Whether you’ve been directly affected by the coronavirus pandemic or not, chances are you will be. Increased cases, school closures, the diving pound and a pending lockdown is making the situation both challenging and scary for businesses across the country.

To help, the Government has announced a series of incentives to lessen the impact of COVID-19 on businesses and help them survive the current and unknown economic impact of the pandemic.

What are the latest measures for supporting your business?

Following the Chancellor of the Exchequer, Rishi Sunak’s Budget 2020 last week, things have changed drastically. The virus is spreading, the economy is weakening, and businesses are either faced with an insatiable demand or no demand at all – neither of which they can cope with for much longer.

Thankfully, Sunak has introduced a range of measures to help support business, including:

Coronavirus Business Interruption Loan Scheme

The Coronavirus Business Interruption Loan Scheme (CBILS) announced in Budget 2020 has been expanded to support loans of up to £5 million in value, thanks to a £330 billion injection of cash from the Government.

Under the scheme, the Government is providing an 80% guarantee for loans between £1,000 to £5 million, and it will also cover the first six months of interest payments. CBILS will make it easier for small businesses to access cash for paying rent, salaries and suppliers or purchasing stock – supporting them through this unprecedented economic uncertainty.

Terms will be from 3 months to 10 years for term loans and asset finance, and up to 3 years for revolving facilities and invoice finance. Should more support be required, Sunak has promised that it will come:

Note that there are eligibility restrictions (discussed below) most notably covering some agricultural, banking and educational sectors.

Business rates support

The Government has also provided £20 billion of extra business support in other areas. This includes a 100% business rates holiday for all retail, hospitality and leisure businesses, for the next 12 months.

Note, that if you’re not eligible for the business rates holiday, you may still qualify for the existing Small Business Rate Relief scheme. Under the scheme, businesses using one property with a rateable value of £12,000 or less will not pay business rates. Businesses using a property with a rateable value of between £12,001 to £51,000, or more than one property, can access reduced business rates.

Grants

The remainder of the £20 billion cash injection will support a series of business grants to help support other companies who need financial help during this time, including:

• A cash grant of up to £10,000 for businesses currently eligible for the Small Business Rate Relief scheme, mentioned above.
• A cash grant of up to £25,000 for retail, hospitality and leisure businesses operating from premises with a rateable value of between £15,000 and £51,000.

HMRC Time To Pay Scheme

The existing HMRC Time To Pay scheme has been expanded to provide additional support for businesses and self-employed workers affected by coronavirus. A new dedicated helpline is providing practical help and advice to those concerned about making or meeting tax payments.

Businesses and self-employed workers who are unable to pay may be able to agree to an instalment arrangement, suspend debt collection proceedings, or cancel penalties and interest incurred as a result of the difficulties.

SSP relief

Statutory Sick Pay relief is being provided to businesses with fewer than 250 employees. The Government will fund the cost of paying 14 days SSP per employee, in full. This funding will provide 2 million businesses with up to £2 billion to help cover the costs of large-scale employee absences.

Insurance

And, in a final breath of relief, the Government confirmed that its advice to the public to avoid pubs, clubs, theatres and other venues, is sufficient for businesses to claim on their insurance. This is provided that you have the appropriate business interruption cover for pandemics.

What if you can’t access support or need more help?

As you can see, the Government is working hard to minimise the impact of COVID-19 on the economy, small businesses and self-employed workers. But what happens if you’re not eligible for the support announced so far or it’s not enough to see you through the crisis?

Existing funding

It’s important not to forget the existing funding available to businesses and start-ups, much of which goes unclaimed throughout the year.

For example, the R&D Tax Credit scheme is a government-funded scheme intended to help UK businesses achieve growth and innovation by claiming back a proportion of research and development spend as tax credits.

However, certain industries aren’t taking advantage. Research shows that one in five eligible engineering companies is missing out on £10.2 billion of R&D tax relief, only 17% of R&D tax credit claims are made by companies up to five-years-old, and many businesses are under the misconception that you can’t claim Research and Development tax relief for a project that is already funded by a grant.

It’s essential to utilise every piece of free funding you can get at the moment, and that involves knowing what you can and cannot claim.

Access private funding

Some private lenders are making additional funds available to small businesses impacted by coronavirus but not eligible for the CBILS.

Lloyds Banking Group has announced £2 billion of arrangement fee-free finance specifically for Britain’s small- and medium-sized enterprises whose cash flow is impacted by COVID-19.

NatWest has outlined a £5 billion Working Capital Support extension to its Growth Funding Package, for SME customers. This is in addition to other financial support, including loan repayment holidays and no-fee emergency loans.

Use your expertise

Businesses with certain expertise are being called upon to help the Government manage the outbreak of coronavirus in the UK.

This week, the Department for Business, Energy & Industrial Strategy asked for businesses who could support the supply of ventilators and ventilator components to get in touch. This includes those experienced in manufacturing, design, prototyping, assembly, certification, logistics, and medical training.

This has prompted other businesses and start-ups to think about how they can use their expertise to sustain their business during the outbreak while helping a country in crisis.

New opportunities

As the famous saying goes, “out of adversity comes opportunity.” Your current business may not be faring well amidst the chaos, but is there a new business opportunity or change in service and production that has emerged from the past three months?

The strain that coronavirus has had on the NHS, the economy, businesses and people has identified weaknesses and gaps in infrastructures, supply chains, products, technology, business continuity plans and so on. Is there something that you could develop to support the current climate, strengthen our weaknesses and fill the gaps?

How to keep your business going with a reduced workforce

With the new requirement that schools in the UK shut their gates from Friday afternoon for an unknown period, the number of businesses facing a reduced workforce is going to increase substantially. What can you do to minimise the impact on your business?

Follow the Government’s advice

You want to keep the majority of your workforce as healthy as possible. Therefore it’s crucial to follow the Government’s guidance on self-isolation and limiting the spread of coronavirus in business and the workplace.

Implement working from home

People have already been asked to work from home, where possible, to reduce the spread of infection. You should enable this if you can. Think of the tasks that can be performed remotely and use technology to your advantage. It’s also important to consider the broader outlook – is it better to offer a full service now and increase the chances of your entire workforce being off sick in the future, or is it better to offer a reduced service now but be able to maintain it throughout the outbreak?

Use flexible hours

As well as possible infection, many workers will now have childcare issues too. Flexibility is key here. Allowing employees to work flexible hours around their childcare could be the difference between someone reporting to work or signing off sick. This could involve early morning, late shifts and weekend hours.

Communicate with everyone

Keeping employees and customers informed of how you’re being affected, what you’re doing, how they can help, and what you will do should the situation get worse is essential. Employees will become more engaged in keeping your business going, while customers will become more understanding of any reduced levels in service or supply.

Plan for the next stage

Government chief scientific adviser, Sir Patrick Vallance confirmed that the UK is four weeks behind Italy. Therefore, it’s reasonable to assume that enforced isolation and lockdown will happen shortly. Make plans for how your business can survive the next stages of the outbreak, including how to maintain service and productivity during a full lockdown and resume full service following it.

How to access support

That’s a lot of information to take in, we know. To help you understand what support your business can access and how to access it, we’ve summarised the main schemes below and application processes.

Coronavirus Business Interruption Loan Scheme

The CBILS is expected to become available from 23 March 2020, via the British Business Bank and its participating providers.

Eligibility is based on being a small UK-based business that:

• Has a turnover of no more than £41 million per year;
• Operates within an eligible industrial sector;
• Has not received de minimis State aid beyond €200,000 equivalent over the current and previous two fiscal years; and
• Has a sound borrowing proposal but insufficient security to meet the lender’s usual eligibility requirements

Businesses should first approach one of the 40+ accredited lenders with their proposal. The lenders range from high street and challenger banks to asset-based and small specialist lenders. If they can offer finance on normal commercial terms, they will do so. Any business that has no or inadequate security will be considered for the CBILS.

It is important to note that you will remain 100% liable for the debt.

Grants

The Small Business Rates Relief and hospitality sector grant money will be distributed to local authorities in early April. The Department for Business, Energy & Industrial Strategy is currently working with local authorities to outline the scheme and application process. Guidance on the application process will follow shortly and we will keep you posted, sign up for our newsletter for all the latest news.

SSP

Statutory sick pay for workers self-isolating due to COVID-19 should be paid to employees as normal. The Treasury is currently working with employers to create a repayment mechanism that enables employers to reclaim SSP from the Government. Guidance on the refund process will follow shortly.

Time To Pay

Businesses concerned about their ability to meet tax repayment obligations should contact HMRC’s Time To Pay helpline on 0800 0159 559. The helpline is open from Monday to Friday 8 am to 8 pm, and Saturday 8 am to 4 pm.

The advisor will discuss the options available to your business and the relevant process.

Insurance payouts

Check the terms of your insurance policies to ensure that you have the relevant cover for a pandemic. If so, speak to your insurance company about the process for issuing a claim and the evidence required.

COVID-19 business support

With the speed that news and information about COVID-19 and business support are being released, it’s difficult for even government departments to keep up. As of yet, there is no real information for businesses in specific sectors, other than retail and hospitality. We hope that more detailed information will be released over the coming weeks.

In the meantime, the above information is accurate as at the time of writing. However, we encourage you to closely follow our blog for the latest news and information relevant to your business and sector.

If you require more information or help regarding your business finances, get in touch with our accounting team.