Government Support for Business
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Paying your staff
Coronavirus Job Retention Scheme extended until 30 September 2021.
On 3 March 2021, the UK Government announced the Coronavirus Job Retention Scheme will be extended until the end of September 2021 to support businesses impacted by coronavirus restrictions. The Government will pay 80% of an employee’s salary for hours not worked, up to a maximum of £2,500 per month. Employers will pay employer National Insurance Contributions and pension contributions.
Employers will be required to make a 10% contribution towards the hours their staff do not work in July, rising to 20% in August and September.
What is the 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.
Eligibility and applying to the scheme
HMRC has published 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 has published a step by step guide about the information employers need to provide to claim for their employees’ wages through the scheme.
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 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 30 September 2021, followed by an interim rate of 12.5% for another six months.
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.
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.
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
The Local Restrictions Support Grant (LRSG (Closed)) supports businesses that were required to close due to the national restrictions:
- from 5 January 2021 onwards
- between 5 November and 2 December 2020.
Eligible businesses may be entitled to a cash grant from their local council for each period under national restrictions.
How much funding is available?
The grant will be based on the rateable value of the property on the first full day of restrictions.
National restrictions from 5 January 2021:
- If your business has a property with a rateable value of £15,000 or less, you may be eligible for a cash grant of £2,001 for each 42-day qualifying restrictions period.
- If your business has a property with a rateable value over £15,000 and less than £51,000, you may be eligible for a cash grant of £3,000 for each 42-day qualifying restrictions period.
- If your business has a property with a rateable value of £51,000 or above, you may be eligible for a cash grant of £4,500 for each 42-day qualifying restrictions period.
National restrictions between 5 November and 2 December 2020:
- If your business has a property with a rateable value of £15,000 or less, you may be eligible for a cash grant of £1,334 for each 28-day qualifying restrictions period.
- If your business has a property with a rateable value over £15,000 and less than £51,000, you may be eligible for a cash grant of £2,000 for each 28-day qualifying restrictions period.
- If your business has a property with a rateable value of £51,000 or above, you may be eligible for a cash grant of £3,000 for each 28-day qualifying restrictions period.
Your business may be eligible if it:
- Is based in England.
- Occupies property on which it pays business rates (and is the ratepayer).
- Had been required to close because of the national restrictions.
- Had been unable to provide its usual in-person customer service from its premises.
How do I apply?
Visit your local council’s website to find out how to apply.
The Restart Grant scheme supports businesses in the non-essential retail, hospitality, leisure, personal care and accommodation sectors with a one-off grant, to reopen safely as COVID-19 restrictions are lifted.
Eligible businesses in the non-essential retail sector may be entitled to a one-off cash grant of up to £6,000 from their local council.
Eligible businesses in the hospitality, accommodation, leisure, personal care and gym sectors may be entitled to a one-off cash grant of up to £18,000 from their local council.
Grants will be available from 1 April 2021.
How do I apply?
- Visit your local council’s website to find out how to apply.
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 by coronavirus restrictions.
Local councils can determine which businesses to target and determine the amount of funding from the ARG.
Local councils have the freedom to determine the eligibility criteria for these grants. However, the Government expects the funding to help those businesses which – while not legally forced to close – are nonetheless severely impacted by the restrictions.
How do I apply?
Visit your local council’s website to find out how to apply.
On 3 March 2021, the Government announced eligible retail, hospitality and leisure businesses will pay no business rates for three months from 1 April to 30 June 2021, with up to 66% relief for the rest of 2021/22.
Launched on 6 April 2021, the Recovery Loan Scheme (RLS) provides financial support to businesses across the UK as they recover and grow following the COVID-19 pandemic.
You can apply to the scheme if COVID-19 has affected your business. You can use the finance for any legitimate business purpose – including managing cashflow, investment and growth.
How much finance is available?
A lender can provide up to £10 million as one of the following facilities:
- Term loan.
- Invoice finance.
- Asset finance.
If your business has already borrowed from any of the other coronavirus loan schemes, such as:
- the Bounce Back Loan Scheme (BBLS)
- the Coronavirus Business Interruption Loan Scheme (CBILS)
- the Coronavirus Large Business Interruption Loan Scheme (CLBILS)
RLS is still open to you, although the amount you have borrowed under an existing scheme may in certain circumstances limit the amount you may borrow under RLS.
RLS will run until 31 December 2021, subject to review.
The Bounce Back Loan scheme supports 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.
On 8 February 2021, the Chancellor announced a new Pay as You Grow option that will enable borrowers to tailor repayments according to their individual circumstances.
The Bounce Back Loan Scheme closed for new applications on 31 March 2021.
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.
Some businesses will be eligible for a second CBILS loan, as long as both loans don’t equate to more than 25% of your last year’s turnover.
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.
The Coronavirus Business Interruption Loan Scheme closed for new applications on 31 March 2021.
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.
The Future Fund closed to new applicants on 31 January 2021.
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.
The Coronavirus Large Business Interruption Loan Scheme closed for new applications on 31 March 2021.
The COVID-19 Corporate Financing Facility (CCFF) 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.
The CCFF closed to new applications on 31 December 2020 and later closed to new purchases on 23 March 2021.
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.
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.
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
Keeping your staff and customers safe
The UK Government has launched a coronavirus testing service for employers. The service enables employers to get the forms they need to order COVID-19 rapid lateral flow tests for their employees.
You can register to order tests if:
- Your business is registered in England.
- Your employees cannot work from home.
You must register on or before 12 April 2021.
Public Health England has published downloadable marketing assets to support businesses and their employees who cannot work from home to take part in workplace testing.
Resources include explainer leaflets, posters and videos.
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.
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
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.
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 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.
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.
Patch – Business Mentor and Support Network
Mentoring to help businesses respond to COVID-19.
Pay It Forward
Free fundraising to help businesses to secure trade during COVID-19.