Covid-19 (Coronavirus) - Support for Businesses
There have been a lot of reports in the press and on social media over the last week or so about the various measures being introduced to support businesses through this difficult time. Whilst this news is encouraging, there has been very little information about exactly how the support will be delivered and which businesses will be eligible.
We are continuing to speak to the local councils and other organisations to collate as much information as we can about exactly what support is available but, in the meantime, have listed below the key points of each scheme as we understand it.
Self Employed –To be eligible for the scheme you must meet all the criteria below:
- Be self-employed or a member of partnership;
- Have lost trading/partnership trading profits due to COVID-19;
- File a tax return for 2018-19 as self-employed or a member of a trading partnership. Those who have not yet filed for 2018-19 will have an additional 4 weeks from this announcement to do so;
- Have traded in 2019-20; be currently trading at the point of application (or would be except for COVID 19) and intend to continue to trade in the tax year 2020 to 2021
- Have trading profits of less than £50,000 and more than half of your total income come from self-employment. This can be with reference to at least one of the following conditions:
- Your trading profits and total income in 2018/19
- Your average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19.
Guidance notes have been produced which can be found using the following link:-
Do not contact HMRC yet – they are looking to start grant payments at the beginning of June.
If you do not fall into any of the eligible categories and wish to continue trading what actions have you already taken ? Do you need a Business plan and cash flow forecast templates or any additional support? – if you do please contact email@example.com
Cash Payments to help businesses meet their ongoing costs
Small Business Grant Fund (SBGF)
All businesses in England already receiving Small Business Rates Relief (SBRR) or Rural Rates Relief (RRR) as at 11th March 2020, will be eligible for a payment of £10,000 for each property that was eligible for the Rates Relief.
This includes businesses in receipt of tapered Rates Relief on properties valued at between £12,001 and £15,000
Your local councils will be in touch. These bank details will not be requested over the phone.
For further detail and information for North Devon Council area please visit the website www.northdevon.gov.uk/business-advice-coronavirus or contact Dominie Dunbrook - firstname.lastname@example.org
For Torridge District Council area please visit the website https://www.torridge.gov.uk/coronavirusadvice or contact: Chris Fuller Chris.Fuller@torridge.gov.uk Regular updates will also be provided through the Torridge Economic Development Facebook page.
Retail, Hospitality & Leisure Grant Fund (RHLGF)
Businesses in England in receipt of the Expanded Retail Discount, with a rateable value of:
a) up to and including £15,000 will be eligible for a grant of £10,000, or
b) between £15,001 and £50,999 will be eligible for a grant of £25,000
for each property that was eligible for the Retail Discount.
Payment of both of these grants will be made automatically by the local authority (i.e. North Devon Council or Torridge District Council) and will be paid to the registered ratepayer.
Businesses do not, therefore, need to apply for these grants, but the Council will need to collect information about each business before making payment, so there may be a slight delay before payment is made.
Businesses not currently paying Business Rates, or with rateable value of £51,000 or more are not included in these schemes.
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.
Covid-19 Corporate Financing Facility (CCFF)
This scheme is administered by the Bank of England and is aimed at larger businesses that make a material contribution to the UK economy and employ significant numbers in the UK.
Typically, these businesses should have a short-term credit rating of A3/P3/F3/R3 or above, or a long-term rating of BBB-/Baa3/BBB- or above by at least one of the major credit ratings agencies such as Standard & Poor’s, Moody’s or Fitch.
Businesses that feel they may be eligible for this should approach their own Bank who will then contact the Bank of England.
Measures to help businesses manage cashflow
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.
Estate agents, lettings agencies and bingo halls to pay no business rates this coming financial year
25.03.2020 government removed some the exclusions for this relief, so that retail, leisure, and hospitality properties that have closed as a result of the measures announced by the Prime Minister in his statement on Monday will now be eligible for the relief.
This will ensure that estate agents, lettings agencies and bingo halls that are required to close will not pay any business rates next year.
Eligible businesses will be rebilled by their local authority and the new bill will give them the discount of 100%.
If businesses have made payments in the meantime, they will be refunded by their local authority. Central Government are working with local authorities to ensure new bills are issued as soon as possible and no action is required by the business.
VAT Payment Deferment
Any VAT liabilities incurred between 20th March and 30th June 2020 may be deferred, with taxpayers being given until the end of the 2020-21 tax year to pay any liabilities accumulated during this three-month period.
This is an automatic offer to all VAT-registered businesses, so no applications are required - businesses will not need to make a VAT payment during this period.
Businesses that 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 on receipt of your VAT return.
Any VAT refunds and reclaims will be paid by the government as normal.
Self-Assessment Income Tax Deferment
Income Tax Self-Assessment payments that would 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.
Please note that this is an evolving situation and new information is coming through on a daily basis. The details provided above are correct to the best of our knowledge but we would recommend that you keep an eye on our website (www.northdevonplus.co.uk) and your local authority area www.northdevon.gov.uk/business-advice-coronavirus or https://www.torridge.gov.uk/coronavirusadvice for new announcements as they are received.