Financial Support for businesses and employees
Tuesday 24th of March 2020.
Current Schemes
1. Coronavirus Business Interruption Loan Scheme
The Chancellor announced support for small businesses in the budget on 11 March. Details are subject to clarification but the scheme has been extended and brought forward to 23 March.
It will be provided through participating provider banks and will offer more attractive terms for both businesses applying for new facilities and lenders, with the aim of supporting the continued provision of finance to UK businesses during the Covid-19 outbreak.
The scheme provides the lender with a government-backed guarantee against the outstanding facility balance, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’. The borrower always remains 100% liable for the debt.
The maximum value under the scheme will be £5 million.
The Government will cover the first 12 months of interest payments, so businesses will benefit from lower initial repayments. The business remains liable for repayments of the capital.
As well as loans, there are many other types of finance supported by the programme, depending on the provider.
Eligibility:
• UK based SMEs with turnover of no more than £41 million per annum
• Be able to confirm that they have not received de minimis State aid beyond €200,000 equivalent over the current and previous two fiscal years
• Have a sound borrowing proposal, but insufficient security to meet the lender’s requirements
2. Coronavirus Job Retention Scheme
• Employers will be able to contact HMRC for a grant to cover most of the wages of their workforce who remain on payroll but are temporarily not working during the coronavirus outbreak.
• Grants will cover 80% of the salary of retained workers, up to a total of £2,500 a month.
• Grants are backdated to 1 March 2020 and the scheme is expected to be up and running by the end of April 2020.
3. VAT payments
• VAT payments due between now and the end of June 2020 will be deferred.
• No VAT registered business will have to make a VAT payment normally due within their VAT return to HMRC in that period.
4. Income tax payments
• Income tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
5. Universal Credit
• The Universal Credit standard allowance and Working Tax Credit basic element will be increased for the next 12 months by £1,000 a year.
6. Renters
• Nearly £1 billion of additional support for renters, through increases in housing benefit and Universal Credit.
• From April, local Housing Allowance rates will pay for at least 30% of market rents in each area.
A financial support package for the self-employed is also expected this week.
The Government has launched a new website that helps businesses find out how to access the support that has been made available, who is eligible, when the schemes open and how to apply - https://www.businesssupport.gov.uk/coronavirus-business-support/
GOV.UK site – support for businesses - https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
GOV.UK site – guidance for employees - https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-guidance-for-employees
Richardson Swift Chartered Accountants – resources for the self-employed - http://www.richardsonswift.co.uk/news-and-comment/coronavirus-resources-for-the-self-employed
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