7 Key Grants to Support SMEs Affected by the Coronavirus Pandemic
With reports suggesting this week that almost a fifth of British SMEs are at risk of collapsing within the next month, the Government has pledged unprecedented aid to companies to the cushion the blow from much of our economy shutting down. Here we list seven key initiatives that could prove to be essential lifelines for all businesses that are feeling the pinch:
1 Coronavirus Business Interruption Loan Scheme:
This scheme will help businesses affected by coronavirus to access bank lending and overdrafts if they need to. For loans up to £5 million, the Government is providing a guarantee of 80% for each loan. This will give lenders the confidence to continue to provide finance to businesses; the Government will not charge businesses or banks for this guarantee.
Am I eligible?
- You will be eligible if your company is UK-based, with turnover of no more that £45 million per annum.
How do I access it?
- Small businesses – Talk to your bank or finance provider as soon as possible and discuss your business plan with them. This will help your finance provider to act quickly once the scheme has launched. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.
- Lenders – To find the full rules of the Scheme and list of accredited lenders, go to the British Business Bank website. All the major banks will offer the scheme once it has launched. There are 40 accredited providers in all.
When can I access it?
- The scheme will be available from the week commencing 23 March.
2 Coronavirus Job Retention Scheme:
Under the coronavirus Job Retention Scheme, all UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis. This applies to employees who have been asked to stop working, but who are being kept on the pay roll, otherwise described as ‘furloughed workers’. HMRC will reimburse 80% of their wages, up to £2,500 per month. This is to safeguard workers from being made redundant. The Coronavirus Job Retention Scheme will cover the cost of wages backdated to March 1st and is initially open for 3 months, but will be extended if necessary.
Am I eligible?
- All UK-wide employers with a PAYE scheme will be eligible – this includes the public sector, Local Authorities and charities.
How do I access it?
- Designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and – depending on the employment contract – may be subject to negotiation.
- Once the new online portal is live, submit information to HMRC about the employees that have been furloughed and their earnings (HMRC will set out further details on the information required)
When can I access it?
- HMRC are working urgently to set up a system for reimbursement and are expected to pay the first grants within weeks, aiming to get it done before the end of April. If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.
3 Small Business Grant Funding:
The Government is providing additional funding for Local Authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.
Am I eligible?
- You will be eligible if your business is based in England, you are a small business that already receives SBRR and/or RRR and you are a business that occupies property,
How do I access it?
- You do not need to do anything. Your Local Authority will write to you if you are eligible for this grant.
When can I access it?
- Local Authorities will write to all eligible businesses with information on how to claim this grant. Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant Local Authority. To find your Local Authority, use this search tool.
4 Statutory Sick Pay Rebate:
The Government will bring forward legislation to allow small and medium-sized businesses to reclaim any Statutory Sick Pay (SSP) paid for staff sickness absence due to coronavirus. This refund will cover up to 2 weeks’ SSP per any eligible employee who has been off work because of coronavirus.
Am I eligible?
- You will be eligible if your business is UK based and if your business is small or medium sized and employs fewer than 250 employees, as of 28 February 2020.
How do I access it?
- A rebate scheme is being developed, further details will be provided in due course.
When can I access it?
- The Government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible. Existing systems are not designed to facilitate employer refunds for SSP. If you are self-employed and want to know if you are eligible for Universal Credit, please visit the gov.uk Universal Credit page
5 Business Rates Holiday for the Retail, Hospitality and Leisure Sector:
Businesses in the retail, hospitality and leisure sectors in England will not have to pay business rates for the 2020-21 tax year. Businesses that received the retail discount in the 2019-20 tax year will be rebilled by their local authority as soon as possible.
Am I eligible?
- You will be eligible if your business is based in England and is in the retail, hospitality and/or leisure sector. Properties that will benefit from the relief will be those that are wholly or mainly being used as a) shops, restaurants, cafes, drinking establishments, cinemas and live music venues, b) for assembly and leisure or c) as hotels, guest/boarding premises and self-catering accommodation.
How do I access it?
- There is no action for you. Local authorities will apply the business rates holiday to your bills. For more information please check the guidance on gov.uk.
- You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator.
- You can find your local authority on gov.uk.
When can I access it?
- This will apply to your business rates bills for the 2020/2021 tax year. However, local authorities may have to reissue your bill. They will do this as soon as possible.
6 Cash Grants for the Retail, Hospitality and Leisure Sector:
If your business is in the retail, hospitality or leisure sector, you will receive a cash grant of up to £25,000 per property. Businesses in these sectors with a rateable value of under £15,000 will receive a grant of £10,000; businesses with a rateable value of between £15,001 and £51,000 will receive a grant of £25,000.
Am I eligible?
- You will be eligible if your business is based in England and is in the retail, hospitality and/or leisure sector. Properties that will benefit from the relief will be occupied properties that are wholly or mainly being used as shops, restaurants, cafes, drinking establishments, cinemas and live music venues for assembly and leisure as hotels, guest/boarding premises and self-catering accommodation
How do I access it?
- You do not need to do anything as your Local Authority will write to you if you are eligible for this grant.
When can I access it?
- Local Authorities will write to all eligible businesses with information on how to claim this grant. Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant Local Authority. To find your local authority, use this search tool.
7 VAT Deferral:
The Government will support businesses by deferring Valued Added Tax (VAT) payments for 3 months.
Am I eligible?
- All VAT-registered UK businesses are eligible.
How do I access it?
- This is an automatic offer with no applications required. UK Registered businesses will not need to make VAT payments normally due with VAT returns during this period. Taxpayers will be given until the end of the 2020-21 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.
When can I access it?
- The deferral will apply from 20 March 2020 until 30 June 2020.