Posted: Tue 11th May 2021
Dan Martin examines how businesses can access the support from the UK government and devolved administrations for dealing with the impact of coronavirus.
We first published this post in March 2020 when the coronavirus outbreak first started to take hold. Chancellor Rishi Sunak outlined a range of measures to help businesses cope with the inevitable negative impact.
Since then the UK government and devolved administrations in Wales, Scotland and Northern Ireland have made several more announcements on support for businesses.
_**We are keeping this post updated with details on how to access government coronavirus small business support. Get more support and advice on dealing with the business impact of coronavirus here.
Governments are regularly updating support schemes as restrictions change so the details below may not be the latest information. Here are government website links:**_
Gov.uk coronavirus support finder for businesses in England and UK-wide schemes
Welsh government support for businesses in Wales
Northern Ireland Executive support for businesses in Northern Ireland
Scottish government support for business in Scotland
*** UPDATE 3 March 2021: The chancellor announced new business support measures in the 2021 Budget speech. Read more details here. ***
The Self-employment Income Support Scheme (SEISS) provides grants to self-employed individuals or partnerships. There have been four grants so far with a fifth grant to come.
The fifth grant covers May to September.
For self-employed people suffering a loss in turnover of 30% or more, the grant will be worth 80% of three months' average trading profits, capped at £7,500. For those experiencing a drop in turnover below 30%, the grant will be worth 30% of three months average trading profits, capped at £2,850. Trading profits must be no more than £50,000 a year.
You will be able to claim the fifth grant from late July.
To be eligible for the fifth SEISS grant, you must be self-employed or a member of a partnership. Limited company directors can't apply.
You must have traded in the 2019 to 2020 and 2020 to 2021 tax years and submitted your 2019 to 2020 self assessment tax return by 2 March 2021.
HMRC will first look at your 2019 to 2020 tax return to work out eligibility. Your trading profits must be no more than £50,000 and at least equal to your non-trading income.
If you're not eligible based on that, officials will then look at the tax years 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020.
You must either be currently trading but are impacted by reduced demand due to coronavirus or have been trading but are temporarily unable to do so due to coronavirus.
You must declare that you continue to trade and that you "reasonably believe that you will suffer a significant reduction in trading profits due to reduced business activity, capacity or demand or inability to trade due to coronavirus".
You must keep evidence to show how your business has been impacted by coronavirus resulting in less business activity than otherwise expected.
The Coronavirus Job Retention Scheme, also known as the furlough scheme, launched in April 2020 to help employers deal with the impact of coronavirus by receiving a grant from the government to cover a proportion of wages of employees placed on furlough.
It was due to end on 31 October 2020 but following the announcement by prime minister Boris Johnson of a second lockdown in England, the scheme was extended. It was first extended to 2 December. On 5 November, the government announced it has been extended until 31 March 2021 and on 17 December it was extended until 30 April 2021.
The government pays 80% of wages up to a cap of £2,500 and employers pay employer National Insurance Contributions (NICs) and pension contributions for the hours the employee does not work.
Flexible furloughing is allowed in addition to full-time furloughing.
To be eligible to be claimed for under this extension, employees must have been on an employer's PAYE payroll by 23:59 on 30 October 2020. This means a real time information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30 October 2020.
In a change to the scheme, there are new monthly deadlines for claims from 1 November. Claims for each month must be submitted within 14 calendar days after the month they relate to, unless it falls on a weekend when the deadline is the next week day.
As under the current CJRS rules:
Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees.
Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. Such calculations will broadly follow the same methodology as currently under the CJRS.
When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days.
Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.
Directors of limited companies can use the scheme to access a grant for themselves if they have a salary through PAYE. Dividends are not covered by the scheme. This includes sole directors of limited companies who are the sole employee. Directors must stop working for their business during the period of furlough. They can perform their statutory duties.
On 3 March 2021, chancellor announced that the furlough scheme has been extended until the end of September 2021.
Employees will continue to receive 80% of their current salary for hours not worked. Employers need to pay National Insurance contributions (NICs) and pensions in April, May and June. From July, the government will introduce an employer contribution towards the cost of unworked hours of 10% in July, 20% in August and 20% in September.
Employers are required to submit information to HMRC about the employees that have been furloughed and their earnings through a online portal. Payments will be made within six working days after a claim has been submitted.
Employers will need to designate affected employees as 'furloughed workers' and notify employees of the change. Furloughing means employees remain on payroll but they are not able to work for the business or charity.
Changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation with staff.
ACAS offers the following advice on furloughing:
The employer needs to get agreement from the worker to do this, unless it's covered by a clause in the employment contract.
The employer can decide who to designate as a furloughed worker. If an employee disagrees with their employer's decision they'll need to talk to their employer and try to come to an agreement.
Any furlough agreements should be in writing. It's a good idea to include:
the date furlough starts
when it will be reviewed
how to keep in contact during furlough
Businesses can apply for apply for loans and overdrafts between £25,001 and £10m and invoice finance and asset finance between £1,000 and £10m. The government provides an 80% guarantee to lenders but borrowers remain 100% liable for the debt.
Unlike previous COVID-19 business loan schemes, nterest and fees need to be paid by the business from the outset.
Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms are up to three years.
No personal guarantees will be taken on facilities up to £250,000, and a borrower's principal private residence cannot be taken as security.
Business owners need to show their business is viable, although the British Business Bank said lenders "may disregard any concerns over its short-to-medium term business performance due to the uncertainty and impact of COVID-19".
The scheme is due to run until 31 December 2021.
Businesses in the hospitality, hotel and holiday accommodation sectors plus certain attractions can apply a 5% reduced rate of VAT until 30 September 2021. From 1 October 2021 to 31 March 2022, a rate of 12.5% will apply.
Eligible retail, hospitality and leisure properties in England receive 100% business rates relief until 30 June 2021. This will be followed by 66% business rates relief from 1 July 2021 to 31 March 2022, capped at £2m per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties.
Any enquiries about the reliefs should be directed your local authority. Find your local authority here.
Eligible businesses in the non-essential retail sector are 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 are entitled to a one-off cash grant of up to £18,000 from their local council.
Grants are provided by local councils. Find your local council website here.
Through the ARG scheme, the government has provided local councils in England with funding to support closed businesses that do not directly pay business rates and businesses that do not have to close but are impacted by coronavirus restrictions.
Local councils can decide which businesses to support and how much funding to provide. It could include suppliers to the retail, hospitality, and leisure sectors and events businesses.
Grants are provided by local councils. Find your local council website here.
Full government guidance is here.
Retail, hospitality, leisure, and aviation businesses will pay no business rates during 2021-22.
The 5 June Local Restrictions Grant provides grants to specific businesses that are impacted by the Scottish Government’s decision to retain Protection Level 2 restrictions in response to rates of COVID-19 in the following local authority areas:
The fund provides grants of up to £750 per week, depending on rateable value and the duration of these restrictions - subject to review this is currently expected to be for three weeks - to specific businesses that previously received financial support through the Strategic Framework Business Fund.
More information about the Local Restrictions Grants here.
The Welsh Government's Economic Resilience Fund (ERF) is providing grants to help meet operating costs (excluding staff wages) for the period 1 May 2021 to 30 June 2021.
The ERF is for businesses that are either:
Forced to remain closed by regulations between 1 May 2021 and 30 June 2021
Unable to open indoors between 1 May 2021 and 17 May 2021
A venue that caters exclusively for weddings and events with a regulatory restriction capacity of 30 guests
A supply chain business that generates 60% or more of its sales revenue from businesses falling into categories a), b) and/or c)
And (applies to all): Have experienced a material negative impact through reduced turnover of 60% or more in May 2021 and June 2021 as compared to May 2019 and June 2019 caused directly by ongoing COVID-19 restrictions.
To receive the funding, businesses need to have applied to the Welsh government’s latest round of emergency funding by 12pm on Wednesday 16 June 2021.
Businesses will be entitled to an additional payment of between £875 and £5,000, depending on their size and circumstance, to cover the period up to the end of June.
Businesses can check eligibility and apply here.
Retail, leisure and hospitality businesses and charities in Wales will pay no business rates in 2021-22.
£50,000 grants for businesses with a Net Annual Value (NAV) over £51,000 that are eligible for the 12 months rates holiday (retail, hospitality, leisure, tourism, manufacturing, childcare, newspaper producers).
£25,000 grants for manufacturers with a Net Annual Value (NAV) between £15,001 and £51,000.
£10,000 grants for businesses that received the £25,000 Retail, Tourism, Hospitality and Leisure Grant and have not been paid under the Localised Restrictions Support Scheme or Covid Restrictions Business Support Scheme: Part B.
£5,000 grants for businesses that received the £10,000 Small Business Support Grant and have not been paid under the Localised Restrictions Support Scheme or Covid Restrictions Business Support Scheme: Part B.
More details on eligibility and applications are here.
The Northern Ireland Executive announced two schemes to support retail, hospitality and tourism businesses.
For the HSS scheme, every adult over the age of 18 in Northern Ireland will get a £100 prepaid card that can be used in physical retail and hospitality businesses. The scheme will be available in the summer.
For the Holiday at Home Voucher scheme, households will be able to claim back up to 50% of the cost of a stay of two nights or more in certified accommodation in Northern Ireland, up to £100. Vouchers providing 50% off entry to tourist attractions up to the value of £20 will also be offered on a first come, first served basis. These schemes will launch in the autumn.
People who are required to submit a 2019/20 self-assessment tax return by 31 January have an extra month to submit it before receiving a penalty for doing it late. No late penalties will apply if the tax return is submitted by 28 February.
Taxpayers are still obliged to pay tax bills by 31 January. Interest will be charged from 1 February on any outstanding liabilities. Customers can pay online, via their bank, or by post before they file. More information on how to pay is available on GOV.UK.
Businesses and self-employed people in financial distress and with outstanding tax liabilities may be eligible to receive further support through HMRC's Time To Pay service which allows payments to be deferred.
The service gives a 12 month extension to self-assessment taxpayers which means payments deferred from July 2020, and those due in January 2021, don't need to be paid until January 2022.
Businesses should contact HMRC's COVID-19 tax support helpline on 0800 0159 559. More information here.
HMRC will discuss your specific circumstances to explore:
Agreeing an instalment arrangement
Suspending debt collection proceedings
Cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately
Commercial tenants who cannot pay their rent because of coronavirus have been protected from eviction.
New measures from the government mean no business will be forced out of their premises if they miss a payment before the end of 2020.
As commercial tenants will still be liable for the rent after this period, the government said it "is actively monitoring the impact on commercial landlords' cash flow and continues to be in dialogue with them".
A new code of practice has also been developed with leaders from the retail, hospitality and property sectors to provide clarity for businesses when discussing rental payments and to encourage best practice so that all parties are supported. More information here.
Businesses that deferred VAT bills between 20 March 2020 and 30 June 2020 can make up to 11 smaller interest-free payments during the 2021-22 financial year.
Small and medium-sized businesses with up to 250 employees (as of 28 February 2020) can reclaim a refund on Statutory Sick Pay (SSP) that they pay to current or former employees for periods of sickness starting on or after 13 March 2020.
The repayment covers up to two weeks starting from the first day of sickness, if an employee is unable to work because they either:
cannot work because they are self-isolating at home
The scheme covers all types of employment contracts, including:
employees on agency contracts
employees on flexible or zero-hour contracts
Employees do not have to give employers a doctor's fit note for you to make a claim.
You must keep records of all the statutory sick payments that you want to claim from HMRC, including:
the reason why an employee could not work
details of each period when an employee could not work, including start and end dates
details of the SSP qualifying days when an employee could not work
National Insurance numbers of all employees who you have paid SSP to
You'll have to keep these records for at least three years following your claim.
Self-employed people are likely to not be eligible for Statutory Sick Pay, so the government is making it easier for them make a claim for Universal Credit or Contributory Employment and Support Allowance:
The Universal Credit minimum income floor has been suspended for self-employed claimants until April 2021 to help them receive support.
The self-employed can now access in full Universal Credit at a rate equivalent to Statutory Sick Pay for employees (£94.25 a week)
People will be able to claim Universal Credit and access advance payments upfront without the current requirement to attend a Jobcentre if they are advised to self-isolate.
Contributory Employment and Support Allowance will be payable. at a rate of £73.10 a week if you are over 25, for eligible people affected by COVID-19 or self-isolating in line with advice from day one of sickness, rather than day eight.
Information on Universal Credit is available here.
*** UPDATE 05/11/20: Following the extension of the Coronavirus Job Retention Scheme until 31 March 2021, the government said the Jobs Retention Bonus (JRB) will not be paid in February 2021 and it "will redeploy a retention incentive at the appropriate time". ***
Chancellor Rishi Sunak announced a Job Retention Bonus in his Summer Statement which allows employers to access £1,000 for every employee who they previously claimed for under the Coronavirus Job Retention Scheme.
More information here.
This scheme was due to launch on 1 November 2020 but it was not introduced due to new lockdown restrictions.
This is the current guidance for the Job Support Scheme:
Businesses legally required to shut as part of local or national restrictions or businesses facing reduced demand can claim grants to pay part of the wages of staff who cannot work through the Job Support Scheme (JSS). It launches on 1 November and runs until 30 April 2021. It applies to all of the UK. Full government guidance is here.
From 1 November, employers need to agree a JSS temporary working agreement with any eligible employees. The agreement must cover at least seven consecutive days. Full government guidance on temporary working agreements is here.
From 8 December 2020 onwards, employers can claim a monthly grant in arrears to cover some of their usual wage costs for hours not worked in the prior month.
There are two versions of the schemes:
JSS Open: If your business is still operating but you have reduced employees' working hours due to decreased demand. Full guidance here.
JSS Closed: If you have been forced to close your business premises by law and have instructed employees to stop working. Full guidance here.
JSS Open is a grant covering 61.67% of an employee's wages for hours not worked, up to a total of £1,541.75 per month. Employers must contribute 5% of the cost of hours not worked up to £125 per month for each employee.
JSS Closed is a grant covering 66.67% of an employee's wages, up to a total of £2,083.44 per month.
For both Job Support Scheme grants you still need to deduct and pay the taxes and employee National Insurance contributions (NICs), and pay employer NICs to HMRC on the full amount paid to the employee, including any grant from the scheme.
You can claim through the JSS if you are experiencing reduced business activity due to coronavirus and you have:
created and started using a UK PAYE scheme on or before 23 September 2020
enrolled for PAYE online
a UK, Channel Island or Isle of Man bank account
We will keep you updated on the latest information on how to access the government's coronavirus small business support, so keep an eye on this post. You can also find details on Enterprise Nation's coronavirus business advice hub and by following Enterprise Nation on Twitter.
If you have any questions or would like to share your experiences accessing the government's coronavirus business support, connect with Dan on Enterprise Nation.