Coronavirus – How and where to access financial support
Government Support Package for Businesses
The Chancellor has set out a package of temporary, timely and targeted measures to support public services, people and businesses through this period of disruption caused by COVID-19. This includes a package of measures to support businesses including:
- Statutory sick pay relief package for SMEs
- 12-month business rates holiday for all retail, hospitality and leisure businesses in England
- Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
- Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
- Coronavirus Business Interruption Loan Scheme to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance
- Paying your Taxes – HMRC Time-To-Pay Scheme
Also covered in this email:
- Mortgage Holidays
- Interest Rates
- Advice on Debtors
Coronavirus and Self-Isolating: How much is statutory sick pay?
The SSP rate is currently £94.25 per week.
Who can claim it?
Employees and Directors of Limited Companies, currently earning over £118 per week.
- SSP will now be available for eligible individuals diagnosed with COVID-19 or those unable to work because they are self-isolating in line with Government advice”.
- Extended SSP will be available for all those who are advised to self-isolate, even if they haven’t yet presented with symptoms. SSP will be payable from day one instead of day four for affected individuals.
- All businesses paying staff SSP for a coronavirus related absence can reclaim this from HMRC for a period of 2 weeks per employee.
How do I apply for an SSP refund for employees?
The government will work with employers over the coming weeks to set up the repayment mechanism for employers as soon as possible.
How does sick pay work if I’m a Director of a Limited Company?
Company Directors are entitled to SSP under current rules, however, until now it has not been possible for a company to reclaim this SSP. We are awaiting news on whether this will alter as a result of the Coronavirus outbreak.
How does sick pay work if I’m self-employed or earn under £118 per week?
Those not entitled to SSP because they’re self-employed (e.g. a Sole Trader) or earn below the minimum amount of £118 per week can now make applications for Universal Credit or Contributory Employment and Support Allowance.
Asked about the £118 threshold, the Government have said they will “bring forward necessary legislation, solution or other changes” so there is hope they will soon apply it to the self-employed.
Are Self-Employed and have paid NI for 2 years?
Employment and support allowance (ESA) benefit will become available to claim from the first day of sickness rather than the eighth. This is for people directly affected by coronavirus or self-isolating.
You should be eligible for contribution-based ESA if you’re self-employed or employed but you’re unable to work and have at least two years of national insurance contributions.
Are you self-employed without 2 years NI contributions, or have you lost your job or business?
The ‘minimum income floor’ for the universal credit benefit is going to be removed. This will mean anyone claiming Universal Credit will receive extra benefits.
Remember: If you are self-isolating you DO NOT need to attend an appointment at the job centre and are eligible for an immediate advanced payment.
If you aren’t self isolating you will have to attend an appointment at the Job Centre to claim but can still get an advanced payment.
How do I claim support if I’m self-employed?
- Business rates in England will be abolished for firms in the retail, leisure and hospitality sectors with a rateable value below £51,000.
- The Government will introduce a business rates retail holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.
How do I apply?
Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.
- A cash grant of up to £25,000 for businesses with a rateable value of less than £51,000
- A £25,000 grant will be provided to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value between £15,000 and £51,000.
How do I apply?
Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority.
£10,000 cash grants are available for smaller firms
If you are a business that currently receives small business rate relief or rural rate relief, you will automatically be eligible for a £10,000 cash grant.
How do I apply for a grant?
Your local authority will contact you to award this. You do not need to do anything, (although chasing won’t hurt).
Coronavirus Business Interruption Loan Scheme
A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch by next week to support businesses to access bank lending and overdrafts.
- The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs.
- Government backed loans make it more likely that banks will lend to your business as if you default the government will stump up the cash in your absence.
- The government will not charge businesses or banks for this guarantee. Businesses can access the first six months of that finance interest free, as government will cover the first 6 months of interest payments.
- Always consider your ability to pay a loan back before you apply for it.
How do I apply?
Contact your bank from next week
Paying your Taxes – Time to Pay Scheme
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s ‘Time To Pay’ Service.
- These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. Businesses can contact HMRC’s new dedicated COVID-19 helpline for advice and support.
- To ensure ongoing support, HMRC have made a further 2,000 experienced call handlers available to support firms and individuals when needed.
- Callers will be able to discuss agreeing on an instalment arrangement and suspending debt collection proceedings. Callers will also be able to discuss cancelling penalties and interest where they have administrative difficulties contacting or paying HMRC immediately. It may be an idea to ask outright for a payment holiday too if you are struggling.
How do I get help?
The helpline number is 0800 0159 559. Opening hours are Monday to Friday from 8am to 8pm, and Saturday 8am to 4pm. The helpline will not be available on Bank Holidays.
The House of Lords announced last night that the IR35 tax reforms would be pushed back by one year, with the legislation now due to be reintroduced in April 2021.
Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim.
Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics
How do I get clarity?
Check your policy and phone your insurance company.
A three-month mortgage holiday for those in difficulty because of coronavirus. Announced in co-ordination and agreement with banks – anyone’s finances that have been impacted by coronavirus can get 3 months break from paying their mortgage.
How do I apply?
Phone your mortgage provider to arrange this. Consider re-mortgaging as currently, the interest rates are lower and there are some good deals to be had. (Please note this is NOT financial advice)
Interest Rates Reduced to 0%
The Bank of England has announced an emergency cut in interest rates to shore up the economy amid the coronavirus outbreak. Policymakers reduced rates from 0.75% to 0.25%, taking borrowing costs back down to the lowest level in history. If you are on a non-fixed rate mortgage this will make payments smaller each month.
Please check which of your clients currently owe you money and ask them to pay you if the amount is now due or overdue. Payments have already slowed down by 75% of all companies, so if you have a large amount owed by debtors, act now and get paid. Make sure your credit days are clear on your invoices if you have not done so already e.g. state ‘payment terms are seven days from invoice’.
More information will follow on help with Cashflow and for Freelancers and Workers as it becomes available.