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Additional Government help for businesses

As you will no doubt be aware, the Government yesterday announced £360bn worth of new measures to help businesses who are suffering as a result of the Coronavirus Covid-19 Pandemic. These include: 

  • Support for businesses that pay business rates including support for those businesses that pay little or no business rates
  • Mortgage Holiday
  • Support for businesses who are paying sick pay to employees
  • Support for businesses through the Coronavirus Business Interruption Loan Scheme.
  • Support for businesses paying tax

Support for businesses that pay business rates

  • There will be a 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.
  • A £25,000 grant will be provided to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value between £15,000 and £51,000. This means that every single shop, pub, theatre, music venue, restaurant, etc. will pay no business rates whatsoever for 12 months and , if they have a rateable value of less than £51,000 they can now get a cash grant as well. 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.
  • 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 be published by 20 March

Support for businesses that pay little or no business rates

  • Additional funding will be provided for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR). This will provide a one-off grant of £10,000 to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs.
  • If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority – you do not need to apply.
  • Funding for the scheme will be provided to local authorities by government in early April. Guidance for local authorities on the scheme will be provided shortly.

Mortgage Holiday 

For those individuals in difficulty due to the Coronavirus Covid-19 Pandemic, mortgage lenders will offer at least a three-moth mortgage holiday, so that people will not have to pay a penny towards their mortgage while they get back on their feet.

Support for businesses who are paying sick pay to employees

Legislation will be brought forward allowing small- and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:

  • this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
  • employers with fewer than 250 employees will be eligible - the size of an employer will be determined by the number of people they employed as of 28 February 2020
  • employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
  • employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note
  • eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to those staying at home comes into force
  • the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible
  • support through Universal Credit and Employment Support Allowance for self-employed people and others not entitled to SSP

Support for businesses through the Coronavirus Business Interruption Loan Scheme

A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch next week to support businesses to access bank lending and overdrafts. The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs.

The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value. Businesses can access the first 6 months of that finance interest free, as government will cover the first 6 months of interest payments. This is available to any business that needs access to cash to pay their rent, salaries, and suppliers or to purchase stock. The scheme will be up and running by the start of next week.

Support for businesses paying tax

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.

If you are concerned about being able to pay your tax due to COVID-19, 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 their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.

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 6th April 2020 to 6th April 2021.

As you will appreciate, support and advice is changing daily and we will continue to provide you with relevant updates. As ever, please feel free to contact a member of our team should you wish to speak to someone about your personal situation.

Disclaimer from Morris & Co: Please note this is the guidance as we understand the legislation at the current time. As you will appreciate it is changing almost on a daily basis and we cannot be held responsible if advice and guidance changes or if our interpretation does not subsequently prove to be correct.