In these unprecedented times, the impact of the Coronavirus will inevitably cause financial uncertainty, and place significant pressure on many businesses and individuals on a global scale. To help support our clients during this critical period, we have issued a number of updates detailing information about the support available for you and your business.

 

If you have any queries relating to any of this information, please get in touch.

The information on this page was last updated on 17th September 2020.

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Loan Schemes

Bounce Back Loan Scheme

The Bounce Back Loan scheme enables small and medium businesses to access finance more quickly during the coronavirus outbreak.

Business can apply for loans, worth up to 25% of their turnover, of between £2,000 and £50,000.

The loan is 100% government guaranteed, with fees and interest covered for the first 12 months. The length of the loan is 6 years, with a fixed interest rate of 2.5%. No repayments will be due during the first 12 months, and no charges will apply if early repayment is made.

You can apply for a loan if your business:

  • is based in the UK
  • was established before 1 March 2020
  • has been impacted by coronavirus

Businesses from all sectors are eligible to apply, but banks (excluding insurance brokers), public-sector bodies, and state-funded primary and secondary schools are not eligible.

You cannot apply for a Bounce Back Loan if you are already claiming under any of the following government support schemes:

  • Coronavirus Business Interruption Loan Scheme (CBILS)
  • Coronavirus Large Business Interruption Loan Scheme (CLBILS)
  • COVID-19 Corporate Financing Facility (CCFF)

If you have already received a loan of up to £50,000 under one of these schemes it is possible to transfer it into the Bounce Back Loan scheme. The deadline to arrange this with your lender is 4 November 2020.

Further details on eligibility and finding a lender can be found here.

Some banks are now prioritising existing customers.  

Coronavirus Business Interruption Loan Scheme

The British Business Bank has amended the CBILS guidance. From 30th July 2020 smaller businesses with fewer than 50 employees and less than £9m in annual turnover will not be considered ‘undertakings in difficulty’, and may now be eligible for the scheme. Further details are available here

The Coronavirus Business Interruption Loan Scheme (CBILS), which opened for applications on 23 March, can provide loan facilities of up to £5m for smaller businesses across the UK (SMEs) that are experiencing lost or deferred revenues, leading to disruptions to their cashflow. It is delivered by the British Business Bank through 50+ accredited lenders and partners.

The scheme supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance facilities. The scheme provides the lender with a government-backed guarantee, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’.

Find out more here.

Coronavirus Large Business Interruption Loan Scheme

The Coronavirus Large Business Interruption Loan Scheme (CLBILS) provides financial support to larger businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cashflow. The scheme support businesses with a turnover above £45 million, the upper limit for the Coronavirus Business Interruption Loan Scheme, which focuses on smaller businesses (CBILS).

Delivered by the British Business Bank, through 50+ accredited lenders and partners, the scheme supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance facilities.

Initially, the scheme lender could provide:

  • up to £25 million to businesses with turnover from £45 million up to £250 million
  • up to £50 million to businesses for those with a turnover of over £250 million

However, on 19 May the Chancellor announced changes to the scheme, due to come into place on Tuesday 26 May. Under the changes:

  • businesses will be able to borrow up to the lower of 25% of turnover or £200m
  • loans above £50m will be subject to restrictions including a ban on dividends, pay rises and cash bonuses to senior management (including board members). Any bonuses and pay offers agreed before the loan was taken out are excluded from the ban.

These changes and restrictions will also apply to any companies who continue to borrow money, beyond 12 months, from the COVID-19 Corporate Financing Facility (CCFF).

COVID-19 Corporate Financing Facility

Under the Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies with turnover in excess of £500m.

This will support your company if it has been affected by a short-term funding squeeze, and allow you to finance your short-term liabilities.

It will also support corporate finance markets overall and ease the supply of credit to all firms.

All UK businesses are eligible.

The full rules of the scheme and guidance on how to apply is available on the Bank of England website.

Employees

Coronavirus Job Retention Scheme (CJRS)

Pensions

The Pensions Regulator has confirmed that employers can change the level of contributions payable to pension arrangements for furloughed employees. In normal circumstances, employers seeking to amend any contributions would have to undergo a minimum 60 day consultation period with employees.

The consultation period has been waived until 30th June 2020.

The regulator has also waived fines for employers who are late in paying contributions under auto-enrolment regulations.

Further details can be found here.

Statutory Sick Pay relief package for SMEs

Holiday entitlement and pay

The government has now set out its long awaited, detailed guidance about the way annual leave, bank holidays and pay will work during the coronavirus pandemic.

The guidance confirms that employers can require employees to take holiday during furlough. This will allow employers to ensure employees have not built up months of accrued holiday when they return to work or when their employment ends.

Employers should be mindful of the fact that they will need to top up holiday pay to 100% of normal pay for any holiday taken. Under the rules of the Coronavirus Job Retention Scheme, the employer can continue to claim the 80% grant and importantly, the holiday taken does not break the furlough status.

Full details of the government guidance can be found here.

Tax

HMRC Time-to-Pay service

Status: Active now.

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. HMRC have set up a dedicated phone helpline to support businesses and self-employed people who are concerned about paying their tax due to coronavirus to get practical help and advice. Up to 2,000 experienced call handlers are available to support businesses and individuals when needed.

Find out more here.

Deferring VAT payments

Status: Automatic offer with no applications required.

If you’re a UK VAT registered business and have a VAT payment due between 20 March 2020 and 30 June 2020, you have the option to defer the payment until 31 March 2021. VAT refunds and reclaims will be paid by the Government as normal.

Whilst VAT payments are being deferred, you should still aim to file your VAT return on time. If you make your payments on account or by direct debit, we are advising that you contact your bank to temporarily stop the payments as HMRC can not be relied upon.

Deferring Income Tax payments

Status: Automatic offer with no applications required.

After some initial confusion, the Government have advised that all taxpayers under self-assessment will be entitled to a deferment of their 31 July 2020 payment on account until 31 January 2021. The original guidance indicated that this deferment only applied to self-employed individuals.

There will be no requirement to apply for this deferment as it will be automatic, while no penalties or interest will arise in respect of the payment on account during the period to 31 January 2021.

Where individuals do have the funds to make the 31 July 2020 payment by the usual date, they can still make this payment. It may be beneficial to cashflow in the long term, if short term cashflow support isn’t required, because there is no indication that the usual amount payable in January 2021 will be reduced in any way. As such any deferment may significantly increase the amount payable in January 2021.

With this in mind, there may be individuals who have already had a reduction in income for the 2019/20 tax year prior to the difficulties encountered as a result of the floods and COVID-19, but would still prefer to make their payment on account in July 2020 to avoid further cashflow issues down the road.

As such there may be scope to reduce the second payment on account which is due by 31 July 2020 towards the tax liability for 2019/20. We would therefore encourage these individuals to provide us with the information to enable us to prepare their tax returns as soon as possible after the end of the tax year on 5 April 2020.

We would then be able to prepare tax returns before the 31 July 2020 payment becomes due and therefore reduce this payment on account as appropriate.

Filing accounts with Companies House

Please note: Companies House will now be automatically extending filing deadlines by 3 months for any private companies where their current deadline falls between 27 June 2020 and 5 April 2021.

Companies House have now confirmed businesses may file their accounts up to three months late if affected by COVID-19, to provide some much-needed breathing space in a time where many businesses are facing intense pressure and uncertainty.

There is one caveat – to benefit from the delay, businesses must act before their original filing deadline. If you do not apply for the extension and your accounts are filed late, an automatic penalty will still be imposed.

You are able to apply for an extension online or via post – more information can be found on the Governments website, which you can access by clicking here. Each appeal will be treated on a case-by-case basis under existing poor health policies.

The same extension will apply to submission of the corporation tax return. Under FA 1998, Sch. 18, para. 19(b), a company is not liable to a flat rate penalty for late submission of a tax return if the return is delivered no later than the last day for the delivery of those accounts to the registrar of companies.

Please note: this only protects the company from the fixed penalty. The tax-geared penalty will arise 18 months after the return period, if any tax remains unpaid at the 18-month date.

Find out more here.

IR35 tax reforms postponed until 2021

The extension of the IR35 Off Payroll rules into the Private Sector has been postponed until 6th April 2021.

Whilst for many businesses this will be a welcome development, for others who have already spent a lot of time, money and effort preparing for the changes, there will be an understandable sense of frustration. It is important to recognise that this development is a postponement of the new regime, not a cancellation. The internal processes, that organisations have developed to manage the implementation of the requirements of the IR35 Off Payroll Legislation, will still be required from 6th April 2021. Preparing now, and being aware of the new rules that will impact on ongoing contracts with intermediaries that may still be in place after the 5th April 2021, will save a lot of time going forward.

Find out more here.

Property

Protection from eviction legislation

Emergency legislation introduced in March means that tenants in social or private rented accommodation will have legal protection from eviction for 3 months. This period has now been extended until the end of 2020.

Find out more here.

Business rates relief for retail, leisure, hospitality and nurseries

A business rates holiday for retail, hospitality, nursery and leisure businesses will be introduced in England for the 2020 to 2021 tax year.

To be eligible for the business rates holiday your business must:

  • be based in England
  • be in the retail, hospitality, nursery and/or leisure sector

Find out more here.

Grants for retail, leisure, hospitality and nurseries

The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.

For businesses in these 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 £15,001 and £51,000, they will receive a grant of £25,000.

Find out more here.

Rural rate relief

Under the rural rate relief, eligible businesses do not pay business rates. The relief applies to businesses in rural areas with a population below 3000.

The relief is applicable if your business is in an eligible area and either:

  • the only village shop or post office, with a rateable value of up to £8,500
  • the only public house or petrol station, with a rateable value of up to £12,500

Contact your local council to check you’re eligible and to apply for rural rate relief.

Small business rate relief

Small business rate relief applies to businesses where:

  • the property’s rateable value is less than £15,000
  • the business only uses one property – you may still be able to get relief if you use more

Contact your local council to apply for small business rate relief.

Business rates do not apply to properties with a rateable value of £12,000 or less will

For properties with a rateable value of £12,001 to £15,000, the rate of relief will go down gradually from 100% to 0%.

Grant for recipients of small business rate relief

A one-off cash grant of £10,000 is available for small businesses who are already receiving small business rate relief (generally, businesses with one property with a rateable value < £15,000) and/or rural rate relief, based in England, and occupying property.

The cash grants will be administered by local authorities. Eligible businesses will be contacted by their local authority, though some local authorities have decided to operate an applications process. To speed up the availability of support, Nottingham City Council has asked businesses to provide some brief details to apply for the business support grant by filling out the online form here.

Other

Chancellor announces aid for charities

During the daily Coronavirus update on 8th April, Chancellor Rishi Sunak announced £750m of funding to help keep struggling charities afloat. Direct cash grants will ensure charities can continue to provide vital services during this time of financial uncertainty.

£370m will go to small local charities, who work with vulnerable people, including those delivering food and essential medicines. This financial support will be provided through the National Lottery.

£360m will be allocated to charities, providing essential front-line services such as St John’s Ambulance, and the Citizens Advice Bureau. Up to £200m of these grants will go to support hospices.

The aim is for charities to receive money in the coming weeks. The application system for the National Lottery Community Fund grant pot is expected to be operational within a similar period of time.

The Chancellor has also stated that the Government will match public donations to the BBC’s Big Night In charity appeal on April 23rd, with at least £20m going to the National Emergencies Trust appeal.

Insolvency

Emergency insolvency measures have been put in place to prevent companies unable to meet their debts, due to the impact of Coronavirus, from being forced to file for bankruptcy.

A temporary suspension to wrongful trading rules for company directors in the UK will remove the threat of personal liability. In normal circumstances, it is an offence to continue trading if they know their business will be unable to pay debts, and that liquidation is unavoidable.

This has been lifted, meaning company directors will be able to continue to pay staff and suppliers even if fears that the company could become insolvent exist. The changes will apply retrospectively from 1 March 2020. These measures are currently in place until 30th September 2020.

Insurance

A number of insurers have argued that the Covid-19 virus is not covered by their policies and, as such, have rejected business interruption claims. This has led to class-action lawsuits by businesses, particularly those in the hospitality industry, who continue to feel the impact of forced closures.

COVID-19 Ideas Grant

UK Research and Innovation (UKRI) will provide funding for short to medium-term research projects, aimed at addressing and mitigating the social and economic impacts of the COVID-19 outbreak.

80% of costs of projects will be funded. You will need to be able to prove why you will not be able to repurpose any existing funds for the project.

Find out more here.

Innovation Fund

Innovate UK will provide £750m of funding, available to small and medium sized enterprises that are engaged in Research and Development.

£200m of grants and loan payments will be available to 2,500 existing Innovate UK partners on an opt-in basis. £550m will also be made available to increase the support on offer to existing partners. Alongside this, £175,000 will be available to 1,200 firms who do not currently receive Innovate UK funding.

Find out more here.

Future Fund

The Future Fund will support innovative UK companies that are essential in ensuring the UK retains its world-leading position is science, innovation and technology.

Developed by government and delivered by the British Business Bank, the Future Fund supports companies that would usually rely on equity investment, but are facing significant delays between funding rounds due to the current economic situation. Financial support will be provided by an initial commitment of £250m of new government funding, subject to at least equal match funding from third-party investors

Find out more here.

Support for Derby businesses

A £47 million financial support and relief package has been announced by Derby City Council, to support the city’s businesses through the current pandemic.

Grants of either £10,000 or £25,000 are available to the almost 4,000 eligible businesses.

Find out more here.

For the self-employed

Self-employed Support Scheme

The Chancellor announced a new self-employed support scheme in March giving self-employed workers a taxable grant of up to 80% of average monthly earnings.

Describing it as one of the most generous packages in the world, the support package for self-employed people was initially intended to run for a minimum of 3 months and cover 80% of average earnings over the past three years earnings (up to £2,500 per month) for that 3 month period.

Under the first grant, eligible individuals can claim a taxable grant worth 80% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £7,500 in total.

The portal opened to applications from taxpayers on a staged basis between 13 and 18 May, with the portal opening on different days for different taxpayers and further details of how to make the application are below

The scheme is open to claims for the first grant relating to the initial 3 months of trading profits until 13 July 2020.

On 29 May it was announced that the scheme would be extended to enable individuals to claim a second taxable grant worth 70% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total.

Applications for the second grant will open on 17 August with a deadline of 19 October. An individual does not need to have claimed the first grant to receive the second grant, but they will need to be able to prove that their business has been adversely affected by COVID-19 on or after 14 July 2020.

Eligibility

This scheme is available to those who are a self-employed individual or a member of a partnership and:

  • Had a trading profit of less than £50,000 for 2018-19 (or an average trading profit of less than £50,000 over the 3 years from 2016-17 to 2018-19)
  • Earned the majority (more than 50%) of their income from self-employment for 2018-19 (the same averaging alternative as above can apply)
  • Have submitted a tax return for 2018/19
  •  Traded in the year 2019-20
  • Are trading when they apply, or would be except for COVID-19
  • Intend to continue to trade in the tax year 2020-21
  • Have lost trading/partnership trading profits due to COVID-19

Your business could be adversely affected by coronavirus if, for example:

You’re unable to work because you:

  • are shielding
  • are self-isolating
  • are on sick leave because of coronavirus
  • have caring responsibilities because of coronavirus

You’ve had to scale down or temporarily stop trading because:

  • your supply chain has been interrupted
  • you have fewer or no customers or clients
  • your staff are unable to come in to work

If you started trading between 2016 and 2019, HMRC will only use those years for which you filed a self-assessment tax return.

How to apply

HMRC will contact you directly to invite you to apply for the support.

HMRC e-mail taxpayers who have provided an e-mail address (when using the eligibility checker or previously) to confirm when the portal is open for them. Taxpayers can also use the eligibility checker to find out whether the application portal is open for them.

Taxpayers then log in to their government gateway account (or select the option to create an account) to complete the application process. This must be done through the taxpayer’s own individual account, not through an agent’s government gateway account.

Read the full update here

Unfortunately, we are aware of an increase in scam emails, calls and texts. If someone gets in touch claiming to be from HMRC, saying that financial help can be claimed or that a tax refund is owed, and asks you to click on a link or to give information such as your name, credit card or bank details, please do not respond. HMRC will never contact you out of the blue to ask for these details. 

Further details:

Self-employed individuals who had not yet submitted their tax returns at the time of the announcement had 4 weeks from 26 March 2020 to submit their tax return and still be eligible for this support. As such they had until 23 April 2020 to submit their tax returns.

The self-employed are still able to apply for Universal Credit (up to £1,800 per month) and business interruption loans in the interim until the above funding becomes available or if they do not qualify for the above funding.

The Government have advised that self-employed individuals will also be entitled to a deferment of their July 2020 payment on account to January 2021. Guidance currently indicates they will not be required to apply for this deferment as it will be automatic. 

Where individuals do have the funds to make the 31 July 2020 payment by the usual date, they can still make this payment. It may be beneficial to cashflow in the long term, if short term cashflow support isn’t required, because there is no indication that the usual amount payable in January 2021 will be reduced in any way. As such any deferment may significantly increase the amount payable in January 2021.