LATEST PACKAGE OF SUPPORT FROM THE GOVERNMENT FOR BUSINESSES
The government has unveiled a £350 billion package of financial measures to shore up the economy against the coronavirus impact.
The Chancellor said –
“That means any business who needs access to cash to pay their rent, their salaries, suppliers or purchase stock will be able to access a government-backed loan or credit on attractive terms.
“And if demand is greater than the initial £330bn [for loans] I’m making available today, I will go further and provide as much capacity as required. I said whatever it takes, and I meant it,” he said.
The amount businesses can borrow through the Coronavirus Business Interruption Loan Scheme has been increased from £1.2 m to £5m and businesses can access the first 6 months of that finance interest free, as Government will cover the first 6 months of interest payments
Summary of current support available
- statutory sick pay relief package for SMEs (less than 250 employees)
- a 12-month business rates holiday for all retail, hospitality and leisure businesses in England
- small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
- grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
- the Coronavirus Business Interruption Loan Scheme to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance
- the HMRC Time To Pay Scheme to help with tax
Some specific guidance for employers
Those who follow advice to stay at home and who cannot work as a result will be eligible for statutory sick pay (SSP), even if they are not themselves sick.
Employers should use their discretion and respect the medical need to self-isolate in making decisions about sick pay.
Anyone not eligible to receive sick pay, including those earning less than an average of £118 per week, some of those working in the gig economy, or self-employed people, is able to claim Universal Credit and or contributory Employment and Support Allowance.
Certifying absence from work
By law, medical evidence is not required for the first 7 days of sickness. After 7 days, employers may use their discretion around the need for medical evidence if an employee is staying at home.
Government strongly suggest that employers use their discretion around the need for medical evidence for a period of absence where an employee is advised to stay at home either as they are unwell themselves, or live with someone who is, in accordance with the public health advice issued by the government.
What to do if an employee needs time off work to look after someone
Employees are entitled to time off work to help someone who depends on them (a ‘dependant’) in an unexpected event or emergency. This would apply to situations related to coronavirus (COVID-19). For example:
- if they have children they need to look after or arrange childcare for because their school has closed
- to help their child or another dependant if they’re sick, or need to go into isolation or hospital
There’s no statutory right to pay for this time off, but some employers might offer pay depending on the contract or workplace policy.
Support for businesses who are paying sick pay to employees
Government will bring forward legislation to allow small- and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:
- this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
- employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
- employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note
- eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to those staying at home comes into force
The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.
Support for businesses that pay little or no business rates
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.
Funding for the scheme will be provided to local authorities by government in early April. Guidance for local authorities on the scheme will be provided shortly.
Support for businesses through the Coronavirus Business Interruption Loan Scheme
A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch next week to support businesses to access bank lending and overdrafts. 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 £5 million in value. Businesses can access the first 6 months of that finance interest free, as government will cover the first 6 months of interest payments.
The government’s guidance talks about the need for a business plan and for the business to be viable to qualify for a loan. The bank may well want to see your latest accounts, as part of their criteria for the loan, so let us have your records if we need to prepare the next year in readiness. We can also assist with a business plan.