While the package of help for businesses will evolve over time, the key elements of the current proposals as of 2 April 2020 are summarised in this document, to help provide guidance on what support is available to businesses and individuals and how to access it.
Coronavirus Job Retention Scheme
All UK employers can claim for 80% of furloughed employees’ (employees on a leave of absence) usual monthly wage costs, up to £2,500 a month, plus the associated employer National Insurance (NI) contributions and minimum automatic enrolment employer pension contributions on that wage.
The scheme is open to all UK employers that had created and started a Pay as You Earn (PAYE) payroll scheme on 28 February 2020.
Employers are required to submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal, which is due to go live at the end of April 2020. Claims can be backdated to 1 March 2020.
For more information: Coronavirus Job Retention Scheme - https://www.businesssupport. gov.uk/coronavirus-job-retention-scheme/
Self-Employment Income Support Scheme (SEISS)
The scheme provides a grant to self-employed individuals or partnerships, worth 80% of their profits up to a cap of £2,500 per month.
The grant is open to those where the majority of their income comes from selfemployment and who have profits of less than £50,000. To qualify, the individual must have been self-employed for the 2018/19 tax year, still trading in the current tax year, and anticipate trading in the 2020/21 tax year. Those who were not self-employed in 2018/19, will not qualify under the rules as they stand.
The scheme will be open for an initial three months with self-employed workers able to make their first claim by the beginning of June 2020. HMRC will contact individuals who are eligible for the scheme and invite them to apply online.
“The scheme provides a grant to self-employed individuals or partnerships, worth 80% of their profits up to a cap of £2,500 per month.”
For more information: Self-Employment Income Support Scheme - https://www.gov.uk/ guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-incomesupport-scheme
Coronavirus Business Interruption Loan Scheme
Delivered by the British Business Bank (BBB), the temporary loan scheme has been designed to primarily support small and medium-sized enterprises (SMEs) in accessing bank lending and overdrafts.
This scheme aims to help any viable business with a turnover of up to £45m to access government-backed finance of up to £5m. Interest payments and any lender-levied fees for businesses will be covered by the government for an initial period of up to 12 months. The government will provide lenders with a guarantee of 80% on each facility to give lenders further confidence in continuing to provide finance to SMEs.
The scheme is open for applications and delivered through 40 accredited lenders.
For more information: Coronavirus Business Interruption Loan Scheme - https://www.businesssupport.gov.uk/coronavirusbusiness-interruption-loan-scheme/
COVID-19 Corporate Financing Facility
To support larger firms, with over 250 employees, the Bank of England has announced a lending facility to provide a quick and cost-effective way to raise working capital via the purchase of short-term debt in the form of commercial paper.
The facility is open to firms that can demonstrate they were in sound financial health prior to the pandemic. Businesses do not need to have previously issued commercial paper in order to participate.
The scheme will operate for at least 12 months.
Businesses that believe they are eligible for the CCFF, should discuss with their bank. It is important to note that not all banks issue commercial paper. UK Finance has a list of banks that are able to assist in this scenario.
For more information: COVID-19 Corporate Financing Facility - https://www.businesssupport.gov.uk/covid-19- corporate-financing-facility
Support for the retail, hospitality and leisure sectors
Business Rates Relief - all businesses in the retail, hospitality and leisure sectors will pay no business rates in England for the 2020/2021 tax year.
There will be no rateable value threshold on this relief - businesses large and small will benefit.
No specific action needs to be taken. The local authority should reissue 2020/21 bills with the exclusion of business rates.
For more information: Business Rates Holiday for Retail, Hospitality and Leisure - https://www.businesssupport.gov.uk/businessrates-holiday-for-retail-hospitality-and-leisure/
Retail and Hospitality Grant Scheme - provides UK businesses in the retail, hospitality and leisure sectors with cash grants of up to £25,000 per property.
Properties that are able to benefit from the relief are occupied premises that are wholly or mainly being used:
- as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
- for assembly and leisure
- as hotels, guest and boarding premises and self-catering accommodation
Businesses in these sectors with a property that has a rateable value of £15,000 and under are eligible to receive a grant of £10,000. Those with a property that has a rateable value of between £15,000 and £51,000 will receive a grant of £25,000.
Businesses with a rateable value of £51,000 or over are not eligible for this scheme.
It is anticipated that initial payments will start being made in April 2020. The local authority should be able to help with any questions on eligibility.
For more information: Cash Grant for Retail, Hospitality and Leisure - https://www.businesssupport.gov.uk/cash-grant-forretail-hospitality-and-leisure/
Support for small businesses
A £10,000 cash grant is available from local authorities for businesses based in England in receipt of Small Business Rates Relief (SBRR) or Rural Rates Relief (RRR), to help meet their ongoing business costs.
It is anticipated that payments will start being made in April 2020. The local authority should be able to help with any questions on eligibility.
For more information: Small Business Grant Funding - https:// www.businesssupport.gov.uk/small-business-grant-funding/
Support for businesses and individuals paying tax
From 20 March to 30 June 2020, VAT payments for all UK businesses will be deferred automatically, while for self-employed individuals, self-assessment income tax payments due on 31 July 2020 will be deferred until 31 January 2021.
There will also be an extension to the HMRC’s Time to Pay scheme, which gives businesses extended time to make any missed payments on their income tax bill.
For more information: Time to Pay from HMRC - https://www.gov. uk/difficulties-paying-hmrc VAT deferral - https://www.businesssupport.gov.uk/vat-deferral/
Statutory Sick Pay (SSP)
UK SMEs are able to reclaim SSP paid for sickness absence due to COVID-19 for the first two weeks of the individual’s absence. An employer is eligible if they had less than 250 employees on 28 February 2020 and they do not need to provide a GP fit note
Existing systems are not designed to facilitate such employer refunds for SSP, however the government will work with employers over the coming months to set up a repayment mechanism for employers as soon as possible. Businesses need to keep records of employees who have taken sickness absence and the reason why so that the right claim can be made once the scheme is online.
For more information: Statutory Sick Pay Rebate Scheme - https:// www.businesssupport.gov.uk/statutory-sick-pay-rebate/
Useful links for government-backed finance and grants
The situation is developing on a daily basis and so it’s important to check in on the latest government announcement, as well as individual departments including HM Treasury and the Department for Business, Energy & Industrial Strategy, as well as the British Business Bank and the Bank of England.
At Gallagher, we work with a large variety of businesses and individuals, each exposed to uniquely different risks and now dealing with individual challenges and circumstances.
As one of the leaders in the risk management business, we remain fully committed to supporting businesses and individuals through these challenging and uncertain times. To discuss individual risk management requirements, please contact your Gallagher representative.