Financial support and cashflow

One of the most immediate challenges facing businesses amidst the coronavirus outbreak is cashflow. The Chancellor has announced a package of measures to support businesses:

Financial Support Finder Tool

Government has launched a new coronavirus business support finder tool. If you are a business owner or self-employed, this ‘support finder’ tool can help you to quickly and easily determine what financial support (e.g. loans, cash grants, tax relief) is available to you during the coronavirus pandemic.

Bounce Back Loans Scheme – Open for applications

The new Bounce Back Loans scheme will allow businesses to borrow between £2,000 and £50,000 and access the cash within days. Delivered by lenders accredited by the British Business Bank for this scheme, Bounce Back Loans target small and micro businesses in all sectors, providing loans from £2,000 up to 25% of the business’ turnover with a maximum loan of £50,000. Loans will be interest free for the first 12 months, and businesses can apply online through a short and simple form. The Government will provide lenders with a 100% guarantee for the loan and pay any fees and interest for the first 12 months. No repayments will be due during the first 12 months.

The length of the loan is for six years but early repayment is allowed, without early repayment fees. The government has set the interest rate for this facility at 2.5% per annum, meaning businesses will all benefit from the same, low rate of interest. This new scheme will run alongside the existing Coronavirus Business Interruption Loan Scheme (CBILS) and Coronavirus Large Business Interruption Loan Scheme (CLBILS).

Eligibility criteria: Businesses from all sectors can apply. A business must be:

  • UK-based in its business activity, and established by 1 March 2020
  • adversely impacted by the Coronavirus (Covid-19)
  • not currently using a government-backed Coronavirus loan scheme (unless using BBLS to refinance a whole facility)
  • not in bankruptcy, liquidation or undergoing debt restructuring

How to apply: Businesses should check the British Business Bank website to find out which lenders provide Bounce Back Loans. Businesses will be required to fill in a short online application form on their lender’s website, which self-certifies whether they are eligible for a Bounce Back Loan facility. Eligible companies will be subject to standard customer fraud, Anti-Money Laundering (AML) and Know Your Customer (KYC) checks. Some State aid restrictions may apply to applications. You can find useful FAQs on the scheme here.

Coronavirus Business Interruption Loan Scheme (CBILS) – Now Extended

This scheme, delivered by the British Business Bank, will enable businesses with a turnover of no more than £45m per year to access loans, overdrafts, invoice finance and asset finance of up to £5 million for up to six years. 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 also make a Business Interruption Payment to cover the first 12 months of interest payment and any lender-levied fees, so businesses will benefit from no upfront costs and lower initial repayments. 

The Government has extended the scheme so that all viable small businesses affected by COVID-19, and not just those unable to secure regular commercial financing, will now be eligible should they need finance to keep operating during this difficult time.

How to apply: The scheme is now open for applications. To apply, you should talk to your bank (or apply via their website) or one of the 40 accredited finance providers to discuss your business plan. The full rules of the scheme and the list of accredited lenders are available on the British Business Bank website.

Preparing your application: To help you prepare for the application process, here is a list of documents and information a lender may require:

  • Last set of financial accounts
  • Management accounts to the pre COVID-19 position
  • A clear explanation of the impact of coronavirus on your business
  • How will you mitigate the impact of COVID-19 on your business
  • A set of cashflow forecasts which you have used to estimate your total cash requirement over the next 12-18 months and the amount of debt you are seeking
  • Any key assumptions or risk factors which impact the above – lenders may expect a model for a six month period of severe disruption
  • The extent to which you’ve explored other areas of funding or government support
  • An explanation of how the funds will be used
  • A list of all pre-existing facilities, loans, HP, leases etc.

Coronavirus Large Business Interruption Loan Scheme (CLBILS)

The new CLBILS will ensure that more firms are able to benefit from government-backed support during this difficult time. It will provide a government guarantee of 80% to enable banks to make loans of up to £25 million to firms with an annual turnover of between £45 million and £500 million. Loans backed by a guarantee under CLBILS will be offered at commercial rates of interest and further details of the scheme will be announced later this month.

Kick-starting Tourism Package

In addition, the government has announced a new £10 million Kick-starting Tourism Package, which will give small businesses in tourist destinations grants of up to £5,000 to help them adapt their businesses following the coronavirus pandemic. Businesses can use the funding to pay for specialist professional advice such as human resources, legal or financial expertise, to adopt new technology and online systems or to purchase new equipment. Read about the announcement here. Further details will be available in due course.

Statutory Sick Pay Refund

For businesses with fewer than 250 employees, the cost of providing 14 days of statutory sick pay per employee will be refunded by the Government in full. More details can be found on .gov.uk 

Business Rates discount for retail, hospitality, leisure and nursery businesses

The Government is temporarily increasing the Business Rates retail discount in England to 100% for 2020-21 for properties in the retail sector. The Government is also temporarily extending a business rates retail holiday to hospitality and leisure businesses in England for the 2020 to 2021 tax year. Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.

Local authority information:

  • Slough Borough Council – If you are a business in the Borough of Slough and you believe that you are entitled to Small Business Rate Relief or Retail Relief and have not been awarded this please contact brates@slough.gov.uk stating why you believe this to be the case, please provide the full address of your business and the business rates account number(s).
  • Wokingham Borough Council – If you are a business in the Borough of Wokingham and you believe that your business should qualify, but you do not receive a revised bill by the time your May 2020 instalment is due, please contact brates@wokingham.gov.uk.
  • Bracknell Forest Council – If you believe that your business should qualify, but you do not get a revised bill by the time your May 2020 instalment is due, please contact  revenue.services@bracknell-forest.gov.uk
  • Reading Borough Council – Amended bills are being dispatched to all qualifying businesses. As businesses may have limited access to their mail at this time, business owners are encouraged to sign up to e-billing in order to view their bill. You can register and view your account at www.reading.gov.uk/customeraccount
  • Royal Borough of Windsor & Maidenhead – If you believe that your business should qualify, but you do not receive a revised bill by the time that your May instalment is due, please contact  business.rates@rbwm.gov.uk
  • West Berkshire Council – If you believe your business may be eligible, you can obtain further advice by sending an email to businessrates@westberks.gov.uk.

Small business grant

The government will provide additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR). This will provide a one-off grant of £10,000 to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs. If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority – you do not need to apply.

Additional local authority information:

  • Bracknell Forest Council – Bracknell Forest Council are contacting eligible businesses. If you think you are eligible for the Small Business Grant or Retail, Leisure & Hospitality Businesses Grant, but have not been contacted, please email revenue.services@bracknell-forest.gov.uk 
  • Reading Borough Council – Reading Borough Council are writing to all eligible businesses about the Small Business Grant or Retail, Leisure and Hospitality Businesses Grant. You can email the council via business.rates@reading.gov.uk with your business rates account reference and stating which grant you are requesting.
  • Royal Borough of Windsor & Maidenhead –  Application forms are being sent out to eligible businesses via email. Where a valid email address is not available, you will be contacted by telephone to obtain an email address and issue a form to you. Payments will be made, by BACS, as soon as completed application forms are
    returned and eligibility is confirmed. 
  • West Berkshire Council – West Berkshire Council have sent an email or letter to those businesses eligible for the grants. On receipt of your email or letter, please respond to the council with your completed form as soon as possible so that they can release your payment. Completed forms are being processed within 48 hours. If you think you may be eligible but have not been contacted, please email businessrates@westberks.gov.uk
  • Wokingham Borough Council – If you think you are eligible for the Small Business Grant or Retail, Leisure and Hospitality Businesses Grant, please complete Wokingham Borough Council’s online business grant form.
  • Slough Borough Council – Letters have been sent to all businesses that Slough Borough Council believe are eligible for this grant. However, if you think your business may be eligible, please complete the form on their website. Please note: Every grant application needs to be verified by Slough Borough Council. The verification process requires the following:
    i. The Business premises address must be used on the grant application form
    ii. Business Rates Reference number must be included (this can be found on a previous business rates bill). Only those registered for business rates on the 11th March 2020 are entitled to the grant
    iii. Bank Details must be verified, so each applicant must upload a PDF or JPEG of one of the following: paying in slip, cheque book page, or recent bank statement.

Discretionary grants for small businesses

A discretionary fund has been set up to accommodate certain small businesses in England previously outside the scope of the business grant funds scheme (outlined above). This additional fund is aimed at small businesses with ongoing fixed property-related costs. Local authorities are being asked to prioritise businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for Small Business Rates Relief, and bed and breakfasts that pay council tax rather than business rates. Businesses must be small, under 50 employees, and able to demonstrate a significant drop in income due to Coronavirus restriction measures. The maximum grant will be £25,000. There will also be grants of £10,000. Local authorities will have discretion to make payments of any amount under £10,000.

Additional local authority information:

  • Bracknell Forest Council – Small businesses can apply online for this grant from Monday 1st June. Details of the eligibility criteria and application form for this discretionary grant can be found here. Application deadline 11pm on 21st June.
  • Reading Borough Council – Eligible businesses can apply online for this grant via the Council’s website. Application deadline 14th June. The eligibility criteria and application form can be found here.
  • Royal Borough of Windsor & Maidenhead – An online application process for this grant will be open from 1st June – 7th June on the Council’s website. Details of the eligibility criteria and application form can be found on the Council’s website here.
  • Slough Borough Council – The application process for the discretionary grant opens online on 1st June 2020. Further details on the eligibility criteria and application process can be found here. Application deadline is midnight on 21st June.
  • West Berkshire Council – The eligibility criteria and claim form are available on the West Berkshire Council website here.
  • Wokingham Borough Council – The application process for the discretionary grant will go live on 1st June 2020. Details on the grant can be found here. Application deadline is 12th June.

Coronavirus Job Retention Scheme

Under the Coronavirus Job Retention Scheme, all UK employers are able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. In addition, the government will now cover the employer national insurance and minimum auto-enrollment pension scheme contributions employers pay on the wages they must pay their furloughed staff – on top of the wages covered under the scheme.

The deadline for furloughing an employee for the first time has now passed. From 1st July the Coronavirus Job Retention Scheme will only be available to employers that have previously used the scheme in respect of employees they have previously furloughed. However, employees on paternity and maternity leave who return to work in the coming months will be eligible for the government’s furlough scheme even after the 10th June cut-off date. This will only apply where they work for an employer who has previously furloughed employees. 

Making a claim

You can now make a claim via HMRC’s online claim service, which is live on GOV.UK . After a claim has been submitted it will take six working days for it to be paid.

You can claim for employees that were:

  • employed as of 19 March 2020 and were on your PAYE payroll on or before that date; this means that you will have made an RTI submission notifying us of payment of that employee on or before 19 March 2020
  • employed as of 28 February 2020 and on payroll (i.e. notified to us on an RTI submission on or before 28 February) and were made redundant or stopped working for you after that, and prior to 19 March 2020, can also qualify for the scheme if you re-employ them and put them on furlough.

You will need to have the following information to make a claim:

  • a Government Gateway (GG) ID and password – if you don’t already have a GG account, you can apply for one online, or by going to GOV.UK and searching for ‘HMRC services: sign in or register’ 
  • be enrolled for PAYE online – if you aren’t registered yet, you can do so now, or by going to GOV.UK and searching for ‘PAYE Online for employers’
  • the following information for each furloughed employee you will be claiming for: Name, National Insurance number, Claim period and claim amount, and PAYE/employee number (optional).
  • if you have fewer than 100 furloughed staff – you will need to input information directly into the system for each employee
  • if you have 100 or more furloughed staff – you will need to upload a file with information for each employee; they will accept the following file types: .xls .xlsx .csv .ods.

HMRC have produced this step by step guidance on how to make a claim. There is also a calculator to help you work out your claim.

Flexible furlough: Bringing back employees from furlough

From 1 July 2020, businesses will be given the flexibility to bring furloughed employees back to work part-time. Individual firms will decide the hours and shift patterns their employees will work on their return, so that they can decide on the best approach for them – and will be responsible for paying their wages while in work.

From August 2020, the level of UK Government grant provided through the job retention scheme will be slowly tapered to reflect that people will be returning to work. The updates mean that the following will apply:

  • June and July: The Government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions.
  • August: Government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.
  • September: Government will pay 70% of wages up to a cap of £2,190. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.
  • October: Government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.

Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked. HMRC will take action against those found to be abusing the scheme.

The Future Fund

The Chancellor has announced a £1.25 billion government support package for UK businesses driving innovation and development to help them through the coronavirus outbreak. This includes a new £500 million loan scheme for high-growth companies, called the Future Fund, and £750 million of targeted support for small and medium sized businesses focusing on research and development.

The Future Fund will issue convertible loans to innovative companies which are facing financing difficulties due to the coronavirus outbreak. The Future Fund will provide government loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors. These convertible loans may be a suitable option for businesses that rely on equity investment and are unable to access the Coronavirus Business Interruption Loan Scheme. The scheme will be delivered in partnership with the British Business Bank and will launch in May 2020. Find out more about the scheme here.

The Sustainable Innovation Fund

The Sustainable Innovation Fund will help companies across all parts of the UK recovering from the impact of coronavirus keep their cutting-edge projects and ideas alive. The Sustainable Innovation Fund will help power the UK’s economic recovery and develop new sustainable opportunities for businesses in any sector following the coronavirus pandemic, while helping the UK meet its ambitions to cut carbon emissions to net zero by 2050. Businesses can apply for support through the Sustainable Innovation Fund by visiting the Innovate UK website from Monday 29 June. Find out more here.

Funding for education, early years & children’s social care

Funding and financial support available for education, childcare and children’s social care organisations. Find out more here.

Financial support for England’s fishing businesses

Government has announced a £10 million fund for England’s fishing and aquaculture sectors. Find out more here.

Deferring Valued Added Tax (VAT) payments for 3 months

The deferral of VAT will apply from 20th March 2020 until the 30th June 2020. This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020-21 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.

Time to Pay

HMRC has set up a dedicated Tax Helpline has been set up to help businesses and self-employed individuals in financial distress and with outstanding tax liabilities to receive support with their tax affairs. Through this, businesses may be able to agree a bespoke Time to Pay arrangement. Find all the information here or call 0800 0159 559.

Filing your accounts

Companies House has produced guidance if coronavirus has affected your company and you need more time to file your accounts. Find all the information here.

Banks

A number of private lenders are also making funds available to small businesses impacted by Coronavirus, including £2 billion from Lloyds Banking Group and £5 billion from NatWest. Many of the major banks, such as NatWest and Barclays have also put together information on the ways they can support business customers during this challenging time (e.g. loan repayment holidays). Contact your bank to discuss your options. 

Other sources of funding

You can find additional information on other funding options available on our Funding & Finance page. This includes: 

Innovate UK funding

  • Innovate UK Smart Grants: January 2020 – Opportunity to apply for a share of up to £25 million to deliver ambitious or disruptive R&D innovations that can make a significant impact on the UK economy. Competition ends 27 May 2020. 
  • Women in Innovation 2020 – Women in Innovation Awards finds and supports the UK’s most promising female innovators to develop their ideas and scale up their businesses. Up to 10 women will secure £50,000 each as well as a bespoke programme of coaching, mentoring and innovation growth support. 

  • Future Leaders Fellowships – Future Leaders Fellowships offers highly talented individuals the chance to turn their business innovations into business success.

Thames Valley Berkshire Funding Escalator

Ban on evictions for commercial tenants

Commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction. More information is available here.

Amendments to insolvency law to help businesses

The Government has amended insolvency law to help companies keep trading while they explore options for rescue. This includes:

  • A moratorium for companies giving them breathing space from creditors enforcing their debts for a period of time whilst they seek a rescue or restructure
  • Protection of their supplies to enable them to continue trading during the moratorium
  • A new restructuring plan, binding creditors to that plan

The proposals will also include key safeguards for creditors and suppliers to ensure they are paid, while existing laws against fraudulent trading and the threat of director disqualification will continue to act as an effective deterrent against reckless misuse of these new measures. The Government will also temporarily suspend the wrongful trading provisions to give company directors greater confidence to use their best endeavours to continue to trade during this pandemic emergency, without the threat of personal liability, should the company ultimately fall into insolvency.