To make the myriad of schemes as easy to understand as possible, we've split this article into three sections:

  • grants and assistance you don't have to pay back
  • bills you don't have to pay now, and
  • loans you do have to pay back.

Coronavirus business support – grants and assistance you don't have to pay back

Small business grant funding - £10,000 grant

If your business occupies premises which qualifies for Small Business Rates Relief or your non-domestic rates are tapered because your premises' rateable value is between £12,001 and £15,000, you qualify for a £10,000 grant. You need to have been in receipt of the relief or the tapering on 11th March 2020.

Your local authority is responsible for distributing the grant. If you have not been contacted by them yet, please check their website, the claims form will probably already be online. The forms are very straightforward but you will need information from one of your rates bills. Our clients have reported that their local councils have been remarkably quick and efficient at paying it out. To find your local council details, please click here.

Please note that if you work from home, you are not eligible for this funding nor are you if your business premises' rateable value is greater than £15,000.

Cash Grant for Retail, Hospitality and Leisure – either a £10,000 or a £25,000 grant

If your business is in the leisure, hospitality, or retail sector (specifically self-catering accommodation, guest and board houses, hotels, venues for assembly and leisure, drinking establishments, cinemas, cafes, live music venues, restaurants, and shops), you will receive:

£10,000 if your rateable value is less than £15,000 or

£25,000 if your rateable value is more than £15,000 but less than £51,000.

As with the Small Business Grant Funding scheme, your local council is responsible for distributing funds to you. If your business premises' rateable value is £51,000 or more, you do not qualify for this scheme.

Please note that you will only be paid under this scheme and not under the Small Business Grant Funding and that your business has to have been registered at its current premises with the local authority on 11th March 2020.

Business Rates Holiday for Retail, Hospitality and Leisure

All retail, hospitality, and leisure businesses will not pay business rates for the 2020/2021 tax year including those eligible for Cash Grant for Retail, Hospitality and Leisure funding. Your local authority will automatically zero-sum your bill for this year. If you were issued with a rates bill prior to the coronavirus crisis, your bill will be reissued at zero and sent to you shortly.

Coronavirus Job Retention Scheme – HMG to cover your wage bill

To encourage companies not to dismiss members of staff because fear over coronavirus and the resulting lockdown has greatly reduced the turnover of many business, the government have introduced the Coronavirus Job Retention Scheme.

You can select to “furlough” staff meaning that they stay on your payroll but they're not allowed to do any work for the company. HMRC will pay you 80% of each furloughed member of staff's wages dated from 1st March 2020 for at least three months.

To qualify, you must be a UK-based company which operated a payroll on or before 28th February 2020 with a UK bank account. Guidance for employers on the scheme can be found here.

The first payments are not expected to be made to employers before the end of May 2020. The claims window is due to open on 20th April and you must have an online PAYE account with Gov.UK in order to claim. Claims can only be made online, there will not be a facility to claim by telephone. Your agent can make the claim on your behalf but only if they have the relevant authority in place. . If your business needs cash now, you may wish to apply for the Coronavirus Business Interruption Loan which is covered later in the article.

Self-employment Income Support Scheme – up to £2,500 income paid by HMG

The self-employed (sole traders and partners) have been particularly hard hit by the coronavirus crisis. If the majority of your income comes from self-employment and you've earned an average of less than £50,000 over the previous three years, you will be paid up to 80% of your historic profits each month to a maximum of £2,500. To determine the level of payment you receive, HMRC will use the profits shown on your 2016/17, 2017/18, and 2018/19 tax returns.

Payments from this scheme are not expected until early June. HMRC will contact you when they're ready to pay you – they will use your nominated bank account.

Statutory Sick Pay Rebate

If your employees stay at home because they are self-isolating because they or a member of their family suspect that they might have coronavirus, you will be refunded up to two week's statutory sick pay per employee. You have to find the money to pay statutory sick pay before you are refunded, however.

To qualify, your business must be based in the UK and, on the 28th February 2020, you must have 249 or fewer staff on your payroll.

HMRC are currently building the system required to deliver these payments back to customers and there is currently no word on when employers can expect their refunds.

Business Rates Holiday for Nurseries

Registered nurseries do not have to pay business rates for the 2020/2021 tax year. Your local authority will automatically zero-sum your bill for this year. If you were issued with a rates bill prior to the coronavirus crisis, your bill will be reissued at zero and sent to you shortly.

Coronavirus business support – bills you don't have to pay right now

VAT Deferral

Businesses which were due to pay a VAT bill between 20 March 2020 and 30 June 2020 no longer have to make the payment on their due date. You will have until 31 March 2021 to pay this bill.

This scheme is automatically applied however HMRC have not figured out how to not take VAT on the due dates by direct debit during 20 March 2020 and 30 June 2020 so, if you pay by your VAT by direct debit, HMRC advice you to cancel the direct debit.

Please note that VAT MOSS and import VAT must continue to be paid.

Deferral of Self-Assessment payment

If you are self employed and you pay HMR on account, your payment due on 31 July 2020 has been deferred until 2021. You do not have to apply to receive this benefit and, if you wish to make payment on or before 31 July 2020, you can.

Time to Pay

This is not a new scheme – the Time To Pay scheme has existed for a number of years now finding initial popularity during and following the Great Recession of 2008 to 2010.

If your business is struggling to make PAYE or corporation tax payments or you are struggling with personal taxes owed, you can agree to pay what's owed back over a number of months.

Under the existing scheme, HMRC would take a payment there and then (if they agreed to your proposal) and collect subsequent payments by direct debit from your bank account. If you missed a payment, HMRC would view it as a breach of contract and the remaining balance would become due in full. You also had to attest that you had attempted other ways to find the money, that those attempts were unsuccessful, and that this was your final option.

In truth, HMRC have always been great with our clients when they make a Time to Pay request – no evidence was ever requested from a client. They might be currently inundated with enquiries so you may have to hang on the phone a little while to make your request.

Coronavirus business support – loans you do have to pay back

Coronavirus Business Interruption Loan Scheme

For UK-based companies with a turnover of £45m or less which:

  • would be economically viable were it not for the disruption caused by coronavirus and
  • will be able to trade through this period with access to cash and without experiencing any short-term to medium-term financial difficulty

…you may be eligible for funding for up to £5m to be repaid over a period of not more than six years in the form of standard loans, bank overdrafts, asset finance, and invoice finance. The government will cover any arrangement fees plus the first 12 months of interest payments meaning that your first year's payments will be lower.

The loans are offered through 40 different lenders including the major banks – the British Business Bank provides a list here.

Coronavirus Large Business Interruption Loan Scheme

This is exactly the same scheme on the same terms as the Coronavirus Business Interruption Loan Scheme shown above except that it targets businesses with annual turnovers of between £45m and £500m per annum struggling to access conventional corporate finance.

The maximum size of the facility which can be applied for with the Coronavirus Large Business Interruption Loan Scheme is £25. The scheme is expected to launch in late April 2020.

Covid-19 Corporate Financing Facility

Designed for very large companies with liquidity and funding issues caused by the collapse in UK and international GDP in Q1 and Q2 of 2020, the Covid-19 Corporate Financing Facility involves the purchase of short-term debt from you by the Bank of England. More information is available on the Bank of England website.

Using a broker to apply for funding under the Coronavirus Business Interruption Loan Scheme

Although you must approach a lender yourself for funding, you may wish to engage with a standard commercial business broker in putting your proposal together.

In the way that mortgage brokers package proposals for homeowners, the banks and financial institutions taking part in the Coronavirus Business Interruption Loan Scheme require proposals to be presented to them in a certain way. The greater the number of times a proposal has to go back and forth between you and the bank you're applying to, the longer it will take for you to receive an answer on your funding request.

We recommend Sunniva Group. For a fixed fee of £399, they will vet your application first making sure that it contains the required details, that all necessary questions have been answered, and that the correct paperwork has been included. They will then make an application to the most suitable lender for your circumstances, in much the same way that mortgage brokers operate.

You should expect to be asked to include one or more of the following with your application – a business plan, management accounts, historic accounts, a cash flow forecast, and details of any assets you have.

How Sunny Accountants can help you and your business during Covid-19

At Sunny Accountants, we are able to assist you with any financial needs that have arisen during this emergency. We'll keep you up to date with the latest information from the Government concerning funding schemes (and changes to them) and how to best approach keeping your business afloat.

If you need any further information, clarification, or to use our services or those of the Sunniva Group, please do not hesitate to email us at [email protected].

For a free chat on how we can help you, please complete the contact form below and we will be in touch.