As we help our clients work through the effects of the COVID-19 disruption on their businesses we are writing and collating a range of help and advice. The best thing to do with it has to be to make it available to other SMEs, so feel free to browse here and do get in touch if you have any follow up questions.
This page is regularly updated, so don’t forget to check back again for new information.
The first place to start is your cashflow forecast: surviving 2020 is going to be all about your ability to pay essential bills rather than your profitability. A cashflow forecast will show you how much help you need (and you will be asked for one if you intend to apply for help under CBILS) and the effects of the changes that you’ve made.
We have a Coronavirus Cashflow Checklist which you can download here.
Government support navigator
Since the first announcements at the end of March there have been a myriad of packages announced by the government. They have constructed their own support finder tool to help befuddled businesses make sure that they have accessed all the support that’s available to them. You can find it here
In addition to this we have a variety of advice and information as well:
Business interruption loans (> £50,001)
SMEs can apply for loans of up to £5 milllion under the Coronavirus Business Interruption Loan Scheme (CBILS). You can access this support via a loan or overdraft application to your bank. We look at what information you should be expecting to provide here
Bounce Back Loans (<£50,000)
These loans are targeted at small businesses (inc self employed businesses) who find themselves facing an uncertain future and short of cash as a result of Coronavirus. You can apply for a loan between £2,000 and £50,000.
The government will guarantee 100% of the loan (although you are still liable for all of the repayments) and for the first 12 months you will not have to pay any fees or interest, or make repayments. One of the exciting points about these loans is that the interest rate after the first 12 months has been capped at 2.5%.
Most high street banks are offering these loans. The application process is much less arduous than the main loan scheme (above) and can be completed online with answers typically within 48 hours.
These options are loans, and the government is expecting them to be paid back over the next 6 years, but there are other options that may help:
Payments of VAT due between March and the end of June 2020 may be deferred until the end of March 2021.
Although the Chancellor’s statement said this was automatically available to businesses, if you pay your VAT by direct debit you must cancel the direct debit in order to take advantage of it.
Job Retention Scheme
This scheme offers the opportunity to furlough staff if you would otherwise be looking at redundancies. The governemnt has committed to cover 80% of the cost of their normal wages making this be a useful tool to a lot of businesses at this time. We have a fact sheet here.
You may also be interested in reading a more practical report from a business who has already furloughed a number of its staff. See this blog from one of our clients.
Time to pay (TTP) arrangements
Businesses (and self-employed people too) who are struggling financially and have tax liabilities to meet can call the HMRC dedicated helpline to discuss a TTP arrangement on 0800 024 1222.
The current advice (April 2020) is to only call if you have missed a tax payment or you might miss your next payment. If you’re worried about a future payment then call nearer the time to avoid overloading the call handlers.
Businesses that are entitled to Small Business Rates Relief or Rural Rates Relief are now set to receive a grant of £10,000, administered by their local authority. While the government announcement said there would be no need to make an application for the grant in practical terms your local authority may not know your bank details, so you may need to contact them about this.
Most (if not all) local councils have now published their advice for this, you can find out more on your council’s website. It may also be useful to have a look at the grant funding guidelines to read the small print regarding this and the Retail, Hospitality and Leisure grants.
The Retail, Hospitality and Leisure sector
The Chancellor announced other measures specifically to help these sectors;
– A £25,000 grant for retail, hospitality leisure businesses operating from premises with a rateable value of between £15,000 and £51,000.
– A one year business rates holiday for the retail, hospitality and leisure sector. This is automatically in place and being administered by the local authority who you pay rates to.
Statutory sick pay
Statutory sick pay will be extended to cover from day one of someone being off sick due coronavirus for a period of two weeks without the need for GP sick note.
This will be recovered by businesses through their PAYE and National Insurance monthly returns but as with a lot of these support measures the actual process for recovering the costs has not yet been published.
Employment allowance (EA)
The Employment Allowance provides a discount on Employer’s Class 1 National Insurance Contributions (NICs). In 2019/20 it was £3,000 but this has been increased to £4,000 for 2020/21. This is claimed on your RTI payroll submission when you pay your staff.