COVID-19 SME Resource Hub

RESPONDING TO COVID-19: PRACTICAL SUPPORT FOR UK BUSINESSES & INDIVIDUALS

At a time when many UK businesses were already struggling under the weight of an unpredictable political and economic environment, COVID-19 (Coronavirus) has taken the world by complete surprise.

Businesses suddenly find themselves scrambling to understand Government schemes, their financial position amidst a plethora of unknowns and their options to ensure that their companies survive the next few months.

This is not a time to go it alone and we are here to help. This portal aims to provide you with tips and advice to help safeguard your employees, your business and your finances while weathering the impact of Coronavirus.

5 key areas businesses should be focusing on now:

Know where your money is coming from and prioritise these activities

Cut costs and make savings where possible

Monitor your supply chain closely

Tap into the resources provided by Government and financial institutions

Be prepared for opportunities, as well as challenges

MANAGING EMPLOYMENT RELATED COSTS

Coronavirus Job Retention Scheme (CJRS) and Job Retention Bonus

The CJRS has been extended until 30 April 2021.

The government will continue to pay 80% of the salary of employees for hours not worked until the end of April. Employers will only be required to pay wages, National Insurance Contributions (NICS) and pensions for hours worked; and NICS and pensions for hours not worked.

Kickstart Scheme and Measures to Help People Find Work

In order to support people finding jobs, the Chancellor announced the Kickstart Scheme, which will provide £2 billion to support the creation of “high quality” six-month work placements for 16 to 24-year-olds on Universal Credit and at risk of long-term unemployment.

The Government will provide employers that offer the placements funding equivalent to 100 per cent of the relevant level of the National Minimum Wage (NMW) for 25 hours a week. It will also cover the associated Employer NICs and minimum automatic enrolment pension contributions.

The Chancellor, Rishi Sunak, also outlined additional measures, including funding for traineeships and employers that hire new apprentices, as well as funding for several careers and job-finding programmes.

The apprenticeships funding will provide £2,000 to employers in England for every apprentice hired under the age of 25 and £1,500 for each newly hired apprentice aged 25 or older. This funding is in addition to schemes already in place to support employers in taking on apprentices.

TAX & GENERAL ASSISTANCE

Mortgage payment holiday

As announced on 31 October, mortgage payment holidays will no longer end. Borrowers who have been impacted by Coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.

SDLT holiday

There is a temporary cut in Stamp Duty Land Tax (SDLT) from 8 July by raising the nil-rate band from £125,000 to £500,000 until 31 March 2021. The Treasury estimates that, as a consequence, around nine in 10 people buying a main residence will pay no SDLT.

Further details can be found on SDLT changes here.

VAT Deferral Scheme

Businesses who deferred their VAT bills will be given more breathing space through the New Payment Scheme, which gives them the option to pay back in smaller instalments – Rather than paying a lump sum in full at the end March next year, businesses will be able to make 11 smaller interest-free payments during the 2021-22 financial year
The temporary 15% VAT cut for the tourism and hospitality sectors has now been extended to the end of March 2021

Expansion of HMRC’s Time to Pay Arrangements

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.

Deferral of Self-Assessment Payment

Self-assessment taxpayers have been granted an additional 12-month extension from HMRC on the ‘Time to Pay’ self-service facility. This means that payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022

LOANS AND GRANTS FOR SMES AND SELF EMPLOYED

Self-Employment Income Support Scheme (SEISS)

SEISS is in place until April 2021. The scheme is currently in its third stage and will offer grants to the self-employed at 80 per cent of average trading profits for November to January, capped at £7,500 in total.

Access to Finance schemes:

Under the Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme (CLBILS), the Government provides lenders with an 80 per cent guarantee to enable them to support viable small and medium sized enterprises (SMEs) and larger businesses respectively.
Under the Bounce Back Loans Scheme (BBLS), the Government provides lenders with a 100 per cent guarantee to enable them to provide loans between £2,000 and £50,000 to small and medium-sized businesses with a simple, streamlined application process.
All three government-backed loan schemes are open until the end of January 2021.

Local Restrictions Support Grants:

Businesses in England that are forced to close will receive up to £3,000 for each 28 day period. Where businesses have not been required to close but have been severely affected by restrictions in tier 2 or tier 3 areas, local authorities will receive funding that will enable them to make grants worth up to £2,100 for each 28 day period.

For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.

Business Rates holiday:

All eligible businesses in the retail, hospitality and leisure sectors will pay no business rates in England for 12 months from 1 April 2020, and nurseries in England will also receive a one-year holiday.

LOANS AND GRANTS FOR LARGE BUSINESSES

The Coronavirus Large Business Interruption Loan Scheme (CLBILS)

CLBILS helps medium and large sized businesses to access loans and other kinds of finance up to £200 million. The government guarantees 80% of the finance to the lender.

You can apply for a loan if your business:

is based in the UK
has an annual turnover of over £45 million
has not received support under the Bank of England’s COVID-19 Corporate Financing Facility, for investment grade companies.

You need to show that:

your business would be viable were it not for the pandemic
your business has been affected by Coronavirus
the loan will enable you to trade out of any short-term to medium-term difficulty resulting from Coronavirus

If you’re borrowing more than £50 million you must agree to restrictions on dividend payments, senior pay and share buy-backs during the period of the loan. Check the eligibility requirements.

SUPPORT FOR RETAIL, HOSPITALITY & LEISURE

Reduced VAT rate for hospitality and tourism:

The Government is extending the reduced VAT rate of 5% for eligible businesses in the hospitality and tourism sectors until 31 March 2021.

Business Rates Holiday

100% relief from business rates for the 2020-21 tax year for retail, hospitality and leisure businesses.

There is no action for you. Local authorities will apply the business rates holiday to your bills.

Note: This also applies to nurseries in England who do not have to pay business rates for the 2020-21 tax year.

Cash Grants

Businesses in the retail, hospitality or leisure sector will receive a cash grant from the Government of up to £25,000 per property.

Businesses in these sectors with a property that has a rateable value of £15,000 and under may be eligible for a grant of £10,000.

Businesses in these sectors with a property that has a rateable value of over £15,000 and less than £51,000 may be eligible for a grant of £25,000.

Eligible businesses will be contacted by their local authority, though some local authorities have decided to operate an applications process.

Protection against aggressive rent collection and closure

Temporary new measures introduced to safeguard the UK high street and other companies against aggressive debt recovery actions during the pandemic.

Funding for cultural organisations, charities and spectator sports

Via the £1.57 billion Culture Recovery Fund; a £750 million package of support for charities; and a £300 million Sport Winter Survival Package.

SUPPORT FOR INNOVATION

Future Fund

This scheme will issue convertible loans between £125,000 to £5 million to innovative companies which are facing financing difficulties due to the coronavirus outbreak.

Loans are subject to at least equal match funding from private investors.

Suitable for businesses that rely on equity investment and are unable to access the Coronavirus Business Interruption Loan Scheme.

Available to businesses which have previously raised at least £250,000 in equity investment from third-party investors in the last 5 years.

On 30 June, the Future Fund was extended. Companies who have participated in highly selective accelerator programmes and were required, as part of that programme, to have parent companies outside of the UK are now be able to apply for investment. Read more here.

Research and development (R&D) Tax Relief for innovation

UK Government will give money back to any qualifying company undertaking a project which seeks to achieve an advancement in science or technology.

These companies are eligible for an enhanced Corporation deduction equal to 230 per cent of the R&D expenditure. This equates to a tax benefit of around 25p for every £1 spent on R&D.

For loss-making SMEs incurring R&D expenditure in the year, it is possible to surrender some of the loss to HMRC for a tax repayment of around 33p for every £1 spent on R&D.

Large companies carrying out R&D receive a tax credit of around 12p for every £1 spent on R&D. This R&D Expenditure Credit is payable to the company net of tax and also can be surrendered to other group companies.

Find out more here.

For further information or to arrange for a no obligation preliminary discussion on how your company could qualify under this Government business support scheme, contact Steve Govey or your usual Beavis Morgan Client Partner.

Support for SMEs focusing on R&D

Innovate UK, the national innovation agency, will accelerate up to £200 million of grant and loan payments for its 2,500 existing Innovate UK customers on an opt-in basis.

An extra £550 million will also be made available to increase support for existing customers and £175,000 of support will be offered to around 1,200 firms not currently in receipt of Innovate UK funding.

Contact Steve Govey or your usual Beavis Morgan Client Partner for more information and for support in submitting your application.

This is a fast-changing situation and it is anticipated that the new measures announced will continue to evolve.

The team at Beavis Morgan is on hand to guide business owners and managers through the weeks and months ahead.

We will continually monitor the situation and update you via this online portal. We also offer the opportunity for you to receive news alerts as they happen directly to your inbox.

You can register to receive these alerts via the contact form provided on this page.

Alternatively, if you have any concerns or queries and require business advice and support at this challenging time, email us at info@beavismorgan.com.

REGISTER FOR CORONAVIRUS BUSINESS SUPPORT NEWS ALERTS

The Coronavirus business support strategies are changing fast. Receive alerts from the Beavis Morgan group sent directly to your inbox and stay informed.

If you have a particular query related to Coronavirus crisis and how we can help you and your business then please email us via info@beavismorgan.com.