Government Support for Business
Navigating Government support
The Government has launched a new tool to help businesses find coronavirus financial support. After answering a series of questions, businesses are signposted to a list of support they may be entitled to
Paying your staff
Job Support Scheme
A six-month Job Support Scheme will be introduced from 1 November to protect jobs in businesses that are facing lower demand over the winter due to coronavirus. The Government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand. Employers will continue to pay the wages of staff for the hours they work – but for the hours not worked, the Government and the employer will each pay one third of their equivalent salary. In order to support only viable jobs, employees must be working at least 33% of their usual hours. The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.
On 22 October, the Chancellor announced the Government will reduce the employer contribution for unworked hours to 5%. The minimum number of hours an employee is required to work to qualify for the scheme has also been reduced from 33% to 20% of an employee’s normal working hours, so that those working just one day a week will be eligible. Find out more.
Scheme expanded to firms required to close due to restrictions
On 9 October, the UK Government confirmed the Job Support Scheme will be expanded to protect jobs and support businesses required to close their premises as a result of coronavirus restrictions. The Government will support eligible businesses by paying two thirds of each employees’ salary (or 67%), up to a maximum of £2,100 a month. Find out more.
Coronavirus Job Retention Scheme
Under the Government’s Coronavirus Job Retention Scheme, UK employers with a PAYE scheme are able to access support to continue paying their employees’ salary for those who would otherwise have been laid off due to COVID-19.
To access the scheme, employers need to designate affected employees as ‘furloughed workers’ and submit information to HMRC, which will reimburse 80% of furloughed workers’ wage costs up to £2,500 per month. The scheme opened to claims on 20 April 2020.
Since 1 July 2020, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim the Coronavirus Job Retention Scheme grant for their normal hours not worked. When claiming the grant for furloughed hours employers will need to report and claim for a minimum period of a week.
Further guidance on flexible furloughing and how employers should calculate claims has been published.
Since August 2020, the level of government grant provided through the scheme has been slowly tapered as set out below:
- June and July: The Government pays 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything.
- August: The Government pays 80% of wages up to a cap of £2,500. Employers pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.
- September: The Government pays 70% of wages up to a cap of £2,187.50. Employers pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.
- October: The Government pays 60% of wages up to a cap of £1,875. Employers pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.
Eligibility and applying to the scheme
HMRC has published updated guidance about who can use the scheme. The guidance covers:
- The basis for furlough pay for employees furloughed on return from leave, including maternity, paternity, sick, adoption, shared parental and parental bereavement leave.
- Furloughing employees subject to TUPE transfer, business reorganisation and payroll consolidation.
- The position of contractors in scope of IR35 in the public sector.
- What information employers need to claim the grant.
- The circumstances where an employee should not be furloughed by multiple employers.
The Government also made a number of updates to the guidance on the Coronavirus Job Retention Scheme in July:
- New guidance has been published on claiming for individuals who are paid through PAYE but not necessarily employees in employment law.
- Guidance on calculating how much you can claim has been updated with information on claim periods ending on or before 31 August 2020.
- Information has been added to clarify that employers can continue to claim for employees while they are serving a statutory notice period.
- Information has been added about the process HMRC is developing to recover overclaimed grant amounts through the tax system.
The Government has also published a step by step guide about the information employers need to provide to claim for their employees’ wages through the scheme.
Job Retention Bonus
Plan for Jobs 2020
The Chancellor of the Exchequer, Rishi Sunak, presented his ‘Plan for Jobs’ to Parliament on Wednesday 8 July 2020, to outline how the government will boost job creation in the UK.
The plan includes:
- A Job Retention Bonus that will be introduced to help firms keep furloughed workers. UK Employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021.
- A new £2 billion Kickstart Scheme will create hundreds of thousands of new, fully subsidised jobs for young people across the country. Those aged 16-24, claiming Universal Credit and at risk of long-term unemployment, will be eligible. Funding available for each six-month job placement will cover 100% of the National Minimum Wage for 25 hours a week – and employers will be able to top this wage up.
- A total of £1.6 billion will be invested in scaling up employment support schemes, training and apprenticeships to help people looking for a job. Young people, who are amongst the worst hit by the crisis, will benefit from this.
- The plan will also create tens of thousands of jobs through bringing forward work on £8.8 billion of new infrastructure, decarbonisation and maintenance projects.
- A temporary increase to the Nil Rate Band of Residential SDLT (Stamp Duty) from £125,000 to £500,000 has been introduced until 31 March 2021. This will drive growth and support jobs across the housebuilding and property sectors.
- The rate of VAT applied on most tourism and hospitality-related activities has been cut from 20% to 5% until 31 March 2021.
On 8 July, the Chancellor of the Exchequer announced a new £2 billion Kickstart Scheme as part of his Summer Economic Update.
The scheme helps create fully subsidised jobs for young people. Individuals aged 16 to 24 who are claiming Universal Credit and at risk of long-term unemployment will be eligible.
Funding is available for each six-month job placement. It will cover 100% of the National Minimum Wage for 25 hours a week. Employers will be able to top up this wage.
Support with statutory sick pay
Employers with fewer than 250 employees will be refunded by the Government for the cost of providing 14-days’ statutory sick pay for employees who can’t work or need to self-isolate due to COVID-19. The scheme opened to applications on 26 May 2020. Go to www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19 for more information.
Financial assistance for redundancy payments
Employers that cannot afford to pay their employees’ redundancy pay can apply for financial support. The Redundancy Payments Service makes statutory redundancy payments directly to employees on their employer’s behalf (subject to approval).
Grant funding and business rates relief
Grants for businesses that pay little or no business rates
The Government has provided additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief. This has provided a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs. Go to www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses for more information.
Reliefs and support for the retail, leisure and hospitality sectors
The following reliefs have been introduced to support smaller businesses in the retail, leisure and hospitality sectors:
- The Business Rates retail discount has been increased to 100% for the 2020/21 tax year, meaning that businesses will be entitled to a business rates ‘holiday’.
- Grants of up to £25,000 to retail, hospitality and leisure businesses operating from smaller premises with a rateable value over £15,000 and below £51,000. Businesses with a rateable value up to £15,000 may be eligible for a grant of up to £10,000.
Go to www.gov.uk/government/news/coronavirus-covid-19-guidance-for-employees-employers-and-businesses for more information.
Discretionary local business grants
The Government have allocated additional funds to local authorities to enable them to provide grants to certain sole traders and SMEs who have not been able to access the COVID-19 government support.
Every local authority has the discretion to use these funds to support local businesses. This means that eligibility criteria may vary depending on which borough your business is based in.
Bounce Back Loan Scheme for small businesses
The Chancellor has announced a Bounce Back Loan scheme to support small businesses and sole traders affected by the coronavirus pandemic.
Key features of the scheme:
- Businesses can borrow between £2,000 and £50,000
- The Government will guarantee 100% of the loan and there won’t be any fees or interest to pay for the first 12 months
- Loan terms of up to 6 years (the Government announced in September it will extend the loan term to 10 years)
- The Government has agreed with lenders a flat rate of 2.5% interest
- The scheme will be delivered through a network of accredited lenders
- Businesses will be able to apply online through a short and simple form, with only seven questions.
The scheme opened to applications on 4 May 2020.
Coronavirus Business Interruption Loan Scheme
The Government-backed Coronavirus Business Interruption Loan Scheme has launched to support businesses to access finance.
The Coronavirus Business Interruption Loan Scheme (CBILS) supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance facilities. The scheme provides the lender with a government-backed guarantee, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’.
- Up to £5m facility: The maximum value of a facility provided under the scheme will be £5m, available on repayment terms of up to six years.
- 80% guarantee: The scheme provides the lender with a government-backed, partial guarantee (80%) against the outstanding facility balance, subject to an overall cap per lender.
- No guarantee fee for SMEs to access the scheme: No fee for smaller businesses. Lenders will pay a fee to access the scheme.
- Interest and fees paid by Government for 12 months: The Government will 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.
- Finance terms: Finance terms are up to six or ten years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.
- Security: Insufficient security is no longer a condition to access the scheme. For all facilities, including those over £250,000, CBILS can now support lending to smaller businesses even where a lender considers there to be sufficient security, making more smaller businesses eligible for finance. No personal guarantees for facilities under £250,000. Personal guarantees may still be required, at a lender’s discretion, for facilities above £250,000.
- The borrower always remains 100% liable for the debt.
The scheme is delivered through commercial lenders, backed by the Government-owned British Business Bank. There are 40 accredited lenders able to offer the scheme, including all the major banks.
How to apply?
The decision on whether to offer finance is taken by each individual lender, not by government. Businesses remain responsible for repaying any borrowing that they take out. In order to access the scheme, businesses should contact their finance provider, not the British Business Bank.
For more information about how to apply, visit the British Business Bank.
Future Fund - Loans for innovative companies
The Department for Business has launched the Future Fund scheme to support innovative companies that are facing financing difficulties due to the coronavirus outbreak.
The Future Fund provides government loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors.
These convertible loans may be a suitable option for businesses that rely on equity investment and are unable to access the Coronavirus Business Interruption Loan Scheme.
On 30 June, HM Treasury announced a number of changes to the fund’s eligibility criteria to support more companies to access finance.
Under the changes, UK companies who have participated in highly selective accelerator programmes and were required, as part of that programme, to have parent companies outside of the UK are now able to apply for investment.
Coronavirus Large Business Interruption Loan Scheme
The Coronavirus Large Business Interruption Loan Scheme (CLBILS) provides a government guarantee of 80% to enable banks to make loans of up to £25 million to firms with an annual turnover of more than £45 million. Firms with a turnover of more than £250 million can apply for up to £200 million.
Loans backed by a guarantee under CLBILS will be offered at commercial rates of interest.
Support for larger firms via the COVID-19 Corporate Financing Facility
The COVID-19 Corporate Financing Facility provides support for larger firms. Under the scheme, the Bank of England will buy short-term debt from larger companies.
This will support companies that have been affected by a short-term funding squeeze, and allow them to finance their short-term liabilities.
It will also support corporate finance markets overall and ease the supply of credit to all firms.
Help with tax
HMRC has introduced a dedicated COVID-19 helpline to support businesses in financial distress and with outstanding tax liabilities to receive help with their tax affairs. Contact the helpline on 0800 0159 559.
Support for businesses paying tax
All businesses 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.
Call the HMRC COVID-19 helpline on 0800 0159 559 for more information.
New Payment Scheme
The UK Government announced on 24 September that eligible businesses that deferred their VAT bills will be given more breathing space through the New Payment Scheme, which gives them the option to pay back in smaller instalments. Rather than paying a lump sum in full at the end of March next year, they will be able to make 11 smaller interest-free payments during the 2021-22 financial year.
Help for landlords and tenants
Ban on evictions for commercial tenants
Commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction until the end of the year. Find out more.
Keeping your staff and customers safe
Working safely during COVID-19
The UK Government has published guidance to support employers to reopen their businesses and operate workplaces safely.
The new ‘COVID-19 secure’ guidelines are available to UK employers, and cover eight workplace settings that are allowed to be open, from outdoor environments and construction sites to takeaways and factories.
The guidance sets out practical steps for businesses focused on five key points, which should be implemented as soon as possible:
- Work from home, if you can.
- Carry out a COVID-19 risk assessment, in consultation with workers or trade unions. The Health and Safety Executive has published advice about how to complete a risk assessment.
- Maintain social distancing, wherever possible. Since 4 July, where it is not possible to stay two metres apart, guidance allows people to keep a social distance of ‘one metre plus’. This means staying one metre apart, plus mitigations which reduce the risk of transmission.
- Reinforce cleaning processes. The Government has published guidance about cleaning in non-healthcare settings.
Support for high streets
The High Streets Task Force has announced training, expert advice and online resources for high streets in England.
The High Streets Task Force provides access to cutting-edge tools, training, information and advice for high streets across England as part of the government’s efforts to help shops recover from COVID-19.
This support is open to local councils and all organisations involved with high streets and will include free access to online training programmes, webinars, data and intelligence on topics including recovery planning and coordination, public space and place marketing.
Advice on trading
Enforced business closures
The Government has published guidance about the businesses and premises that must close. Businesses that do not follow the rules will be subject to prohibition notices, and fixed penalties.
Support for exporters
The Department for International Trade (DIT) has published guidance for UK businesses that export or deliver goods and services abroad, and have been impacted by the spread of COVID-19. It covers financial support for businesses trading internationally, as well as support available from the DIT.
Other Government advice and information
The Skills Toolkit
The Government has launched an online learning platform to help people build their skills during the coronavirus outbreak.
The Skills Toolkit gives people access to free, high-quality digital and numeracy courses to help build up their skills, progress in work and boost their job prospects.
Courses on offer cover a range of levels, from everyday maths and tools for using email and social media more effectively at work, to more advanced training.
All courses are online and flexible, so people can work through them at their own pace.
Coronavirus Business Support Blog
The Department for Business, Energy and Industrial Strategy has created the Coronavirus Business Support Blog to help businesses get the support they need to help with the impact of coronavirus.
The Government has made available a full range of business support measures during this time. This blog contains additional information and resources, including:
- Case studies from businesses who have or will be accessing government support
- Posts from different people across government and business.
Mayor’s Resilience Fund
Support for businesses and community groups to recover from the coronavirus crisis.
Early Years Sector Business Support
Support for the early years sector during COVID-19.