Business support and finance during the Coronavirus

Yellow cogs spelling out business continuity

Businesses and organisations are facing unprecedented challenges due to the Coronavirus. The government has put together a package of measures to help businesses meet some of these challenges and we’ve listed some of the new schemes and support available below.

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What is the Coronavirus Job Retention scheme?

Under the Coronavirus Job Retention Scheme, all UK employers running a PAYE scheme (most employers) can get support to continue paying partial salaries for people who would otherwise have been laid off. Employers, and not employees are responsible for applying to the scheme.

This applies to employees who have been asked to stop working, but who are being kept on the payroll – known as ‘furloughed workers’. Employers – not employees – are responsible for applying to the scheme. Employers need to let furloughed workers know about their change in status.

HMRC will reimburse 80% of their wages, up to £2,500 per month, to safeguard workers from redundancy.

The scheme will cover the cost of wages backdated to March 1 2020. It will initially be open for three months but will be extended if necessary.

What financial support is the government providing for business?

The Coronavirus Business Interruption Loan Scheme will help businesses affected by Coronavirus to access bank lending and overdrafts if they need to.

For loans up to £5 million, the government is providing a guarantee of 80% for each loan. This will give lenders the confidence to continue to provide finance to businesses. The government won’t charge businesses or banks for this guarantee.

Is there a business rates holiday for retail, hospitality and leisure sectors?

Yes. Businesses in the retail, hospitality and leisure sectors in England won’t have to pay business rates for the 2020-21 tax year. Businesses that received the retail discount in the 2019-20 tax year will be rebilled by their local authority as soon as possible.

Is there a business rates holiday for nurseries?

Yes. Nurseries in England don’t have to pay business rates for the 2020-21 tax year.

What is the Statutory Sick Pay rebate?

The government will bring forward legislation to allow small and medium-sized businesses to reclaim Statutory Sick Pay (SSP) paid for staff sickness absence due to Coronavirus.

This refund will cover up to two weeks of SSP for each eligible employee who has been off work because of Coronavirus.

What is the Covid-19 Corporate Financing Facility?

The new Covid-19 Corporate Financing Facility (CCFF) means that the Bank of England will buy short-term debt from larger companies. This will support companies which are fundamentally strong, but which have been affected by a short-term funding squeeze.

It will also support corporate finance markets and ease the supply of credit to all firms.

The scheme will be funded by central bank reserves – in line with other Bank of England market operations. It will operate for at least 12 months, and for as long as steps are needed to relieve cash flow pressures on firms that make a material contribution to the UK economy.

Is the government deferring VAT for businesses?

Yes. The government will support businesses by deferring Valued Added Tax (VAT) payments for three months.

Deferring income tax for the self-employed until 2021

If you’re self-employed, income tax payments due in July 2020 under the self-assessment system will be deferred to January 2021.