals in financial distress and with outstanding tax liabilities by providing support with their tax affairs. All businesses can access Time to Pay.
HMRC’s helpline for help and advice: 0800 024 1222. Further info here.
Coronavirus Business Interruption Loan Scheme (CBILS)
Run by the British Business Bank, eligible firms can borrow up to £5 million with first 12 months interest free.
- Be UK based, with turnover of no more than £45 million per annum.
- Have a sound borrowing proposal, but insufficient security to meet a lender’s normal requirements.
- Have a borrowing proposal which the lender would consider viable, were it not for the current pandemic
- Self-certify that it has been adversely impacted by the coronavirus (COVID-19).
Details on how to access the scheme can be found here.
Coronavirus Large Business Interruption Loan Scheme (CLBILS)
Under CLBILS, a lender can provide:
- up to £25 million to businesses with turnover from £45 million up to £250 million
- up to £50 million to businesses for those with a turnover of over £250 million
CLBILS gives the lender a government-backed partial guarantee (80%) against the outstanding balance of the facility. The borrower remains fully liable for the debt.
Under the scheme, personal guarantees of any form will not be taken for facilities below £250,000.
Details on how to access the scheme can be found here.
COVID-19 Corporate Financing Facility
- Working with Bank of England, the Government will guarantee up to £330bn worth of loans.
- Aimed to support corporates who would normally seek market-based finance but are finding it difficult to access financial markets during the economic slowdown.
- Scheme is open to “all non-financial companies… that can demonstrate they were in sound financial health prior to the shock.”
Details on eligibility can be found here: https://www.bankofengland.co.uk/news/2020/march/the-covid-corporate-financing-facility
Additional funding for apprenticeships
An incentive payment will be made to employers who hire an apprentice between 1 August 2020 and 31 January 2021. The apprentice must be a new employee to the business, have a contract of employment start date between 1 August 2020 and 31 January 2021 (inclusive) and must not have been employed by the employer within the six months prior to the contract start date.
Claims can start to be made by employers in relation to these apprentices from 1 September 2020. Those claims must be made through the apprenticeship service. There will be two levels of payment based on age. For apprentices aged 16-24 the payment will be £2,000, and for apprentices aged 25 or over the payment will be £1,500. The payment will be made directly to employers in two equal instalments, where the apprentice is still in learning at day 90 and day 365.
There will be no limit on the number of incentive payments that an employer can claim for apprentices eligible to receive funding, provided each apprentice meets the criteria, including being a new employee.
Incentive payments for hiring a new apprentice information here.