Covid-19 (Coronavirus) - Support for Businesses
There have been a number of new measures introduced to support businesses through this difficult time. This is an evolving situation and new information is coming through on a daily basis, but, in the meantime, we have listed below the key points of each scheme as we understand it.
Coronavirus Local Restrictions Support Grants
For Businesses that have been required to close due to temporary local restrictions
Businesses that were open as usual but then required to close due to local restrictions (as a result of the local COVID alert level moving to "Very High") may be eligible for LRSG (Closed). Under the scheme, eligible businesses are entitled to a cash grant from their local council for each 14 day period they are closed.
For more information about the scheme, including eligibility criteria, visit the LRSG (Closed) website
For Businesses required to close during the National Lockdown
Businesses that have been required to close between 5th November and 2nd December 2020 due to the national restrictions imposed by government may also be eligible for LRSG (Closed) Addendum. Eligible businesses may be entitled to a cash grant from their local council for each 28 day period under national restrictions.
For further information about the grants, visit the LRSG (Closed) Addendum website
For Businesses not required to close but severely impacted as a result of the restrictions
Businesses that have not had to close but which have been severely impacted due to local restrictions (Local COVID alert levels: High or Very High) may be eligible for LRSG (Open). Eligible businesses may be entitled to a cash grant from their local council for each 28 day period under local restrictions.
Visit the LRSG (Open) website for further information about this scheme
The Additional Restrictions Grant
The Additional Restrictions Grant (ARG) provides local councils with grant funding to support closed businesses that do not directly pay business rates as well as businesses that do not have to close but which are impacted. In addition, larger grants can be given than those made through LRSG (Closed).
Further details of the scheme are availability on the ARG website
LRSG and ARG on-line Application Forms
For further information, including details about how to apply, follow the relevant link to your local Council's website:
North Devon Council - LRSG Scheme
North Devon Council - ARG Scheme
Torridge District Council - LRSG Scheme
Torridge District Council - ARG Scheme
Article added 24th November 2020
Plan for Jobs: Chancellor increases financial support for businesses and workers
On 22nd October, the government announced it will significantly increase the generosity and reach of its winter support schemes to ensure livelihoods and jobs across the UK continue to be protected in the difficult months to come, supporting jobs and helping to contain the virus.
For more information visit the Government’s news bulletin
Article updated 6th November 2020
Loan Funding Schemes
Coronavirus Business Interruption Loan Scheme (CBILS)
The Coronavirus Business Interruption Loan Scheme provides access to a range of borrowing facilities of up to £5 million and repayable over a maximum period of 6 years.
Funding is provided by commercial lenders, including all the major banks and is backed by the government-owned British Business Bank.
The government will provide lenders with a guarantee of 80% on each loan to give lenders further confidence in continuing to provide finance to businesses.
The government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.
To be eligible for a facility under CBILS, the business must:
• Be UK based in its business activity with annual turnover or no more than £45m
• Have a borrowing proposal which, were it not for the COVID-19 pandemic, would be
considered viable by the lender, and for which the lender believes the provision of finance
will enable your business to trade out of any short-to-medium term difficulty
In the first instance, businesses should approach their own provider – ideally via the lender’s website. They may also consider approaching other lenders if they are unable to access the finance they need.
The British Business Bank has prepared a useful list of Frequently Asked Questions about the CBILS Scheme and the South West Business Council has produced a useful checklist detailing points you will need to consider when applying for a CBILS or Bounce Back Loan.
Coronavirus Bounce Back Loan
This scheme was launch on 4th May and will help small and medium-sized businesses affected by Coronavirus with loans of between £2,000 and £50,000.
Loan terms can be up to 6 years with no repayments due during the first 12 months. No fees or interest will be payable for the first 12 months and the government has agreed a flat interest rate of 2.5% for the remaining period of the loan. The scheme will be delivered through a network of accredited lenders and the government will guarantee 100% of the loan amount.
To be eligible for a Bounce Back Loan, the business must be based in the UK, have been negatively affected by Coronavirus and not have been considered an ‘undertaking in difficulty’ on 31 December 2019. The formalities associated with applying for and drawing the Bounce Back Loans have been kept to a minimum to make the whole process as streamlined as possible with the aim of getting funds released to businesses within a matter of days
You cannot apply if you’re already claiming under the CBILS schemes, although if you’ve already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender until 31st January 2021.
New options have been made available to top up existing loans, extend the loan period, make interest-only repayments, or pause repayments. A repayment holiday of up to 6 months is now possible once at any point during the term of a Bounce Back Loan.
For further information visit the Bounce Back Loan website (link added 5th May)
Article updated 8th February 2021
Recovery Loan Scheme
The Recovery Loan Scheme ensures businesses of any size can continue to access loans and other kinds of finance up to £10 million per business once the existing COVID-19 loan schemes close, providing support as businesses recover and grow following the disruption of the pandemic and the end of the transition period.
Finance can be drawn in the form of Loans or Overdrafts or as Asset Finance or Invoice Finance. Once received, the finance can be used for any legitimate business purpose, including growth and investment.
The government guarantees 80% of the finance to the lender to ensure they continue to have the confidence to lend to businesses.
The scheme launches on 6 April and is open until 31 December, subject to review. Loans will be available through a network of accredited lenders, whose names will be made public in due course.
For further information visit the Recovery Loan website
Article added 4th March 2021
Other measures to help businesses manage cashflow
Extended payments for deferred VAT
On 24 September 2020, the Chancellor announced that businesses who deferred VAT due from 20 March to 30 June 2020 will now have the option to pay in smaller payments over a longer period.
Instead of paying the full amount by the end of March 2021, you can make smaller payments up to the end of March 2022, interest free.
You will need to opt-in to the scheme, and for those who do, this means that your VAT liabilities due between 20 March and 30 June 2020 do not need to be paid in full until the end of March 2022.
If you deferred VAT payments due between 20 March 2020 and 30 June 2020 and still have payments to make, you can pay the deferred VAT in full, on or before 31 March 2021 or join the VAT deferral new payment scheme – the online service is open between 23 February 2021 and 21 June 2021
For further information visit the HMRC Deferred VAT website
Article updated 23rd February 2021
Business Rates Holiday for Retail, Hospitality & Leisure Businesses
In addition to the grant payments above, no Business Rates will be payable for the 2020-21 tax year on any business premises used:
• as hotels, guest & boarding premises and self-catering accommodation
• as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
• for assembly and leisure
Business Rates Holiday for (children’s) Nursery Businesses
Similarly, no Business Rates will be payable for the 2020-21 tax year on any business premises used:
• by Nursery providers listed on Ofsted’s Early Years Register
• wholly or mainly used for the provision of the Early Years Foundation Stage
The Councils are currently in the process of re-issuing council tax bills to reflect these Business Rates Holidays and no action is required by the business.
Self-Assessment Income Tax Deferment
Income Tax Self-Assessment payments that would normally be due on the 31st July 2020 may be deferred until the 31st January 2021.
This is an automatic offer to all who are registered as self-employed, and no applications are required. No penalties or interest for late payment will be charged in the deferral period.
Customers who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay. Please do so in sufficient time so that HMRC do not attempt to automatically collect payment.
HMRC’s Time to Pay Service
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.
These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559. If you’re worried about a future payment, please call nearer the time.
Coronavirus (COVID-19) Self-employment Income Support Scheme
Use this scheme if you're self-employed or a member of a partnership and have lost income due to Coronavirus.
The fourth instalment of this scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £7,500 for the 3 month period.
Applications for the fourth grant (covering the period from February to April 2021) will open in late April and will run until 31st May 2021. A fifth (and final) grant has been announced for the period from May to September 2021 with applications expected to open in late July.
Guidance notes have been produced which can be found at the following Gov.uk website, which includes an online tool to check eligibility
Article updated 4th March 2021
Online Business Support Finder
The government has launched an interactive “Support Finder” to help businesses identify which financial support schemes are most suitable for their needs. There are 7 simple questions to help filter the results (e.g. do you employ less than 250 people? are you self-employed? do you pay business rates? etc.):
Article added 21st April 2020