Coronavirus Support for Small Business Owners
As the UK announced new measures to fight the coronavirus outbreak, many small and medium-sized businesses are feeling its effects.

We have recently been contacted by some of our clients looking for guidance on this issue.  Please keep reading to discover the financial support that your business may be eligible for and details on how to apply.

This document provides information on:

• Tax Deferrals
• VAT Deferrals
• Banks and Loans
• Suppliers
• Business Interruption Loans
• Corporate Financing
• Job Retention Scheme
• Support in covering Sick Pay
• Support for Working Parents
• Help for the Self-Employed
• IR35 Delay
• Business Rates Holiday
• Retail and Hospitality Grants
• Support for Businesses that pay little or no Business Rates
• Insurance
• Facebook Small Business Grants
• Financial Support for Artists, Creative Practitioners & Freelancers

We’ll continue to update this as any new information is becomes available (Last update: 3 April).

Financial Opportunities and Support Available

Tax (HMRC)
For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021. You are eligible for this if you’re self-employed. It’s also an automatic deferral so there’s no need to make an application.

In addition, 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. This has recently been scaled up to ensure all firms and individuals have access to this. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

If you are concerned about being able to pay your tax due to COVID-19, HMRC have setup a dedicated Tax Helpline: 0800 0159 559

For those unable to pay due to COVID-19, HMRC will discuss your specific circumstances and explore:
1. agreeing an instalment arrangement
2. suspending debt collection proceedings
3. cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately.

We would encourage all clients who are forecasting cash-flow issues due to COVID-19 to contact HMRC.  They will be looking for a cash-flow forecast that shows the issue to approve payment holidays. If you need help creating this, If you need help creating this please contact us.

VAT
All UK businesses that are VAT registered can now defer their VAT payments. You don’t need to apply, it’s an automatic offer where businesses won’t need to make a VAT payment during the period 20th March – 30th June 2020. Taxpayers will be given until March 31st 2021 to pay. VAT refunds and reclaims will be paid by the government as normal.

Banks and Loans
Banks are also increasing credit lines and overdrafts and in some cases they may even offer repayment holidays. If you are predicting cash-flow issues, please contact all of your suppliers now to ask about relaxing payments.

Suppliers
We are also seeing some improved terms in cases of businesses renegotiating supplier payments and even improved pricing.

Business Interruption Loans
The Coronavirus Business Interruption Loan Scheme gives SME’s access to loans, overdrafts, invoice finance and asset finance of up to £5 million for up to 6 years.

The government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.

The government will provide lenders with a guarantee of 80% on each loan (subject to pre-lender cap on claims) to give lenders further confidence in continuing to provide finance to SME’s.

To apply you will need to speak to your bank or one of the approved lenders listed here. After a review of the system, applications will now not be limited to businesses that have been refused a loan on commercial terms, as had previously been the case. Banks have also been banned from asking company owners to guarantee loans with their own savings or property when borrowing up to £250,000.

Larger firms with a turnover of up to £500m will also be eligible for more help. The revamped scheme will offer government-backed loans of up to £25m to firms with revenues of between £45m and £500m.

Firms will have to prove that they are viable businesses which have been trading successfully, but just need extra support to deal with short term difficulties caused by the current disruption. Some firms may not be successful. We can help you get the necessary cash-flow forecasting and planning in place. If you’d like to arrange a call to discuss, then please email simonmarshall@actioncoach.com.

The Covid-19 Corporate Financing Facility
For larger companies, the Bank of England will buy your short-term debt.

This will support your company if it has been affected by a short-term funding squeeze, and allow you to finance your short-term liabilities. It will also support corporate finance markets and ease the supply of credit to all firms.

Further information on this will be provided when we know more.

The Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme will allow all UK employers to be able to continue to pay part of a salary to employees’ that they’d otherwise have had to lay off during this current situation.

All UK employers with a PAYE scheme are eligible for this support. It applies to employees who have been asked to stop working, but who are being kept on the pay roll, otherwise described as ‘furloughed workers’.

Furloughed employees must have been on your PAYE payroll on 28 February 2020, and can be on any type of contract, including:

• full-time employees
• part-time employees
• employees on agency contracts
• employees on flexible or zero-hour contracts

The scheme also covers employees who were made redundant since 28 February 2020, if they are rehired by their employer.

Once placed on furlough, an employee cannot do any work for or on behalf of the organisation. This includes providing services or generating revenue. While on furlough, the employee’s wage will be subject to usual income tax and other deductions.

If an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for this scheme and you will have to continue paying the employee through your payroll and pay their salary subject to the terms of the employment contract you agreed.

HMRC will reimburse 80% of their wages, up to £2,500 per month. The Coronavirus Job Retention Scheme will cover the cost of wages backdated to March 1st and is initially open for 3 months, but will be extended if necessary.

HMRC are currently setting up a system that will handle the application process and reimbursement payments. In the meantime, begin by identifying your ‘furloughed workers’ you must notify your employees of this change in status. Once the online system is in place you will then be able to notify HMRC of these ‘furloughed workers’.

Support in covering Sick Pay
For businesses with fewer than 250 employees, the cost of providing 14 days of statutory sick pay per employee will be refunded by the government in full. This will provide 2 million businesses with up to £2 billion to cover the costs of large-scale sick leave. This will come in the form of a refund. The Treasury says that it is “working with employers over the coming months to set up a repayment mechanism as soon as possible for employers reclaiming statutory sick pay”.

The government has announced that they will bring forward legislation to allow small and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be:

• this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19.
• employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020.
• employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19.
• employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note.
• eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to those staying at home comes into force.
• the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.

A rebate scheme is being developed and will be announced in due course.

For more information about coronavirus government statutory sick pay, go to the Department for Work & Pensions website here.

For further advice regarding sick pay and how best to support your employee’s should they self-isolate, the ACAS website has issued the following information – https://www.acas.org.uk/coronavirus

Support for Working Parents
With the recent announcement that all schools will be closed indefinitely to all children except those with parents in key working roles. HR body CIPD have stressed that those that are able to work from home should continue to do so as far as they can. However, this is an exceptional circumstance. Employers must accept that there will be disruption and that working parents will struggle to be as productive as normal.

We advise you to support your staff in any way you can, find out what they need and any obstacles that may prevent them working from home around childcare issues.

Currently working parents have the right to take unpaid leave to look after children in an emergency or unforeseen situation, either as emergency time off or unpaid parental leave, but this is intended to cover an employee for a couple of days. Experts have warned that employers may have to look at options such as unpaid leave or reduced hours where they can’t afford to pay working parents unable to work their full hours as a result of childcare responsibilities. At this stage it’s a wait and see approach and we’ll update with any further word from the government if any new developments occur.

Coronavirus help for self-employed
The Self-Employed Income Support Scheme (SEISS) will financially support those registered as self-employed.

If eligible, you’ll get a taxable grant, which will be 80% of the average profits from the tax years (where applicable):

• 2016 to 2017
• 2017 to 2018
• 2018 to 2019

To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.

It will be up to a maximum of £2,500 per month for 3 months.

• 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 your income in these periods must come from self-employment.
• To minimise fraud, only those who are already in self-employment and meet the above conditions will be eligible to apply.
• You don’t need to contact HMRC. They will identify eligible taxpayers and contact them directly to invite them to apply, once the scheme is operational.

This income support scheme will cover the three months to May. Grants will be paid in a single lump sum covering all 3 months, and will start to be paid at the beginning of June.

If you who pay yourself a salary and dividends through your own company, you are not covered by the scheme but will be covered for your salary by the Coronavirus Job Retention Scheme if you are operating PAYE.

You may also be eligible to apply for Universal Credit which could support you until payments under this new scheme are released in June. The rules regarding eligibility for Universal Credit have being relaxed and the government is backing this with a £7 billion financial safety net.

To find out more and apply for Universal Credit, please visit the gov.uk Universal Credit page

Mortgage payment holidays of up to three months have also been introduced by many lenders as a way to ease the financial burden.

Support has also been pledged for renters, so if you rent, please speak to your landlords.

IR35 Delay
The government has also announced that it will delay the implementation of the new IR35 reforms that were due to be brought in for all freelance workers.

A Business Rates Holiday
A business rates holiday has been introduced for 2020-21 for retail, hospitality and leisure businesses with a rateable value of over £51,000.

Businesses that received the retail discount in 2019-20 will be re-billed by their local authority as soon as possible.

Those businesses eligible for the newly expanded retail discount and/or the new pubs discount may need to apply to their local authority to receive the discount.
A rates holiday has also been introduced for all early years nurseries.

You don’t need to take any action. This rates relief will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They’ll do this as soon as possible.

You can estimate the business rate charge you’ll longer have to pay this year using the HMRC business rates calculator.

The Retail and Hospitality Grant Scheme
A £25,000 grant will be provided to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value between £15,000 and £51,000.
Properties that will benefit are those operating:

• as shops, restaurants, cafes, drinking establishments, cinemas and live music venues.
• for assembly and leisure.
• as hotels, guest & boarding premises and self-catering accommodation.

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.

Your local authority will write to you if you are eligible for this grant.

Support for businesses that pay little or no business rates
The government are providing additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority – you do not need to apply. However, we are being informed that if you can make contact with your local authority and send a copy of your rates bill, showing your small business rates relief, you will get your grant quicker than if you wait to be contacted.

Funding for the scheme will be provided to local authorities by the government in early April.

You can find your local authority here.

Insurance
Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc. is sufficient to make a claim.

Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.

Facebook Small Business Grants
Facebook have made $100m worth of Cash Grants and Ad Credits available to help Small Businesses through the disruptions caused by the Covid-19 global outbreak. They will begin taking applications in the coming weeks. In the meantime, a web-page has been set up where you can sign up for updates on when these grants become available.

Financial Support for Artists, Creative Practitioners & Freelancers
The Arts Council are making £20 million worth of grants available to individuals working in the cultural sector, including artists, creative practitioners and freelancers. Those whose main work is in the following areas may be eligible:
• Music
• Theatre
• Dance
• Visual Arts
• Literature
• Combined Arts
• Museums practice
• Libraries (activity that helps deliver the Universal Library Offers)
This includes choreographers, writers, translators, producers, editors and freelance educators.

More details can be found on the Arts Council Website.

ActionCOACH Hastings are running regular webinars covering contingency planning, and actions to take to mitigate the risks so your business can survive and thrive through this.  Many of these webinars have guest speakers who are experts in different aspects of business such as Marketing, HR, Finance. Please contact us to find out about the next webinar.

Any questions or support you need please get in touch

Let’s work through this together to ensure you and your business survive and thrive.