Government to Introduce Financial Support for Businesses as a Result of Covid-19

In response to Covid-19, the Chancellor has set out a ‘temporary’ package of measures to support businesses during this uncertain period.

The package includes:

  • A Statutory Sick Pay (SSP) relief package for SMEs

Small-and-medium-sized businesses and employers, with fewer than 250 employees, will be able to reclaim SSP paid for sickness absence due to Covid-19, for up to 2 weeks per eligible employee off work. Employees will not need to provide a GP fit note; however, employers will need to maintain records of staff absences and payments of SSP in order to reclaim the expenditure. The eligible period for the scheme will start the day after the regulations on the extension of Statutory Sick Pay, to those staying at home comes into force, and the government have said they will work to make sure the repayment mechanism for employers is set up as soon as possible.

  • A 12-month business rates holiday for all retail, hospitality and leisure businesses in England and a grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000

A business rates holiday will be introduced for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year. Businesses that received the retail discount in the 2019 to 2020 tax year, will be rebilled by their local authority as soon as possible.

Businesses operating from smaller premises, with a rateable value of between £15,000 and £51,000, will be provided a £25,000 grant.

Dixcart can assist with any enquiries regarding eligibility, which must then be directed to the relevant local authority. Guidance for local authorities on the business rates holiday will be published by 20 March 2020.

  • A small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief

For small businesses that pay low, or no business rates already, due to small business rate relief (SBRR), the government will provide a one-off grant of £10,000 per business in order to help them with their ongoing business costs. Funding will be provided to local authorities by the government in early April 2020. If your business is eligible for SBRR, or rural rate relief, you will be contacted by your local authority directly – you do not need to apply.

  • The Coronavirus Business Interruption Loan Scheme to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance

A temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch next week in order to support businesses to access bank lending and overdrafts. The government have said they will provide lenders with a guarantee of 80% on each loan (these are subject to a per-lender cap on claims) so that lenders can continue to provide finance to SMEs. Businesses or banks will not be charged for this guarantee and the Scheme will support loans of up to £5 million in value. The government will cover the first 6 months of interest payments – allowing businesses to access this first 6 months of finance interest free.

  • The HMRC Time to Pay Scheme

The government have announced that all businesses, and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs via HMRC’s Time to Pay Service. This arrangement will need to be agreed on a case-by-case basis and will be tailored to individuals’ circumstances and liabilities.

Insurance

If your business has cover for both pandemics and government-ordered closure, you should be covered as the government and insurance industry confirmed on 17 March 2020, that advice to avoid public establishments (pubs, theatres, etc.), is sufficient to make a claim.

Insurance policies differ significantly. If you are unsure if your business can make a claim, Dixcart can help review your terms and conditions.

How can Dixcart Help?

As you know, we are a team of accountants, lawyers, tax and immigration advisors, all working together as one team to make it happen for you and your business. We can help you:

  • Apply for the support you need during this uncertain time.
  • Assist you with your applications for additional funding.
  • Help negotiate a Time to Pay scheme with HMRC.
  • Help you reclaim SSP paid for employees who have taken sickness absence due to Covid-19.
  • Assist with payroll enquiries.
  • Offer employment law advice for your business, and answer any questions you or your employees may have regarding SSP.
  • Review whether your business is eligible for financial support / business rate reliefs.

If you have any concerns, please feel free to get in touch. We are here to help – so let’s talk.

The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.