The 2020 Budget announced a plan to provide support for businesses affected by Coronavirus. These measures were supplemented with further UK government responses.
1.Tax
Deferral of VAT for 3 months- VAT payments will be deferred for 3 months (until 30 June 2020). This is an automatic offer with no applications required. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. For the self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021. Self-employed will get full Universal Credit at a rate equivalent to statutory sick pay.
Time to Pay upscaled - a dedicated helpline has been set up to help businesses and self-employed individuals in financial distress and with outstanding tax liabilities to receive support with their tax affairs. Through this, businesses may be able to agree a bespoke Time to Pay arrangement.
2. Financial aid
i.Coronavirus Business Interruption Loan Scheme (CBILS)
This is a new scheme delivered by the British Business Bank, will enable small and medium sized businesses to apply for a loan of up to £5m, with the government covering up to 80% of any losses and with no interest due for the first twelve months. Those loans will now be available on Monday 23rd March.
Additionally Barclays bank has an existing £14 billion lending fund which launched in 2019 as part of a three-year commitment to help SMEs build resilience during uncertain times.
ii. Support to self employed individuals
The Self-employment Income Support Scheme is a ground-breaking UK-wide scheme for self-employed individuals whose income has been impacted by coronavirus to receive direct cash grants.
Those who are eligible can receive a cash grant worth 80% of their average monthly trading profit over the last three years, up to £2,500 per month. This covers 95% of people who receive the majority of their income from self-employment.
iii. Other loans and grants
£25,000 cash grant -for businesses in the retail, hospitality and leisure sectors, with a rateable value over £15,000 and below £51,000.
£10,000 cash grant to small businesses- there will be a £10,000 cash grant to small firms in England eligible for Small Business Rate Relief. This will be delivered by Local Authorities.
Government backed and guaranteed loans– there will be an initial £330bn to support companies in the form of government-backed loans for any business who needs access to cash, with more capacity as required.
Three-month ban on evictions for commercial tenants - Commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction.This willmean that no business will be forced out of their premises if they miss a payment in the next 3 months. Commercial tenants will still be liable for the rent after this period.
3. Coronavirus Job Retention Scheme (CJRS)
Government grants will cover 80% of the salary of retained workers, up to a total of £2,500 a month. The scheme, open to any employer in the country, will cover the cost of wages backdated to March 1st and will be open before the end of April for at least 3 months.
4. Statutory Sick Pay (SSP)
SSP will be temporarily available to those who are advised to self-isolate and people caring for those within the same household who display Coronavirus symptoms and have been told to self-isolate. A new style Employment and Support Allowance and Universal Credit will be available to those that are not entitled to Statutory 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 UK government in full. This will provide 2 million businesses with up to £2billion to cover the costs of large-scale sick leave.
5. Business Rates
Increased Business Rates Relief- the UK government is temporarily increasing the Business Rates discount to all businesses in the retail, hospitality and leisure sectors in England to 100% for 2020-21, irrespective of rateable value.
6. Self-employment Income Support Scheme (SEISS)
The Self-employment Income Support Scheme (SEISS) will support self-employed individuals (including members of partnerships) whose income has been negatively impacted by COVID-19. The scheme will provide a grant to self-employed individuals or partnerships, worth 80% of their profits up to a cap of £2,500 per month. People able to make their first claim by the beginning of June.
For further information and clarification, view the Coronavirus FAQ's here.
There may be some variations to the above measures announced among devolved nations. Further information on support for businesses in the devolved nations can be found below:
Support for business in Wales
Support for business in Northern Ireland
Support for business in Scotland
