Financial help for businesses

The Coronavirus (Covid-19) pandemic is proving a difficult time for businesses across the world. In the UK there are financial schemes available for businesses to access as the government has put contingency plans in place in preparation for emergencies.

The Government business support finder webpages include a wealth of information available for businesses and you will find it beneficial to review this material.  Support is available to employees and the self-employed, including sole traders and limited company directors.  Whether your business is open or closed during this pandemic, you may be eligible for loans, tax relief, cash grants.

This flow chart will help you decide which scheme your business is eligible to apply for

Government Business Grants

Following the introduction of national restrictions on 5 November 2020 the government announced further financial support for businesses in the form of new grant schemes:

Local Restrictions Support Grant 

  • A grant for certain businesses who have business rates liability AND have been forced to close by Government.

Additional Restrictions Support Grant 

A discretionary scheme announced to provide further support for: 

  • Businesses that have closed but do not pay business rates, and
  • Businesses that have not been required to close, but are still severely impacted by national lockdown restriction.

Check you're eligibility for the Coronavirus Local Restrictions Support Grant and the Additional Restrictions Grants 

 

Bounce back loan scheme (BBLS)

This scheme (BBLS) enables smaller businesses to access loan finance more quickly during the coronavirus outbreak. 

It helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000.

The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.

 

Business rates relief:

Retail, hospitality, leisure and private nurseries businesses

A business rates holiday has been introduced for retail, hospitality and leisure businesses – this means they do not have to pay business rates for the 2020 to 2021 tax year. 

Private nurseries which are occupied by providers on Ofsted’s Early Years Register and which are wholly or mainly used for the provision of the Early Years Foundation Stage will pay no business rates in 2020/21

If your business falls into one of these categories, you do not have to do anything as Dudley Council will sort on your behalf.

 

Coronavirus small business interruption loan scheme (CSBILS)

This scheme has been extended and provides financial support to small and medium sized businesses (up to £5 million) affected by Covid 19, by putting businesses in touch with potential lenders. Loans can be up to three years for overdrafts and invoice finance facilities or up to six years for loans and asset finance facilities. The government guarantees 80% of the finance to the lender and pays, interest and any fees, for the first 12 months.

 

Coronavirus large business interruption loan scheme (CLBILS)

This scheme has been extended and provides financial support to medium and larger businesses (up to £200 million) affected by Covid 19, by putting businesses in touch with potential lenders. Loans can be taken for periods of between three months and three years. The government guarantees 80% of the finance to the lender

 

COVID-19 Corporate Financing Facility

This scheme helps large businesses affected by coronavirus (COVID-19) through the purchase of their short-term debt. 

Under the COVID-19 Corporate Financing Facility (CCFF), the Bank of England will buy short-term debt from large companies.  This scheme will support your company if it’s been affected by a short-term funding squeeze and allow you to finance your short-term liabilities. It will also support corporate finance markets overall and ease the supply of credit to all firms.

The scheme is delivered through commercial lenders, backed by the Bank of England. It will operate for at least 12 months, and for as long as steps are needed to relieve cash flow pressures on firms that make a material contribution to the UK economy.

 

Culture recovery fund

The culture recovery fund provides a fund to support the UK’s performing arts, heritage sites, independent cinemas, music venues and museums.

 

Future fund

This scheme will issue convertible loans between £125,000 to £5 million to innovative companies which are facing financing difficulties due to the coronavirus outbreak.

 

Job support scheme (replacing job retentions scheme)

From 1 November the new job support scheme will be launched and will run for six months (this replaces to job retention scheme).

Access to the Job Support Scheme will be expanded in order to protect jobs. Under this scheme, if a business is forced to close, then the Government covers the full cost of two thirds of an employee's salary.

The Chancellor has announced a reduction in the number of hours that an employee needs to work to be eligible to enter the Job Support Scheme. This requirement will decrease from 33% to 20% of the employee's normal hours. 

The employer contribution to the pay for those hours not worked will also drop from the originally planned 33% to 5%. This will apply to all businesses at all alert levels.

Employers using the job support scheme are also able to claim the Job Retention Bonus if they meet the eligibility criteria.

 

Self-assessment payment deferment

If you are interested in self-assessment payment deferment - check what you need to do after 31 July 2020 if you chose to defer your second payment on account for the 2019 to 2020 tax year.

 

Self-employed income support scheme

The UK Government recognises the continued impact that coronavirus (COVID-19) has had on the self-employed and has taken action to provide support.

The Self-Employment Income Support Scheme Grant Extension provides critical support to the self-employed in the form of two grants, each available for three month periods covering November 2020 to January 2021 and February 2021 to April 2021.

To be eligible for the Grant Extension self-employed individuals, including members of partnerships, must:

  • have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
  • declare that they intend to continue to trade and either:
    • are currently actively trading but are impacted by reduced demand due to coronavirus
    • were previously trading but are temporarily unable to do so due to coronavirus

Visit their website to find out more.

 

Statutory sick pay (SSP)

If you run a small or medium sized business (of less than 250 employees), you can reclaim any statutory sick pay (SSP) incurred due to Covid 19, for up to two weeks per eligible employee.

Visit the government website to find out how to claim.

 

Tax: unable to pay on time

If you find that you cannot pay your tax on time, you must contact HM Revenue and Customs (HMRC) as soon as possible. How you contact HMRC depends on what you need to pay.  Visit the government website to find out more.

 

Tourism and hospitality

Tourism and hospitality sectors have a temporary government 15% cut to VAT until the end of March 2021.

Those businesses who have deferred their VAT bills are also able to pay back in smaller instalments – 11 smaller interest free payments during the 2021-22 financial year, instead of March 2021.

Talk to your finance team if you wish to take up this scheme.

 

Other resources

We urge you to seek advice as soon as possible if your business is affected.  As well as the Government website, you might find the Money Advice Service useful as they provide free, impartial money advice:

  • Advice and guides to help improve your finances
  • Tools and calculators to help keep track and plan ahead
  • Support over the phone and online

You may also find it beneficial to get in touch with The Federation of Small Businesses.  They provide advice and guidance to small businesses and the self-employed on reducing the risks from coronavirus.  

 

News Releases

Government extends Furlough to March and increases self-employed support

Businesses in England to receive £2.2 billion to see them through national restrictions