Coronavirus - Covid-19
The Government are releasing new information, guidance and support each day and we have set out below some of the keys schemes you may benefit from together with some additional advice we hope you find useful.
The Government have announced a number of schemes to help support businesses:
- Coronavirus Job Retention Scheme. All UK employers are eligible to apply for this via HMRC. HMRC will reimburse employers up to 80% of an employee’s salary (capped at £2,500 per calendar month) if that employee would have otherwise lost their job as a result of Covid-19. The employee must be designated as a “furloughed worker” and the employer would then submit the information required through a new online portal. (The portal is still being prepared at the time of writing).
- Business Rates relief. This will support all retail, hospitality and leisure businesses as well as estate agents and letting agents that would usually pay business rates. In order to be eligible for this, the business must be based in England and the property in occupation. (It has been confirmed that if a business is closed due to Covid-19, it will still be classed as occupied). If you have any questions about your eligibility for this you can speak with your Local Authority. Otherwise, no action is required and this will be applied to your April 2020 tax bill.
- Cash Grants for Retail, Hospitality and Leisure Businesses. Companies within these areas will be able to access a grant of up to £10,000 if the property has a rateable value of less than £15,000. Those with a rateable value between £15,000 and £51,000 may receive a grant of up to £25,000. If you are eligible for either of these, the Local Authority will contact you directly.
- Small Business Grant. Further funding is available through your Local Authority if you already pay little or no business rates as a result of Small Business Rate Relief or Rural Rate Relief. If your business has a rateable value of less than £15,000 you may receive a grant of up to £10,000. You do not need to take any action to apply for this and will be contacted directly by the Local Authority if your business is within the qualifying criteria.
- Business Interruption Loan Scheme. This is available to small and medium sized businesses to enable access to loans, overdrafts, invoice finance and asset finance facilities. The Government will provide the lenders with a guarantee of up to 80% on each loan as well as covering any interest due in the first 12 months together with the lenders’ fees. To be eligible for this, your business must have a turnover of less than £45million per year. If you are interested in using this scheme please speak with your lenders as soon as possible.
- Covid-19 Corporate Financing Facility. This is to support large companies to bridge the disruption to their cash flow by purchasing short-term corporate debt. This is open to firms who can demonstrate that they were in sound financial health prior to Covid-19. Further information on this can be found on the Bank of England’s website.
In addition, the Government have reported the following tax relief provisions:
- Time to Pay – This is to support all firms and individuals who are in temporary financial distress. Advice can be sought from HMRC and each matter will be dealt with on a case to case basis.
- VAT deferral – VAT payments have been deferred until 30th June 2020. This will be dealt with by HMRC automatically with no applications required but the outstanding balance will be due by the end of the 20/21 tax year.
- Income Tax – Again, this will be dealt with automatically by HMRC with payments deferred until 21st January 2021.
- Statutory Sick Pay (SSP) – This is available to all small or medium sized businesses with fewer than 250 employees as at the 28th February 2020. Employers will be refunded two weeks of SSP that they have had to pay due to an employee being off sick with Covid-19. The application process is still being set up as at the time of writing.
There is further reassurance for businesses as the Government have announced legislation that will protect commercial tenants from being evicted from their property if they miss a rent payment in the next three months.
This will be a relief for many and provides commercial tenants with a safety net in the worst case scenario. However, before you were to reach that stage please consider making contact with your Landlords or Tenants now if you have cash flow concerns. In most cases a friendly, sensible discussion can relieve many of the stresses and concerns both parties may have during this time.
Options you could consider include agreeing a rent holiday or deferring payments to a later date. If you are able to reach a mutual agreement, follow this up with written confirmation of the terms agreed for both parties’ records.
As well as making contact with any Landlords or Tenants; please do speak with any service providers, contractors or suppliers you may have. Any fit-out works or alterations may need to be postponed as a result of contractors self-isolating or if social distancing measures cannot be put in place at the property. Again, these issues can often be resolved by a simple chat between the parties followed by a letter to confirm the terms.
If you need any help or want to discuss any of the above, please contact Nicholas Eve on 01329 822 333.
We know this is a difficult and uncertain time for many of us, but here at Churchers we are dedicated to providing you will all the support and assistance we can. Many of our colleagues are working from home but we remain contactable by telephone and email.
Last but by no means least, please take care of yourselves during this time. Be safe and if you have any concerns or queries, please do get in touch with us.