BFC Briefing on COVID-19 Business Assistance
The BFC have outlined the support the Government has made available for businesses through the period of disruption caused by Coronavirus (COVID-19). Most of the Governments up-to-date advice and the source of information contained in this document, can be found here.
Coronavirus Job Retention Scheme
The Government’s intention is that under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.
Further details are due to be announced in the near future. HMRC is working urgently to set up a system for reimbursement as existing systems are not set up to facilitate payments to employers.
How to access the scheme
You will need to:
- Designate affected employees as ‘furloughed workers,’ and notify your employees of this change - changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
- Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)
HMRC will reimburse 80 per cent of furloughed workers wage costs, up to a cap of £2,500 per month.
Deferring VAT payments
The Government is allowing businesses to defer their Value Added Tax (VAT) payments for three months. The VAT deferral will apply from 20 March 2020 until 30 June 2020. All UK businesses are eligible for the scheme.
This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the Government as normal.
Business Interruption Loan Scheme
The Government has introduced the Coronavirus Business Interruption Loan Scheme to support Small and Medium Sized businesses with access to working capital. This includes loans, overdrafts, invoice finance and asset finance of up to £5 million in value for up to six years.
The Government will pay to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will not face any upfront costs and will benefit from lower initial repayments.
This scheme is being delivered through commercial lenders, backed by the British Business Bank.
Businesses are eligible for the scheme if they are based in the UK with a turnover of no more than £45 million per year and have met other British Business Bank eligibility criteria.
The scheme is open for applications. To apply, you should talk to your bank or one of the 40 accredited finance providers as soon as possible. All major banks are offering this scheme. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.
The full rules of the scheme and the list of accredited lenders are available on the British Business Bank website.
Support for businesses paying sick pay to employees
The Government will, in the near future, bring forward legislation to allow small and medium sized businesses to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. A rebate scheme is being developed by the Government.
Businesses will be eligible for this scheme if they are based in the UK and employ fewer than 250 employees as of 28 February 2020.
The criteria for this scheme will be as follows:
- The refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
- Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
- Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website.
- Eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force
- The Government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.