What support is available for businesses during the coronavirus crisis?

The government has announced details of their support schemes for businesses during this difficult time, as you may have read about in our previous article here.

 

Businesses of all shapes and sizes may have been forced to close their doors for the foreseeable future in a bid to stop the spread of COVID-19.

 

While this is for the best, it does leave many business owners and employees worried about their income and hoping this virus will not mean shutting down for good, or finding themselves unemployed.

 

Many people are not certain on some aspects of the schemes, so this article will explain some of the main options and their eligibility requirements.

 

Coronavirus job retention scheme:

 

This is a very important scheme for employers who are forced to consider making redundancies in their firms.

 

With this scheme, the government will pay up to 80% of a workers usual salary (up to £2,500 per month) for those employees that would otherwise have been laid off during this crisis.

 

All UK businesses will be eligible to apply, and the government are working urgently to set up a system of reimbursement.

 

To use this scheme, employers will have to do the following:

 

• designate affected employees as ‘furloughed workers,’ and notify their employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation. We can advise you on this issue.
• submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

 

 

 

Coronavirus Business Interruption Loan Scheme:

 

This is for Small or Medium sized businesses (SME’s), and means they can access to working capital (including loans, overdrafts, invoice finance and asset finance) of up to £5 million in value and for up to 6 years.

 

Key features of the scheme:

 

• Up to a £5m loan: The maximum value of a facility provided under the scheme will be £5m. The repayment terms will last up to six years.
• 80% guarantee: The scheme provides the lender with a government-backed, partial guarantee (80%) against the outstanding facility balance. There will be an overall cap for each lender.
• No guarantee fee for SMEs to access the scheme: No fee for smaller businesses, instead the lenders will pay a fee to access the scheme.
• Interest and fees paid by Government for 12 months: This means smaller businesses will benefit from no initial costs and lower early repayments.
• It is very important to remember that the borrower always remains 100% liable for the debt.

 

 

You are eligible for the scheme if:

 

• your business is UK based, with turnover of no more than £45 million per year
• your business meets the other British Business Bank eligibility criteria (we can advise on this)

 

 

How to access the scheme:

 

The scheme is now open for applications. To apply, you should talk to your bank or one of the 40 accredited finance providers (not the British Business Bank) as soon as possible, to discuss your business plan. You can find out the latest on the best ways to contact them via their websites.

 

All major banks are offering this scheme. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.

 

 

Support for businesses that pay little or no business rates:

 

A Small Business Grant Scheme is being set up to fund local authorities supporting 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.

 

You are eligible if:

 

• your business is based in England
• you are a small business and already receive SBBR and/or RRR
• you are a business that occupies property

 

How to access the scheme

 

You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

 

Guidance for local authorities on the scheme will be provided shortly, by the Home Office.

 

Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.

 

Find your local authority.

 

 

Support for retail, hospitality and leisure businesses that pay business rates

 

Business rates holiday for retail, hospitality and leisure businesses

 

The government will introduce a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.

 

Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.

 

 

You are eligible for the business rates holiday if:

 

• your business is based in England
• your business is in the retail, hospitality and/or leisure sector

 

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

 

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

 

How to access the scheme

 

Nothing to do now. This 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 will do this as soon as possible.

 

You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator.

 

Cash grants for retail, hospitality and leisure businesses

 

For businesses in the retail, hospitality and leisure 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 £15,000 and £51,000, they will receive a grant of £25,000.

 

Eligibility

 

You are eligible for the grant if:

 

• your business is based in England
• your business is in the retail, hospitality and/or leisure sector

 

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

 

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

 

 

How to access the scheme

 

Nothing to do now. Your local authority will write to you if you are eligible for this grant.

 

Contact us!

 

We are open for business and are taking instructions as usual. We are here to advise on any business enquiry you have, as well as all other legal issues.

 

Call on 020 7928 0276, or email into info@lisaslaw.co.uk.

 

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