While the coronavirus pandemic has affected the health of hundreds of thousands of people worldwide, it has also had a devastating effect on small and medium-sized businesses in the UK and beyond.
Following a £12 billion package of measures announced in the Budget, the Chancellor has since unveiled a substantial support package designed to help businesses survive during this uncertain period.
If you’re a small business owner, there is help available from the government and beyond. Here’s a summary of the support on offer.
Coronavirus Job Retention Scheme
In a measure unprecedented in modern times, the Chancellor announced a ‘job retention’ scheme in which the government will pay up to 80% of the salary of ‘furloughed’ workers.
If you have essentially laid-off workers temporarily, and you notify employees of this change, HMRC will refund 80% of these workers’ wage costs, up to a cap of £2,500 per month, for three months.
It means that if you intend to re-employ your staff when your business reopens, the government will pay up to 80% of their wages in the interim.
Note that changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
Statutory Sick Pay
Businesses with fewer than 250 employees (at 28 February 2020) can reclaim the cost of any Statutory Sick Pay (SSP) caused by the coronavirus (up to a limit of 14 days per individual). This will be refunded to the company, in full, by the government.
In order to be eligible for the changes to Statutory Sick Pay, you must keep records of the employee’s absence and SSP payments, but the employee will not need to provide a doctor’s note.
All businesses in the UK can defer their Valued Added Tax (VAT) payments for three months.
This deferral will apply from 20 March 2020 until 30 June 2020 and is an automatic offer (you don’t need to apply). You will be given until the end of the 2020/21 tax year to pay any liabilities that have accumulated during the deferral period.
Business Interruption Loans
A new Coronavirus Business Interruption Loan Scheme will see banks offer loans of up to £5m to support SMEs, for up to six years. The business loan scheme will be delivered by the British Business Bank and businesses will access the loans via their high street bank or one of 40 accredited finance providers by requesting a government-backed business interruption loan.
The government will pay to cover the first 12 months of interest payments and any lender-levied fees, so businesses will not face any upfront costs and will benefit from lower initial repayments.
To be eligible for a business interruption loan you must:
Business Rates Support
All retail, leisure and hospitality companies in England will be exempt from business rates for the 2020/2021 tax year. Nursery businesses will also be exempt from business rates in 2020/21.
If you have a business in the retail, hospitality or leisure sector with a rateable value of less than £15,000 then a cash grant from the government of £10,000 will be made available. If the rateable value of your business in these sectors is £15,000 to £51,000 then a £25,000 grant is available. Speak to your local authority to check your eligibility.
The £3,000 grant announced in the Budget for businesses that qualify for Small Business Rate Relief or Rural Rate Relief has been increased to £10,000. This will be administered by the local authority from early April and, if you’re eligible, you will be contacted directly and do not need to apply.
Other Budget announcements
In addition to emergency measures to tackle the coronavirus outbreak, there was other good news for small businesses.
The government also announced that it is delivering on its commitment to increase the Employment Allowance to £4,000. This means that businesses will be able to employ four full-time employees on the National Living Wage without paying any employer National Insurance contributions (NICs).
The Chancellor also confirmed that the Corporation Tax rate would remain at 19%.
Facebook for Business grants
During the coronavirus pandemic, and to help up to 30,000 eligible small businesses in over 30 countries where they operate, Facebook are offering $100m in cash grants and ad credits.
The social media giant will begin taking applications in the coming weeks. In the meantime, you can sign up to receive more information when it becomes available.