Coronavirus is the biggest threat that the world has had to face for some time. It’s quickly disrupted life, business, transport and the economy.
It feels hard to stay positive during this difficult time, that’s why we’ve created this resource section to help you navigate your way through! We’re here to support your business.
Below, you’ll find the latest government schemes and advice, along with information from other key supporters of SMEs.
If you’d like to get in touch with Capify for any reason, please email: firstname.lastname@example.org.
We want to help and support SMEs through this difficult time.
We’re regularly updating this section as and when there’s new announcements.
The following was last updated on: Friday 3rd April.
News, updates and advice
The Chancellor is extending the support available to SME’s and large businesses via the CBILS. The new measures include
• All viable small businesses affected by COVID-19, and not just those unable to secure regular commercial financing, will now be eligible should they need finance to keep operating during these challenging times
• Lenders will no longer be allowed to request personal guarantees for loans under £250,000
• The government will provide a guarantee of 80% to enable banks to make loans to large business with an annual turnover of between £45m and £500m. These businesses will be able to access loans of up to £25m.
• The government will continue to cover the first twelve months of interest and fees.
Further details are expected to be announced later. This page will be updated as soon as further details are available.
In these uncertain times, the cash and liquidity needs of a business are paramount. Managing cash is now a critical priority and an essential part of any survival plan.
Below we have outlined a range of measures you should consider and the government schemes that are available to support your business and employees.
Don’t bury your head in the sand: chase late payments
For any business, chasing up payments from debtors can be time-consuming, even awkward. Burying your head in the sand won’t do you any good, particularly when COVID-19 is impacting your sales. Payment terms should be set out clearly in your contracts, and you shouldn’t be afraid of chasing up late payers.
In uncertain times, incentivise early payment
Many businesses have found success encouraging early payments from customers by offering discounts for paying upfront. This provides a quick cash injection when you need it, as well as rewarding good debtor behaviour with a reduced cost. Alternatively, arrange for payment to be made when goods are delivered.
Review the sources of government support
Since the outbreak began, the UK government has announced a range of measures aimed at supporting businesses through this crisis. These include policies focused on maintaining business liquidity. Details of the Coronavirus Business Interruption Scheme, which is designed to keep businesses going, are available online.
Use government support to manage your fixed costs
Government support for businesses battling COVID-19 goes beyond providing loans. The Coronavirus Job Retention Scheme steps in to directly pay 80 per cent of furloughed employees’ wages (up to £2,500 per employee per month). This allows businesses to effectively address some of their fixed costs, without having to resort to laying off staff.
Defer your tax liabilities with HMRC
HMRC have set up a dedicated helpline to speak to businesses and the self-employed to delay their tax bills. You can contact them on 0800 024 1222. They will help with deferring your liabilities, stopping collections and cancelling penalties and interest. HMRC have also offered automatic deferrals of VAT and income tax. You don’t need to apply for these. VAT payments due between 20 March and 30 June 2020 are now deferred until the end of the tax year, Income Tax payments usually due in July 2020 are now due by January 2021.
Your local authority will be in touch about the new grants
The government has announced measures to help businesses who pay rates or claim small business rates relief/rural rate relief. These include grants of £10,000 (All businesses) and £25,000 (if you are in the Leisure, retail and hospitality sector). Businesses in the Leisure, retail and hospitality sector will also get a rates holiday for 2020-21.
Contact your insurance provider
Finally check the terms of your business insurance policy it may cover pandemics or government ordered closure.
Details of the government support measures can be found here
The Coronavirus Job Retention Scheme is offered by HMRC. The aim is to support business owners and enable them to pay for and keep their existing employees. The details below were updated as at the 26 March following further official government statements:
1. Furloughed members of staff must not work for the employer during the period of furlough.
2. Furlough period is from 1 March 2020, so is to be backdated. It will last for at least 3 months and will be extended if necessary. Note that while the scheme is backdated to the beginning of March as it is intended to support all those employed then, a firm will only be eligible to claim the grant once they have agreed the furlough with their staff and staff have stopped working for the employer. This will of course be subject to employment law in the usual way.
3. The scheme is available for employees on the payroll at 28 February 2020.
4. All UK businesses are eligible.
5. The scheme pays a grant (not a loan) to the employer.
6. The grant will be paid to the employer through a new online system which is being built for this purpose. There is no detail currently about how the application process will work.
7. The employer will pay the employee through payroll, and report payments to HMRC using the Real Time Information (RTI) system as usual, as required by the employment contract.
8. The scheme will be administered by HMRC:
• Relevant employees must be designated as furloughed employees.
• Employers will submit claims to HMRC through a new online portal.
• As the system will take time to build, businesses should look to the Coronavirus Business Interruption Loan Scheme to support cash flow in the meantime.
9. The maximum grant will be calculated per employee and is the lower of:
• 80% of ‘an employee’s regular wage’ and.
• £2,500 per month.
Plus the associated employers’ national insurance contributions (NIC) on this amount and the minimum automatic enrolment employer pension contributions on that wage.
Fees, commission and bonuses should not be included.
This gives a maximum cap of £2,500 +£245 (employers’ NIC) + £59 (auto- enrolled pension contribution) = £2,804 of total possible grant that can be applied for per employee per month.
For further guidance from HMRC:
• Guidance for employers on the Coronavirus Job Retention Scheme
• Support for employees on whether they are covered by the Coronavirus Job Retention Scheme
The Self-employment Income Support Scheme (SEISS) will support self-employed individuals (including members of partnerships) who have lost income due to COVID-19.
This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next three months. This period may be extended if needed.
Who can apply?
The scheme will be open to those with
• a trading profit of less than £50,000 in 2018-19 or
• an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19.
• more than half of their income in these periods coming from self-employment.
Anyone who missed the Jan filing deadline has an extra 4 weeks to submit their tax return.
How will the grant be paid?
Grants will be paid in a single lump-sum instalment covering all 3 months and will start to be paid at the beginning of June.
How do you apply?
You cannot apply for this scheme yet.
HMRC will use existing information and contact you if you are eligible for the scheme. You will then be invited to apply online once the scheme is operational.
Note: Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.
Further Details can be found at – https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme
The British Business Bank says self-employed people with an annual turnover of up to £45m can apply under the scheme, as long as they operate through a business bank account, and generate more than 50% of their turnover from trading activity.
This includes sole traders, freelancers, and limited partnerships, operating in all sectors.
The government has already said the UK’s five million self-employed people would be allowed to defer self-assessment tax payments, and would benefit from mortgage payment holidays as well as an expansion of welfare support, including universal credit and Local Housing Allowance.
If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
Valued Added Tax (VAT)
For UK based businesses VAT payments can be deferred for 3 months, the deferral will apply from 20 March 2020 until 30 June 2020.
This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. 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.
If you are self-employed income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.
This is an automatic offer with no applications required.
No penalties or interest for late payment will be charged in the deferral period. HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.
Time to Pay service
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. For further information please visit this link, or if you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559.
What sick pay support is available to people who are self employed?
Self-employed people affected by COVID-19 can claim for Universal Credit or the Contributory Employment and Support Allowance.
What support is there for businesses who are paying sick pay to employees?
Statutory Sick Pay (SSP) is payable to qualifying employees and is now payable from day 1 for those who self-isolate or are unwell because of COVID 19.
The current rate of SSP is £94.25 per week.
HM Treasury has announced that small and medium sized UK based businesses (those with fewer than 250 employees) may recover this cost where SSP has been paid as a result of COVID 19 from 13 March for a maximum of two weeks’ sickness per employee.
Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website.
A rebate scheme is being developed. Further details will be provided in due course.
At this years Budget on March 11th, the Government announced plans for a new Coronavirus Business Interruption Loan. On Monday 23rd March, this loan was made available. Find out more about what it is, and how you can access it here.
A business rates holiday will be introduced for nurseries in England for the 2020 to 2021 tax year.
To be eligible your business must be based in England.
Properties that will benefit from the relief will be hereditaments:
- Occupied by providers on Ofsted’s Early Years Register.
- Wholly or mainly used for the provision of the Early Years Foundation Stage.
There is no action for you. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill to exclude the business rate charge. They will do this as soon as possible.
You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator.
Announced in the recent Budget was a plan to support business owners in the Retail, Hospitality and Leisure Sectors. Here’s details of that scheme:
- Qualifying businesses in these sectors and are based in England will receive targeted relief.
- Qualifying business with a rateable value of less than £51,000 will not pay business rates for 12 months.
A cash grant of up to £25,000 per property will also be available:
- Businesses with a rateable value under £15,000 will receive a grant of £10,000.
- Businesses with a rateable value of between £15,001 and £50,000 will receive a grant of £25,000.
- You need to do nothing, your local authority will write to you.
If you own a smaller business which wouldn’t benefit from rates relief, the Government have implemented grants. Details below:
- For small businesses that pay little or no business rates, there will be a one-off grant of £10,000 to eligible business
- The grant is available for businesses based in England
- You must be a business that occupies a property
- You must already receive small business rate relief, rural rate relief and tapered relief
- You need to do nothing your local authority will write to you.
In order to discover how business owners are feeling about the Coronavirus, we sent out a survey to SMEs across the UK. It’s a worrying time, and this is what people are most concerned about.
On Wednesday 11th March, the new Budget was announced. Whilst it seems like Coronavirus was only in its very early stages, it was a focal point of the talk. Here are some of the plans to support business owners during this challenging time.
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