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 (JRS)

Through the JRS the Government will reimburse employers for 80% of the wages, up to £2,500 a month, plus the associated Employer National Insurance contributions and pension contributions, of any employees that they pay through the pay as you earn (PAYE) system if those employees are temporarily not working i.e. on ‘furlough leave’. The amount paid is up to a maximum of £2,500.

Registration for the furlough of employees not having previously been on furlough leave for a full three week period will close on Wednesday 10 June.

From 1 July, businesses will be given the flexibility to bring furloughed employees back part time.

Over the course of the next four months the JRS will continue with businesses gradually asked to contribute more to the costs of the scheme, while increased flexibility is introduced.

Businesses would remain responsible for repaying any facility they may takeout.

TAX ASSISTANCE

VAT Deferral Scheme

To assist cashflow, all businesses with a UK VAT registration have the option to defer VAT payments due between 20 March and 30 June.

This is an automatic offer with no applications required.

UK Registered businesses will not need to make VAT payments normally due with VAT returns during this period. Taxpayers will be given until 31 March 2021 to pay any liabilities that have accumulated during the deferral period.

VAT refunds and reclaims will be paid by the Government as normal.

Those businesses who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay. Please do so in sufficient time so that HMRC does not attempt to automatically collect on receipt of your VAT return.

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

The Self- Assessment payment on account, that is ordinarily due to be paid to HMRC by 31 July 2020 may now be deferred until January 2021.

If you are due to make a self- assessment payment on account on 31 July 2020 then you are eligible for the deferment.

The deferment is intended to assist self-assessment taxpayers, including those who are self-employed, who are suffering hardship as a result of the Coronavirus.

The deferment is optional and anyone still able to pay their second self-assessment payment on account on 31 July 2020 should still do so.

This is an automatic offer with no applications required. No penalties or interest for late payment will be charged if you defer payment of your July 2020 payment on account until January 2021.

LOANS AND GRANTS FOR SMES AND SELF EMPLOYED

Coronavirus Business Interruption Loan Scheme (CBILS)

The scheme supports SMEs businesses, with an annual turnover of up to £45m, to access loans, overdrafts, invoice finance and asset finance of up to £5 million for up to six years.

The scheme will be delivered through commercial lenders, backed by the Government-owned British Business Bank.

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.

The Government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so businesses will benefit from no upfront costs and lower initial repayments.

Find out more about the Coronavirus Business Interruption Loan Scheme here and keep up with latest Government announcements and scheme developments here.

Bounce Back Loans for small businesses

Businesses can borrow between £2,000 and £50,000 and access the cash within days.

Loans will be interest free for the first 12 months, and businesses can apply online through a short and simple form.

The fast-track finance scheme will provide lenders with a 100 per cent guarantee for the loan and pay any fees and interest for the first 12 months.

No repayments will be due during the first 12 months.

Small Business Grant Funding

The Government is providing additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief, rural rate relief and tapered relief.

This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

Self-employment Income Support Scheme

The scheme will support self-employed individuals (including members of partnerships) whose income has been negatively impacted by Coronavirus.

The Government has announced a second round of the Self-Employment Income Support Scheme (SEISS). Self-employed workers will be able to claim another grant worth 70% of their average monthly trading profits, paid out in a single instalment covering three months’, and capped at £6,570.

If you are eligible and want to claim the first grant you must make your claim on or before 13 July.

Applications for the second grant will open in August 2020. Further information to be provided on 12 June.

Statutory Sick Pay Rebate Scheme

SMEs with fewer than 250 employees can to apply to HMRC to recover the costs of paying Coronavirus-related SSP

Employers will be able to make their claims through a new online service from 26 May.

This means they will receive repayments at the relevant rate of SSP that they have paid to current or former employees for eligible periods of sickness starting on or after 13 March 2020.

Click here to find out if you can claim back SSP paid to employees due to Coronavirus (COVID-19).

Employers are eligible if they have a PAYE payroll scheme that was created and started before 28 February 2020 and they had fewer than 250 employees before the same date.

LOANS AND GRANTS FOR LARGE BUSINESSES

Coronavirus Large Business Interruption Loan Scheme CLBILS)

CLBILS will provide a Government guarantee of 80% to enable banks to make loans of up to £25 million to all firms with a turnover of more than £45 million and up to £50 million for firms with a turnover of more than £250 million.

This will give banks the confidence to lend to many more businesses which are impacted by Coronavirus.

Facilities backed by a guarantee under CLBILS will be offered at commercial rates of interest.

Lenders will still be expected to conduct their usual credit risk checks, but this scheme allows them to specifically support business that were viable before the Coronavirus outbreak but are facing significant cash flow difficulties, that would otherwise make their business unviable in the short term.

Businesses would remain responsible for repaying any facility they may takeout.

Coronavirus Corporate Financing Facility (CCFF)

The CCFF means that the Bank of England will buy short-term debt from larger companies.

This will support companies which are fundamentally strong but have been affected by a short-term funding squeeze.

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

The scheme will be funded by central bank reserves – in line with other Bank of England market operations.

It will operate for at least 12 months, and for as long as steps are needed to relieve cash flow pressures on firms that make a material contribution to the UK economy.

More information about eligibility can be found here.

SUPPORT FOR RETAIL, HOSPITALITY & LEISURE

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.

Statutory demands and winding up petitions issued to commercial tenants to be temporarily voided and changes to be made to the use of Commercial Rent Arrears Recovery, building on measures already introduced in the Coronavirus Act.

Landlords and investors are asked to work collaboratively with high street businesses and other companies unable to pay their bills.

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.

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.