What help is available for businesses experiencing increases in costs or financial disruption?
It is a worrying time for many businesses at present, so we thought it would be useful to highlight the following points that were covered in the Spring Budget 2020 and further measures announced on 17th March 2020 as well as a couple of practical points.
Sick Pay Rebates
Qualifying small and medium sized businesses will be able to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The scheme will be open to employers who employ fewer than 250 people and the following guidance has been issued:
- The amount of SSP that can be reclaimed is 2 weeks per eligible employee who has been off work due to COVID-19
- Employers should maintain records of staff absences, but employees will not need to provide a GP fit note.
The eligibility period for the scheme is from 13th March 2020 being the day after the regulations on the extension of SSP to those that are asked to self-isolate comes into force.
The weekly allowance for SSP is currently £94.25 rising to £95.85 as from 6th April 2020. The mechanism to make the refund claim is not yet in place but the government have stated they hope to get in place as soon as possible. This may be a claim against PAYE/NI or possibly a standalone claim.
Business Rates Holiday for Retail, Hospitality and Leisure Sectors
It was announced that all businesses within retail, leisure and hospitality sectors will receive a 100% business rates holiday for the next 12 months.
Due to March being the month many business rates bills are being sent these will not show the changes announced and the local authority will send out a revised bill. It is the responsibility of eligible businesses to apply for rate relief therefore it is best to check with your local authority if you are unsure if your business qualifies.
Local authorities advise that you should continue with current payment schedules until you receive your revised bill. Guidance on this relief will be published on 20th March 2020.
£10,000 One-off Grant
This is a one-off grant of £10,000 available to those businesses that are currently eligible for Small Business Rates Relief or Rural Rate Relief to help meet their ongoing business cost. This is an increase from £3,000 previously announced in the Budget.
Due to the eligibility for the grant being based on those that are currently eligible for Small Business Rates Relief if you qualify it looks to be automatic as the basic guidance states that the business will be contacted by its local authority and you need not apply.
Funding for the scheme is being issued to local authorities by government in early April. Detailed guidance should hopefully come out to state when businesses should expect to receive the actual grant in their bank accounts.
£25,000 One-off Grant
This is a one-off grant of £25,000 available to those businesses operating in the retail, hospitality and leisure sector from smaller premises that have a rateable value over £15,000 but below £51,000.
We assume this will be accessed via local authorities once the government has provided funding for the scheme in early April as above. Due to only certain sectors qualifying you may wish to contact your local authority to confirm eligibility but hopefully further guidance should be issued shortly.
Interruption Business Loan Scheme
This loan scheme specifically for businesses affected by coronavirus is going to be delivered by the British Business Bank and will be launched in the next few weeks so that businesses will have access to bank lending and overdrafts.
These loans will be backed by the government by proving lenders with a guarantee of 80% on each loan to give confidence to lending to SMEs. It has been stated that there will be no knock-on charges to the lender or the business in the government providing guarantees.
Loans of up to £5 million will be supported which has been increased from the £1.2 million announced within the Budget. The government have stated that the first 6 months will be interest free on the basis that they will cover the interest payments within this period.
On the British Business Bank website, it states that they are in the process of defining and agreeing the scheme details. Ian Walker in our Corporate Finance Team is keeping an eye on this area and will be happy to discuss any questions you may have.
HMRC Dedicated Helpline
HMRC have set up a helpline to support businesses and self-employed people who are concerned about paying taxes due to the impact of coronavirus.
This is important to highlight as if you discuss your situation with HMRC they will take into account your businesses circumstances and explore ways that they can assist. Possible assistance could be:
- Agreeing an instalment arrangement
- Suspending debt collection proceedings
- Cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately
The helpline number is 0800 0159 559; hopefully you will not require this but if your cash flow is impacted or a key member of staff is off who deals with payments it would be worthwhile contacting HMRC to make them aware.
Delay in IR35 Changes
It was announced that the IR35 off-payroll changes that were due to come in effect from April 2020 have been delayed for 12 months until April 2021 due to the current situation. This legislation impacted on contractors and the companies that used their services. We can provide further details on this if you are affected.
Mortgage lenders have agreed they will support customers that are experiencing issues with their finances as a result of COVID-19. The type of support mentioned is a payment holiday of up to 3 months. It would be worthwhile contacting your lender to discuss your situation and seeing what help they can provide.
Relaxation on Planning Regulations
To support the food industry and help to provide meals for those that self-isolate the government is relaxing planning regulations to allow pubs and restaurants to start providing takeaway meals without a planning application.
HR Plan and Remote Working
Make sure your employees are aware of government advice and how your business will be dealing with sickness and the requirement to self-isolate.
It is a good time to review and implement remote working arrangements so that they are in place if the employee is sick but symptoms are mild and wishes to work or they were required to self-isolate.
Business Insurance Policy
Check your insurance policy to see if it has a business interruption clause and what it covers so you are aware if you can make a claim to cover increase staff cost or other expenses incurred due to COVID-19.
Businesses that have cover for both pandemics and government-ordered closures should be covered as the government and insurance industry confirmed on 17th March 2020 that advice issued to the public to avoid pubs, theatres etc is sufficient to make a claim. Therefore, if in doubt contact your insurance provider to confirm what your policy covers.
Watch out for scams as some criminals are trying to take advantage of the outbreak. This includes offering medical products, guidance or tax refunds.
This is an ongoing situation and the government has stated that they will issue further measures if required to help businesses and individuals financially. Please feel free to contact us if you have any questions or require assistance in any way.