Covid-19 Business Support Update
15 June 20  /  Covid-19

The Coronavirus crisis continues, although thankfully the situation is easing, with the R rate appearing to stabilise at 1 or below, lockdown restrictions lifted, and more sectors being allowed to open for business, providing social distancing requirements are met. For many businesses, however, life continues to be a struggle, not least for the hospitality, travel, fitness and beauty sectors, with many companies still closed and unable to open, or operating on a limited basis with reduced staff levels.

Here, we provide an update of the latest announcements made by the Government on current help available for businesses:

Self-employed grants

The Self-Employed Income Support Scheme has been extended for a further three months to 31st August 2020. Applications for this period will open in late August 2020. The amount that can be claimed for June-August 2020 will be limited to 70% of eligible earnings capped at a maximum grant of £6,570. Please note, claims for the first quarter to 31st May 2020 will close on 13th July 2020. To find out if you are eligible, enter your Unique Tax Reference number and National Insurance number at this link: https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference

Coronavirus Job Retention Scheme (CJRS)

On 12 May 2020, the Chancellor confirmed that this scheme will be extended until 31 October 2020. On the 29th May he confirmed the details of how the scheme would be changed to a flexible arrangement from 1 July 2020.
Until 1 September 2020, claims for time not worked will continue to be based on 80% of furloughed person’s salary up to the £2,500 maximum. For September this reduces to 70% capped at £2,187.50 and a further reduction in October to 60% capped at £1,875.

From 1 July 2020, employers can bring back furloughed staff part-time. Employers will be responsible for paying for this part-time work.

From 1 August 2020, employers will be required to pay for any employers' NIC and pension costs. From 1 September employers will be asked to contribute 10% of the CJRS wage costs for time not worked and from 1 October this contribution will increase to 20%.

The scheme will now close 31 October 2020. For details, please visit: https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme.

Register for CJRS by 10th June

The CJRS will close to any employee who has not been formally furloughed for three weeks by the 30 June 2020. If you intend to furlough an employee who hasn’t been furloughed before, you’ll need to agree that with them and start their period of furlough on or before 10 June 2020. This is the last day on which someone who has never been furloughed before can start a period of furlough and qualify for the scheme, as it ensures the minimum three-week period is complete by 30 June 2020. So, to qualify employees for CJRS, you must add them by 10 June 2020.

CJRS over-claims

If you’ve over-claimed in a previous claim, you must pay back this money to HMRC. Either your new claim amount can be reduced to reflect this when you re-apply, or if you don’t intend to submit a further claim, you must pay back any amount you’ve received in error. At present, HMRC are working on a process to allow you to do this.

Trade Credit Insurance Update

Trade Credit Insurance provides cover to suppliers selling goods against the company they are selling to defaulting on payment. It is used extensively in non-service sectors, such as manufacturing and construction, giving businesses the confidence to trade. Due to Coronavirus, businesses struggling to pay bills risk having their credit insurance withdrawn or premiums increased to unaffordable levels.

To prevent this occurring, the government will temporarily guarantee business-to-business transactions currently supported by Trade Credit Insurance. The guarantee will be delivered through a temporary reinsurance agreement with insurers currently operating in the market, offering support to supply chains and enabling businesses to trade, safe in the knowledge they will be protected if a customer defaults on payment.

For details, please visit: https://www.gov.uk/government/news/government-to-support-businesses-through-trade-credit-insurance-guarantee

Bounce back loans (BBLS)

The bounce back loan scheme, which supports small businesses with 100% state-backed loans, allows small businesses to receive a loan worth quarter of their turnover, up to £50,000 within as little as 24 hours. As of 7 June, 782,246 small businesses had received bounce back loans, representing £23.8 bn. For details, please see: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/

Coronavirus Business Interruption Loan Scheme (CBILS)

This scheme provides financial support to SMEs across the UK that are losing revenue and seeing their cashflow disrupted. It has been significantly expanded, along with changes to the scheme’s features and eligibility criteria, which mean even more smaller businesses can access funding if they need it. For details, see: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/

Coronavirus Large Business Interruption Loan Scheme (CLBILS)

This scheme provides finance to mid-sized and larger UK businesses with a turnover of more than £45m. Several changes have taken place from 26 May, with the maximum amount increasing from £50m to £200m. As of 7 June, £9.6bn had been lent to businesses under the CBILS scheme, which carries an 80% government guarantee. For details, please visit https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/clbils/

Claim back Statutory Sick Pay (SSP)

The formal process to claim back certain SSP payments launched from 26 May, with employers able to register their claim using a new online process. As an employer, you can use the scheme if  you’re claiming for an employee who’s eligible for statutory sick pay due to coronavirus. To find out more, please visit: https://www.gov.uk/guidance/claim-back-statutory-sick-pay-paid-to-employees-due-to-coronavirus-covid-19

Retail businesses

On 25 May 2020, the Prime Minister announced outdoor markets and car showrooms could open from 1st June. All other non-essential retailers, selling clothes, shoes, toys, books and electronics, along with furniture stores, tailors, auction houses, photography studios and indoor markets can reopen from 15 June, as long as the government’s five tests are met and they follow the COVID-19 secure guidelines.

Businesses can only open if they have completed a risk assessment, in consultation with trade union representatives or workers, are confident they can manage the risks and have taken the necessary steps to comply with current Health & Safety legislation. For details of current guidelines, visit: https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19/shops-and-branches

Other businesses

Business Secretary, Alok Sharma, announced on 9 June 2020 that it was hoped other businesses, including restaurants, pubs and bars, hairdressers, barbers, nail bars and other related services would be able to reopen at the earliest from 4 July 2020, providing social distancing measures were in place. Keen to reopen other parts of the economy and support an economic bounce-back, the Government will publish safe working guidelines, allowing businesses to re-open in a manner that is as safe as possible for workers and their customers. Watch out for updates.

Help available

For the latest information on help available for businesses during the pandemic, please refer to the official Government website at https://www.gov.uk/coronavirus/business-support

If this article has highlighted the need for an accountant, legal or financial support, or assistance with corporate finance or banking, we are happy to introduce you to our connections, so please get in touch. Either call us on 01865 208 000 or email us at: info@mathewscomfort.co.uk

Safe wishes to all our clients and friends.

Sources:
https://www.cityam.com/coronavirus-bounce-back-loans-approach-24bn-but-cbils-approval-rate-languishes/

 

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Be Resilient and Gain Personal Momentum Coming Out of the Covid-19 Pandemic - Part 2
15 June 20  /  Covid-19