UK Government Announces Financial Support for Businesses

Our team has put together a summary of the recent announcements and links to resources where you can find further support which may be helpful for your business, your family and professional contacts. 

The announcements include a package of measures to support businesses, including: 

1.  A statutory sick pay relief package for SMEs 

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 2 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 and payments of SSP, but employees will not need to provide a GP fit note 
• Eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to those staying at home 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 

2.  A 12-month business rates holiday for all retail, hospitality and leisure businesses in England 

• The Government will introduce a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year. 
• Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible. 
• A £25,000 grant will be provided to retail, hospitality and leisure businesses operating from smaller premises with a rateable value between £15,000 and £51,000. 
• Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority. Guidance for local authorities on the business rates holiday will be published by 20 March 

3.  Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief. 

• The Government will provide additional 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 £10,000 to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs. 
• If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority – you do not need to apply. 
• Funding for the scheme will be provided to local authorities by government in early April. Guidance for local authorities on the scheme will be provided shortly. 

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

• The UK Government will introduce a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year. 
• Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible. 
• A £25,000 grant will be provided to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value between £15,000 and £51,000. 
• Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority. Guidance for local authorities on the business rates holiday will be published by 20 March. 

5.  The Coronavirus Business Interruption Loan Scheme to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance. 

• This Government initiative, delivered by the British Business Bank, will launch next week 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 £5 million in value. Businesses can access the first 6 months of that finance interest free, as government will cover the first 6 months of interest payments. 

6.  The HMRC Time To Pay Scheme 

• 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. 
• If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559. 

Support for Business Website: here is a link to the support for business website which provides more details  

Extension of IR35 postponed: as a separate measure, the UK Government announced yesterday – although a briefing note from the UK Government has not yet been published to formally confirm this - that the extension of IR35 to medium and large companies in the private sector is being postponed by a year, to 6 April 2021. 

Business Interruption Insurance: there have been press reports that the insurance industry may seek to argue that they will not pay out under the terms of any business interruption insurance policies. 

The current advice from the UK government is 

• that businesses that have cover for both pandemics and government-ordered closure should be covered, as the Government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc. is sufficient to make a claim. 
• Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics. 

We suggest that if you have that type of cover in the UK and, if your business is affected, that you look into the exact terms and speak with your insurance broker. 

UK Government Coronavirus update page: here is a link to the Government Coronavirus update page. You can register to receive updates. 

If you have any concerns or questions in relation to the above, please get in touch with your usual contact at the Firm. We are here to help you.

The content of this note is provided for general purposes only and does not constitute professional advice specific to your situation and should not be relied upon. Before any action is taken, please speak with your usual contact at Nyman Libson Paul.