COVID-19 (Coronavirus) represents a very real threat to a lot of small businesses. Whether this is through loss of earnings because you can’t work, or you have jobs cancelled on you, or because you have a lack of trade to your business.
The Government has made it clear that your first response must be to look after yourself and your family, and keep those most at risk as safe as possible.
We will continue to be available to help in any way possible, including providing regular advice, as the situation changes, or further advice or support is announced by the Government via our website (https://baird-consulting.co.uk/) and Facebook page (https://www.facebook.com/BairdConsulting). We also remain available for discussions by phone, video call, or over email if you prefer, or if you are self-isolating.
As you may have heard in March’s budget and since, there is various support available for businesses affected by COVID-19.
Statutory Sick Pay for Employees
SME’s will be (legislation has not yet been passed, but is expected to be retrospective) to reclaim SSP paid for up to 2 weeks absence per employee if they are isolated because of COVID-19. Employers with up to 250 employees (as at 28-Feb-20) are covered. No fit note from a GP is required from these absences.
If you are self-employed, and not eligible for SSP, contributory Employment and Support Allowance will be available to those self-isolating in line with advice, from day one of sickness, as opposed to day 8 (as normal).
Business Rate Support
For the 2020/21 tax year, the Business Rate discount for properties with a rateable value under £51,000 will be increased to 100%. This means you no business rates to pay until April 2021. There may also be an entitlement to a rebate on part of the 2019/20 rate, which will be confirmed in due course. You are best advised to seek advice from the local authority you pay rates to.
If you get Small Business Rate Relief, or Rural Rate Relief
You will be entitled to claim a one off grant of £10,000 to meet your ongoing business costs. You should apply to your Local Authority for information on how to claim this grant. Please note that this is not currently available for businesses that operate from a home office (IE not subject to business rates) or to contractors, although we are aware of pressure being put on the Government to extend this grant to all SME’s.
If you’re in the Retail, Leisure or Hospitality Sectors
It as been anounced that businesses with a rateable value under £15,000 will only get the £10,000 grant mentioned above, but irrespective of whether or not you are in receipt of Small Business or Rural Rate Relief. If, however your rateable value is above £15,000, but below £51,000, you will recieve an uplifted grant of £25,000.
Job Retention Scheme
The Government has also anounced that they will cover 80% of the salary for any PAYE employee that is furloughed, up to £2,500 pcm. More information is avilable below, but what is currently clear is that is designed for staff, not directors, and that the furloughed employee canoot undertake any work for the business during this time.
Support for the Self-Eemployed
The Government has also anounced grants for the self-employed. While details of this are still being finalised, it woudl appear that in order to access the scheme, you must have been trading in the 2019/20 tax year, and intend to trade into the 2020/21 tax year. You must also have submitted a return for the 2018/19 tax year (suggesting that those who became self-employed after 6th April 2019 may not be included in the scheme.
You must also have not made a trading profit of more than £50,000 in the 2018/19 year, nor have made an average trading profit of more than £50,000 over the 2016/17, 2017/18 and 2018/19 tax years. You will recieve a grant of 80% of your average monthly profit up to a maximum of £2,500 pcm. If you have not been self-employed for the whole of the three years, they will take an averaage over the period for which you have been self-employed.
This is currently being offered for three months, but it likely to be extended past this. It is worth noting that you cannot apply directly to this scheme, HMRC will contact those eligible. We are, however advising clients who have rcently become self-employed to get their 2019/20 teturns filed as soon as possible, as they may still be able to claim under the scheme if their returns are entered before the published 2018/19 deadline for the scheme of 23rd April.
Buisness Loan Underwriting
Another incentive announced in the budget was government underwriting of business loans. More details are to follow on this scheme, which is not yet fully in place, but expected late March / early April. This lending is provided indirectly, with existing lenders having 80% of the value of loans guaranteed by the Government, in order to de-risk lending to SMEs in financial difficulty.
Following some initial teething problems with this, the Government has since taken action to ensure that for loans under £250,000 no personal guarantee can be required. For loans above £250,000, a personal guarantee can only be required for the 20% not covered by Government. In addition to this, the requirement for SMEs to attempt to access commercial finance first has been removed. Banks have also been instructed to speed up their processing of applications, particularly for smaller loans, however there is no clear guidance on the time it will take for a decision to be made. This does however mean that if you applied previously and were refused, it may be worth contacting yoru lender to ask them to reiew the application again.
HMRC bills and “Time to Pay”
All businesses and self-employed people are likely to be eligible to receive support with their tax affairs through HMRC’s “Time to Pay” service. Please be aware that this is on a case by case basis, but if your business has been affected by COVID-19 in any way, and you have an outstanding HMRC bill, you should discuss with HMRC what support they can provide.
Most SME insurance policies will not cover a pandemic. This is because most business interruption insurance policies are focussed around damage to property. It is possibly that your policy may include an add on relating to notifiable diseases, or cover against supply chain issues, or denial of access – in these cases you may be covered. The best advice is to check your policy and if in doubt, check with your insurer.