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 29th May.
News, updates and advice
On Friday 29 May, the Chancellor Rishi Sunak announced details of his plans for the next phase of the furlough scheme. This included detail on the creation of new flexibilities allowing employees to work part time while still being eligible for furlough grants, and the introduction of employer contributions.
Employers will be able to bring furloughed workers back part-time from next month
From 1 July, employers will be able to return furloughed workers on a part-time or reduced-hours basis while still claiming from the job retention scheme for the hours the employee isn’t working. For example, if a worker is brought back for two days a week, the employer will pay these two days in full as usual, while continuing to claim 80 per cent of the employee’s wage cost through the furlough scheme for the other three days.
Employees need to be on the scheme by 10 June
The flexible furlough scheme will be introduced as a new scheme, with the current system coming to a close on 30 June. However, claims will be restricted to employees already furloughed before this date. This means any organisation wanting to make use of the new scheme’s flexibilities will need to have furloughed these staff by 10 June, to allow them to complete the minimum three weeks required by the current scheme before it comes to an end.
Employers will not have to contribute until August
The job retention scheme will continue operating as it has done since launch for the rest of June and throughout July, with the government paying 80 per cent of wages up to a maximum of £2,500 for furloughed staff. From 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 – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.
From September employers will contribute 10 per cent of wages
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. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.
In October, the last month of the scheme, the government’s contribution will drop to 60 per cent
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. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.
For further information please refer to the Government’s guidance which can be found here
The Chancellor announced today that the Job Retention Scheme will be extended until the end of October and will continue to apply across all regions and sectors in the UK economy. The scheme will continue in its current form until the end of July and the changes to allow more flexibility will come in from the start of August. The key points of the announcement;
- Furloughed workers across the UK will continue to receive 80% of their current salary, up to £2,500
- From the start of August, furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff, but with greater flexibility to support the transition back to work
- The government will explore ways through which furloughed workers who wish to do additional training or learn new skills are supported during this period
More specific details and information around its implementation will be announced by the end of this month.
If you have yet to make a claim under this scheme you can access the Government’s guide to the scheme here
With the Government about to announce its “road map” for easing restrictions from the Covid-19 lockdown, is your business ready to rev up again once the limitations are lifted?
As part of supporting SME businesses, we thought we should share some of our thoughts and experiences in how to survive a recession. This guide is not a comprehensive list but a summary of points a business should consider when thinking about life after lockdown.
Here’s Capify’s guide to life after lockdown, click here to download
Coronavirus Bounce Back Loan
The Government has announced that small businesses will be able to access loans of up to £50,000. These loans will be guaranteed 100% by the government and there will be no fees or interest to pay for the first 12 months.
The scheme will be launch on 4 May 2020.
Loan terms will be up to 6 years, with no repayments due during the first 12 months. The government will work with lenders to agree a low rate of interest for the remaining loan period.
Small firms will be able to apply for a loan up to 25 per cent of their annual turnover with the government paying the interest for the first 12 months.
You can apply for a loan if your business:
- is based in the UK
- has been negatively affected by Covid-19
- was not an “undertaking in difficulty” on 31 December 2019
Who cannot apply
The following businesses are not eligible to apply:
- banks, insurers and reinsurers (but not insurance brokers)
- public sector bodies
- further-education establishments, if they are grant-funded
- state funded primary and secondary schools
If you are already claiming funding
You cannot apply if you are already claiming under the Coronavirus Businesses Interruption Loan Scheme (CBILS)
If you are already receiving a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan Scheme, you can arrange this with your lender until 4 November 2020.
How to apply
The Bounce Back Loan scheme will launch on 4 May 2020
Further information about how to apply will be published shortly.
The Government has now issued a guide that explains the information that employers need to provide to claim for their employees’ wages. The guide is split into five sections
1) Essential information
2) Before you make your claim Step
3) Calculating your claim
4) Making a claim
5) What to do next
You can access the guide here
The scheme will open on 20 April and you should receive payment six working days after making an application.
The 28 February eligibility cut-off has now been extended to 19 March 2020.
The Government’s Job Retention Scheme is expected to be fully operational from Monday 20 April, which includes access to the online portal.
Under the scheme, employers can claim a grant covering 80% of the wages for a furloughed employee, subject to a cap of £2,500 a month. To qualify and to protect against fraudulent claims, individuals originally had to be employed on 28 February 2020, this is now extended until 19 March 2020.
You can find out more on the Government’s Job Retention guidance pages on Gov.uk
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 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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