Government Business Financial Support Available In Response To Covid-19
Whilst many businesses have well tested business continuity plans, the events that are overtaking the world are unprecedented. They are testing even the most resilient of businesses. Whilst Altion Law’s thoughts are with those whose health is affected. Or overwhelmed by the virus, we are seeking to help protect people’s businesses and livelihoods. We can assist business navigate through the government advice being provided.
Altion Law is well prepared to ensure business continuity in all scenarios. We have invested in Cloud IT systems, and have facilities for remote working and access to our systems. This allows us continue to offer our services, both in our offices and also remotely if needed. All staff have access to telephones, emails and document management systems, whether they are working remotely or in the office.
Urgent Access To Legal Advice
Many business are now in a situation where immediate legal advice is need to be taken, but businesses are concerned on cashflow. To meet this need, Altion Law will offer initial fixed fee consultations that can be accessed by telephone and videoconferencing. Please contact us on 01908 414990 or email@example.com to book a session.
If you would like to download this Guide, please click here.
Government Help For Businesses
Below is the list of financial support packages Government are making available to businesses.
There is a package of measures to support businesses including:
- A statutory sick pay relief package for SMEs –Eligibility – Any UK business with under 250 employees will be able to claim a refund. This will cover the costs of up to 2 weeks’ SSP per eligible employee who have been off work because of COVID-19. Currently, there is no confirmed process to apply for this, and advice is to maintain employee sickness records. This would be using the new online sickness note scheme from 111, whilst the government creates the reclaim mechanism.
- the online claim service will be launched on GOV.UK on 20 April 2020 – please do not try to access it before this date as it won’t be available.
- the only way to make a claim is online – the service should be simple to use. Any support you need available on GOV.UK. This will include help with calculating the amount you can claim.
- you can make the claim yourself even if you usually use an agent.
- claims will be paid within 6 working days. You should not contact HMRC unless it is absolutely necessary – any queries should be directed to your agent, representative or HMRCs online chat service.
- HMRC cannot answer any queries from employees – Employees will need to raise these with their employer, directly. The government is to pay 80% of wages for employees not working, up to £2,500 a month.
Information you will need before you make a claim:
- The current quarters VAT payments will be deferred to the end of June. Eligibility – Open to all UK VAT registered businesses. No action to take other than cancelling any direct debit payments for this quarter, but you must pay the VAT due on or before 31 March 2021. HMRC will not charge interest or penalties on any amount deferred for this current VAT quarter.
- A 12-month business rates holiday for all retail, hospitality and leisure businesses in England. Currently as it is proposed , there is no action for you to take. This will be applied automatically to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge.
- Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief. Many businesses have already received notification as to if they are eligible for this scheme.
- The HMRC Time To Pay Scheme (dedicated helpline 0800 0159 559), Eligibility – call if you are concerned you will miss a payment.
- Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000 – Again any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority. Authorities received guidance from government on 19.03.2020 and should be updating their advice.
- The Coronavirus Business Interruption Loan opened for applications on 23rd March 2020. Eligibility – Viable UK businesses with turnover of no more than £41 million per annum, who may need to respond to cash-flow pressures by seeking additional finance. Delivered by the British Business Bank, it provides lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. Businesses can access the first 12 months of that finance interest free, as government will cover the first 12 months of interest payments. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £1.2 million in value.
Businesses will need
- Last set of statutory annual financial statements
- Up to date management accounts for the period since the last financial statements.
This will need to be easily reviewed, Ideally, by month in Excel etc. Most bookkeeping packages can do this.
- Forecast / budgeted results for the forthcoming 3-5 years pre-Covid19.
- Estimated impact of virus on profit/loss and cash flow for the business, both immediate and then projected recovery.
- Details of any other mitigating factors being taken by business to assist cash flow and minimise impact of the virus. (e.g. delayed/cancelled unnecessary capital expenditure, evidence of deferring HMRC payments.
The above information is not extensive and it varies by lender but it is likely the applications intake will be busy once it opens so preparation would be advisable, if you need to submit. Banks have been criticised for still applying lending criteria and more announcements are expected to increase the levels and rate of approvals. If your business was in financial difficulty prior to Covid 19, you may find obtaining support through this mechanism difficult. If support is needed, please do contact Altion Law.
In preparation for, and indeed alongside the above, there are further actions that you can take:
- Consider your supply chains if you are importing or exporting and talk to all components of the chain. Agreeing contingency plans now and discussing payment plans etc to maintain cashflow into a business rather than cancelling all trade, maybe an option.
- Talk to your bank and your advisers. They may be able to connect you to other businesses that can provide first-hand advice on the points above
Government Support for those that are Self Employed
The government have introduced a scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed but it cannot be applied for currently until the end of June 2020.
Who can apply:
You can apply if you’re a self-employed individual or a member of a partnership and you:
- have submitted your Income Tax Self Assessment tax return for the tax year 2018-19
- traded in the tax year 2019-20
- are trading when you apply, or would be except for COVID-19
- intend to continue to trade in the tax year 2020-21
- have lost trading/partnership trading profits due to COVID-19
Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment.
If you need support please do contact Altion Law. We are operating normally and are also building contacts in Accountancy practices, business advisory firms as well as collating advice on this page. We are experts in dealing with commercial disputes and HMRC matters. Our staff have experience of obtaining govt backed funding for businesses. To make a free enquiry, call us today on 01908 414990, or complete our Free Enquiry Request for a confidential and no obligation discussion and let one of our expert team discuss your situation and the options available to you.