With the uncertainty facing all of us around coronavirus (COVID-19), Be the Business wants to help you navigate the influx of news around it. Below is a short update on the most recent announcements and measures which may be relevant to you and your business.
- People on maternity and paternity leave who return to work in the coming months will be eligible for the government’s furlough scheme, even after 10 June cut-off date.
- Businesses must start paying towards furlough scheme from August, Sunak says. The furlough scheme cannot continue indefinitely, Employers will be asked to contribute, alongside the taxpayer, to pay the wages of their staff.
- In June and July, the scheme will continue as before, with no employer contribution at all.
- In August, the taxpayer contribution will stay at 80%. Employers will only be asked to pay national insurance and employer pension contributions, he says.
- By September, employers will be asked to start paying towards people’s wages. Taxpayers will pay 70% of the furlough grant, employers 10%.
- In October, taxpayers will pay 60%, employers 20%.
- The Chancellor also said that firms can start bringing furloughed staff back part time from July 1. Firms will decide the hours and shift patterns their employees will work upon their return and will be responsible for paying their wages while in work.
- The Self-Employment Income Scheme will be extended, with applications opening in August for a second and final grant. This will be paid out in a single instalment, covering three months’ wages worth of average monthly trading profits. The final value of the grant will be 70% up to a total of £6,570.
- A new £50 million fund for councils to support their local high streets get safely back to business has been announced today by High Streets Minister Simon Clarke. The Reopening High Streets Safely Fund will help councils in England introduce a range of safety measures in a move to get people back to work and customers back to the shops.
- Applications for the coronavirus Future Fund open tomorrow and will remain open until September. The Future Fund will provide government loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors. These convertible loans may be an option for businesses that rely on equity investment and are unable to access other government business support programmes because they are either pre-revenue or pre-profit.
- Chancellor Rishi Sunak has extended the Government’s Coronavirus Job Retention Scheme until the end of October, with furloughed workers across the UK continuing to receive 80% of their current salary up to £2,500 per month. New flexibility will be introduced from August which will allow furloughed workers to return to work part-time, with employers being asked to pay a percentage of their salaries from that point onwards.
- Chief Medical Officer, Professor Chris Whitty, said there is a distinction between businesses which must remain open, those which must remain shut and those which can open if they can be made safe. This distinction remains a fundamental part of the Government’s strategy. The PM stressed that all workplaces must be “COVID secure”, and that special measures such as increased inspections by the Health and Safety Executive will be organised to ensure companies are doing the right thing.
- The Prime Minister today announced a three-stage approach to getting people in England back to work, beginning this week. From Wednesday, certain restrictions will be lifted to allow those who cannot work from home to return to work if it is safe to do so. The government has said that sectors of the economy that are allowed to be open should be open. This includes production, construction, manufacturing, logistics, distribution and scientific research in laboratories. The only exceptions to this are those workplaces such as hospitality and non-essential retail, which are required to remain closed. These changes will only apply in England.
As soon as is practicable, the government has said that workplaces should follow the new “Covid-19 Secure” guidelines, which will be published this week.
- The government highlighted the increased risk of cyber crime as criminals are seeking to exploit the coronavirus crisis through hacking computer systems and sending out phishing emails. Cyber-experts in the UK and the US have, published a joint statement warning of this increased threat. There are various motives for these threats, from fraud to espionage.
- The Department for Education launched a new online platform, “The Skills Toolkit”, which gives people access to free, digital and numeracy courses to help build their skills.
The chancellor announced a new fast-track finance scheme for small businesses, with a 100 per cent government-backed guarantee for lenders. From May, small businesses will be able to access the Bounce Back Loans scheme, which will provide loans of up to £50,000. The scheme has been designed to ensure that small firms needing cash injections to keep operating can get finance in a matter of days.
- Businesses will be able to borrow between £2,000 and £50,000 and can apply online through a standardised online application
- Loans will be interest free for the first 12 months and 100 per cent backed by the government
- Loan terms will be up to six years and no repayments will be due during the first 12 months
The scheme will launch for applications on 4 May and more information on it can be found here. The government has said it will work with lenders to ensure loans delivered through the scheme are advanced as quickly as possible and agree a low standardised level of interest for the remaining period of the loan.
You can apply for a loan if your business:
- Is based in the UK
- Has been negatively affected by coronavirus
- Was not an “undertaking in difficulty” on 31 December 2019
- In response to a large number of complaints from consumers since 10 March, the Competition and Markets Authority (CMA) announced today it will set out further steps in relation to cancellations and refunds next week
- Updated figures from UK Finance showed that banks have approved less than half of applications for coronavirus loans. Loans for businesses increased £1.45bn in the week from 14 April to 21 April, bringing total lending under the Coronavirus Business Interruption Loan Scheme (CBILS) to £2.8bn
- The Coronavirus Job Retention Scheme opened for business, and by 4pm more than 140,000 firms had applied. The money will take six working days to reach businesses
- Two initiatives were launched by the chancellor today worth £1.25bn, including:
- The £500m Future Fund will be delivered in partnership with the British Business Bank and launches in May. The fund will provide UK-based companies with between £125,000 and £5m from the government, with private investors matching the government commitment. The £500m Future Fund is comprised of £250m from government combined with equal match funding from private investors
- £750m of targeted support for the most R&D intensive small and medium size firms will be available through Innovate UK’s grants and loan scheme
Dominic Raab outlined five assessment points that the government will use before any lockdown can be lifted.
- That the NHS has sufficient capacity to cope with the number of coronavirus patients across the UK
- That there is a sustained fall in the death rates from coronavirus
- That data shows infection rates are decreasing to a “manageable level”
- That testing capacity and the quantities of PPE can meet any future demand
- That any adjustment to the measures will not risk a second peak in infections
- HM Treasury announced the eligibility cut-off date for the Coronavirus Job Retention Scheme had been extended from 28 February 2020 to 19 March 2020. Employers can now claim for furloughed employees that were employed and on their PAYE payroll on or before 19 March 2020
- More than 6,000 businesses have received over £1.1bn through the Coronavirus Business Interruption Loans Scheme
- The Office for Budget Responsibility (OBR) warned that coronavirus could see the UK economy shrink by a record 35 per cent by June. Chancellor Rishi Sunak responded to the report saying there is hardship ahead and that the government wouldn’t be able to protect every job or every business. He said that he is speaking to banks “every single day” to ensure that those who needed small business loans were able to get them from lenders
- The UK economy is forecast to fall by 14 per cent in the current pandemic-afflicted quarter ending in June. The forecast comes from an average projection of more than a dozen top economists surveyed by the BBC
- Business secretary Alok Sharma wrote an open letter to those working in manufacturing and industry in the UK, in which he confirmed that there is no restriction on manufacturing continuing under the current public health guidelines. In addition to this he sent an open letter to the UK’s retail sector, in which he reiterated the importance of continuing online retail services
- It was announced that the prime minister would remain in hospital under observation after undergoing routine tests for “persistent” coronavirus symptoms, ten days after he was diagnosed with the illness. He tweeted “I’m in good spirits and keeping in touch with my team, as we work together to fight this virus and keep everyone safe.”
- The government launched a survey to help understand how and where coronavirus is affecting people
3 April 2020
Chancellor Rishi Sunak took further action today to support firms affected by the coronavirus crisis by bolstering the Coronavirus Business Interruption Loan Scheme (CBILS) and announced a new scheme for larger companies. Key things include:
- The government is stopping lenders from requesting personal guarantees for loans under £250,000 and making operational changes to speed up lending approvals. The government will continue to cover the first twelve months of interest and fees
- For loans over £250,000, personal guarantees will be limited to just 20 per cent of any amount outstanding on the CBILS lending after any other recoveries from business assets. Lenders were already prohibited from asking business owners to put their house on the line, but the changes will provide further reassurance regarding personal assets
- Larger firms will also get more help with government-backed loans of up to £25m to companies with revenues of between £45m and £500m. The new scheme will sit alongside the CBILS
The government has announced £20 million of funding to build the UK’s resilience to the long-term impact of coronavirus. Grants of up to £50,000 will be available to tech and research focused businesses to develop new ways of working and help build resilience in industries such as delivery services, food manufacturing, retail and transport, as well as supporting people at home.
2 April 2020
- Health secretary Matt Hancock announced that £300m will be made available for community pharmacies and is writing off £13.4bn of NHS debt. The health secretary also stated that the government will test more NHS staff, critical key workers and local communities for the virus. He set out a five-point testing plan with a goal for 1000,000 tests a day by the end of the month
1 April 2020
- As part of the measures announced by the chancellor to support those affected by the coronavirus outbreak, eligible properties, including those in the retail, hospitality and leisure sectors, will not pay business rates for the next 12 months. The measure came into force immediately and is expected to save firms in England £11bn. The smallest businesses in these sectors are also beginning to receive one-off grants of either £10,000 or £25,000
29 March 2020
- The business secretary wrote a letter to the UK construction industry stating it should continue its “critical contribution”. He states that sites should work to the Site Operating Procedures (SOP) published by Construction Leadership Council
28 March 2020
- The business secretary, Alok Sharma, announced he will make changes to enable UK companies undergoing a rescue or restructure process to continue trading, which could help them avoid insolvency. This will also include enabling companies to continue buying much-needed supplies, such as energy, raw materials or broadband, while attempting a rescue, and temporarily suspending wrongful trading provisions retrospectively from 1 March 2020 for three months for company directors so they can keep their businesses going without the threat of personal liability.
27 March 2020
- Additional guidance on the government’s Coronavirus Job Retention Scheme has been published, setting out further details on eligibility and payments
The chancellor outlined measures to “benefit 95 per cent of people who are majority self-employed”. Key points include:
- Those who have been adversely affected by the coronavirus can get a taxable grant worth 80 per cent of their average monthly profits over the last three years – up to £2,500 per month
- The scheme will be open to those with a trading profit of less than £50,000 in 2018-19 or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19. To minimise fraud, only those already in self-employment who have a tax return for 2019 can apply
- The scheme, which is being designed by HMRC from scratch, will cover the three months to May. Grants will be paid in a single lump sum instalment covering all three months, and will start to be paid at the beginning of June
- To make sure no one who needs it misses out on support, HMRC have decided to allow anyone who missed the filing deadline in January, four weeks from today to submit their tax return
- Further information and details of the scheme will be shared shortly by HMRC
Guidance on the closure of all retailers that sell non-essential goods and other non-essential premises, as part of further social distancing measures has been updated to include additional details to the list of businesses and premises that must remain closed.
25 March 2020 coronavirus update
- The government launched a GOV.UK Coronavirus Information service on WhatsApp. The service will provide information on topics such as coronavirus prevention and symptoms, the latest number of cases in the UK, advice on staying at home, travel advice and myth busting
- Businesses are being given the opportunity to apply for a three month extension for filing accounts with Companies House
24 March 2020
- Commercial tenants who cannot pay rent because of coronavirus will be protected from eviction. These measures, included in the emergency Coronavirus Bill, will mean no business will be forced out of their premises if a rent payment is missed in the next three months
23 March 2020
The prime minister announced that the government will enforce strict rules about when people can leave their homes. You can only leave your house for limited purposes, including:
- Shopping for basic necessities
- One form of exercise a day (a run, walk or cycle)
- Any medical needs (provide care or help a vulnerable person)
- Travel to and from work (only if necessary)
All shops selling non-essential goods, libraries, playgrounds, outdoor gyms and places of worship will close. These restrictions will be reviewed in three weeks.
The government has launched a new central website outlining the full range of business support that has been made available, who is eligible, when the schemes open and how to apply.
20 March 2020
Cafes, restaurants, clubs, theatres and leisure centres will close from 21 March. The chancellor also announced an employment and wage subsidy package, including:
- A new Coronavirus Job Retention Scheme which will pay 80 per cent of wages up to £2,500 per month for employees who are not working. All employers are eligible for the scheme and will need to contact HMRC for a grant. The payment scheme will be backdated to 1 March and will last until the end of June. There will be no limit to the amount of money available for the scheme and can be open for longer than three months if necessary
- The Coronavirus Business Interruption Loan scheme will make loans of up to £5m available with no interest due for a year. The scheme will be available from Monday 23 March
- The government will defer next quarter of VAT payments and you will have until the end of the financial year to repay those bills
- Universal credit standard allowance and working tax credit will increase by £1,000 a year
- To support the self-employed, the government will suspend the minimum income floor to access universal credit at a rate equivalent to Statutory Sick Pay for employees and defer the next self-assessment payments to January 2021
19 March 2020
The Bank of England cut interest rates to 0.1 per cent to support the UK economy in the face of the coronavirus pandemic. This is a further cut following earlier action by the Bank on 11 March, when it announced a 0.5 per cent cut in rates to 0.25 per cent.
18 March 2020
The government announced schools in the UK would close their doors on Friday 20 March – except for vulnerable pupils or children of key workers. At this point it is unclear how long schools will remain closed for.
17 March 2020
At a press conference on Tuesday 17 March, chancellor Rishi Sunak joined the prime minister Boris Johnson to announce a massive range of economic stimulus designed to protect businesses and jobs, including:
- Government-backed and guaranteed loans of £330bn on attractive terms to support businesses with rent, wages, suppliers, and other costs
- To support larger firms with liquidity, a low-cost new lending facility has been agreed with the Bank of England
- To support SMEs, the Coronavirus Business Interruption Loan scheme will make loans of up to £5m available with no interest due for the first six months. Both schemes should be available from W/C 23 March
- Firms in the retail/hospitality/leisure sector without insurance and with a rateable value of up to £51,000 will be eligible for a cash grant of up to £25,000
- Firms in these sectors will also now have a 12-month business rates holiday irrespective of the rateable value of the property
- The £3,000 cash grant available from Local Authorities announced for businesses in receipt of Small Business Rates Relief at the Budget on 11 March has now increased to £10,000
- A support package for airlines and airports to be announced
- The chancellor is also taking a new legal power in the Covid Bill to offer whatever further financial support deemed necessary
16 March 2020
Speaking at a press conference on Monday 16 March, the prime minister requested that anyone with a cough or fever and all the members of their household to stay at home for 14 days. The government has also advised against all unnecessary travel, mass gatherings and social meetings at venues such as pubs, clubs and theatres. Working from home is also encouraged.
W/C 9 March 2020
In the Budget on 11 March, the chancellor set out a package of temporary and targeted measures to support public services, individuals and businesses through this period of disruption caused by coronavirus. This included a package of measures to support businesses including:
- A statutory sick pay relief package for SMEs
- A Business Rate Relief for small businesses and pubs, small business grant funding of £3,000 for all business in receipt of Small Business Rates Relief (SBRR) and Rural Rates Relief
- The Coronavirus Business Interruption Loan Scheme to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance
- The HMRC Time To Pay Scheme
One final thought.
Please look after yourselves. Staying safe and having the right advice is important. From the way we work, travel or socialise; we all are facing extraordinary change and daily life disrupted. As you continue to adapt your business as a result of coronavirus, we hope to update you on developments and measures announced over the coming weeks. As always, we’re grateful for your thoughts on what would be helpful from us and feedback on this update.
Be the Business