The UK Government has set out a range of schemes to help employers deal with the coronavirus crisis.
This includes a package of measures to support businesses including:
Coronavirus Job Retention Scheme
The coronavirus job retention scheme aims to help employers who would otherwise have to lay off workers due to the Covid-19 outbreak.
HMRC will reimburse 80% of furloughed workers’ wages, up to £2500 per month.
Workers must have been designated as furloughed. Employers should check workers’ employment contract terms before considering lay offs or putting workers on furlough.
To access the scheme, employers will need to submit information about the worker to HMRC via a new online portal, details of which are not yet available.
Statutory Sick Pay relief package for SMEs
The statutory sick pay (SSP) relief scheme is being made available to small and medium-sized employers. It can be used to reimburse up to two weeks’ SSP payments for staff off work sick with coronavirus.
To be eligible for the scheme, employers have to be based in the UK with 250 or fewer employees as of 28 February 2020.
The scheme is currently being developed. In the meantime, employers are advised to ensure records of all workers’ absences and SSP payments are maintained during this period.
Note that employees will not be required to present a fit note as evidence.
VAT deferral period
VAT payments are being automatically deferred by 3 months for all UK businesses.
The deferral period will apply from 20 March 2020 until 30 June 2020.
Businesses will have until the end of the 2020/2021 tax year to pay any liabilities that have accumulated during the deferral period.
Deferred income tax payments
The July 2020 income tax deadline for the self-employed is being pushed back automatically to January 2021.
There will be no penalties or interest applied for late or non-payment during the deferral period.
HMRC’s Time to Pay offer has also been expanded for those with outstanding tax liabilities facing temporary financial distress as a result of Covid-19.
12-month business rates holiday for retail, hospitality and leisure businesses in England
The Government has introduced a business rates holiday for retail, hospitality and leisure businesses in England for the 2020/2021 tax year.
To be eligible for the relief, properties must be occupied hereditaments wholly or mainly being used as shops, restaurants, cafes, drinking establishments, cinemas and live music venues; for assembly and leisure; or as hotels, guest & boarding premises and self-catering accommodation.
The relief will be applied automatically to eligible business’ next council tax bill.
Businesses that received the retail discount in the 2019/2020 tax year will be rebilled by their local authority as soon as possible.
Cash grants for retail, hospitality and leisure businesses
The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.
Qualifying businesses are to be based in England operating in the retail, hospitality and/or leisure sector.
For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000.
For businesses in these sectors with a rateable value of between £15,001 and £51,000, they will receive a grant of £25,000.
To be eligible for the relief, properties must be occupied hereditaments wholly or mainly being used as shops, restaurants, cafes, drinking establishments, cinemas and live music venues; for assembly and leisure; or as hotels, guest & boarding premises and self-catering accommodation.
Your local authority will contact you if qualify for the scheme.
Support for nursery businesses that pay business rates
Nurseries based in England will benefit from a business rates holiday for the 2020/2021 tax year.
Eligible properties will be hereditaments occupied by providers on Ofsted’s Early Years Register that are wholly or mainly used for the provision of the Early Years Foundation Stage.
If you qualify, the relief will be applied to your next council tax bill in April 2020.
Support for businesses that pay little or no business rates
For businesses already in receipt of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief, an additional Small Business Grant Scheme funding has been introduced.
Under the scheme, local authorities will contact eligible businesses about a one-off grant of £10,000 to help meet their ongoing business costs.
Eligible businesses must be based in England and already in receipt of SBBR and/or RRR. They must also be a business that occupies property.
Coronavirus Business Interruption Loan Scheme
If your business needs short term cash flow support, you may be eligible for the Coronavirus Business Interruption Loan.
Under the scheme, SMEs can apply for bank lending and overdrafts through the British Business Bank.
Loans of up to £5million will be made available through the scheme.
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.
The scheme is open to UK-based businesses with a turnover of no more than £45 million per year that meet the British Business Bank’s other eligibility criteria.
All major banks are to offer the scheme once launched.
Support for larger firms through the COVID-19 Corporate Financing Facility
Under the new Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger UK-based companies.
It will also support corporate finance markets overall and ease the supply of credit to all firms. Further details are to be provided.
As this a rapidly changing area, employers are advised to keep the government guidance under review.
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services - a Marketing Agency for the Professional Services Sector.
