Covid-19 is having a massive impact on startups and early stage companies. Here are some of the steps the UK Government is taking to help support businesses across the country.
The Government has promised a £330bn package of loans to help British businesses in the face of Covid-19. It has also promised to partly fund the salaries of workers who face being laid off.
“Any business who needs to access to cash to pay their rent, their salaries, suppliers or purchase stock will be able to access a government-backed loan or credit on attractive terms,” pledged chancellor Rishi Sunak.
Details of how businesses will be helped are still emerging but here are some of the ways that the government is looking to assist business owners.
Coronavirus Business Interruption Loan Scheme
The Coronavirus Business Interruption Loan Scheme (CBILS) will be delivered by the government-supported British Business Bank to help businesses access bank lending and overdrafts. The government will provide lenders with a guarantee of 80% on each loan, with a maximum loan value of £5m. Businesses can access the first six months of finance interest free, with the government covering these interest payments.
Coronavirus Job Retention Scheme
On 19th March the government announced a new scheme to cover part of the salary cost for any employee that would otherwise be laid off as a result of this crisis.
HMRC will reimburse up to 80% of the cost of workers’ wages, up to a monthly cap of £2,500. Businesses that need urgent support while the scheme is being set up may be eligible for a Coronavirus Business Interruption Loan (see above).
Further announcements are expected regarding the self-employed.
Statutory Sick Pay
Businesses with fewer than 250 employees will be able to reclaim Statutory Sick Pay (SSP) for sickness absence due to Covid-19. The refund will cover two weeks’ SSP per employee, though exactly how companies can claim for it is yet to be announced.
Small businesses that are eligible for Small Business Rate Relief (SBRR) or Rural Rate Relief (RRR) will be eligible for a grant of £10,000 to help meet ongoing business costs. The funding will come via local authorities. Eligible businesses will be contacted directly by their local authority and do not need to apply.
The government will defer VAT payments for three months, applicable from 20 March 2020 to 30 June 2020. You do not need to apply to this scheme – businesses do not need to make a VAT payment during this period. Taxpayers will have until the end of the 2020-21 tax year to pay liabilities that accumulated in the deferral period.
Businesses and self-employed people in “financial distress” may have payment deadlines extended under the HMRC’s Time to Pay service. Such arrangements are made case-by-case.
Income tax self-assessment payments that were due on 31 July will now be deferred until 31 January 2021.
There is a special helpline for anyone concerned about being able to pay their tax due to Covid-19: 0800 015 9559
Learn more about the government’s Covid-19 guidance and assistance for employers and business here.
Disclaimer: This information was correct at time of publication but please check with official sources for the latest updates. None of the information in this article should be treated as financial advice.