Government support for small businesses if affected by the COVID-19 outbreak
There were a number of reliefs in the recent budget to support small business owners during the present Coronavirus outbreak. We have listed below some of the issues covered in a recent government news item.
Statutory sick pay (SSP)
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:
- This refund will cover up to two weeks’ SSP per eligible employee who has been off work because of COVID-19
- Employers with fewer than 250 employees will be eligible. The size of an employer will be determined by the number of people they employed as of 28 February 2020.
- 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, 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 self-isolators comes into force.
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.
NOTE: This final paragraph is significant. Initially, employers will not be able to reclaim SSP as there is no existing system to facilitate the process. Employers affected should keep adequate records to record SSP payments made so that as soon as a repayment process is announced claims can be made.
The Chancellor may not have gone far enough in offering this support as many employees asked to self-isolate and then get well if they do develop COVID-19 symptoms, will likely exceed the 14 day refund on offer.
The government will increase the Business Rates retail discount to 100% for one year, expand it to the leisure and hospitality sectors and increase the planned rates discount for pubs to £5,000. Taken together with existing small business rate relief (which provides full relief for businesses using a single property with a rateable value of £12,000 or less), an estimated 900,000 properties, or 45% of all properties in England, will receive 100% business rates relief in 2020/21:
- Businesses that received the retail discount in 2019-20 will be rebilled by their local authority as soon as possible.
- Those businesses eligible for the newly expanded retail discount and/or the new pubs discount may need to apply to their local authority to receive the discount.
- Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority.
- The government will provide an additional £2.2 billion 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 £3,000 to around 700,000 business currently eligible for SBRR or Rural Rate Relief, to help meet their ongoing business costs. For a property with a rateable value of £12,000, this is one quarter of their rateable value, or comparable to 3 months of rent.
Business Interruption Loan Scheme
A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch in a matter of weeks to support 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 £1.2 million in value. This new guarantee will initially support up to £1 billion of lending on top of current support offered through the British Business Bank.
Extended payment facility for tax payments
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. These businesses can contact HMRC’s new dedicated COVID-19 helpline from 11 March 2020 for advice and support. To ensure ongoing support, HMRC have made a further 2,000 experienced call handlers available to support firms and individuals when needed. For Time to Pay support if you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.
There has never been a time when British businesses have been subject to so many outside threats to their continuing business activities. Consequently, planning is absolutely key in order to survive the inevitable downturn and disruption.
No doubt, normal service will be resumed as soon as possible, in the meantime we will need to be vigilant and rethink our planning options if we are to survive the process. If you need help with this “re-think” please call.
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