The Government has announced – and is continuing to announce – packages to help businesses through the disruption caused by the Covid-19 virus.
A total of £330 billion has been set aside for businesses needing cash, though sole traders are not yet covered. Moves include a three-month freeze on mortgage payments for those in difficulty.
While there has been no specific package aimed at the private hire or taxi sector, businesses can take advantage of some of the funding available in a bid to lessen the financial pain.
Key features include
- Statutory sick pay relief package for SMEs
- A 12-month business rates holiday for all retail, hospitality and leisure businesses in England
- Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
- The Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
- A new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
The government will bring forward legislation to allow small- and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to Covid-19. The eligibility criteria for the scheme will be as follows:
The refund will cover up to two weeks’ SSP per eligible employee who has been off work because of Covid-19. Only employers with fewer than 250 employees as of 28 February 2020 will be eligible.
Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of Covid-19. Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note.
The eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to those staying at home comes into force. A repayment mechanism for employers will be established “as soon as possible”.
Statutory sick pay is £94.25 a week for all employees, including agency workers. Workers need to earn £118 a week to qualify. The prime minister has shortened the period for the payment of statutory sick pay from day four of illness to day one, as a result of the coronavirus outbreak.
The government is planning to introduce a business rates retail holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year. If you have a high-street office with walk-in booking facility, you may qualify as a “retail” business, but that decision would be down to the local authority.
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 government will provide additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR). This will provide a one-off grant of £10,000 to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs.
If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority – you do not need to apply.
A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch in the fourth week of March to help small and medium sized businesses to access bank lending and overdrafts.
The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value.
Businesses can access the first 6 months of that finance interest-free, as government will cover the first 6 months of interest payments. Further details, including on the lenders providing access to this scheme will be announced in the coming days, and the scheme will be available from early week commencing March 23, 2020.
To support larger firms, the Bank of England has announced a new lending facility to provide a quick and cost-effective way to raise working capital via the purchase of short-term debt.
This will support companies which are fundamentally strong, but have been affected by a short-term funding squeeze, enabling them to continue financing their short-term liabilities.
It will also support corporate finance markets overall and ease the supply of credit to all firms. Further details, including on how to access this funding will follow in the coming days, and the scheme will be available from the week commencing March 23.
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.