COVID-19 & Government Assistance for Businesses
The government has announced a huge package of measures aimed at helping businesses and individuals to survive financially during the pandemic crisis. Here is a summary of the key measures available.
Points to be covered in this article
Retail, hospitality and leisure businesses based in England will have a business rates holiday for the 2020 to 2021 tax year. To qualify a property will be occupied and wholly or mainly being used:
- as shops, restaurants, cafes, drinking establishments, cinemas, and live music venues;
- for assembly and leisure;
- for hospitality, as hotels, guest and boarding premises, or self-catering accommodation.
You do not need to do anything to access this scheme and you local authority should be in contact with you about it, most likely by issuing a new bill for the coming tax year. If you are in doubt as to whether you qualify or think you have not been included when you should have been, you should get in touch with your local authority.
Cash grants for retail, hospitality and leisure businesses
Businesses in the retail, hospitality, and leisure sectors can get a cash grant of up to £25,000 per property provided your business is based in England and the rateable value of your property is less than £51,000. You can check the rateable value of your buildings by clicking here.
Your local authority will write to you if you are eligible for this grant and you should not need to take any action.
Support for Small Businesses with little or no business rates liability
If you are a business that pays little or no business rates because of small business rates relief, rural rate relief and tapered relief, the government will provide you with a one off grant of £10,000 to meet ongoing business costs. Again, your local authority should contact you about this if you qualify and you should not need to do anything to access the scheme.
Business Interruption Loan Scheme
40 accredited lenders are offering loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years to small and medium-sized enterprises. The government are guaranteeing each loan up to a value of 80%. They will also make a business interruption payment to over the first 12 months of interest and lender fees to allow smaller business to benefit from no upfront costs and lower initial repayments.
Your business may be eligible for this scheme if it is UK based, with a turnover of no more than £45 million per year and meets the other lending criteria. Please click here for more details regarding eligibility and how to apply.
There has been widespread criticism of the scheme and the way in which some the lenders are applying it meaning many businesses were being turned down for loans or offered loans on terms which were unpalatable including interest rates of up to 30%.
The government has now introduced changes to the scheme so that it is not a requirement for a business to have been turned down for a commercial loan before it can access the scheme. Also if the loan applied for is under £250,000 banks can no longer request personal guarantees. The government has failed to put a cap on the interest rates that banks can place on the loans.
Corporate Financing Facility
The Bank of England will provide support for larger businesses to allow them to finance their short-term liabilities. For click here for more information.
Deferring VAT Payments
If you have a VAT payment due between 20 March and 30 June 2020 you will have the option to pay the VAT due as normal or to defer the payment until a later date. You will still have to submit your VAT returns on time but you do not need to tell HMRC that you are choosing to defer your VAT payment. Once the deferral period ends you will have to pay the deferred amount and the government has yet to release details as to how to do this.
Time to Pay Scheme
HMRC have the discretion to provide any business of self-employed person with support if they are in financial difficulties and have outstanding tax liabilities. If you think you might be eligible for help under the Time to Pay Scheme you should contact HMRC on 0800 024 1222. HMRC will decide each application on a case by case basis
You can find more information about these and the other measures being introduced on the Government website.