COVID-19: Business Update
Covid19 – Business Update
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. HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.
The Government will bring forward legislation to allow small-and medium-sized businesses (under 250 employees) and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. This refund will cover up to two weeks’ SSP per eligible employee who has been off work because of COVID-19 (subject to eligibility)
The Government will support businesses by deferring Valued Added Tax (VAT) payments for three months. The deferral for VAT will apply from 20 March 2020 until 30 June 2020 and is an automatic process with no applications required
A business rates holiday will be implemented for retail, hospitality and leisure businesses in England for the 2020/ 2021 tax year. Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.
The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property depending upon the property’s rate-able value. The local authority will write to eligible businesses.
The Government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.
The new Coronavirus Business Interruption Loan Scheme supports SMEs with access to working capital (including loans, overdrafts, invoice finance and asset finance) of up to £5 million in value and 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.
Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim as long as all other terms and conditions are met. Most businesses won’t be covered, as standard business interruption insurance policies depend on damage to property and exclude pandemics.
