Support for business through the Coronavirus Job Retention Scheme

What is the Job Retention Scheme:

Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.

More information on the Job Retention scheme here.

Eligibility:

All UK businesses are eligible

How to access the Job Retention Scheme:

You will need to:

  • designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required).

The online service used to claim is not yet live. It is expected this will be live from the end of April 2020.

You can only submit one claim at least every 3 weeks, which is the minimum length an employee can be furloughed for. Claims can be backdated until the 1 March if applicable.

More information for how employees can claim through the Job Retention Scheme is available here.

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.


Support for business with turnover up to £45m through the Coronavirus Business Interruption Loan (CBIL) Scheme

What is CBIL:

The CBIL scheme provides loans of up to £5m for UK based SMEs with a turnover of up to £45m. These will be interest-free for 12 months and loans are backed by the British Business Bank and accessed via approved lenders.

The UK government have committed that all loans of less than £250,000 will not require any personal guarantees. OGUK is aware that the position of banks with regards to personal guarantees on loans greater than £250,000 varies.

More information on the Coronavirus business interruption loan scheme – CBIL here. 

Eligibility:

To be eligible for this companies must:

  • You must be a UK-based SME with an annual turnover of up to £45m
  • Have a borrowing proposal which, were it not for the COVID-19 pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable your business to trade out of any short-to-medium term difficulty

How to access CBIL:

Applications for support are open and information on how to apply can be accessed here.

The list of accredited lenders can be found here.

OGUK encourages members to discuss this option with their banking partner as soon as possible.


Support for business with turnover of between £45m and £500m through the Coronavirus Large Business Interruption Loan Scheme (CLBILS)

What is CLBILS:

This scheme (announced on 3 April) is an additional measure aimed at companies with a turnover of between £45m and £500m per year and will provide loans of up to £25m. These will be interest-free for 12 months and up to 80% of the value of the loan is backed by the British Business Bank. The finance will be accessed via approved lenders.

The UK government have committed that all loans of less than £250,000 will not require any personal guarantees. OGUK is aware that the position of banks with regards to personal guarantees on loans greater than £250,000 varies.

Further information is available here and OGUK will update the information available to members when it is released by the Government.


Support for larger firms through the COVID-19 Corporate Financing Facility (CCFF)

What is CCFF:

Under the new Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies. This will support your company if it has been affected by a short-term funding squeeze, and allow you to finance your short-term liabilities.

More information on the Covid corporate financing facility here.

CCFF Market Notice – March 2020

Eligibility:

This scheme is eligible to all companies who ‘make a material contribution to the UK economy’.

In practice, firms that meet this requirement would normally be:

  • UK incorporated companies, including those with foreign-incorporated parents and with a genuine business in the UK;
  • companies with significant employment in the UK;
  • firms with their headquarters in the UK.

The Bank of England will also consider whether the company generates significant revenues in the UK, serves a large number of customers in the UK or has a number of operating sites in the UK.

Companies will also need to demonstrate that they were in sound financial health prior to the impact of Covid-19. The clearest way to demonstrate this test is to have, or acquire, a rating. For such firms, investment-grade means a short-term rating of A3/P3/F3 or above, or a long-term rating above BBB-/Baa3/BBB- by at least one of the major credit ratings agencies: S&P, Moody’s or Fitch.

How to access CCFF:

Full information can be found here.

Companies can contact the Bank of England at [email protected] to discuss eligibility.

In order to access the CCFF, your company will also need to liaise with your bank. It is important to note that not all banks issue commercial paper. If your bank does not issue commercial paper, UK Finance will provide a list of banks that are able to assist.

The Bank of England plan to issue further clarity on the application process on 23 March – this is expected to be published here when available here.


Support for business paying tax: Time to Pay service

What is the Time to Pay Service:

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.

Eligibility:

You are eligible if your business:

  • pays tax to the UK government
  • has outstanding tax liabilities

How to access this service:

If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline 0800 0159 559


Support for business through deferring VAT and Income Tax payments

What support is available:

HMRC will support businesses by deferring Valued Added Tax (VAT) payments for 3 months. If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.

Eligibility:

All UK businesses are eligible

How to access this service:

This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.


Support for business paying sick pay

What support is available:

Small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19.

Eligibility:

  • your business is UK based
  • this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
  • employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020
  • employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
  • employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website
  • eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force
  • the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible

How to access this service:

A rebate scheme is being developed. Further details will be provided in due course once the legalisation has passed.


Support for Self-employed

Companies can apply for hardship relief to reduce business rates in England. Companies need to be able to prove that this relief is in the interest of local people.

Support packages were unveiled by the UK Government to support the self-employed. If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020. This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed.

Who can apply

You can apply if you’re a self-employed individual or a member of a partnership and you:

• have submitted your Income Tax Self Assessment tax return for the tax year 2018-19
• traded in the tax year 2019-20
• are trading when you apply, or would be except for COVID-19
• intend to continue to trade in the tax year 2020-21
• have lost trading/partnership trading profits due to COVID-19

Your self-employed trading profits must also be less than £50,000 and more than half of your income comes from self-employment. This is determined by at least one of the following conditions being true:

• having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
• having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period
• If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.

HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way.

More information available here.


Other support mechanisms

Companies can apply for hardship relief to reduce business rates in England. Companies need to be able to prove that this relief is in the interest of local people.

Rate relief for some businesses in Scotland.

A number of banks are making additional funds available to small businesses, including: