20/03/2020
As you are aware, the world is facing an unprecedented challenge in dealing with the Covid-19 virus. Here at Evans & Co, we will continue to support our clients with a presence in the office with other staff working remotely. In the first instance, please email any questions you have and we will respond by phone or email. We will still have limited phone cover so do not be concerned if you cannot get through. Please also check our website under “news” for any further updates in this fast-changing environment.
If you wish to drop off paperwork, please contact us in advance and we can arrange this. The current policy is to drop off at the door and we can then bring the paperwork inside although this could be subject to change.
Below is a summary of the key points announced so far by the Chancellor to help businesses with the outbreak. Full updated details can be found at https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses And https://www.gov.uk/government/publications/support-for-those-affected-by-covid-19
Base rates
Bank of England cut base rates on 11 March from 0.75% to 0.25%. This has been cut again to 0.10%
Coronavirus Business Interruption Loan Scheme
The Government has announced £330 billion of loans for small business. The Coronavirus Business Interruption Loan Scheme was revealed in the budget with a maximum loan of £1.2 million and the first 6 months interest-free. A week later, this has been raised to £5 million, with the Chancellor promising more if necessary.
Commercial bank loans
Help from major UK lenders appears to be readily available for micro, small and medium sized businesses, with Lloyds Banking Group offering £2bn of assistance, HSBC and NatWest both providing £5bn each and lenders such as Barclays, Santander and the Co-operative Bank all offering assistance to their business customers.
£10,000 grant for the smallest businesses
Approximately 700,000 of the smallest businesses in England will be entitled to a one-off, non-repayable grant. Initially set at £3,000 in the Budget this has been increased to £10,000.
This is payable to those small businesses that are currently eligible for Small Business Rate Relief (SBBR) or Rural Rate Relief. Any business eligible for those reliefs can apply for the emergency funding direct from their local authority.
The grant only applies in England. Scotland, Wales and Northern Ireland will make their own arrangements. Scotland has already announced an £80 million fund to provide grants of £3,000 to small businesses in sectors that suffer the worst economic impact of COVID-19, available via a helpline on 0300 303 0660.
Welfare payments
Universal credit will be boosted by £500 million and has been made more accessible. This will help workers who have been laid off and made redundant.
Hardship fund
A £500 million hardship fund is to be made available through local authorities. This is a further source of funds for those without income, including the self-employed.
Business rates
Almost half (45%) of those currently paying business rates in England were to be made exempt for the 2020-21 tax year as a result of Covid-19 assistance announced at the Budget for the retail, leisure and hospitality sector, where businesses had a rateable value of less than £51,000. Again, less than a week later the Government announced a drastic expansion of this policy, exempting all businesses in the retail, leisure ad hospitality sectors, irrespective of rateable value for the entire 2020-2021 tax year.
Time to settle tax bills
HMRC has confirmed it will ensure that businesses and self-employed individuals in financial distress and with outstanding tax liabilities receive support with their tax affairs. It is employing an extra 2,000 staff to run a dedicated Covid-19 helpline on 0800 0159 559.
The “Time to Pay” system has previously been used in response to flooding and the financial crisis and has proved successful. These arrangements give businesses a time-limited deferral period on HMRC liabilities owed and set a pre-agreed time period to pay these back.
Companies House
Companies House has confirmed that any companies unable to file their accounts on time due to Covid-19, can make an application to extend the period allowed for filing by up to three months.
Making an application is essential as any late filing companies will still receive an automatic penalty if they fail to do this.
Insurance
For the vast majority of businesses, insurance cover is unlikely to mitigate their losses.
The Association of British Insurers (ABI) issued a statement on 17 March 2020 which made clear that “…irrespective of whether or not the Government orders closure of a business, the vast majority of firms won’t have purchased cover that will enable them to claim on their insurance to compensate for their business being closed by Covid-19.”
The ABI went on to explain, “…standard business interruption cover – the type the majority of businesses purchase – does not include forced closure by authorities as it is intended to respond to physical damage at the property which results in the business being unable to continue to trade.”
Grants to those without insurance cover
Smaller businesses without sufficient insurance cover will be eligible for a cash grant of up to £25,000 per business.