With the UK in full lockdown for the third week, all non-essential retailers have been forced to close as a measure to contain the coronavirus outbreak. Out of all the businesses affected, SME’s are sure to be impacted to a greater extent. According to research conducted nationwide, a fifth of the nation’s small businesses are at risk of collapsing within a month. To counter the economic threat due to the COVID-19 outbreak, the government announced several financial support measures addressed to small and medium-sized businesses, among others.
In this article, we outline the new government support initiatives available to SME’s in the hospitality, retail and leisure sectors to help you navigate through this challenging period. We will keep updating this page as soon as new schemes are announced.
Business rates holiday for retail, hospitality and leisure businesses
The government announced it will waive business rates for businesses based in England and operating in the above sectors for the 2020 to 2021 tax year.
Which businesses are eligible?
Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:
- as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
- for assembly and leisure (including betting shops, casinos and gambling clubs)
- as hotels, guest and boarding premises and self-catering accommodation.
You can find the full list of all eligible businesses for the scheme here.
Currently, there is no action needed on your end; local authorities will contact you and may need to recalculate your bills accordingly. You can also access the government’s business rates calculator to estimate the business rates relief here.
Support for businesses that pay no business rates
Businesses that already pay little or no business rates may also receive financial support, with a one-off grant of £10,000 to help meet their ongoing operational costs.
Which businesses are eligible?
You may access the scheme if your business
- is based in England
- occupies a property
- you are receiving small business rate relief or rural rate relief as of 11th March.
Local authorities will contact eligible businesses, although some of them have decided to follow an application process. For more information, it is advised that you follow your local authority guidelines.
Cash grants for retail, hospitality and leisure businesses
In addition to the business rate relief, grants are available to support businesses with a fund lifeline during times of ceased trading. The government is providing businesses in these sectors, with a rateable value up to £51,000 and are based in England with a cash grant of up to £25,000 per property.
If your business property rateable value is up to £15,000, you may be eligible for a grant of £10,000. Businesses with a rateable value of between £15,001 and £51,000 may receive £25,000.
Which businesses are eligible?
Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:
- as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
- for assembly and leisure
- as hotels, guest and boarding premises and self-catering accommodation.
Local authorities will contact eligible businesses, although some of them have decided to follow an application process. For more information, it is advised that you follow your local authority guidelines.
Coronavirus Business Interruption Loan Scheme (CBILS)
The newly introduced loan scheme for SME’s provides access to loans, overdrafts, invoice finance and asset finance of up to £5 million on repayment terms of up to six years. For the first 12 months, the government will pay all interests and fees, while the business will be fully liable for loan repayment.
Which businesses are eligible?
The eligibility criteria to access the scheme are below:
- The business activity must be based in the UK
- Annual turnover of no more than £45 million
- The business must have a borrowing proposal which the lender would consider were it not for the pandemic outbreak
- The borrower must self-certify that they have been adversely impacted by the coronavirus (COVID-19).
Businesses from any sector can apply, except the following:
- Banks, insurers and reinsurers (but not insurance brokers)
- Public-sector bodies
- Further-education establishments, if they are grant-funded
- State-funded primary and secondary schools.
The scheme is accessible through over 40 accredited commercial lenders. The demand is very high, so consider applying through the bank’s website as telephone lines may be extremely busy and branches may not be able to handle applications in person.
Coronavirus Job Retention Scheme
In light of the forced closures across all non-essential businesses, the government has introduced a scheme to help reduce redundancies and enable job retention. Businesses can claim up to 80% of employees’ salaries who have stopped working during this period but remain on the payroll. The scheme covers the usual monthly wages cost of furloughed employees, up to £2,500 a month, and is initially open for three months.
Which businesses are eligible?
The scheme is available to all UK employers that have current employees on their PAYE payroll and are unable to work due to the impact of COVID-19 on their business. All affected employees should be listed as furloughed workers to meet eligibility criteria.
HMRC are setting up an online portal so employers can submit all necessary information about furloughed workers and their salaries. Access to the portal and funds is due before the end of April. Until then, employers are responsible for compensating their staff. Find out more here.
Coronavirus Statutory Sick Pay Rebate Scheme
Small and medium-sized businesses can reclaim Statutory Sick pay for employees’ absences due to coronavirus. The repayment will cover up to two weeks starting from the first day of sickness starting on or after March 13th 2020. The scheme covers all types of employment, including full-time, part-time, agency contracts and flexible or zero-hour contracts.
Which businesses are eligible?
- The scheme can be used by businesses that:
- are based in the UK
- had fewer than 250 employees as of 28th February 2020
- are claiming for an employee who’s eligible for sick pay due to coronavirus
- had a PAYE payroll scheme that was created and started on or before 28th February 2020
HMRC is developing a portal for employers to make their claim. The launch of the portal will be announced on the government’s website.
VAT payments deferral
Businesses can now defer VAT payments for three months.
Which businesses are eligible?
The VAT deferral scheme is available to businesses that are UK VAT registered and have a VAT payment due between 20 March – 30 June 2020.
There is no application process for this scheme. If you have a VAT payment due in the timeframe above, you can delay it after the three-month deferral period. However, all accumulated VAT payments must be made until the end of the 2020-2021 tax year.
Time to Pay service
All tax-paying businesses under financial pressure may be able to receive funding for their outstanding tax affairs, on a case-by-case basis.
Which businesses are eligible?
All businesses that pay taxes to the UK government and have outstanding tax liabilities.
If you meet the criteria or may miss your next tax payment due to COVID-19, you may call HMRC’s dedicated helpline at 0800 024 1222.
How emerchantpay can help
We understand that this turbulent period may mean business is not as usual for many sectors. A few weeks ago, we shared what emerchantpay are doing to support our customers, partners and communities throughout this situation. Our top priority remains to enable businesses in any way we can. If you are exploring ways to expand your payment offering online, find out more by completing this contact form. Existing customers can contact their account managers to discuss additional steps for payment optimisation, alternative payment methods and new solutions for seamless payments.