COVID-19 (Coronavirus)

Summary of Government Support Initiatives

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Grants etc

Coronavirus Bounce Back Loan

  • This scheme will help small and medium-sized businesses affected by Coronavirus (Covid-19) to apply for loans of up to £50,000.
  • Scheme launched on 4 May 2020.
  • Government to guarantee 100% of the loan.
  • No repayments, fees or interest due during the first 12 months.
  • Loan term will be up to 6 years. 
  • Government will work with lenders to agree a low rate of interest.

Coronavirus Job Retention Scheme ("CJRS")

  • Chancellor extends furlough scheme until October - the Government's CJRS will remain open until the end of October.  Furloughed workers across the UK will continue to receive 80% of their current salary up to £2,500.
  • New flexibility will be introduced from August to get employees back to work and boost economy.
  • As economy re-opens 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.  Employer payments will substitute the contribution the Government is currently making.
  • Scheme will continue in its current form until end of July and the changes to allow more flexibility will come in from the start of August.  More specific details will be made available by the end of May.
  • Further information of the announcement available here.  

Support measures for the self employed

  • Self-Employed Income Support Scheme (SEISS)
  • Government will pay self-employed people adversely affected by Coronavirus a taxable grant worth 80% of their average monthly profits over the last three years, up to £2,500 a month.
  • Scheme will be open for at least three months.
  • Self-employed are able to claim grants and continue to do business.
  • Open to anyone with income up to £50,000.
  • Only those in self-employment who have a tax return for 2019 will be able to apply.

Additional financial support for businesses during Coronavirus (COVID-19)

  • Repayment of statutory sick pay - Employers will be able to make claims through the Coronavirus Statutory Sick Pay Rebate Scheme (CSSPRS) from 26 May 2020.  The new online service will be launched for small and medium-sized employers (with fewer than 250 employees) to recover Statutory Sick Pay (SSP) payments they have made to their employees and will receive repayments at the relevant rate of SSP that they have paid to current or former employees for eligible preiods of sickness starting on or after 13 March 2020.  Further details available here
  • Employment allowance - SMEs will not have to pay Employers National Insurance Contributions on the first £4,000 of their annual bill.
  • Small business rate relief - For those who already qualify for small business or rural rate relief will be paid a one off grant of £10,000 to help meet ongoing business costs.  Available now from the Local Authorities who have all received funds from the Government and are ready to distribute them to applicants who qualify.
  • Retail/leisure/hospitality - 100% business rate relief until 31 March 2021 - grant funding of up to £25,000.  You do not need to do anything, your local authority will write to you if you are eligible.
  • Insurance - Businesses that have insurance for a pandemic can claim. 
  • Government has provided details here.

Coronavirus business interruption loan scheme ("CBILS")

To provide loans of up to £5million for up to six years to businesses with a turnover of less than £45million - replacing the Enterprise Finance Guarantee but on more attractive terms including twelve months interest free.  A business needs to meet the other British Business Bank eligibility criteria of which the core one is a company needs to have a borrowing proposal which, were it not for the COVID-19 pandemic, would be considered viable by the lender and for which the lender believes the provision of finance will enable your business to trade out of any short-to-medium term difficulty.

Businesses above the turnover threshold may apply for up to £25 million under the CLBILS (Coronavirus Large Business Interruption Loan Scheme).

Visit the British Business Bank website for key features and how businesses can qualify and apply here.

Important changes to the Government Coronavirus Business Interruption Loan Scheme ("CBILS"):

From Monday 6 April CBILs has been expanded and its eligibility criteria relaxed and is summarised as follows:

  • Applications no longer limited to businesses that have been refused a loan on commercial terms.
  • Banks now prohibited from asking company owners to guarantee the loans below £250k with their own savings or property.
  • An accredited lender (of which there are over 40) can provide up to £5m for up to six years in the form of loans, overdrafts, invoice or asset finance.
  • The accredited lender determines the interest and fees.
  • Government will make a Business Interruption Payment to cover the first 12 months of interest payments and fees.
  • The British Business Bank gives the accredited lender a government-backed guarantee for the loan payments.
  • Since 3 April loans below £250k do not require a personal guarantee ("PG") from the directors.  Loans above £250k are likely to require a PG to cover 20% of any shortfall in the event of recovery by the bank.  Banks may not recover monies owed under the PG if the director guarantor's only asset is their primary home.

Top up to local business grant funds scheme

  • Discretionary fund has been set up to accommodate certain small businesses previously outside the scope of the business grant funds scheme.
  • This is an additional 4% uplift to the £12.33 billion funding previously announced for the Small Business Grants fund (SBGC) and the Retail, Hospitality and Leisure Grants Fund (RHLGF) to up to £617 million.
  • Aimed at small businesses with ongoing fixed property-related costs.  Local authorities to prioritise businesses in shared spaces, regular market traders, small charity properties that would meet Small Business Rates Relief.
  • Allocation of funding at discretion of local authorities.
  • Businesses must be small, under 50 employees and they must be able to demonstrate they have seen a significant drop of income due to Coronavirus restriction measures.
  • Three levels of grant payments of between £10,000 up to a maximum £25,000.
  • Local authorities will have discretion to make payments of any amount under £10,000.  Councils to adapt their approach locally.
  • Further detail available here.
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Deferment and liquidity

  • Deferring VAT - automatic offer with no application required.  No business will need to pay Value Added Tax until after June 2020 - no interest or penalties will be charged on any amount deferred - returns still need to be submitted on time - to be repaid before the end of the 2020/21 tax year.
  • Deferring income tax - income tax payments due on 31 July 2020 may be deferred until 31 January 2021.  No application required, offer is automatic, no interest or late payments will be charged.  Check eligibility criteria.
  • HMRC time to pay - has been around since the global financial crisis in 2008 but is likely to be available on more generous terms by calling HMRC's dedicated line on 0800 0159 559.
  • Three month extension period to file accounts - businesses will be given an additional three months to file year end accounts with Companies House to help companies avoid penalties as they deal with the impact of COVID-19.  Applications can be made by phone 030 1234 500 or online via the normal filing gateway.
  • New HMRC tax payment helpline launched - to help businesses concerned about paying their tax due to Coronavirus (COVID-19) .  If you run a business or are self-employed and are concerned about paying your tax due to Coronavirus, you can call HMRC’s helpline for help and advice: 0800 024 1222.

Information on proposed changes to Insolvency laws

Under the plans, the UK’s Insolvency Framework will add new restructuring tools including: 

  • A moratorium for companies giving them breathing space for from creditors enforcing their debts for a period of time whilst they seek a rescue or restructure; 
  • Protection of their supplies to enable them to continue trading during the moratorium; and
  • A new restructuring plan, binding creditors to that plan.

The proposals will include key safeguards for creditors and suppliers to ensure they are paid while a solution is sought. 

The government will also temporarily suspend the wrongful trading provisions to give company directors greater confidence to use their best endeavours to continue to trade during this pandemic emergency, without the threat of personal liability should the company ultimately fall into insolvency. 

Existing laws for fraudulent trading and the threat of director disqualification will continue to act as an effective deterrent against director misconduct. 

Additional quotes: 

Jennifer Marshall, president of the Insolvency Lawyers Association and chair of the City of London Law Society Insolvency Sub-Committee said:  "We welcome and support these proposals. Suspending wrongful trading, in particular, will assist directors in accessing Government or bank funding without concerns regarding personal liability."
"The insolvency profession in the UK is hugely talented and these reforms, together with existing rescue tools such as administration, could really assist in saving livelihoods."
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For business advice in these challenging times
please contact us on 0800 331 7417




Updated 12 May 2020

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