Updated Financial Support available to Businesses and Individuals

The Chancellor of the Exchequer has announced several more measures to support businesses, which includes:

VAT

The next quarter of VAT payments will be deferred until June.

Job Retention Scheme

The Government will cover 80% of employees’ salaries up to £2.5k per month which will be available from April (back dated from 1st March) for initially 3 months but the Chancellor has stated it will be extended if necessary.

Companies and organisations will be able to apply for a grant from HMRC to cover the wages of people who are not working due to coronavirus shutdowns, but who have not been laid off.

Further information and guidance on this scheme will be published on this in the coming days.

‘Coronavirus Business Interruption Loan Scheme’ (CBILS)

The Government have announced that they will now cover 12 months of interest payments for loans announced earlier this week. Businesses will also be able to apply for these loans from Monday. To apply for an CBILS-backed facility, businesses need to approach one or more participating lenders which can be found here.

We expect that further information on all of above will be available in due course and we will update this note accordingly.

Coronavrius (COVID-19): Support for Businesses: UK Government

In response to the global outbreak of Covid-19, the UK Government has introduced a raft of measures to support businesses experiencing increases in costs or financial disruptions.

What support is available?

  • Support for businesses who are paying sick pay to employees
  • Support for businesses through the ‘Coronavirus Business Interruption Loan Scheme’ (CBILS)
  • Support for businesses through the ‘Covid Corporate Financing Facility’ (CCFF)
  • Support for businesses who pay tax
  • One-off grants of up to £10,000 to the smallest businesses - who pay little or no business rates * excludes the retail, hospitality and leisure sectors which have access to £25k
  • Support for businesses who pay business rates

Some of these measures were covered in last week’s Budget, with others being introduced through emergency Coronavirus legislation - both of which are due to be passed into law this week.

We will be providing regular updates as and when available.  It is expected that these measures including potential loans will begin to be available from 23rd March onwards.

Further information on all financial support from the UK Government can be read here

Support for businesses who are paying sick pay to employees

The Government’s emergency legislation will change the rules on Statutory Sick Pay (SSP) to allow businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19.

  • The 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

How to apply:

It is not yet clear as the government is yet to set-up the ‘repayment mechanism’ for businesses which could take some time. In the meantime, employers should pay the SSP as advised and maintain up-to-date records of staff absences and payments of SSP in order to make reclaiming simpler. We expect that further information will be released in the coming days.

Support for businesses through the ‘Coronavirus Business Interruption Loan Scheme’ (CBILS)

The Chancellor announced that businesses with a turnover of no more than £41m will be able to apply for a loan through the Coronavirus Business Interruption Loan Scheme (CBILS.) This will be delivered by the state-owned British Business Bank and will unlock up to £330 billion pounds to protect and support small and medium businesses.

How will the loans work?

The scheme provides the lender with a government-backed guarantee against the outstanding facility balance. The Government will also cover the first 12 months of interest payments, so businesses will benefit from lower initial repayments. The business remains liable for repayments of the capital. The maximum value of a facility provided under the scheme will be £5 million.

Who is eligible?

To be eligible businesses must:

  • Be UK based, with turnover of no more than £41 million per annum
  • Be able to confirm that they have not received de minimis State aid beyond €200,000 equivalent over the current and previous two fiscal years
  • Have a sound borrowing proposal, but insufficient security to meet the lender’s requirements

Finance terms are from three months up to ten years for term loans and asset finance and up to three years for revolving facilities and invoice finance.

How to apply:

We expect that loans will be available from March 23rd. To apply for an CBILS-backed facility, businesses need to approach one or more participating lenders which can be found  here

Support for businesses through Covid Corporate Financing Facility (CCFF)

HM Treasury and the Bank of England have announced that they will be launching a Covid Corporate Financing Facility (“CCFF”) to provide additional help to firms to bridge through Covid-19 related disruption to their cash flows.

How will it work?

The CCFF offers financing for up to 12 months (at pre-crisis rates) by purchasing commercial paper of up to one-year maturity, issued by firms making a material contribution to the UK economy.  The scheme will be put into place by the Bank of England as soon as possible.

Who is eligible?

  • Companies must be able to demonstrate they were in sound financial health prior to the shock 
  • The facility will look through temporary impacts on firms’ balance sheets and cash flows by basing eligibility on firms’ credit ratings prior to the Covid-19 shock
  • Participants must have had, prior to being affected by Covid-19, a short or long-term rating of investment grade, or financial health equivalent to an investment grade rating
  • Businesses do not need to have previously issued commercial paper in order to participate

How to apply:

Further details of the Facility, including application forms, terms and conditions and operating procedures will be published on the Bank’s website on Monday 23 March 2020.

Further details on the CCFF can be found here in the market notice issued by the Bank of England.

Support for businesses who pay tax

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. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

How to apply:

Call HMRC’s dedicated helpline on 0800 0159 559.

One-off grants of up to £10,000 to the smallest businesses - who pay little or no business rates

The government will provide additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR). This will provide a one-off grant of £10,000 to businesses currently eligible for SBRR or rural rate relief, 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.

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

Other considerations

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.

Coronavrius (COVID-19): Support for Businesses: Welsh Government

Business Rate Relief

The Welsh Government has announced a package of support worth more than £200m for small businesses to help them during the coronavirus outbreak. This includes £100m will be available for a new grant scheme for small businesses. This will be targeted at those businesses facing the most pressure. Further details on this new grant scheme will be confirmed as soon as possible.

Development Bank of Wales

The Development Bank of Wales has loan and equity funding available immediately to Welsh businesses. The Welsh Government is working closely with the Development Bank of Wales to consider additional support to help businesses through the Covid-19 impact.

For further information please visit the Development Bank of Wales website or call 0800 587 4140.

Further information on support offered by the Welsh Government can be found here

Coronavirus (COVID-19): Support for Businesses: Scottish Government

The Scottish Government has announced a package of £320 million to support businesses with the impact of COVID-19.

As of 18th March, they are yet to publish details on further support of relevance. They expect details to be finalised in the coming days outlining how businesses can access this support.

Scottish Enterprise have set up a helpline for businesses on 0300 303 0660.