The Job Protection Scheme has been designed by the UK Government to support businesses though these unprecedented COVID-19 times. The scheme allows employers to put some of their employees on a special kind of leave - known as “furlough” - as a result of coronavirus (COVID-19). The employer can apply to the Government for a grant of up to 80% of these employees’ wages, up to a maximum of £2,500 per month. In addition, the grant also covers the associated employer National Insurance (NI) contributions and pensions contributions up to the minimum automatic enrolment employer pension contribution.
The current scheme is for four months from 1 March, 2020. The Government has advised it may be extended if necessary.
The scheme is open to all entities - i.e. business, charities recruitment agencies, public authorities, etc. - with a UK Payroll scheme, provided such scheme was created and started prior to 19 March, 2020. The scheme is also open to individual employers who use PAYE for their employees and a real time information (RTI) submission was notified prior to 19 March, 2020.
When a company is in administration an administrator is able to access the scheme provided there is a reasonable likelihood of the employees being rehired. As to “a reasonable likelihood of being rehired”, the Government has suggested a future sale of the business by way of an example.
To be eligible for the grant, employers must provide their employees with written confirmation that they have been furloughed. Employers should discuss with their staff and make any changes to the employment contract by agreement. When deciding which employees to furlough, equality and discrimination laws apply in the usual way. If an employer wishes to furlough a number of their employees it may be necessary to engage in collective consultation. Employers should obtain employment law advice where they are unsure.
The scheme is available for all contracted employees, including part-time, agency and flexible or zero hours contracts. The employee must have been on employed and on payroll prior to 19 March, 2020. Employees who were employed prior to 28 February but have subsequently ceased to be employed, can be re-employed and then furloughed.
Furloughed employees cannot undertake any work for, by or on behalf of the employer’s organisation or any linked or associated organisation.
Any employee must be furloughed for a minimum of three weeks. It is possible to place an employee on furlough more than once but each period of furlough must last for a minimum of three weeks.
If a business is registered for UK VAT and has a payment due between 20 March, 2020, and 30 June, 2020, there is an option to defer quarterly and monthly VAT return payments for the periods ending in February, March and April, any payments on account due within that period (20 March, 2020, and 30 June, 2020) and annual accounting advance payments due within that period (20 March, 2020, and 30 June, 2020). The deferral does not apply to VAT Mini One Stop Shop (MOSS) or import VAT.
Any deferred VAT as a result of coronavirus, must be paid on or before 31 March, 2021.
At the time of writing (29 April, 2020) there is no requirement to notify HMRC that the VAT payment is being deferred.
No, currently all payments due at the end of the deferral period - currently 30 June, 2020 - are due as usual.
Time to pay arrangements which started before 20 March, 2020, should still be paid.
Yes - businesses in the hospitality, retail and leisure sectors do not need to pay business rates for the 2020/2021 tax year. Neither do nurseries - although local authority run nurseries are not eligible.
Where your property is a shop, restaurant, café, bar, pub, cinema, live music venue, assembly or leisure property - e.g. a sports club, gym or spa - or a hospitality property, like a hotel, guest house or self-catering accommodation, then you are eligible for business rate relief. Nurseries are eligible if they are not local authority run and they provide early years foundation stage education and are on Oftsted’s Early Years Register.
No action is currently required and your local authority will apply the discount to the relevant properties. You can contact your local council if you are not getting relief and believe that you are eligible.
A Government scheme to assist businesses - which have an annual turnover of up to £45m - who have been affected by COVID-19 to access finance of up to £5m for up to six years. This finance includes loans, overdrafts as well as invoice or asset finance. The Government will assist in providing an 80% guarantee to accredited lenders who make finance available under the CBILS.
A payment made by the Government to cover the first 12 months of interest payments together with any fees applicable to relevant finance obtained under the CBILS.
The Government has published a list of 40 accredited lenders which includes all of the major clearing banks.
UK-based businesses with an annual turnover of up to £45m who would, but for the coronavirus pandemic, have a viable business proposal. You must certify that your business has been adversely affected by coronavirus. The full rules, eligibility and how to apply can be found on the British Business Bank Website.
Banks, insurers, reinsurers (but not brokers), public-sector businesses, grant funded further education establishments and state-funded schools.
It is a new scheme which will launch in May 2020 for innovative companies in financial difficulty as a result of coronavirus. Full eligibility criteria and details of the scheme will be launched in due course and we will keep updated with the developments in this scheme.
A scheme to enable small and medium-sized businesses access finance of between £2,000 and £50,000, which is repayable over periods of up to six years. The scheme will launch in early May. The Government will guarantee 100% of the loan. Repayments under the loan will not be due within the first 12 months. Neither will any interest be charged in the first 12 months.
UK-based businesses who were not an “undertaking in difficulty” on 31 December, 2019, and which have been negatively affected by coronavirus. If you are claiming funding via the CBILS then you are not eligible for the Coronavirus Bounce Back Scheme. However, if you have borrowed up to £50,000 under the CBILS, it is possible to transfer a CBILS loan to the Bounce Back Scheme and you will be able to arrange this direct with your lender prior to 4 November, 2020.
Similar to the scheme for small and medium-sized businesses, the CLBILS is a Government scheme to assist larger businesses with an annual turnover in excess of £45m who face significant cash flow difficulties and access to finance. The Government will assist in providing an 80% guarantee to accredited lenders who make finance available under the CLBILS. The finance made available pursuant to the CLBILS will be offered at commercial rates of interest.
Businesses with a turnover between £45m and £250m can access finance of up to £25m through the scheme and businesses with a turnover in excess of £250m can access up to £50m.
The accredited lenders offering the CLBILS scheme are listed on the British Business Bank website.
UK-based businesses with an annual turnover in excess of £45m who would, but for the coronavirus pandemic, have a viable business proposal according to the lender. In addition, the lender must consider that the business will be able to trade through any short to medium term difficulties. You must certify that your business has been adversely affected by coronavirus. The full rules, eligibility and how to apply can be found on the British Business Bank Website.
Businesses who have received a facility under the Bank of England’s COVID-19 Corporate Financing Facility (see below) together with banks, insurers, (but not brokers), public-sector businesses, grant-funded further education establishments and state-funded schools.
A scheme whereby the Bank of England will purchase short term debt from large companies to assist with short term cash flow issues. It’s delivered through commercial lenders and is backed by the Bank of England.
The full eligibility criteria is available on the Bank of England’s website, but broadly all those companies who make a “material contribution” to the UK’s economy are eligible to participate.
The Government has announced a temporary suspension of wrongful trading legislation for three months from 1 March, 2020. Directors should note however that there have not been any changes to the directors’ disqualification regime or the rules around fraudulent trading. Directors must still be mindful of their wider directors’ duties at this time and continue to act responsibly. Actions taken by directors should be based upon professional advice and directors should remain mindful of all relevant company stakeholders and the position of creditors when making decisions.
Please note: These FAQs have been prepared for ease of reference as a summary of
the help available for businesses throughout these COVID-19 times. Nothing in this
note is to constitute legal, financial, tax or any other professional advice. Businesses
should always seek professional advice where required.
The situation around COVID-19 is fast paced and changes frequently. Every effort
has been made to ensure the accuracy of this information at the time of publication
however readers should always check the Government’s website for the most up to
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