Coronavirus Business Support Page

Keeping your business healthy during the pandemic

There’s no denying that times are tough. The economic effects of COVID-19 will be with us for a long time. But fortunately there are steps you can take to mitigate the damage and emerge from the crisis in good shape.

Below you’ll find our guide to weathering the coronavirus storm. The government has announced a number of initiatives to help businesses – from grants and bounce back loans to tax deferrals and job retention schemes – but which measures can help you?

We examine what the options are, which businesses are eligible, and explain the advantages as well as some potential pitfalls. You’ll also find some broader advice about organising your finances and communicating with key people in these challenging times.

All the information below will be updated as circumstances evolve. And of course, if you have any concerns or questions, don’t hesitate to contact us.

Employment

Coronavirus Job Retention Scheme (CJRS) – updated 29th June 2020

If you’re a UK employer with a PAYE scheme, the CJRS can support employees who would otherwise be made redundant.

For the period 1st March to 31st July, the government will pay 80% of a furloughed employees’ salary (up to £2,500 per month), as well as the associated National Insurance and pension costs.

Up to 30th June, employees cannot work for you while they’re furloughed.

The March-June scheme will end on 30th June. Claims under this scheme must be made on or before 31st July.

From 1st July onwards, claims can only be made for employees that you have already furloughed for at least 3 consecutive weeks up to 30th June.

You will have the flexibility to bring employees back part time and pay their wages and associated costs for the hours they work, while still being able to claim a grant for furloughed hours. Each claim made must be for a week or more.

The maximum number of employees that can be claimed for will be limited to the maximum number on any single claim up to 30th June.

From 1st August, a furloughed employee will still have 80% of their salary covered, but you’ll start to share the cost.

The July-October scheme will end on 31st October. Claims must be made on or before 30th November.

GovernmentEmployer
Salary grantSalary
% of salaryMax*Plus% of salaryMax*Plus
Mar - Jul80%£2,500NIC & pension---
Aug80%£2,500---NIC & pension
Sept70%£2,187.50-10%£312.50NIC & pension
Oct60%£1,875-20%£625NIC & pension

* For a fully-furloughed employee. For flexible furloughing the cap will be proportional to the hours not worked, and the employer will pay for any hours worked.

The CJRS covers all employees on your payroll between 28th February and 19th March. You could choose to fund the differences between CJRS payments and your employees’ salaries but this is up to you.

Meanwhile, any employee who was made redundant after 28th February can be re-employed and furloughed. The minimum furlough period is 3 consecutive weeks.

Before you claim …

Please be aware that the CJRS has some conditions, notably:

  • Furloughed Directors can only perform statutory duties and obligations like filing accounts. They cannot undertake work or generate income.
  • The CJRS scheme does not extend to dividends.
  • There is proposed legislation which includes powers for HMRC to check grants made under this (and other) schemes enabling them to prosecute those guilty of fraud or over claiming, such as asking staff to continue working despite being furloughed or by claiming the grant for an employee without their knowledge. Employers will have 30 days from the legislation becoming law to inform HMRC of any monies over claimed, either fraudulently or mistakenly.
  • If you would like to go ahead and make a claim, click here to visit the government’s online portal.
  • From 1st August, employers will need to submit data on usual hours and actual hours worked as part of their claim. Hours furloughed will be the difference. No claim period can extend across a calendar month end.

 

Statutory Sick Pay (SSP) Rebate Scheme – updated 29th June 2020

If you’re an employer with fewer than 250 employees, and an employee was unable to work after 13th March due to COVID-19, the SSP can help you.

The rebate scheme allows you to claim back up to two weeks statutory sick pay per employee if they have been unable to work due to having coronavirus symptoms, have been self-isolating because they live with or have been notified they’ve been in contact with coronavirus symptoms, or have been shielding and have a letter from the NHS or a GP.

It does not include employees unable to work solely due to the 14-day quarantine period on returning to the UK. 

Make sure you keep a record of staff absences and SSP payments. Thankfully you do not need GP notes from employees to make your claim, though you can ask them to provide you with an isolation note from NHS 111.

Self Employment

Self Employment Income Support Scheme (SEISS) – updated 29th June 2020

If you’re self-employed or a member of a partnership, and you’ve lost income due to the COVID-19 crisis, the SEISS could help.

You can claim a taxable grant worth 80% of your average monthly trading profits (capped at £2,500 per month for up to 3 months) if your business is adversely affected up to 13th July. The scheme will close its doors for further claims on 13th July.

If your business is adversely affected after 13th July, from August you can apply for a second and final taxable grant worth 70% of your average monthly trading profits (capped at £2,190 per month for up to 3 months). This second grant can be claimed even if you’ve not claimed the first grant i.e. if your business first becomes adversely affected after 13th July.

In each case, you will need to meet the following conditions:

  • You traded in the tax year 2019-20
  • Are trading when you apply (or would be trading if not for COVID-19)
  • You will continue trading in the tax year 2020-21
  • Have lost trading / partnership trading profits due to COVID-19
  • Your self-employed trading profits are less than £50,000 and at least 50% of your total income.
  • You have submitted your Income Tax Self Assessment tax return for the tax year 2018-19 before 23rd April 2020
  • Your business started on or before 5th April 2019

Unlike employed workers furloughed during the outbreak, self-employed workers can continue working and claim SEISS.

HMRC will automatically invite you to apply online if you are eligible. The grant will be paid directly into your bank account in one instalment.

 Click here for more information on self-assessment.

Government Grants

Business rates grants – updated 29th June 2020

These helpful rates grants are organised by local authorities rather than HMRC. The person who (according to the authority’s records) was the ratepayer for the property on 11th March 2020 will receive the funds.

You don’t need to apply if you’re eligible – your local authority will contact you automatically. However, they’ll contact you via mail so you’ll need to check your premises on a regular basis to avoid delays.

The scheme offers two main types of support:

  • A taxable £25,000 grant is available for retail, hospitality and leisure businesses in England operating from smaller premises with rateable value between £15,000 and £51,000. Pubs and restaurants will also be granted fast-track planning permission to serve takeaway hot food and drinks.
  • A taxable £10,000 Small Business Grant Fund (SBGF) will potentially be available to all businesses currently eligible for Small Business Rates Relief or Rural Rates Relief operating from premises with a rateable value of £15,000 or less. This is to help businesses in England meet on-going costs.

Additional support

A discretionary fund has also been created to help small businesses with ongoing property costs outside the scope of the business grant funds scheme. This includes market traders, small charities, those operating from shared office space where they’re not the rates payer, plus B&Bs paying council rather than business rates. 

These taxable grants are banded £25,000, £10,000, and under £10,000. However, it’s unlikely you will be contacted by your local authority if you qualify so please check the criteria on their website.

If you have claimed other COVID-19 grants, apart from the Job Retention Scheme (CJRS) and the Self Employment Income Support Scheme (SEISS), you will not be eligible for a top-up grant.

Click here for more information on business rates.

Loans

Bounce Back Loan Scheme (BBLS) – updated 7th May 2020

The BBLS is designed to give small and micro businesses a kick-start to help them recover from the COVID-19 crisis. The online application is short and simple, plus you should receive the funds in just 1-2 days.

  • Claim up to 25% of your turnover (capped at £50,000)
  • No fees, interest, or repayments due in the first 12 months
  • Loan terms are 6 years
  • Fixed interest rate of 2.5%
  • No early repayment fees
  • No personal guarantee required (although some security may be sought for unincorporated businesses)

Are you eligible?

If your business was trading on 1st March 2020, and your balance sheet was positive on 31st December 2019, then you could be eligible for the scheme. However, you won’t be eligible if you already have a Coronavirus Business Interruption Loan (see below) – although you can migrate your CBILS into a Bounce Back Loan if you wish.

Please note that the BBLS is a loan not a grant – it won’t be taxed but you’ll be fully liable for the debt. You’ll therefore need to decide if it’s the right option for your business.

We’ll make sure you have all the relevant information at hand so you can make an informed decision.   

 

Coronavirus Business Interruption Loan Sch​eme (CBILS) – updated 7th May 2020

The CBILS is a new temporary loan scheme designed to support SMEs. You could obtain a loan or overdraft of up to £5 million with the government covering your interest and fees for the first 12 months.

You’ll be eligible if:

  • Your business activity is UK-based
  • You have an annual (group) turnover of no more than £45 million (alternative assistance is available for businesses with more)
  • You have a borrowing proposal that would be viable if not for COVID-19
  • You can demonstrate that your business has been adversely impacted by COVID-19
  • Your balance sheet was positive on 31st December 2019.

The maximum term for a CBILS loan is 3 years for overdrafts and invoice finance, or 6 years for loans and asset finance.

Personal guarantees are not needed for loans under £250,000. However, unlike BBLS support, it may take some time before you can access your funds. What’s more, the loan will be subject to affordability and you’ll be fully liable for the debt.

Taxes and Filings

Self assessment – updated 7th May 2020

If you’re worried about paying your tax bill in these troubling times then help is at hand. HMRC will let you defer your 31st July 2020 self-assessment payment until 31st January 2021 without penalty or interest.

You don’t need to inform HMRC if you wish to do this. And it’s available for everyone whether you’re self-employed or not. However, you may want to think carefully before you defer.

A deferment will result in a large payment in January next year. And this may put further cashflow pressures on you down the road.

Consequently, if you’re able to pay your second payment on account on 31st July then it’s prudent to do so. Alternatively, just pay what you can before January.

Click here for more information on the Self Employment Income Support Scheme (SEISS).

 

VAT payments – updated 29th June 2020

Deferring your VAT payments can ease the pressure on your businesses finances. Therefore it might be worth taking up HMRC’s offer to defer VAT payments due between 20th March and 30th June 2020. All liabilities accumulated during this period must be paid on or before 31st March 2021 instead. This could include making additional payments with subsequent VAT Returns.

However, be aware that you must file your VAT return by the usual date – only the payment can be deferred. 

You don’t need to apply to take advantage of HMRC’s offer. It’s automatic. All you need to do is cancel your direct debit if you pay this way.

If you usually receive VAT refunds, you could also consider moving to monthly VAT returns to improve your cashflow – although you will need to apply to do this.

This scheme has not been extended, therefore any payments due after 30th June 2020 – for VAT periods ending 31st May 2020 and after – will be payable by the usual dates. You’ll need to reinstate any cancelled direct debit arrangements in enough time for HMRC to take payment.

 

Filing accounts at Companies House – updated 29th June 2020

Businesses will get more time to file their accounts at Companies House. You do not need to apply for an extension, if your company is eligible the filing deadline will update automatically – you can check on the Companies House website here.

In addition, Companies House will, for a temporary period:

  • ease strike off activity – this includes suspending voluntary strike off applications in order to protect creditors and any other interested parties who may wish to object to the strike off;
  • treat late filing penalty appeals sympathetically, if the late delivery of accounts was caused by the coronavirus outbreak. However, penalties will continue to be issued in the usual way;
  • provide a break for companies to pay late filing penalties, as well as providing additional support with payment plans for late filing penalties.

 

Support for businesses paying tax liabilities – updated 7th May 2020

HMRC’s Time To Pay service may be able to help you with outstanding tax liabilities. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances.

Please call HMRC’s dedicated helpline on 0800 024 1222 for more information. 

 

Business rates – updated 7th May 2020

Local authorities are helping companies with their business rates during the COVID-19 crisis. Discounts will be applied automatically so you don’t need to do a thing.

A business rates retail holiday for retail, hospitality and leisure businesses in England is being introduced for the 2020 / 21 tax year.

HMRC are also introducing a business rates holiday for nurseries in England. Properties that will benefit include will be those:

  • Occupied by providers on Ofsted’s Early Years Register, and
  • Wholly or mainly used for the provision of the Early Years Foundation Stage

If your nursery is temporarily closed due to the government’s advice on COVID-19 then you will qualify. However, if your premises are occupied but not wholly or mainly used for the qualifying purpose, then you won’t be eligible.

Click here for more information on business rates grants.

Businesses

IR35 and the private sector

The IR35 tax reforms scheduled for April 2020 have been postponed. The legislation will now be reintroduced in April 2021 instead.

This means you have a further year to review your contracts and working practices, to have productive discussions with your clients, and ensure you remain outside of IR35 this time next year.

If you were due to be affected by the new measures, it would be sensible to speak to your end client immediately to confirm that they will also be deferring any changes to your working practices and arrangements.

 

Protection from eviction for commercial tenants

If you cannot pay your rent during the COVID-19 crisis then you’ll be automatically protected from eviction.

No business in England, Wales, or Northern Ireland will automatically forfeit their lease and be forced from their premises if they miss a payment before 30th June. The government may extend this period if needed, however no new announcements have yet been made.

Remember, you’ll still need to pay the amount owed eventually. It is not a rent holiday.

 

Insurance claims

If you’re insured for pandemics and government-ordered closure then it’s possible that you may be covered. The government said on 17th March 2020 that their advice for people to avoid pubs, theatres etc should be sufficient in most circumstances to make a claim.

However, in reality you may not be covered because standard business interruption insurance policies focus on property damage and exclude pandemics. Therefore you should check the terms and conditions of your specific policy. Only your insurers can tell you for sure.

Cashflow and Forecasting

Managing cashflow

Cash is vital to the health of your business so following the advice below could be key to surviving the COVID-19 crisis.

Work out where you are and what you might need. Taking out finance may temporarily boost your bank balance but it’s likely to be an unnecessary cost overall.

Ask yourself the following questions to make sure you’re managing cash sensibly:

  • What income is due to come in?
  • Is it guaranteed?
  • What expenditure is essential at the moment?
  • Can any large expenditure/projects be put off?
  • Do you have cash reserves that can be diverted?
  • Are you making the most of existing credit terms or can some payments be delayed to plug any immediate cashflow shortfalls (whilst ensuring you can still make the later payment)?

It’s also worth helping other businesses in these difficult times. Consider helping a struggling supplier by making an early payment to them if you’re able to.

 

Cashflow Forecasts

If you don’t have a cashflow forecast now is the time to create one. If you already have one, it should be frequently reassessed and adjusted.

It’s a good idea to stress test your forecast too. What if that receipt doesn’t come in? What if staff productivity falls? If you identify any problems ask yourself if they can be managed with existing facilities / resources or whether you’ll need to consider external financing.

Talk to us if you need help putting a forecast together or reassessing / testing an existing one. We’re here to help.

 

Overdrafts

An overdraft is often the quickest way to access short-term funds, especially if you have an existing facility. Speak to your bank because they may be willing to extend your limit. Some banks have earmarked funds specifically to help businesses affected by COVID-19.

However, don’t forget that any extension may be temporary and could be withdrawn later on.

 

Invoice Finance

It’s worth thinking about invoice financing if you have a large debt book. This can be arranged quickly and will likely provide you with more cash than an overdraft.

However, this solution is potentially expensive. What’s more, the value of the debts will be discounted because your finance company will take on the risk of slow and non-payment.

 

Alternative finance loans

Many products exist outside of banks. And some are more flexible, simpler and faster to access. Talk to us about these alternative options.

Practical and business planning

Words of advice

Navigating the COVID-19 crisis is a challenge for all businesses. Here are some tips to help you through these difficult times. Leadership and people skills will be key.

 

Communicate

Everyone is feeling nervous, or at least uncertain, about the immediate future. Communication is therefore key to provide an element of certainty. As a leader in your business, people will look for you to lead with purpose, positivity and integrity.

Communicate with your customers and clients to reassure them that you’re open for business, even though it might look different for a while.

Communicate with your staff and contractors too. If you are able to remain open, reassure them that they’re needed and there’s still work to be done.

Keep communicating all the time. Evaluate how and when you need to touch base, especially if you find yourself with a home working team.

 

Remote working

Working from home (WFH) has become more popular in recent years. In fact, many new businesses operate exclusively on a remote working model. However, this modern approach will be unsettling and new territory for many people.

If you and your staff are able to work from home then ensure you have the infrastructure to do this. If you already work off of a remote server then this may be simple to achieve. But if you have an on-site server then you may need to set up a secure remote connection.

Be clear what you expect from your team but have realistic expectations. For many it will be hard to transition from office to home working in such a short space of time. Consider giving them a framework or boundaries to help them adapt.

Although you’ll expect your staff to work like they would in the office – taking calls, replying to emails etc – appreciate they’ll have distractions too (not least children and concerned relatives etc). Tell them you understand these problems. Reassure conscientious employees and empower them to make the right decisions.

Most importantly, keep communicating. Set up a WhatsApp group so they don’t feel isolated. Arrange regular phone / video calls with your team to stay in touch on both an operational and personal level.

Don’t forget your own needs either. All the above is relevant to you too. Business can be lonely at the best of times, so find your own support through business contacts and networks. And, of course, feel free to check in with us.

 

Review systems/processes

Remember that the current difficulties will pass. So make sure you’re in a good position for the post COVID-19 world.

Use any downtime wisely. Work on the things you’ve been too busy to do before. Reflect on where you started and how far you’ve come. And think about ways to make your business better. What can be tweaked or improved?

Imagine what your ideal business would look like. How can you get closer to that? If you’re not already using cloud accounting software then look at your options – we recommend FreeAgent or Xero depending on your requirements.

Consider additional apps that might be useful too – for chasing debts, cashflow management, projections, stock control etc. Use free trial periods to try things that might suit your business.

 

Future planning

The COVID-19 crisis took most businesses by surprise. So what can you do to anticipate and prepare for future difficulties?

You might consider the following:

  • Permit more homeworking so an easy transition next time
  • Put more cash aside as an ‘emergency reserve’
  • Move to a cloud-based strategy so you have offsite access to vital files and software
  • Do more cashflow projections and/or scenario testing of those projections

Remember that these uncertain days will eventually pass. In the meantime we’re here to help whenever you need us.

Phone us on 01892 891902 or contact us to talk about your financial plans