Troubleshooting by Pat Abel, Corporate Finance Partner at Hart Shaw

Hart Shaw’s Pat talks businesses through the support available during the coronavirus

Whilst the recent Coronavirus outbreak is worrying – it’s also causing concern for business owners.

The Government has announced various measures to assist those affected. This is available in several forms:

  • Business rates reductions, and grants for businesses who have low rate bills
  • Extending Statutory Sick Pay (SSP) and allowing employers to reclaim it.
  • Time to Pay being extended
  • Help with business loans.

 

Coronavirus Business Interruption Loan Scheme (CBILS)

Businesses can apply for a loan of up to £5m, 80 per cent of which is backed by a government guarantee to the lender with no interest for 12 months. However, capital repayments will be made.

Currently, full eligibility criteria haven’t yet been published, but the main ones will be:

  • Must be UK based, with an annual turnover of no more than £45m
  • Operate within an eligible industrial sector. (A small number of industrial sectors are not eligible for support)
  • The borrower has not received de minimis State Aid beyond €200,000 equivalent over the current and previous two fiscal years.
  • Have a sound borrowing proposal, but insufficient security to meet the lender’s requirements.

 

Paying sick pay to employees

New legislation allows SMEs to reclaim SSP paid for up to 2 weeks’ sickness absence due to COVID-19 or self-isolation, as long as the company has less than 250 employees.

Records must be kept but there is no need for a GP fit note.

The government has promised to work with employers to set up the repayment mechanism as soon as possible. SSP is currently £94.25 per week.

 

Business rates

The government has introduced a business rates holiday for leisure and tourism businesses in England for the 2020-21 tax year. Businesses who received the retail discount in the 2019-20 tax year will be rebilled by their local authority as soon as possible.

On application, grants of £10,000-£25,000 will be provided to these businesses operating from smaller premises with a rateable value between £15,000-£51,000.

 

Support for businesses paying little or no business rates

The government will provide additional funding for local authorities to support small businesses who already pay little or no business rates because of small business rate relief (SBRR). This will provide a one-off grant of £10,000 to businesses currently eligible to help meet their ongoing costs.

If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority.

Funding for the scheme will be provided by early April.

Businesses are eligible for SBRR if their property’s rateable value is less than £15,000 and the business only uses one property.

 

Support for businesses
paying tax

All businesses in financial distress and with outstanding tax liabilities may be eligible to receive support with their tax affairs through HMRC’s Time to Pay service. These arrangements are agreed on a case-by-case basis.

 

Insurance

The advice on this is to check your insurance policy to see if it includes cover for both pandemics and government-ordered closure. If your policy does cover these events, you can make a claim.

At the time of writing, these measures had just been announced and the situation is evolving rapidly.

 

If you would like advice on any of the above, or help applying for finance or cashflow advice please get in touch at Patrick.abel@hartshaw.co.uk or on 0114 251 8850.