Chancellor has just announced several other measures to support businesses and their employees.
- Government will help pay wages under a Job Retention Scheme, for those who are unable to work. All are eligible and this will be backdated to 1st March 2020. The scheme will cover up to 80% of salary, to maximum £2,500 per month. This will be open for at least three months. This was announced as cafes, pubs and restaurants were told they must close this evening but are able to supply take-away food;
- VAT holiday, (deferment), until the end of June 2020;
- Self-assessment payments due by 31stJuly 2020 can be deferred until January 2021;
Both the above tax liabilities are deferments and at some point, the payments will need to be made to HMRC.
- The Coronavirus Business Interruption Loan Scheme,which was announced on Tuesday, (see below for further details), has now had the interest free period extended from six months to 12 months.
Further to our first update sent yesterday, the Government has released further details on the measures announced on Tuesday, which we summarised in our FACT SHEET that we released.
Retail, hospitality & Leisure Businesses - Business Rates Relief
- There is no action for you to take, to claim the relief;
- The relief will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. We are advised that they will do this as soon as possible;
- If you are eligible for the relief, make sure you receive notification that your business qualification has been actioned and cancel any direct debit or standing order.
Cash grants for retail, hospitality and leisure businesses
The £25,000 grant will be provided to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value between £15,000 and £51,000.
For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000.
You do not need to do anything. Your local authority will write to you if you are eligible for this grant.
Eligibility: You are eligible for the business rates relief and the above grant if:
- your business is based in England (Scotland, Wales & Northern Ireland have their own arrangements);
- your business is in the retail, hospitality and/or leisure sector;
Properties that will benefit from the relief will be occupied and 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.
Any enquiries on eligibility for, or provision of the reliefs and grants, should be directed your relevant local authority.
Support for businesses that pay little or no business rates - £10,000 grant
Eligibility: You are eligible if:
- your business is based in England;
- you are a small business and already receive small business rates relief;
- you are a business that occupies property.
How to access the scheme: You do not need to do anything. Your local authority will write to you if you are eligible for this grant.
Coronavirus Business Interruption Loan Scheme (CBILS)
The full rules of the Scheme and the list of accredited lenders is now available on the British Business Bank website. All the major banks will offer the Scheme once it has launched. There are 40 accredited providers in all. Details can be found HERE.
The Government will cover the first twelve months of interest payments and any facility arrangement fees charged by lenders, so businesses will benefit from no upfront costs and lower initial repayments. The maximum value of a facility provided under the scheme will be £5m.
The Chancellor advised MPs today that the scheme would be in place next week.
You should talk to your bank or finance provider, (not the British Business Bank), as soon as possible and discuss your business plan with them. This will help your finance provider to act quickly, once the Scheme has launched. Harbour Key can help where required with financial information for application.
The British Business Bank and the Government are keen to point out, that the borrower always remains 100% liable for the debt.
If you have an existing loan with monthly repayments, you may want to ask for a repayment holiday to help with cash flow.
We spoke today with one of the high street banks, and they are open to discussions on restructuring loans.
HMRC Time to Pay Arrangements
One of our clients has today (in one day!!), agreed a time to pay arrangement in respect of their VAT liability (this may be because HMRC knew the announcement re VAT holidays was on the way). Although we can’t guarantee that everyone will get the matter dealt with as quick, having spent one hour on the virus helpline number, once answered their details were taken and they received a call back within a few hours, where their payment due early next month was deferred until July 2020.
Although the virus and the strict conditions to manage the situation are creating difficulties, Innovate UK is still offer grants for the right type of business. Details of the competitions that are open can be found at HERE.