The pandemic has been sudden and extremely challenging with many businesses forced to close as part of a national strategy to slow the virus and protect the vulnerable. With economic activity suspended in many sectors, a huge effort has been made to support companies until Covid-19 is brought under control. Here are just some of the tools to help you shelter your business.
1. Coronavirus Business Interruption Loan Scheme
Your bank may be able to help if your business gets into difficulty because of Covid-19. The Government and Bank of England have made billions of pounds available to support small and medium-sized enterprises through the Coronavirus Business Interruption Loan Scheme. It will provide lenders with an 80% guarantee on each loan. The scheme will support loans up to £5 million and your business is eligible if it has a turnover of no more than £45 million. The full rules of the scheme and list of accredited lenders is available on the British Business Bank website.
2. Job retention scheme
The Chancellor has announced a coronavirus job retention scheme, allowing any employer to apply to HMRC to have up to 80% of a member of staff’s salary paid – capped at £2,500 a month. This will be backdated to 1 March and run for three months (a timescale that will be kept under review). All UK businesses are eligible for the scheme but you will need to designate affected employees as ‘furloughed workers’ and provide information about them and their earnings through an online portal. At the time of writing HMRC was working urgently to set up a system for reimbursement.
3. Time to Pay
If you think you may be eligible for support from HMRC through Time to Pay, which allows you to pay tax over a longer period, you can call the helpline number on 0800 024 1222. Arrangements are agreed on a case-by-case basis and can be tailored to your circumstances and liabilities. In a further bid to help, HMRC has also deferred VAT for the next quarter and you won’t need to make any VAT payments during this period. You have until the end of the 2020/2021 tax year to pay any liabilities that have accumulated over the period.
4. Statutory sick pay and Employment Allowance
Small and medium-sized businesses (employing fewer than 250 people on 28 February 2020) can reclaim statutory sick pay (SSP) for absence due to Covid-19. It covers up to two weeks of SSP per eligible employee. You need to maintain a record of staff absences and SSP payments but employees do not need to provide a GP fit note. If you require evidence employees can get an isolation note from NHS 111 online. In addition, small employers with a National Insurance bill of £100,000 or less will continue to qualify for Employment Allowance, which will be expanded to £4,000 per business from this month.
5. Business rates holidays
A business rates holiday for retail, hospitality and leisure businesses in England has been introduced for the 2020/21 tax year. And if you received the retail discount in the 2019/20 tax year you will be re-billed for this period. Eligible properties include shops, cafes, restaurants, drinking establishments, cinemas, live music venues and those used for assembly and leisure, hotels, guest and boarding premises and self-catering accommodation. This will apply to your April council tax bill and you don’t need to take any action. In addition, Small Business Grant Scheme funding of £10,000 is available to some businesses – your local authority will contact you if you are eligible. The governments of Scotland, Wales and Northern Ireland have launched similar help.
6. Insurance cover
Think about how your business insurance will work if your business has to close due to an outbreak of the virus. Check the wording because standard policies may not include any protection if your business suffers because of disease. Talk to your broker to see if you have business interruption cover in your commercial insurance policy. Once you have confirmed that you have business interruption cover, check if you have an extension for ‘notifiable diseases’. If you have this policy wording, you should contact your broker/insurer to see if coronavirus is covered. Most businesses do not have insurance that covers a pandemic, however, and in this case, you should consider the Government support on offer.
7. Self-employed Income Support Scheme
If you are self-employed or a member of a partnership, you can claim a taxable grant worth 80% of your trading profits, up to a maximum of £2,500 a month, for the next three months and this timescale may be extended. You should check the Government's advice on the Self-employed Income Support Scheme to make sure you are eligible. Among the requirements, you must have submitted a self-assessment tax return for 2018-19 and your self-employed trading profits must be less than £50,000, while more than half of your income must come from self-employment.
At the time of writingit was not possible to apply for this scheme. HMRC will contact you if you are eligible and invite you to apply online. You may be entitled to 80% of trading profits from the three tax years between 2016 and 2019.
8. Government advice
The Department for Business, Energy and Industrial Strategy has launched a dedicated business support helpline, where small business owners in England can get advice on how to minimise the impact of coronavirus. The number is 0300 456 3565 but you can also email firstname.lastname@example.org. The Scottish Government’s helpline number is 0300 303 0660; the number for Wales is 0300 060 3000 and in Northern Ireland it is 0800 181 4422.
The Entrepreneur Club is here to help. You can read our guide or talk to your St. James’s Place Partner to book an hour-long session with our virtual consultancy service, which can help you manage the challenges of Covid-19.
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