Disclaimer: These FAQs are intended to provide information and guidance on the HR and employment law implications of the Covid-19 situation. They do not constitute legal advice and should not be relied upon as such.
Financial support for Business
Last updated 13.15pm on 25/09/2020
1. What support for business was there for Statutory Sick Pay?
The government is supporting small and medium sized businesses and employers to cope with the extra costs of paying Covid-19 related SSP by refunding eligible SSP costs under the SSP Rebate Scheme. The scheme will repay employers the current rate of SSP (£95.85 per week). The eligibility criteria for the scheme are as follows:
The refund will be limited to two weeks’ SSP per employee who is either ill or has been told to self-isolate because of Covid-19. Employers can make more than one claim per employee, but cannot claim for more than two weeks per employee in total.
The scheme covers all types of employment contracts, including FT/PT, Contractors and those on zero hour contracts. The scheme can be accessed by employers who have a PAYE payroll scheme that was created and started on or before 28 February 2020.
Only employers with fewer than 250 employees are eligible. The size of the employer will be determined by the number of people employed on their PAYE payroll as of 28 February 2020.
Connected companies can also use the scheme if their total combined number of PAYE employees are fewer than 250 on or before 28 February 2020.
Employers can claim in respect of employees who transferred to them under TUPE if they had fewer than 250 employees (including TUPE transferred employees) across all PAYE payroll schemes on 28 February 2020. The new employer can only make claims for SSP it has paid, not SSP paid by the previous employer.
Eligible employers can reclaim expenditure for any employee to whom they have paid SSP as a result of Covid-19. The eligible period for the scheme depends on the reason for the employee’s absence. Claims can be made from:
- 13 March 2020 – if your employee had coronavirus or the symptoms or is self-isolating because someone they live with has symptoms.
- 16 April 2020 – if your employee was shielding because of coronavirus.
- 28 May 2020 – if your employee has been notified by the NHS or public health bodies that they’ve come into contact with someone with coronavirus.
- 26 August 2020 – if your employee has been notified by the NHS to self-isolate before surgery.
Employers should maintain records of staff absences, but will not be required to get employees to provide a GP fit note. Employers can, however, ask that employees give them either an isolation note from NHS 111 if they are self-isolating and cannot work because of Covid-19; or the NHS or GP letter telling them to shield because they are extremely clinically vulnerable.
In order to claim you must keep a record of the following employee details (for at least 3 years following the date you receive payment for a claim):
- the dates the employee was off sick;
- which of those dates were qualifying days for SSP;
- the reason they said they were off work – e.g. if they had symptoms, someone they lived with had symptoms or they were shielding; and
- the employee’s National Insurance number.
Note that you can claim back from both the Coronavirus Job Retention Scheme and the SSP Rebate Scheme for the same employee but not for the same period of time.
Employers can claim under the scheme online. Guidance on the requirements of the scheme and how to claim is available here.
There is no set end date for the scheme. Government will announce when it is coming to an end.
2. Are Business Rates being adjusted to help businesses cope with the impact of Covid-19?
The government had already announced the Business Rates retail discount will be increased to 50% in 2020-21. In light of the potential impact that Covid-19 will have, further measures are being introduced by the government to mitigate business disruption:
- To support small businesses affected by Covid-19 the government is increasing the Business Rates retail discount further to 100% till March 2021.
- The 100% relief will also be expanded to the leisure and hospitality sectors.
- These temporary measures, taken together with existing Small Business Rates Relief, mean that around 900,000 properties, or 45% of all properties in England, will receive 100% business rates relief in 2020-21.
Local authorities will be fully compensated for these Business Rates measures so that their capacity to provide services will not be impacted by these measures.
3. Is there any direct funding available for businesses for 2020-21 to mitigate the impact of Covid-19?
The government has introduced additional grant funding for businesses eligible for the Small Business Rates Relief Scheme (SBRR):
- To support those businesses, the government will provide £2.2 billion of funding to be distributed by Local Authorities in England.
- This will provide a one off £10,000 cash grant to businesses currently eligible for SBRR or Rural Rate Relief. The maximum rateable value for a property will be £15,000
4. What if my business has outstanding tax liabilities that I may not be able to pay in due time because of Covid-19 related business disruption?
The government is setting out measures that will seek to enable those businesses and self-employed individuals with outstanding tax liabilities to receive support with their tax affairs:
- HMRC has set up a dedicated Covid-19 helpline (0800 024 1222) to help those in need, and they may be able to agree a bespoke Time to Pay arrangements.
- Time to Pay arrangements were previously used in response to flooding and the financial crisis, giving businesses a time-limited deferral period on HMRC liabilities owed and a pre-agreed time period to pay these back.
- To ensure ongoing support, HMRC have made a further 2,000 experienced call handlers available to support firms when needed.
HMRC will also waive late payment penalties and interest where a business experiences administrative difficulties contacting HMRC or paying taxes due to COVID-19.
Additionally, the Government recently announced deferments of VAT that were originally due in March 2021 may be repaid over 11 smaller instalments spread between 2021/2022.
5. My business is struggling to access finance due to Covid-19’s impact on lender confidence, is there any new government help with financing?
There are currently a number of schemes available to access finance delivered by the British Business Bank (BBB) and various other accredited institutions, these includes:
- Coronavirus Business Interruption Loan Scheme (CIBLS)
- Coronavirus (Large) Interruption Loan Scheme (C(L)BLS)
- Covid-19 Corporate Financing Facility (CCFF)
- The Bounce Back Loan Scheme (BBLS)
- The Future Fund
Details of each scheme are provided below:
Coronavirus Business Interruption Loan Scheme (CIBLS)
- 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 £5m in value. The government will cover the first 12 months of interest payments and any lender-levied fees.
- The borrower remains fully liable for the debt. However, under this scheme, personal guarantees of any form will not be taken for loans below £250,000
- There are CIBL accredited lenders for SMEs are listed here
This new guarantee will initially support up to £1 billion of lending on top of current support offered through the British Business Bank.
Please note that applications for CIBLS will remain open until 30 November 2020. Furthermore, the length of loans can be extended from six to ten years for businesses that need it.
Coronavirus Large Business Interruption Loan Scheme (CLIBLS)
- The scheme will provide a government guarantee of 80% to enable banks to make loans of up to £200m for firms with turnover of more than £45m.
- However, firms that take out more than £50m will be subject to additional restrictions on dividend payments, senior pay and share buy-backs during the period of the loan
- The scheme will be delivered through commercial lenders and be offered at commercial rates of interest. Lenders are required to conduct their own credit risk checks.
- The scheme will benefit businesses that were financially viable prior to the outbreak of Covid-19 but now face cash-flow difficulties as a result of the pandemic.
Eligibility requirements include the following:
- A UK based entity
- Annual turnover greater than £45m
- Be unable to secure regular commercial finance
- Have a borrowing proposal prepared, which the lender would consider viable if not for Covid-19 and believes the borrower will be able to trade out of any short/medium term difficulty.
- Self-certify that it has been adversely impacted by the coronavirus (Covid-19)
- Not have received a facility under the Bank of England’s Covid-19 Corporate Financing Facility (CCFF), or CBILS or BBLS.
Businesses from the following sectors are ineligible – banks/building societies, insurers/reinsurers, public-sector organisations (including schools)
Please note that applications for C(L)IBLS will remain open until 30 November 2020.
- The Bank of England will buy short term debt from larger companies.
- This facility will provide funding by purchasing commercial paper of up to one-year maturity, issued by firms making a material contribution to the UK economy.
- The facility will be open to firms that can demonstrate they were in sound financial health prior to the Covid-19 shock (i.e. by having a short-term investment grade rating of A3/P3/F3/R3 or a long-term investment grade rating of BBB-/Baaa3/BBB-/BBB low or above by at least one of the major credit ratings agencies: S&P, Moody’s, Fitch or DBRS Morningstar).
- The scheme will cease operation from 22 March 2021.
Bounce Back Loans (BBLS)
This scheme enables smaller businesses to access finance more quickly.
- SME’s can borrow between £2,000 and 25% of their turnover with a maximum loand of £50,000
- The Government will guarantee 100% of the loan with no interest/fees for the first 12 months.
- Following the first 12 months the interest rate applied will be 2.5% a year.
- To be eligible you must be a UK business established be 1 March 2020, and have been adversely impacted by Covid-19.
- The length of this loan is six years, which can be repaid early without incurring additional fees.
- The Government recently announced a new “Pay as you Growth” repayment plan for those businesses that may struggle with increasing debt. This can increase the length of the loan to ten years in required with interest-only and payment holidays available.
A £250m loan scheme available for high-growth businesses facing financial difficulties during the Covid-19 crisis. Particularly for those that cannot access other means of finance.
- Companies can borrow £125k - £5m as convertible loans
- For loans of £250 a company must show a matching contribution of £250k
- To be eligible you must be UK based and predominately marketing your product in the country, have pound-for-pound matching funding from investors, have already raised £250k from investors over the last five years, and is unlisted.
- The company does not need to show evidence of a negative impact as a result of Covid-19.
- Repayment terms include and 8% interest to the Treasury when the loan matures after a maximum term of 36 months.
For more details on how the Future Fund works see here
Please note that applications for the Future Fund will remain open until 30 November 2020
If you have not found an answer to your question here please contact [email protected] for further assistance.