Help for Employers

1. Coronavirus Job Retention Scheme

What is available?
Government grants will cover 80% of the employment costs of PAYE employees who would otherwise have been laid off, backdated to 1 March 2020, up to a cap of £2,500 per month. The employee must be on the payroll as at 28th February 2020. It is intended that the scheme will run for at least 3 months from 1 March 2020 and this may be extended if necessary. It is at the employer’s discretion whether to fund the difference.

When will it be available?
The scheme will be open before the end of April. HMRC are working to develop their systems to allow payments to be made to employers. In the interim, you may wish to consider applying for a loan under the Coronavirus Business Interruption Loan Scheme.

Who is it available for?
This scheme is available to all employers, there are no requirements.

How to apply?
To claim under the scheme employers will need to:

  • designate affected workers who are temporarily not working during the coronavirus pandemic as “furloughed workers” and then notify your staff of this change. Note that placing employees on “furlough leave” requires an express term in their employment contracts which would permit this or you will otherwise need individual employees’ express consent to this change of status (preferably obtained in writing by letter or email), but in the current climate employees are highly likely to agree
  • submit information to HMRC about the workers that have been furloughed and their earnings through a new online portal that is being set up – HMRC will set out further details on the information required shortly.

Other key points:

  • This is a grant, not a loan.
  • it will cover workers who have already been laid off, made redundant or had their contracts terminated because of the coronavirus, but it’s likely you will need to re-engage them first
  • there’s no requirement for your business to be closed to access the scheme, so you should be able to furlough some workers and not others
  • furloughed workers aren’t entitled to receive a top-up of their wages from you. It’s up to you whether you wish to top up their wages further, e.g. from 80% to 100%
  • employees and workers remain employed/engaged during the furlough period.

PAYE and NIC will continue to apply as normal on payments to furloughed employees. A grant receipt is taxable income for the business but salary expenses will be offset.

2. Statutory Sick Pay relief package for SMEs

What is available?
Small-and medium-sized businesses and employers can reclaim up to two weeks’ Statutory Sick Pay (SSP) per eligible employee paid for sickness absence due to COVID-19. The rate of SSP is £94.25 per week. If you’re a director of a limited company, you can pay yourself two weeks of SSP if you need to self-isolate subject to meeting the minimum salary requirement for SSP of at least £118 per week (£6,136 per annum).

When will it be available?
The eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force.

Who is it available for?
Small or medium-sized businesses with fewer than 250 employees as at 28 February 2020.

How to apply?
The method for reclaiming the SSP has not yet been announced. The Government are working to set up the reclaim scheme as soon as possible.

Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website.

3. Deferral of VAT payments

What is available?
The next quarter of VAT payments will be deferred, meaning businesses will not need to make VAT payments until the end of June 2020. Businesses will then have until the end of the 2020-21 tax year to settle any liabilities that have accumulated during the deferral period.

What you need to do still make your VAT return.
All VAT returns are still required to be submitted within the normal timescales and normal default rules will apply for fines.

If you pay by direct debit, cancel your dd for your vat payment when will it be available?
The deferral will apply from 20 March 2020 until 30 June 2020.

Who is it available for?
All UK businesses.

How to apply?
The deferral applies automatically. VAT refunds and reclaims will be paid by the Government as normal.

4. HMRC Time To Pay scheme

What is available?
HMRC have always had the discretion to agree payment terms for taxes where businesses are struggling financially. They are now offering more generous payment terms for taxes. We have seen businesses being given up to at least mid-June to pay February, March, April 2020 PAYE bills, with the arrears being payable thereafter via a payment plan.

How to apply?
Call HMRC’s dedicated Covid-19 helpline on 0800 0159 559.

5. Coronavirus Business Interruption Loan Scheme

What is available?
Loans of up to £5 million, interest free for 12 months.

The borrower remains liable for 100% of the debt. The lender receives a guarantee of 80% of the loan amount from the Government to enable more loans to be approved. At the discretion of the lender, the scheme may be used for unsecured lending for facilities of £250,000 and under.

As well as loans, there are many other types of finance supported by the programme, such as:

• Term facilities
• Overdrafts
• Invoice finance facilities
• Asset finance facilities

More information is available from the CBILS website and their FAQs for SMEs.

Who is it available for?
UK-based businesses with turnover of no more than £45 million.

The business must be unable to meet a lender’s normal lending requirements for a fully commercial loan or other facility but would be considered viable in the longer-term.

The business must meet the other British Business Bank eligibility criteria. There are a small number of ineligible and restricted sectors: fishery, aquaculture and agriculture businesses may not qualify for the full interest and fee payment.

Ineligible sectors are Banks, Building Societies, Insurers and Reinsurers (but not insurance brokers); The public sector including state funded primary and secondary schools; Employer, professional, religious or political membership organisation or trade unions.

When is it available?
From Monday 23 March 2020.

How to apply?
Delivered by lenders that partner with the British Business Bank. All the major banks will offer the Scheme. There are 40 accredited providers.

You should talk to your bank or finance provider as soon as possible and discuss your business plan with them. You will need to have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable the business to trade out of any short-to-medium term difficulty.

If you have an existing loan with monthly repayments, you may want to ask for a repayment holiday to help with cash flow.

BBB suggest applying via the lender’s website in the first instance due to branches being closed and telephone lines busy.

6. COVID-19 corporate financing facility

What is available?
The Bank of England has set up a scheme to finance working capital by purchasing commercial paper from larger businesses. The scheme will operate for at least 12 months.

Who is it available for?
All UK businesses ‘making a material contribution to the UK economy’. UK incorporated companies, including those with foreign-incorporated parents and with a genuine business in the UK, will normally be regarded as meeting this requirement. Companies with significant employment in the UK or with their headquarters in the UK will normally be regarded as meeting this requirement.

Businesses do not need to have previously issued commercial paper in order to participate, but they must meet the eligible securities criteria (see the Bank of England website for more details). It is important to note that not all banks issue commercial paper. If your bank does not issue commercial paper, UK Finance has provided a list of those banks that are able to assist.

When is it available?
From Monday 23 March 2020.

How to apply?
Companies must do this via a bank. Application form and full terms will be published on the Bank of England website.

7. Retail, hospitality and leisure businesses – grants and rate relief

What is available?
1. No rates payable for the 2020-2021 tax year.

2. Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000.

3. Grant funding of £10,000 for businesses in these sectors with a rateable value of under £15,000.

Who is it available for?
All businesses in the retail, hospitality and leisure sector based in England.

Properties that will benefit from the rate 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

Grants are only available to businesses with property with a rateable value between £15,000 and £51,000 (businesses with a lower rateable value property may be eligible for the small business rate relief grant – see below).

How to apply?
There is no action required. The rates relief will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible. Your local authority will write to you if you are eligible for a grant.

8. Grant for recipients of small business rate relief

What is available?
A one-off cash grant of £10,000.

Who is it available for?
Small businesses already receiving small business rate relief (generally, businesses with one property with a rateable value < £15,000) and/or rural rate relief, based in England, and occupying property.

How to apply?
The cash grants will be administered by local authorities. Your local authority will write to you if you are eligible for this grant.

9. Business rates holiday for nursery businesses

What is available?
No rates payable for the 2020-2021 tax year.

Who is it available for?
Properties that will benefit from the relief will be hereditaments:

• occupied by providers on Ofsted’s Early Years Register
• wholly or mainly used for the provision of the Early Years Foundation Stage

How to apply?
There is no action required. The rates relief will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge which will be done as soon as possible.

Help for individuals

10. Sick pay
Eligible employees (earning over £118 per week) who are too ill to work are entitled to £94.25 per week Statutory Sick Pay (SSP), for up to 28 weeks.

Employees staying at home because of COVID-19 can now claim SSP. This includes individuals who are caring for people in the same household and therefore have been advised to do a household quarantine.

The Government is legislating for SSP to be paid from day 1, rather than day 4, of absence from work due to COVID-19. Once the legislation has been passed, this will apply retrospectively from 13 March 2020.

11. Deferral of income tax payments

What is available?
Income Tax Self-Assessment payments on account due on 31 July 2020 will be deferred until 31 January 2021.

HMRC have also scaled up their Time to Pay offer to all individuals who are in temporary financial distress as a result of COVID-19 and have outstanding tax liabilities.

How to apply?
This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period.

Time to Pay arrangements are available via HMRC’s dedicated helpline: 0800 0159 559.

12. Pay for furloughed employees

What is available?
COVID-19 is likely to cause many businesses financial difficulties. Employers can now access grants from the Government to avoid the need to lay off staff (Coronavirus Job Retention Scheme).

In order to qualify, the employer will need to classify relevant employees as “furloughed workers”. This means that the worker is kept on the payroll but does no work for the employer while furloughed. The grant will cover up to 80% of the employee’s employment costs (including employer’s NIC and pension), up to a cap of £2,500 per month. The employer may fund the difference but does not have to.

Where employees’ salary is reduced as a result of these changes, they may be eligible for support through the welfare system, including Universal Credit.

The scheme is intended to run for at least 3 months from 1 March 2020 but will be extended if necessary.

13. Mortgage and Rent Holiday

Mortgage borrowers in England and Wales can apply for a three-month payment holiday from their lender. Interest will continue to be charged on the amount owed.

Tenants can apply for a three-month payment holiday from their landlord. Guidance will be issued to landlords in due course. Buy-to-let mortgages are also eligible for the mortgage holiday.

No one can be evicted from their home or have their home repossessed over the next three months. More information to be forthcoming but see the 18 March 2020 press release for more details.

4. Universal Credit/Employment and Support Allowance
Individuals not eligible for SSP – those who are self-employed or earning below the Lower Earnings Limit of £118 per week – who have COVID-19 or are advised to stay at home, can make a claim for Universal Credit and/or new style Employment and Support Allowance.

If you are eligible for new style Employment and Support Allowance, it will now be payable from day 1 of sickness, rather than day 8, if you have COVID-19 or are advised to stay at home. An individual affected by coronavirus will be able to apply for Universal Credit and can receive up to a month’s advance upfront without physically attending a jobcentre.

From 6 April the requirements of the Minimum Income Floor will be temporarily relaxed. This change will apply to all Universal Credit claimants and will last for the duration of the outbreak.

Visit the DWP website for more details and to check eligibility.