Coronavirus COVID-19 and Business Support

23rd March 2020
Coronavirus COVID-19 and Business Support

‘What does my business need to know?’

The Chancellor announced several business support schemes, loan facilities, grant funding, rates relief, salary contributions and more during this period of disruption caused by COVID-19. The Northern Ireland Executive received an additional £640M from the UK Government in order to implement these schemes for local businesses.

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GRANT FUNDING – Small Businesses / Retail / Hospitality / Leisure

Grant funding is non-repayable. You don’t need to be concerned about paying this back at a later date, or leveraging your small business with debt.

Firstly, if your business qualifies for the small business rates relief scheme, you may be eligible for a one off grant of £10,000. The precise mechanism for the payment is currently unclear. However, the aim is for this not to be an application process, but an expedited direct payment, based on the information held by Land and Property Services (LPS). The LPS website can be found here for updates as they come through.

Secondly, if your business sector is in retail, hospitality or leisure, with a rateable value of £15,000 – £51,000, the grant available is £25,000. Not sure what your ratable value is? Check here. Again, the mechanism for payment is anticipated to to be a direct payment, however unconfirmed at the date of publishing.

BUSINESS LOANS – Small, Medium and Large Enterprises

The British Business Bank and the Bank of England have released loan facilities, depending on the size of your company.

British Business Bank (BBB) – Small & Medium Enterprises.

If your company has a turnover up to £45M, the British Business Bank has a loan facility aimed at helping with cash flow issues resulting from COVID-19. The scheme provides the lender with a government backed guarantee for loans up to £5M, in addition, the government pay the first 6 months of interest payments. For further information on the scheme, see here.

Bank of England (BoE) – Larger Corporations.

The Bank of England have launched the Covid Corporate Financing Facility (CCFF). This allows larger corporate businesses to liaise with their existing bank, to explore the options available to support longer term liquidity. For more information and the practical steps required in order to assess CCFF click here.

BUSINESS RATES – Northern Ireland

Presently, there is a 3 month rates holiday for all businesses in Northern Ireland. There has been some confusion on the headlines surrounding this, as retail, leisure and hospitality businesses in England have a full 12 months. Effectively, it’s not a case of ‘rate free’, rather your rates bill will be deferred until perhaps July 2020. This should be a simple case of not being charged in the interim and awaiting correspondence from Land and Property Services (LPS).

JOB RETENTION SCHEME – HMRC PAYE Salary Contributions

All UK businesses are eligible for this scheme, designed to retain staff who would have otherwise been made redundant due to the COVID-19 pandemic. This scheme is administered and operated by HMRC.

How does the Job Retention Scheme work?

This is a totally new scheme, for which there are bound to be teething problems, as HMRC are not currently set up to issue payments outwards. HMRC are in the process of setting this up with a new online portal. Employers will follow an application process, and the scheme will reimburse 80% of the salary payment for furloughed workers. Individual salary reimbursements are capped at £2,500 per month.

What are furloughed workers?

By agreement with the employee, their employment status is changed to being a ‘furloughed worker’. This is a mandatory suspension from work and workers are absolutely forbidden to carry out any work duties.

Employers have to follow a strict process to avail of the Job Retention Scheme, as it currently stands, the process is as follows:

  1. Identify affected employees.
  2. Change the status of such employees to furloughed workers.
  3. Notify HMRC through a new online portal.

Please note, this scheme is not yet up and running. The scheme is anticipated to be ready for applications by the end of April 2020, however backdating to 01 March 2020 is an option being considered.

VAT Deferral Scheme

HMRC are currently working on a system to allow businesses to defer their VAT for 3 months. Quite simply, businesses will not make a VAT payment from 20 March 2020 until 30 June 2020. This offer should not require any application process. Importantly, VAT reclaims will be paid as normal, and any VAT liabilities accumulated during the period will be due by the end of the 2020/21 tax year. For more information, see here.

STATUTORY SICK PAY (SSP) RELIEF – Businesses fewer than 250 employees.

Legislation for small and medium sized businesses who have fewer than 250 employees is being brought forward. This allows employers to reclaim up to two weeks SSP due to a COVID-19 sickness related absence from work. To find out more, click here.

For all business related support and for all up to date information, visit the UK GOV Website link here.

For more specific business support issues in Northern Ireland, click here.

SUMMARY TABLE – Business Support

Application
needed?
  Small
Business
Medium
Business
Large
Business
Grants Yes   ✔️ ✔️
Loans Yes   ✔️ ✔️ ✔️
Rates
Relief
No   ✔️ ✔️ ✔️
Job
Retention
Scheme
Yes   If PAYE, yes. ✔️ ✔️
VAT
Deferral
No   If VAT Reg,
yes.
✔️ ✔️
SSP Relief Yes   If PAYE, yes. ✔️