Following on from the Budget and the announcement this week from the Chancellor of the Exchequer, the Government has announced a package of measures to help businesses deal with the coronavirus.
The help available is in a number of forms:
– Business rates reductions, and grants for businesses who have low rate bills
– Extending statutory sick pay (SSP), and allowing employers to reclaim it.
– More scope for deferring tax bills, if paying them is difficult with Time to Pay being extended
– Help with business loans or overdrafts from banks.
The details of none of this help is clear yet, but what we do know is:
Business rates reductions are going through the normal systems, with rates bills being recalculated. They don’t seem to require much action, but equally they don’t seem likely to have much of an immediate impact.
Grants for small businesses have been increased:
– £10, 000 for those who get full rates relief (up from £3,000 in the Budget)
– £25, 000 for hospitality, leisure, and retail businesses, which also get a rates holiday for a year
– The grants are to be administered by local authorities, but details are yet to be released
– Authorities are meant to be actively contacting businesses to let them know how to claim
– The systems are not yet set up, so no cash is coming from here for a while.
SSP changes mean more workers can claim it and it is now payable for the first 3 days of absence. Small employers can claim it back, but:
– People seem to be very confused as to who can claim SSP due to the virus. Look out for our separate guidance note for employers on this area.
– There’s no clarity yet on what ‘small’ means in terms of less than 250 employees and how they are grouped. The best guess at the moment is that the 250-employee limit is per PAYE reference.
It’s academic at the moment as the mechanism is not yet set up. This is to be done ‘as soon as possible’ and ‘over the next few months’. Even though businesses are paying that out now it seems very unlikely you will be getting any cash back from that source in the near future.
Time to Pay is being extended, and it looks like HMRC will be a lot more flexible about it.
– There’s a dedicated line for this: 0800 0159 559
– Interest and late payment penalties can be waived
– Debt collection can be suspended
It is not yet known how long HMRC will spread payments over
Help with business loans is more immediate help as they’re being delivered through banks and should be the most immediately accessible.
– The first 6 months of the interest is to be covered by the Treasury
– 80% of the loan is guaranteed by the government
– Loans can be up to £5million (up from £1.2million in the Budget)
But is burdening businesses with more debt the answer. Maintaining cashflow is probably the most important issue for a business at the moment and getting deeper into debt is not necessarily going to be an attractive proposition.
As part of the UK200Group we have access to up-to-the-minute information and can help you get access to the support you need.