Who would have thought when we set down to work on 1st March that we would find ourselves here by April. Unprecedented times for business globally.
Here at Business Partnership we work with and represent businesses across all sectors, including those in retail, hospitality and leisure which have been particularly hard hit this week. Our thoughts are with you.
We understand that many businesses will be suffering right now on the back of social distancing tactics and it is important that everyone has access to the changing information released this week. So here, we have summarised the key financial support available for business along with some key contact numbers and government guides in one place.
Above all other things, we urge you to TALK.
The government have made some huge financial commitments, but they cannot cover every eventuality and specific businesses are falling between the gaps. Talk to HRMC, you banks, you local authorities, you insurance companies, you staff. This is a changing situation and not all the detail has been set. Keep talking to the relevant contacts for your business but have patience, they are going to be busy.
The Government
Top in all of this are the UK Government’s Department for Business, Energy and Industrial Strategy who have a business support line on 0300 456 3565 or email them on enquiries@businesssupporthelpline.org.
Top source for all information and updates is their website
Corporation Tax, PAYE, VAT, IR35
A lot of SMEs are going to struggle with the drop in trade due to social distancing tactics. That will put a huge strain on cashflow so paying all your taxes may not the be healthiest thing for your business right now, but you can’t avoid them altogether.
HMRC are offering Time To Pay schemes to help SMEs spread the payments and these can be arranged in a short phone call to 0800 015 9559.
HMRC are also waiving late payment penalties during this time, so speak with them on this too.
Finally the IR35 changes which were imminent have been postponed until April 2021.
Business Rates
Businesses who are in the retail, hospitality or leisure sector will now receive 100% rate relief for 12 months.
Businesses with a rateable value of between £15,000 and £51,000 who are also in the retail, hospitality or leisure sector will also receive grants of a further £25,000.
Businesses who already qualify for Small Business Rates Relief or Rural Rates Relief will be given a cash grant of £10,000 with more details of how this will be administered due next week.
Statutory Sick Pay
For SMEs with up to 250 employees the government has pledged to pay SSP for a period of 2 weeks per employee who takes time off due to coronavirus. SSP will come into effect from day 1 of sickness, not day 4.
Costs will be covered by way of a rebate but the mechanism of how this happens is still being finalised. It is not yet clear if SSP can be claimed for employees who are well, but self isolating due to members of their household being ill.
Comprehensive SSP records will need to be kept by the business, but no GP certification is required.
British Business Bank
The government have made billions of pounds available for domestic banks across the UK in order to specifically help small businesses in this crisis, although some qualifying criteria must be met. Assistance will be via lending, invoice financing and asset financing on favourable terms. All major high street banks and many others have signed up to the scheme. Full details. https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/
Bounce Back loans are also now in place with low lending rates. Interest and repayments are suspended for the first 12 months. Again full details of the scheme will give you who can and how to apply. https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/
Customer Invoicing
Increasing sales will potentially bring cash into your business in 3 months time, when what you may need is cash in your business now. Large PLCs have been asked to pay small businesses without delay and Morrisons have led the way on this making immediate payments to 3,000 small suppliers.
It may seem callous, but chase your debtors for immediate payment and issue invoices quickly. This is all about managing cashflow right now and you should be on top of it.
Discuss invoice discounting with your bank/finance provider. It might bring cash in now rather than waiting to be paid.
Insurance
You are looking to see if you have Business Interruption Cover in your commercial insurance policy which would cover you for loss of earnings. Then you are looking to see if you are covered for Notifiable Diseases within this.
Speak with your insurance company to find out the exact terms of your policy, what you are covered for now, and what you can retrospectively add at this point in time.
Grants & Hardship Funds
£500m have been allocated to local authorities to support vulnerable people. No further definition is yet available but it is hoped this definition will include the self-employed and small businesses in distress as well as individuals. Check your own local authority website for details, which are now starting to appear.
Universal Credit
Whilst this is a benefit for the unemployed, it is also a benefit for those on low incomes and covers those classed as self-employed.
Various restrictions on income levels and waiting times have been lifted during this time. It is likely that Jobcentre Plus, who administer the benefit, will switch to phone and online consultations only. https://www.gov.uk/contact-jobcentre-plus
Rent Holiday
Whilst announcements have been made for mortgage holidays and rent suspensions for individuals, no such announcements have been heard commercially. Bodies like the FSB, Chamber of Commerce and Institute of Directors are speaking to major landlords about the support they can offer to their SME tenants, but we wait for news.
We urge you to speak with your own landlord, open up a dialogue and discuss a compromise payment schedule.
Salaries – Coronavirus Job Retention Scheme
Under the Coronavirus job retention scheme, 80% of PAYE salaries will be covered by the government during this time for employees who have been furloughed. Those furloughed employees must not work during that time and employers can make up the additional 20% salary if they wish. Full details https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme
Self Employed – Income Support Scheme
Like the furlough scheme for employees, the government is committing to cover 80% of the profits of the self employed. Calculated as an average and for those self employed who have submitted tax returns for the 2018-2019 tax year. Conditions do apply and can be found here https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme
First applications for the self employed have begun to be processed. If you believe you quality but have not yet been contacted by HMRC, get in tough with them directly.
Who else can help you?
It is difficult to predict who needs what help but your own accountant is also a good place to start. They are used to dealing with HRMC and tax rebates so have a head start in navigating these new allowances.
If it is support on staff matters and employment issues that you seek, ACAS will be your starting point but there are many other recognised bodies who are disseminating the government messages on a daily basis to the public. Below are some main ones.
Federation of Small Business
https://www.fsb.org.uk/campaign/covid19.html
Institute of Directors
https://www.iod.com/news-campaigns/news/articles/COVID-19-coronavirus-advice-and-resources
ACAS
https://www.acas.org.uk/coronavirus
World Health Organisation
Don’t forget your local Chamber of Commerce and your Local Authority.
Finally, Lansberg Gersick have put together a Crisis Management Toolkit for business on the link below.
Can your business help?
If your production can be changed to manufacture medical equipment such as ventilators you can offer your services https://ventilator.herokuapp.com
If you think your business can help in other aspects visit coronavirussupport@cbi.org.uk
Business Partnership
Clearly, if you want to take this opportunity to assess your business value or discuss your plans for sale, we are happy to talk and you will find your local office details here.
May you all stay healthy and may all our businesses survive and then thrive when we are through the worst of this crisis.
on behalf of
Regional Partners and supporting staff
Business Partnership