Grants, Loans & Tax Reliefs ⁠— Don't Let COVID-19 Take You Down

The current pandemic is impacting on every part of our lives. 

The coronavirus outbreak has made it necessary for social distancing and isolation to be put into effect, with non-key-workers (Ed: the definition of non-key and key is changing on a daily basis) staying at home for the foreseeable future. 

Following the decision to close schools and Early Learning and Childcare (ELC) settings, the Scottish Government has provided guidance to councils on how to define key workers, which includes:
•    health and care workers directly supporting COVID-19 response, life threatening emergency work, critical primary and community care; energy suppliers and teachers and those providing childcare for those at the frontline of the response
•    all other health and care workers, emergency service and critical welfare workers and those supporting critical national infrastructure
•    workers in the public, private and third sectors without whom there would be a significant impact on Scotland

As in previous times of economic crisis the government is using “quantitative easing” to create the money to try and combat not only the virus but also all the downstream economic impacts. The consequences of this increase in the supply of Money will be felt later (increases in inflation, reduced value of Sterling, higher interest rates (not now but certainly later)), this will also be compared to how other currencies have fared and might not be as bad as we think.

This UK aid goes beyond the unprecedented amounts of money being made available to help businesses and individuals impacted by the outbreak but also includes investing in the Department for International Development mission to stop the spread of misinformation on social media.

Economically it is having a very real downstream impact on all businesses and all business owners. Issues involving supply chains, cash flow, employment and sick leave will mean that without aid, many small businesses will not to survive the short term never mind the long term when the pandemic is under control.

Recently, however, the government revealed several ways in which they plan to help businesses as a part of their daily coronavirus response. This plan includes a £330 billion package of measures which provides exemptions for business rates, loans and a one-off cash grant of at least £3,000* for those eligible for small business status.

Grants*

When first announced the coronavirus small business grant was of £3,000, but as of 17 March this has been raised to £10,000. This small business rate relief (SBRR) is available to those that currently either pay no or low business rates and have a rateable value of less than £15,000.

For other businesses that have a rateable value between £15,000 and £51,000, that are in the retail, hospitality and leisure businesses, there will also be a £25,000 grant made available.

However, the coronavirus grant currently only applies to small businesses in England. The devolved administrations (Ed: Wales, Scotland and Northern Ireland) set their own business rates, however it’s expected these will follow the UK Government announcement once details are fully known.

How To Apply For The Grant

We applied on 17th March to be advised that the application process was not yet available but that it would be by 23rd March.  The good news (if you’re in England) is there is no need to apply. The department for Business, Energy and Industrial strategy will be coordinating with local authorities to get the scheme up and running. Once prepared, if eligible, your local authority will contact you with the funding becoming available in April.

There doesn’t appear yet to be an appeal system.
 
Rates Relief

In addition to the grant fund, the government has also announced a year's exemption of business rates for retail, leisure and hospitality businesses in England.

The Scottish government has announced their own fund, along with plans they will put into place to support businesses impacted during the current financial year. The steps they have revealed thus far are:
•    a 75% rates relief for retail, hospitality and leisure sectors with a rateable value of less than £69,000 from 1 April 2020

•    an £80 million fund to provide grants of at least £3,000 to small businesses in sectors facing the worst economic impact of COVID-19

•    1.6% rates relief for all properties across Scotland, effectively reversing the planned below inflation uplift in the poundage from 1 April 2020

•    a fixed rates relief of up to £5,000 for all pubs with a rateable value of less than £100,000 from 1 April 2020
 
Again, there is no need to apply for the rates relief. The relief will be applied to your next council tax bill in April 2020.
 
Coronavirus Business Interruption Loan Scheme (CBILS)

A new type of loan, set up by the British Business Bank, will also be available to businesses to help them weather the impact of COVID-19. Businesses will be able to apply for a loan of up to £5 million, and the government has agreed to cover up to 80% of any losses with no fees. The first six months of this financing will be accessible interest-free, as the government will cover the first six months of the interest payments.
 
For those who wish to apply, the process has been said to be equivalent to a standard loan application. The British Business Bank has briefly outlined the steps necessary when the scheme launches. Small businesses interested in the loan should first take their borrowing proposal to an accredited lender for review. If the CBILS lenders can then offer finance on standard terms, without the need of the lending scheme, then they will do. In the case of a small business having inadequate security, but a sound proposal, then the lender will use CBILS to offer support.

This information is very fluid, so please check details on the CBILS including security terms for the latest guidance.

Hardship funds

Additionally, on 20 March, a new fund was announced. This new Hardship fund aims to keep as many people paid as possible during the pandemic. The projected UK unemployment rate was 8% due to the coronavirus, but with the aid of the government, they hope to cut it to 6%. 
As not everyone can work from home during the pandemic, this new hardship fund promises to pay up 80% of the wages of employees that have been impacted by the impact of COVID-19, helping businesses to pay employees where they may struggle. This fund will also support those who have, temporarily or permanently, lost their jobs due to the virus. Aid will also be available in the form of almost £1 billion promised to help those for those struggling with rent and an increase of £20 a week for those receiving Universal credit.
 
These new measures aim to help small businesses support their workers, but also to increase the amount of support that unemployed, or self-employment people can receive in the wake of the virus.
 
Other business support

For small businesses who employ less than 250 people, the government will also be giving aid to help support those on sick leave or self-isolation. The government announced they will now cover the cost of providing 14 days of Statutory Sick Pay per employee while the virus forces them into staying at home.

A dedicated HMRC helpline (0800 0159 559) is also available for businesses and self-employed individuals in financial distress. It will allow the discussion of taxes and the impact of the pandemic. It may also be possible to set up personalised payment plans to help those who are worried or struggling due to the effects of COVID-19.

For more information, resources on how to deal with the impact of coronavirus can be found on the government website and at findbuisnesssuport.gov.scot.