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Coronavirus: Government financial support for organisations

28/04/2020
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In response to feedback from business leaders the Chancellor has extended further support to businesses facing difficulties arising from the coronavirus (COVID-19) disruption. With effect from 20 April, the larger CBILS facility (CLBILS) opened for businesses turning over more than £45 million. Funding will be available of up to £25 million for businesses turning over up to £250 million. For those businesses turning over more than £250 million, funding is available up to £50 million. The maximum term under CLBILS is three years. More recently, the government announced that from 4 May micro businesses seeking up to £50,000 of funding can benefit from a Bounce Back Loan Scheme (BBLS), backed by 100% government guarantee.

The support measures include:

Financial support for workers

  • Coronavirus Job Retention Scheme (CJRS) 
    Under the new scheme, any employer will be eligible to contact HMRC for apply for a grant to cover the majority of the wages of people who are part of a PAYE scheme and who not working but furloughed and kept on payroll. The grant will be 80% of salary up to £2,500 a month (just above median income) plus employers' NIC and minimum auto enrolment pension contributions. Employers can top up this amount if they wish. The grant can be backdated to 1 March and will apply for three months; it will be extended if necessary. The Chancellor confirmed that there would be no limit on funding as the government wishes to support as many jobs as necessary. The intention is that payments should be available before end of April. Read more on the CJRS.
  • Support for the self-employed

On 26 March a package of support for the self-employed was announced.  Further details can be found here.

  • For the self-employed there is a suspension of the minimum income floor for everyone. This will mean they can access universal credit at same rate as statutory sick pay.
  • The next self-assessment payment date has been deferred to January 2021.

Download COVID-19 self-employed funding support flowchart     

covid 19 self employed



This flowchart is designed to point you in the right direction of what measures might be available for you and your business based on what we know at present.

Deferral of VAT payments

The government has announced an immediate deferral for UK businesses of VAT payments that would otherwise have been due between 20 March to 30 June 2020.

The vast majority of organisations file calendar quarter VAT returns which would have meant the VAT owing for the quarter to 31 March 2020 would have been payable to HMRC over the course of the next few weeks. The deferral of this payment will be welcome news to many and applies automatically. Businesses deferring this payment need not seek any additional specific agreement. Taxpayers will need to pay the deferred VAT on or before 31 March 2021. VAT returns should continue to be submitted in line with the organisation’s normal VAT return filing deadlines.

The deferral measure is for all UK VAT registered organisations, including overseas businesses.

On 25 March, HMRC updated its guidance to highlight that organisations that normally pay by direct debit should cancel their direct debits to ensure that payment is not automatically taken.

Deferral to the payment of UK taxes

Details of the HMRC helpline for organisations that are struggling to pay their UK taxes on time is available on the GOV.UK website.

It is recommended that businesses contact HMRC at the earliest opportunity to agree tax deferrals if they are not automatic.  

We understand that it can take time to get through on the line so you should have as much detail to support your grant or tax deferral discussion.   

HMRC will discuss your specific circumstances to explore:

  • agreeing an instalment arrangement
  • suspending debt collection proceedings
  • cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately.

We understand that HMRC has not been issuing either written confirmation of payment deferral agreements or even a tax reference. We therefore suggest that you keep detailed records of the conversation including the name of the person you spoke to, the date and time so that you have a record of the agreement to a payment deferral and that no interest will be charged by HMRC.

What funding support could you be eligible for?

As more measures are introduced and more detail becomes available, this tool will be updated on a real time basis.

 

Download COVID-19 funding support flowchart

COVID 19 flowchartDesigned to point you in the right direction of what measures might be available for you and your business based on what we know at present.

Coronavirus Business Interruption Loan Scheme (CBILS)

With effect from 20 April 2020 the larger CBILS facility opened for businesses turning over more than £45 million under the Coronavirus Large Business Interruption Loan Scheme (CLBILS). Funding will be available of up to £25 million for businesses turning over up to £250 million. For those businesses turning over more than £250 million, funding is available up to £50 million. The maximum term under CLBILS is three years.

In addition to plugging the funding gap in the mid-market with the introduction of CLBILS, at the smaller end of the market personal guarantees have also been scrapped for lending under £250,000 and, in the main, lenders are not requesting personal guarantees for facilities above this level either. 

The British Business Bank has stated that the funding is intended for viable businesses that have been adversely affected by the COVID-19 outbreak.For further information about the CBIL and CLBIL scheme and how to maximise your chances of securing a loan, read more.

CBILS: The scheme currently runs to 30 September 2020.

CLBILS: The scheme currently runs to 20 October 2020.

Bounce Back Loan Scheme (BBLS)

Effective from 4 May 2020, the smaller BBLS facility will open for businesses seeking up to £50,000 of funding. With lending capped at 25% of turnover, the BBLS is to be provided by a wide range of accredited lenders and is backed by a 100% government guarantee. There will be no fees or interest to pay for the first 12 months and the maximum term under BBLS is six years.

Again, The British Business Bank has stated that the funding under BBLS is intended for businesses that have been adversely affected by the COVID-19 outbreak.

If you are already claiming funding and have received a loan of up to £50,000 under CBILS, you can transfer it into the BBLS by arranging this with your lender before 4 November 2020.

More information on applying for the BBLS can be found on the GOV.UK website.

BBL: The scheme currently runs to 4 November 2020.

Business Rates Relief

Business Rates Relief include:

  • the 12 months business rates relief applies to all hospitality, retail and leisure businesses in England
  • an expanded retail discount.

The reliefs will be given automatically and will be administered by Local Authorities. Details of the reliefs can be found on GOV.UK website.

Grant funding for small business

It was announced that funding grants of the following would be provided:

  • the £25,000 grant for retail, hospitality and leisure businesses with a rateable value of between £15,000 and £51,000
  • the £10,000 grant is for any business that qualifies for Small Business Rates Relief.

There may be other funding solutions for businesses available through your current or an alternative provider. Crowe’s debt advisory team have strong relationships with a wide range of potential funders, for more details on how we can support you please contact Dave Riley or your usual Crowe contact.

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Jane Mackay
Jane Mackay
Partner, Head of Tax
Thames Valley