Covid-19 Business and Individual Support Measures

Business Support - Summary of Emergency Measures Covid-19

We are here to offer practical and professional advice to help you navigate the options available. Below are some Government support measures for Businesses and Individuals and how we believe we can help.

BOUNCE-BACK LOANS TO SMALL BUSINESSES On 27 April 2020, the Chancellor of the Exchequer announced a new business loan scheme aimed at helping small businesses during the Coronavirus pandemic. The “Bounce-back Loans” scheme to be launched on Monday 4 May is to run alongside the existing Coronavirus Business Interruption Loan Scheme (CBILS) managed by the British Business Banks.Under this new scheme, small businesses should be able to apply for loans between £ 2,000 and £ 50,000 or 25% of business turnover. Unlike CBILS, this scheme comes with a 100% Government guarantee for lenders and allows for loans at below £ 25,000.Under the terms of a Bounce-back Loan, businesses will not need to make any payment during the first 12 months and during that period, no interest will be charged. The terms of the repayment will be up to 6 years. The Chancellor also announced that the Government will work with lenders to agree a low rate of interest for the remaining term of the loan. According to the Chancellor’s announcement, these loans should not require looking forward criteria or complex eligibility requirements and businesses should be able to apply for a loan using a short and simple online form.EligibilityBusinesses can apply for a loan if the latter:
  • is based in the UK
  • has been negatively affected by coronavirus
  • was not an ‘undertaking in difficulty’ on 31 December 2019
The following businesses are not eligible to apply:
  • banks, insurers and reinsurers (but not insurance brokers)
  • public-sector bodies
  • further-education establishments, if they are grant-funded
  • state-funded primary and secondary schools
Businesses cannot apply if they are already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS). However, any business who has already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, can arrange this with their lenders until 4 November 2020.How to apply?Applications are around two-pages long and are submitted through an online form available from 4 May 2020. Basic details are required to verify the business exists and is eligible. Business owners and company directors will be required self-certify that the information they provide is true and their lender will decide whether or not to approve the loan. A tax return may be required in a small number of cases.Only businesses that existed on 1 March 2020 can apply. The announcement suggests that funds should be in a business account around 24 hours after an application has been approved. More information on this can be found here CORONAVIRUS BUSINESS INTERUPTION LOAN SCHEME UPDATE To speed up the provision of finance to small and medium-sized businesses under CBILS, the largest seven SME lenders (Barclays Bank UK, Danske Bank, HSBC, Lloyds Bank, NatWest, Santander and Virgin Money) have stated that rather than relying on businesses providing forecasts and business plans in applications, lenders will use their own information. In a joint statement with UK Finance, they said that “lenders will only ask businesses for information and data they might reasonably be able to provide at speed and we will not require the provision of forward-looking financial information or business plans from businesses applying for CBILS-backed lending, relying instead on our own information to assess credit and business viability.”While the exact details of the changes are still to be released, the moves is aimed to make the scheme easier to access and make the application process quicker. However, businesses should still assess carefully the implications of taking on debt finance and be comfortable that this is the right solution for them at this time.Businesses with existing finance should also consider other options provided by their lender such as capital repayment holidays, overdrafts and working capital extensions where appropriate. Banks have also been encouraged to support businesses who have successfully applied for furlough with their cashflow needs in advance of furlough funds being received.In summary, loans under the CBILS
  • Can range between £25 K – £25 m
  • Are interest free for twelve months
  • Are guaranteed by the Government for up to 80% on each loan
  • Require no personal guarantees on loans under £250 K
  • Will require personal guarantees limited to 20% of any amount outstanding for loans in excess of £250 K
  • Should be prohibited from asking business owners to put their house on the line
How can we help? If you need advice to ascertain your eligibility, requirements or indeed need support in applying for the loan, please contact us and we will do our best to help you in this process.Guidance on www.gov.uk is being regularly updated so please review it frequently.
InformationHow we can help
Grants to cover 80% of the salary of PAYE employees not working but furloughed and kept on payroll, up to £2,500 a month. This is backdated to 1 March 2020 and will be open before the end of April, for at least 3 months.If we process your payroll, we can guide you through the process from advice on the Coronavirus Job Retention Scheme to making the claim for furloughed employees.Please click below for more detailsCoronavirus Job Retention Scheme
We have checked with our professional indemnity providers. We cannot review your staff employment contracts and advise you whether you can ‘furlough’ somebody.  However, a pragmatic solution could be to ‘negotiate’ the furlough terms with individual employees (as stated by the government), in writing, as we believe that should suffice.For absolute certainty, please contact an employment lawyer.Or, we have negotiated a special rate with HR Dept who have offices across the UK.  Contact Olivia (olivia.flattery@hrdept.co.uk), include your contact details (name, address, phone number) and you will receive a call from your local HR Representative.
For Directors on minimum salary the same principle will apply.If you are a director and take minimum salary and maximum dividends you are an employee and, if you draw your salary through a PAYE scheme, you can be furloughed from the date you were unable to work.  The salary must go through a PAYE scheme, and had to be being paid and in operation before 28.02.2020.Use the Corona Virus Business Interruption Loan to help finance the shortfall between the normal remuneration and the grant.
InformationHow we can help
Self-Employed Income Support Scheme
  • Self-employed trader or in a trading partnership
  • Must have < £50k profits on average over the last 3 years (note: this is based on profits after expenses, not the gross income)
  • Majority of taxable income must be from the trade
  • Have lost trading profits due to COVID-19
  • Have filed a tax return for 2018-19
  • Late filers will have until a new 23 April 2020 deadline to bring their returns up to date and these late returns will be “risk assessed” by HMRC, no doubt to check for excessive income
  • Must have traded in 2019-20; be currently trading at the point of application (or would be except for COVID-19) and intend to continue to trade in the tax year 2020-21
  • HMRC will work out who is eligible from their records and contact you
  • This will likely be end April as they need to design the systems
  • The initial three-month grant will be paid directly to a nominated bank account in a single lump sum.
  • There will be a form to complete
  • Please be careful to check that any communication from HMRC is really from them and is not a scam
  • The grants are expected to be paid out at the beginning of June.
  • For more information click below
Self-Employed Income Support Scheme
For Directors
  • Dividends and salary do not qualify as being self-employed and so will not qualify for the self-employment income support scheme. Self-employed people operate a trade through either a sole trader or partnership.
  • If you have both a self-employment business and also a director, you will only qualify for self-employment income support scheme if the self-employment profit declared on your 2019 tax return was more than 50% of the total income declared on the tax return and was below £50K on average over last 3 years.
  • Benefits do not count towards your self-employment profits, (only trading profits declared on your self-assessment return)
  • Must have traded in 2019-20; be currently trading at the point of application (or would be except for COVID-19) and intend to continue to trade in the tax year 2020-21.
Universal CreditIf you are on low income or unemployed, you can now more easily make a claim for Universal Credit or Contributory Employment and Support AllowanceFor a guide on how to claim click here.Click below to know moreUniversal Credit
Contributory Employment and Support Allowance will be payable, at a rate of £73.10 a week if you are over 25, for eligible people affected by COVID-19 or self-isolating in line with advice from Day 1 of sickness, rather than Day 8
You may be able to claim New Style Jobseeker’s Allowance (JSA) with, or instead of, Universal Credit, depending on your National Insurance record.Click here for more information
What other support is available?
  • The second tax payment on account for self-assessment, due on 31 July 2020, for 2019-20, is being deferred for all taxpayers, not just the self employed
  • Deferment is automatic and we can model in the forecast cash flow as above to see the impact on your business
VAT defermentHow we can help
Deferral of VAT payments due between 20 March 2020 and 30 June 2020 until 31 March 2021. This effectively means an interest free loan from HMRC for one quarter’s VAT.The next quarter of VAT payments will be deferred, so no payments until the end of June. Businesses have until the end of the financial year to repay the payments deferred.Deferment is automatic and we can model in the forecast cashflow as above to see the impact on your business
 
 InformationWhat can we do
Mortgage lenders have agreed they will support customers through payment holiday of up to 3 months.We can assist in liaising with your bank
Many banks providing further support on mortgages through reduced or deferred payments, longer term support extending term of their mortgage, switching part/all to interest-only mortgage arrangements
 
 InformationWhat can we do
The Government is making changes to the insolvency legislation. These amendments seek to protect businesses, give them breathing space to survive and ensure that, where appropriate, insolvency can be avoidedIf you would like information please contact our Insolvency team carrie.james@benemack.com
Suspension of Wrongful Trading Action from 1 March 2020The Government has announced that Wrongful Trading provisions will be suspended from 1 March 2020 for an initial period of 3 months in order for businesses to keep going without the threat of personal liability.
Key relief areas in England (slight differences for rest of UK)CriteriaReliefWhat can we do
Small Business Rate Relief (retail, hospitality and leisure businesses operating from smaller premises)Properties with a Rateable Value over £15,000 and less than £51,000Small Businesses eligible for 100% relief under SBBR will be eligible for a £25,000 cash grant.Let us know if your local authority has not contacted you by end of April
Small Business Rate ReliefProperties with a Rateable Value of less than £51,000, only occupying one propertyGrants of £10,000 to small businesses eligible for Small Business Rate Relief (up from £3,000)You will be contacted by your local authority, they will not take calls, this may change.
Rural Rate ReliefProperties in eligible areas (population less than 3,000) that are the only village shop or post office with a Rateable Value of less than £8,500; or the only pub or petrol station with Rateable Value of less than £12,500
Retail Discount (Retail, leisure and hospitality businesses)100% discount for one year beginning April 1 2020 (applied to all rateable values)Not required
Hardship ReliefRatepayers experiencing financial difficulties may apply to their local authority for hardship relief which may grant a discount or exemption to the ratepayer at their discretion.
The Charity Commission and the Government have both been issuing a lot of guidance for the charity sector about how it can respond to the challenges presented by the current situation and the support available to charities, many of which will be seriously impacted at this time. It is summarised here.It covers advice on how charities can ensure they continue to act within their objects when offering support to those affected by the virus and practical advice on holding meetings and AGMs It also includes guidance on the use of reserves and restricted funds, as well as links to information about the Government’s support package for charities, which Chancellor Rishi Sunak announced on Wednesday 8 April.Under this package, charities across the UK will receive a £750 million package of support to ensure they can continue their vital work during the coronavirus outbreak. The Government believes that tens of thousands of charities providing vital services will benefit from direct cash grants to ensure they can meet increased demand as a result of the virus as well as continuing their day-to-day activities supporting those in need. As part of a UK-wide package of support, £360 million will be directly allocated by government departments to charities providing key services and supporting vulnerable people during the crisis. As well as this, £370 million will be made available for small and medium-sized charities, including through a grant to the National Lottery Community Fund for those in England, which will support those organisations at the heart of local communities which are making a big difference during the outbreak, including those delivering food, essential medicines and providing financial advice. The Chancellor also announced the Government will match fund whatever the public donates to the BBC’s Big Night In charity appeal on 23 April, starting with a contribution of at least £20 million to the National Emergencies Trust appeal. Charities providing vital services and helping vulnerable people through the current crisis will benefit from the £360 million allocated by government departments which will identify priority recipients, with the aim for charities to receive money in the coming weeks.These will include:
  • Hospices to help increase capacity and give stability to the sector
  • St Johns Ambulance to support the NHS
  • Victims charities, including domestic abuse, to help with potential increase in demand for charities providing these services
  • Vulnerable children charities, so they can continue delivering services on behalf of local authorities
  • Children charities, so they can continue delivering services on behalf of local authorities
  • Citizens Advice to increase the number of staff providing advice during this difficult time
For those smaller Charities, to which £370million of grant aid will be available, more details are awaited, but the National Lottery Community Fund grant pot is expected to be operational within the next few weeks.We will continue to update our charity clients of any further Government assistance.The Government package builds on previous announcements by the Chancellor to support charities and businesses, including deferring their VAT bills, paying no business rates for their shops next year, and furloughing staff where possible with the Government paying 80% of their wages.
Updated guidance for employers, businesses and employees is available at: Other useful links: Disclaimer: While care has been taken to ensure the accuracy of the contents of this e-mail, no responsibility for loss occasioned to any person acting or refraining from action as a result of any statement in it can be accepted by the authors. Readers should take specialist advice before entering into any specific transactions.