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Coronavirus - Support for your business - 18/03/2020

The government have introduced a number of measures to help support businesses through this period of disruption caused by COVID-19.

A summary of this information is as follows.

1. ‘Time to Pay’ for business tax

2. Support for businesses that pay business rates

3. Support for businesses that pay little or no business rates

4. Support for businesses borrowing

5. Sick pay costs can be reclaimed

6. Insurance

1. ‘Time to Pay’ for business tax

The government will assist businesses and self-employed individuals in financial distress and with outstanding tax liabilities through support in settling their tax affairs.

‘Time to Pay’ gives businesses a time-limited deferral period on HMRC liabilities owed and a pre-agreed time period to pay these back.

HMRC has set up a dedicated COVID-19 helpline to help those in need, and each case will be negotiated on an individual basis with bespoke ‘Time to Pay’ arrangements. Details of the helpline can be found on the .gov website HERE.

During the coronavirus outbreak, the usual 3.5% annual interest on deferred tax payments will be waived.

Where applicable, it is important that businesses apply in plenty of time and agree upfront with HMRC before a payment deadline.

2. Support for businesses that pay business rates

In response to COVID-19, the Government has announced that it will introduce a business rates retail 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.

Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority.

Key Coronavirus business risk areas:

- Demand: Decreasing footfall and potential lockdown of regions resulting in reduced or no sales;

- Employee sick days: Coronavirus breakout in the work place or enforced shut down leading to employees off work and/or public relations issues;

- Supplies: increasing wholesale costs, delays and lack of availability.

3. Support for businesses that pay little or no business rates

The government has announced small businesses that already pay little or no business rates due to the small business rate relief (SBBR) will be eligible for a one-off coronavirus grant worth up to £10,000, 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.

4. Support for businesses borrowing

A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch next week to support primarily small and medium sized 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.

Further details, including on the lenders providing access to this scheme will be announced in the coming days, and the scheme will be available from early week commencing 23 March 2020.

Details of the scheme and eligibility are currently being confirmed by the British Business Bank. However, initial suggestions are that eligible businesses will be those:

- Under £41m turnover per annum

- With a sound borrowing proposals but insufficient security

- Not be in receipt of de minimis State aid beyond €200,000 in the current and previous two fiscal years

- Not in a very small number of restricted or ineligible sectors

- Using a finance provider (or broker working on their behalf) who is a partner of the British Business Bank

5. Sick pay costs can be reclaimed

The government will support small and medium-sized businesses and employers to cope with the extra costs of paying COVID-19 related Statutory Sick Pay (SSP) by refunding eligible SSP costs.

The eligibility criteria for the scheme include:

- Emergency legislation is being passed that means employees suffering from COVID-19, or self-isolating, will be entitled to SSP from day 1, rather than observing the usual 3 waiting days;

- The refund for employers will be limited to two weeks per employee;

- 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, but should not require employees to provide a GP fit note;

- The eligible period for the scheme will commence from the day on which the regulations extending SSP to self-isolators come into force.

- Repayment of employee sick days will not be through the payroll software. The Government is yet to set up a repayment mechanism so employers may need to wait several months yet before claims can be submitted and for the first reimbursements to be made. Therefore, good recordkeeping for making an eventual claim is essential.

6. 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.

It is important if your business is experiencing difficulties that you assess your options at the earliest opportunity before it leads to a more critical liquidity issue.

If you are concerned, speak to your bank, trade association or us as soon as possible so that you can get specific advice or guidance

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