What cashflow support is available for your business during the COVID-19 pandemic?

What cashflow support is available for your business during the COVID-19 pandemic?

The government has announced an unprecedented package of support for businesses to help deal with the Coronavirus pandemic. Many of these are well known and understood, but some may have escaped your attention. We thought it would be helpful to summarise them here in a short article, with a link at the end to find out more information on any particular area, if you need it.

All of these measures are designed to assist primarily with cashflow. With almost all businesses, large and small, having been caught unaware by Coronavirus, few are lucky enough to have sufficient cashflow to keep their business ticking over for more than a few months. The main headlines of the government’s new policies to help with this are:

• The Coronavirus Job Retention Scheme:- perhaps the best known policy in place, this scheme received over 67,000 applications in the first half an hour of opening on 20 April. If you cannot maintain your current workforce because your operations have been severely affected by Coronavirus, you can ‘furlough’ employees and apply for a grant that covers 80% of their usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and pension contributions (up to the level of the minimum automatic enrolment employer pension contribution) on that subsidised furlough pay.
• Deferring VAT payments:- if you are a UK VAT registered business and have a VAT payment due between 20 March 2020 and 30 June 2020, you have the option to defer the payment until a later date. HMRC will not charge interest or penalties on any amount deferred.
• Statutory Sick Pay (SSP) Rebate Scheme:- the Coronavirus SSP Rebate Scheme will repay employers the current rate of SSP that they pay to current or former employees, for periods of sickness starting on or after 13 March 2020. The repayment will cover up to 2 weeks starting from the first day of sickness, if an employee is unable to work because they either have Coronavirus, cannot work because they are self-isolating at home, or are shielding in line with public health guidance.
• 12 month business rates holiday for certain businesses:- if your business is in the retail, hospitality and leisure sectors in England, you will not have to pay business rates for the 2020/21 tax year. You do not need to do anything; if you are eligible, your local council will apply the discount automatically.
• Grants of £10,000 or £25,000:- you may be eligible for a one-off grant of £10,000 if you are a small business that already pays little or no business rates because of small business rate relief, rural rate relief or tapered relief. Alternatively, you may be eligible for a grant of £25,000 if you are a retail, hospitality or leisure business, with property with a rateable value between £15,000 and £51,000.
• The Coronavirus Business Interruption Loan Scheme:- this scheme offers loans of up to £5 million for small and medium sized business through the British Business Bank. The government will give lenders an 80% guarantee on each loan (subject to pre-lender cap on claims).
• The HMRC Time To Pay Scheme:- if you cannot pay your tax bill on time because of Coronavirus, you may be able to delay it without penalty, using HMRC’s Time to Pay service.
• Extra protection for businesses with a ban on evictions for commercial tenants who miss rent payments: - commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction, please see the government website for more information.

More details of all these measures are available at the government support site for Coronavirus: https://www.gov.uk/coronavirus/business-support. A wider business support site can be accessed here: https://www.businesssupport.gov.uk/.

If we at Harding Financial can assist you in any way, please contact Jennie, our Corporate Adviser by telephone on 01483 802010 or email on [email protected].