The UK Chancellor has unveiled a £330bn support package to help business during the Coronavirus pandemic with the potential to increase the package if required in the weeks ahead.
Business Interruption Loan Scheme
Any business that needs access to cash will be able to apply for government-backed and guaranteed loans. The Business interruption loans announced in the budget of £1.2m has been increased to £5m, with no interest due for the first six months, and will now be made available to all small and medium sized businesses.
The business loan scheme will be delivered by the British Business Bank. It is anticipated that these will be available by the start of next week. Businesses will access the loans via their high street bank requesting a government backed business interruption loan.
To be eligible for a business interruption loan you must:
- Be UK based, with a turnover of no more than £41 million per annum
- Operate within an eligible industrial sector (a small number of industrial sectors are not eligible for support)
- Have a sound borrowing proposal but have inadequate security to meet a lender’s normal requirements
- Be up to date in respect of any accounts and tax filings due (even if tax is not necessarily fully paid)
- Be able to confirm that you have not received other public support of de minimis state aid beyond €200,000 equivalent over the previous three years
Business Rates Support
A cash grant from the government of £25,000 will be made available to businesses in the retail, hospitality and leisure sectors who have a rateable value of less than £51,000. The business rates holidays will be extended to all firms in these sectors. Guidance on the business rates holiday will be published to local authorities on 20th March. Eligibility for the £25,000 grant should be directed to your local authority.
The £3,000 grant announced in the budget for businesses that qualify for small business rate reliefs or rural rates relief has been increased to £10,000. This will be administered by the local authority and eligible companies will be contacted directly and do not need to apply for this. This funding will be available from early April.
Help with paying tax liabilities
A dedicated helpline has been set up to help businesses and self-employed individuals in financial distress and with outstanding tax liabilities to receive support with their tax affairs. If you are concerned about being able to pay your tax due to Coronavirus, let us know and we will be able to assist you with agreeing a time to pay arrangement with HMRC.
Statutory Sick Pay
HMRC is bringing forward legislation to allow small and medium sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to Coronavirus. You will be able to claim 2 weeks SSP for each employee what has been off work because of the Coronavirus. In order to be eligible for the changes to statutory sick pay, you must employ less than 250 people (as at 28th February 2020), keep records of the employees’ absence and payments of SSP but the employee will not need to provide a doctor’s note.
Additional Support
In addition to the loan schemes and grants, the Chancellor also announced government backing to help firms pay their employees’ wages, similar to measures recently introduced by other countries. Due to the speed with which this measure needs to be introduced, it is accepted that this cannot be a scheme that is ‘invented from scratch’ but must be based on a system already introduced by other countries. Full details of how this scheme will operate are expected in the coming days.
One further measure announced to support the self-employed and sub-contractor community was a delay to the introduction of the IR35 legislation for the private sector. This was due to come in to force from April 2020 but this has now been delayed until April 2021. It is hoped that the delay to the introduction of this legislation will provide much needed assistance to sub-contractors at this time.
If you have any questions or require any assistance on any of the measures announced please contact your usual RPG contact.
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