Over recent weeks, drastic measures to ensure social distancing and to reduce the spread of the coronavirus have meant that millions of businesses have been forced to shut their doors.
The impact on the economy has been severe. Indeed, investment expert Peter Toogood says that “GDP has effectively stopped, which is something that no one who is alive today has ever seen”.
In an attempt to help SMEs to survive the economic shutdown, the government has announced a range of measures designed to help small business. Here’s your guide to the assistance that is available.
Self-employed? Read our guide to the self-employed support that is available
Claim up to 80% of the wages of furloughed employees
To try and ensure that employers don’t have to lay off staff during the nationwide lockdown, the Chancellor has announced a ‘job retention’ scheme through which the government will pay up to 80% of the salary of ‘furloughed’ workers – those on a leave of absence.
If you have furloughed your workers you can claim for 80% of your employees’ usual monthly wage costs, up to £2,500 a month. You can also claim the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.
Remember that changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
Defer your VAT payments
You can now defer your Valued Added Tax (VAT) payments for three months.
This deferral will apply from 20 March 2020 until 30 June 2020 and you don’t need to apply to defer payment. You have until the end of the 2020/21 tax year to pay any liabilities that have accumulated during the deferral period.
Claim up to 14 days Statutory Sick Pay per employee
If your business has fewer than 250 employees (at 28 February 2020) you can reclaim the cost of any Statutory Sick Pay (SSP) caused by the coronavirus. The government will fund the cost of this in full, up to a limit of 14 days per individual.
You must keep records of your employee’s absence and the SSP payments that you make. However, your employee will not need to provide a doctor’s note.
Take a business rates holiday
If you own a business in the retail, leisure or hospitality sector in England, you will be exempt from business rates for the 2020/2021 tax year.
Nursery businesses will also be exempt from business rates in 2020/21.
Claim a cash grant if you run a retail, leisure or hospitality businesses
If your retail, hospitality or leisure business has a rateable value of less than £15,000 then you will be eligible for a cash grant of £10,000.
If the rateable value of your retail, hospitality or leisure business is £15,000 to £51,000 then a £25,000 grant is available.
These grants will be available through your local authority.
Claim a cash grant if you qualify for certain reliefs
A £10,000 grant is also available to businesses that qualify for Small Business Rate Relief or Rural Rate Relief.
This will be also administered by the local authority. If you are eligible, you will be contacted directly.
Remain in your business premises
If you cannot pay your commercial rent because of Covid-19 your business is safe from eviction in the short term.
The government has announced that no business will automatically forfeit their lease and be forced out of their premises if they miss a payment before 30 June. This period could be extended.
Note that you will remain liable for the rent due.
Apply for a Business Interruption Loan
The Chancellor has announced a new Coronavirus Business Interruption Loan Scheme. Under the scheme, SMEs can apply for loans of up to £5 million for up to six years. The business loan scheme will be delivered by the British Business Bank and you can access the loans via your high street bank or one of 40 accredited finance providers.
The government will cover the first 12 months of interest payments and any lender-levied fees, meaning you won’t face any upfront costs and will benefit from lower initial repayments.
To be eligible for a business interruption loan you must:
• Be based in the UK with an annual turnover of no more than £45 million
• Meet the other British Business Bank eligibility criteria
Claim on your insurance
The government requested that certain businesses and venues should remain closed from 21 March 2020 onwards. If your insurer requires clarity that the government had ‘ordered’ businesses to close, this official advice is sufficient.
Bear in mind that most commercial insurance policies are unlikely to offer cover for Covid-19. You should check the terms and conditions of your specific policy and talk to your insurer.
If you have an event cancellation policy that includes unspecified notifiable disease extensions, you should be able to make a claim for the necessary and unavoidable cancellation, abandonment, curtailment, postponement and disruption of your event, subject to the other terms and exclusions of your policy.
Get in touch
If you run a small business and you need advice during this uncertain period, please get in touch. Email admin@stonegatewealth.co.uk or call us on 01785 876222.
This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of government legislation which is subject to change.
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