01142747576 bestadvice@knowleswarwick.com

COVID-19: Latest updates and advice

This page will be regularly updated as new information is released.

We want to reassure all of our clients and colleagues that we remain committed to helping you through this unprecedented time of uncertainty and worry. We will keep this page updated with the most recent information and advice from the UK government, as well as details of all of the financial support available to you.

Our dedicated COVID-19 advice team is on hand to answer any questions and guide you through the process of accessing that financial aid, so please do not hesitate to get in touch.

Email: covidteam@knowleswarwick.com

Phone: 0114 274 7576


*NEW* National lockdown announced 

On Monday 4 January, Prime Minister Boris Johnson announced a third national lockdown for England to reduce stress on our health service and minimise the impact of the new strain of the virus this winter. The lockdown began immediately, legally coming into effect on Wednesday 6 January, and is expected to last until at least 21 February, with schools closed until after the February half term as a minimum. 

Read more


 

Latest support for businesses

Chancellor unveils £4.6bn support package

Rishi Sunak has announced further financial aid for businesses worst hit by the coronavirus pandemic and consequent lockdown measures. Businesses in the retail, hospitality and leisure sectors will receive a one-off grant worth up to £9,000, as well as 100% business rate relief.

Read more

 

£1,000 Christmas grant for 'wet-led' pubs

The government has announced an additional £1,000 grant for wet-led pubs (those that don't serve food) in tiers 2 and 3, who will miss out on turnover during the busy Christmas period.

The payment will be a one-off during December and will be paid on top of the £3,000 monthly cash grants for businesses. Read more

 

Furlough scheme extended to 30 April 2021

The Job Retention Scheme has been extended to April 2021, maintaining 80% of employee’s wages, even if they weren’t previously furloughed, as long as they were on their employer’s payroll on 31 Oct. Read more

Deadline for applications to government-backed loan schemes and the Future Fund have been extended to 31 Jan 2021.

 

Support for the self employed 

Self-employed workers will be able to claim government support worth 80% of trading profits for the third time (details on our SEISS page). Loans and credit card holidays to be extended for 6 months amid second lockdown. In a statement, the FCA said it's in talks to extend measures to support those who will be affected by latest restrictions. It will be followed by new measures for those struggling to keep up with mortgage repayments.

New and extended mortgage holidays WON'T show up on your credit report.


 

The Tier System

Local COVID alert levels came into effect on 2 December. Here is a brief summary of the tier system:

  • Tier 1 – Medium Risk – If employees can work from home then they should do so. If work cannot be undertaken at home then employers must provide a Covid Secure workplace. Pubs, bars and restaurants must close at 10pm and groups must be limited to 6 or less.
  • Tier 2 – High Risk – If employees can work from home then they should do so. If work cannot be undertaken at home then employers must provide a Covid Secure workplace. Pubs, bars and restaurants must close at 11pm and groups indoors must not mix with anyone from outside of their household or support bubble. Groups outdoors can be from multiple households but are limited to groups of 6.
  • Tier 3 – Very High Risk – If employees can work from home then they should do so. If work cannot be undertaken at home then employers must provide a Covid Secure workplace. Pubs and bars must remain closed from today (Wednesday 2 December) except for takeaway, delivery, click-and-collect or drive-through services. Groups indoors and outdoors must not mix with anyone from outside of their household or support bubble. In addition, casinos, betting shops and adult gaming centres will also be closed along with indoor gyms, fitness and dance studios and sports facilities (with an exemption for organised indoor team sports for disabled people and children’s activities). Shops, including those within otherwise closed venues such as museums and galleries, may remain open.
  • Tier 4 - Stay At Home - You must not leave your home and garden for any reason, except: work and volunteering, where this cannot be done from home; essential activities, such as food shopping, buying or collecting medicine, obtaining or depositing money or accessing critical public services, fulfilling legal obligations and any activity related to buying, selling or renting a property, voting, etc. (View the full list of 'reasonable excuses' on the GOV website). Education and childcare will continue, as well as childcare bubbles and support bubbles. 

Check your local area's tier status on the Government website.

For full details of the current local restrictions, click here.


 

The Chancellor’s 2020 Winter Economy Plan

In his statement, Rishi Sunak announced the next stage of help and support for jobs and businesses. The aim is to steer the economy through what he described as a “difficult winter” after the hard decision to end the furlough scheme.

Mr Sunak announced the following main measures:

 

A new Jobs Support Scheme *postponed until at least May 2021*

Under the scheme, eligible employees will be expected to work for at least one third of their normal hours and be paid for that by their employer. The government and the employer will then each pay one third of the employee’s usual pay rate for the hours not worked. This is targeted at sustaining “viable jobs”. All small and medium sized businesses will qualify as will certain large firms if their turnover has fallen due to the pandemic. The scheme will run for six months from November 2020.

Download our JSS factsheet

Business finance

  • Help with businesses’ cash flow will come from extensions to the Bounce Back Loan Scheme and other initiatives.
  • New and existing borrowers of bounce-back loans will be able to extend their repayment periods from six to ten years under a ‘Pay As You Grow’ measure.
  • Struggling businesses will be able to switch to interest-only payments and some will be able to suspend payments altogether for up to six months.
  • The government guarantee for Coronavirus interruption loans will also be extended to ten years. The application deadline for all the main loan schemes has be extended to the end of January 2021.
  • The deferred VAT and self-assessment payments due early next year can be repayable in instalments rather than as a lump sum. The new repayment scheme will launch in early 2021.

Hospitality and leisure

  • The lower 5% VAT rate for hospitality and tourism will be extended to 31 March 2021

 

COVID-19 Business Guidance and Resources

  • Visit our dedicated Client Resources website for tips, tools and step-by-step guides to accessing the support available. 
  • Download our COVID-19 eBook, which is filled with valuable resources for employers, employees and the self employed. From details about the available financial support, to health advice from the government and the NHS, and a bonus section on managing and maintaining your physical and mental wellbeing during the pandemic, it's an essential read that can be shared with your staff and colleagues.

 

Coronavirus government help for employers

The government has announced a package of measures to help those businesses who have been financially impacted by the coronavirus outbreak. 

Coronavirus Job Retention Scheme (CJRS)

The Coronavirus Job Retention Scheme was announced on 20 March 2020, and opened for applications on 20 April. It has now been extended until 30 April 2021.

The current 'flexible furlough scheme' allows employees to return to work part time without effecting their income as the government will cover the remaining days, up to 80% of the employee's total salary. 

If you make a claim, make sure to keep any records in case HMRC wishes to check them later. 

Visit our dedicated Furlough Scheme page for the latest information on the COVID-19 Job Retention Scheme.

Loan Guarantees

The government has announced a range of loan guarantees to provide financial support to a variety of businesses, from the new Bounce Back Loan Scheme for small businesses, to a Covid Corporate Financing Facility for large firms with a turnover of more than £45million.

Covid Corporate Financing Facility (CCFF)

Businesses with more than £45million turnover can access the CCFF, which "will provide funding to businesses by purchasing commercial paper of up to one-year maturity, issued by firms making a material contribution to the UK economy".

The company must satisfy Bank of England lending criteria, which originally meant having an investment grade credit rating from a ratings agency, but has since been changed to also allow lending banks to judge credit worthiness. However, the ultimate decision remains with the BoE.

Find out more on the government website and apply to the scheme on the Bank of England website.

Coronavirus Large Business Interruption Loan Scheme (CLBILS)

Medium to large sized businesses with a turnover between £45 million and £500 million can apply to the CLBILS. The Large Business Interruption Loan Scheme has a ceiling of £25 million and is targeted at businesses that are too large for the CBILS but fail to meet the criteria for CCFF. This scheme will provide an 80% government guarantee on individual loans and other forms of finance (e.g. overdrafts).

The aim is to provide support for businesses that were viable before the pandemic, but now face significant cash flow difficulties that would otherwise make them unviable for lending in the short term.

27 lenders have now signed up to the CLBILS. The scheme is open to applications until 31 January 2021. Find out more and apply on the government website.

Coronavirus Business Interruption Loan Scheme (CBILS)

Under the Coronavirus Business Interruption Loan Scheme, UK businesses with an annual turnover of no more than £45m may be able to borrow up to £5m interest-free for 12 months under a British Business Bank (BBB) scheme where the government provides the lender with a guarantee for 80% of each loan (subject to a per-lender cap on claims) and covers the cost of the first 12 months of interest.

The scheme supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance faciities. Finance terms are up to six years for term loans and asset finance facilities, and up to three years for overdrafts and invoice finance facilities.

The scheme provides lenders with a government-backed guarantee that could turn a 'no' credit decision by a lender into a 'yes'. Lenders pay a fee to access the scheme, meanng there will be no guarantee fee for SMEs who receive support via the scheme.

Lenders cannot require personal guarantees on borrowing of under £250,000, nor can primary residential property be taken as security under the scheme. When a personal guarantee is required, it is capped at 20% of the outstanding value of the loan.

Business owners can access CBILS through 117 BBB accredited lenders, but not all of these lenders will be able to provide every type of funding. Business should speak to their existing bank lender(s) if they wish to access CBILS. If your current lender is unable to provide the facility they may refer you to another lender.

The scheme is open to application until 31 January 2021. Find out more and apply to the scheme on the government website.

Bounce Back Loan Scheme (BBLS)

The BBLS will provide micro loans of between £2,000 and £50,000 (subject to a ceiling of 25% of turnover) interest free for the first 12 months, with the government supplying a 100% guarantee for lenders. After the initial 12 months, the interest rate will be 2.5% a year.

There will be no forward-looking tests of business viability, nor any "complex eligbility criteria", and "for most firms, loans should arrive within 24 hours of approval". 

The BBLS is run by the the British Business Bank and 29 lenders have now signed up. The scheme is open to applications until 31 January 2021, and if you already received a Bounce Back Loand but borrowed less that you are entitled to, you can apply for a top up to your existing loan up to your maximum limit, before 31 January 2021.

Find out more and apply on the government website

Support for innovative businesses

On 20 April, Chancellor Rishi Sunak announced a two-part support package for 'innovative firms', which will help those startups and other venture capital backed businesses that do not meet the criteria of the previously announced measures. 

Future Fund

The Future Fund will provide loans between £125,000 and £5 million, with private investors at least matching the government commitment. Eligibility criteria is fairly strict, the business must be unlisted and UK registered/based (at least 50% of employees must be UK based, or at least half of revenue must be from UK sales). The company must have been incorporated on or before 31 December 2019, and it must have previously raised at least £250,000 in equity investment from third party investors in the last five years.

The scheme is open for applications until 31 January 2021. Visit the government's website to apply for the new Future Fund.

Research and development tax relief

The government has pledged £750 million of targeted support for the most R&D intensive small and medium size firms, which will be made available through a grant and loan scheme operated by Innovate UK

Innovate UK will accelerate up to £200 million of grant and loan payments for its 2,500 existing customers on an opt-in basis. An extra £550 million will also be made available to increase support for existing customers and £175,000 of support will be offered to around 1,200 firms not currently in receipt of Innovate UK funding.

Get in touch if you'd like to discuss a R&D tax relief claim.

Business Rate Reliefs

The Chancellor has announced a 12 month business rates holiday for all retail, hospitality and leisure businesses in England and Scotland for the 2020/21 tax year.

Your local authority will adjust the next council tax bill you receive to remove the business rates charge. You can estimate the saving for your business using this calculator (based on English rates).

Some businesses may also be able to request Hardship Relief via their local authority.  

Grants

Local Restrictions Support Grant (for Open Businesses)

In England, the Local Restrictions Support Grant (LRSG (Open)) supports businesses that have been severely impacted due to temporary local restrictions. Businesses that have not had to close, but which have been severely impacted due to local tier 2 and 3 restrictions, may be eligible for LRSG (Open). 

Eligible businesses may be entitled to a cash grant from their local council for each 14-day period under local restrictions. Local councils have the discretion to provide grant funding for businesses under this scheme. Find out more and see if you're eligible on the government website.

Retail, Hospitality and Leisure Grant Fund (RHLGF)

Under the Retail and Hospitality Scheme, businesses can access cash grants of £25,000 for each property in England with a rateable value of £15,001-£51,000 and £10,000 for each commercial property in England with a rateable value of £15,000 or lower. 

Details of the properties that will benefit from the relief can be found here. Your local authority should be able to confirm if you are eligible for a grant.

Small businesses which occupy premises in England and already receive small business rate relief or rural rate relief are eligible for a one-off grant of £10,000 to help meet their ongoing business costs.

Scotland and Wales have announced similar grant schemes. 

Top-up grants

Small businesses that previously fell through the gaps in the available coronavirus government funding can now access a top-up business grant funds scheme. The Business Secretary has made £617 million available to small businesses that did not fit the criteria for the Small Busines Grants Fund or the Retail, Hospitality and Leisure Grants Fund.

Local authorities are responsible for allocating the funds to relevant businesses with less than 50 employees, including those in shared spaces such as bed and breakfasts, regular market traders and small charity properties. 

The maximum grant will be £25,000, with some grants of £10,000, and local authorities will have the discretion to allocate funds of less than £10,000 according to local economic need. Recipients must be able to show that they have seen a significant drop in income due to Coronavirus restriction measures. Further guidance is due to be released.

Tax Measures

VAT reduced rate for hospitality, holiday accomodation and attractions

The reduced rate of VAT of tourism and hospitality has been extended from 12 January 2021 to 31 March 2021

The government made an announcement on 8 July 2020 allowing VAT registered businesses to apply a temporary 5% reduced rate of VAT to certan supplies relating to:

  • hospitality
  • hotel and holiday accomodation
  • admissions to certain attractions

The temporary reduced rate will apply to supplies that are made between 15 July 2020 and 31 March 2021.

Read more on the government website.

VAT Deferral

VAT payments that would have been due between 20 March and 30 June 2020 have been deferred until 31 March 2021.

HMRC has issued guidance on paying deferred VAT. If you still have payments to make, you can:

  • pay the deferred VAT in full on or before 31 March 2021
  • opt into the VAT deferral new payment scheme when it launches in 2021
  • contact HMRC if you need more help to pay

The scheme will launch in early 2021 and will use an online opt in process. Instead of paying the full amount owed by the end of March 2021, you will be able to spread the cost over up to 11 smaller monthly instalments, interest free. All instalments must be paid by the end of March 2022.

If you opt into the scheme, you can still have a time to pay arrangement for other HMRC debts or outstanding tax.

Find out more and get ready to opt into the new payment scheme on the government website.

Income tax deferral

Self employed individuals with income tax payments due in July 2020 under the Self-Assessment system can also defer payment until January 2021. This is automatic, no application necessary.

Time to Pay

HMRC have also scaled up their 'Time to Pay' service and requests can be made to defer other tax payments including corporation tax and PAYE which are due (or overdue) to HMRC by calling the new dedicated Coronavirus helpline on 08000 241 222 between 8am and 4pm, Monday to Friday.

Statutory Sick Pay (SSP)

Businesses with less than 250 employees can obtain a refund from the government for Statutory Sick Pay paid for up to 2 weeks' absence due to COVID-19. This also covers absence due to self-isolation in line with government advice.

The size of an employer will be determined by the number of people they employed as of 28 February 2020. Employers should keep a record of staff absences and payments of SSP, but employees will not be required to provide a GP fit note. If evidence is required by the employer, those with symptoms can get an isolation note from NHS 111 online and those who live with someone with symptoms can get a note from the NHS website.

The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.

3-month extension to file accounts

Companies House and the government have launched an initiative providing businesses effected by the coronavirus outbreak with a 3-month extension to file their accounts.

Under normal circumstances, all companies that file accounts late are issued with an automatic penalty, but now, those who apply for the extension and are accepted will have an additional 3-month period to focus on managing the impact of COVID-19 on their business before filing.

All businesses that cite COVID-19 or Health matters as the grounds for the application will be accepted, unless they have already extended their filing deadline or shortened their accounting reference period. Full guidance can be found here.

Applications can be made through a fast-tracked online system which will take just 15 minutes to complete, according to Gov.UK.

Eviction moratorium extended to commercial leases

If your business rents commercial premises and you are unable to pay rent due to the impact of COVID-19, your landlord is now prohibited from evicting you due to a piece of emergency legislation extending the forfeiture moratorium on residential leases to include commercial leases.

Read the press release here.

Alternative Funding

Many alternative funders are still open for business and actively looking to lend during the lockdown. We can help you to investigate opportunities with:

  • Crowdfunding
  • Crowdsourcing
  • Equity crowdfunding
  • Peer to peer lending
  • Asset finance
  • Supply chain finance and Reverse factoring
  • Pension led funding
  • Merchant cash advance

Please be aware that fraudsters are already taking advantage of the situation and targeting individuals with coronavirus-related scams. If you are unsure, please speak to your advisor before making any decisions about your finances, particularly with regard to savings and pensions. 


 

COVID-19 government help for self employed

On Thursday 26 March, the government announced its new scheme to support self-employed professionals who have been financially impacted by the continuing coronavirus pandemic. 

Self-Employment Income Support Scheme (SEISS)

If you are self-employed or a member of a partnership, you can claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next three months, based on your income over the last three years.

Your trading profits must be less than £50,000, and more than half of your income must come from self-employment. To be eligible, you must have submitted your Income Tax Self Assessment tax return for the tax year 2018-19 and have traded in 2019-20, and still be trading or would be except for COVID-19. 

Unlike the CJRS, where staff must be furloughed and cease working, self employed individuals are not expected to stop operating their business in order to receive the SEISS funding. However, if unable to operate due to current restrictions, they must intend to continue trading when possible. 

The third grant for SEISS is now open, and you may make a claim even if you did not claim the first or second grant. In order to be eligible, your business must have been impacted on or after 1 November 2020. Submit your claim between 30 November 2020 and 29 January 2021 using the government website.

For full details and to make a claim, click here.


Our dedicated COVID-19 team can help you to access the funding available to your business, please get in touch on 0114 274 7576 or email us at covidteam@knowleswarwick.com to find out more.


Additional Resources

GOV.UK Coronavirus (COVID-19) Guide

Coronavirus Advice Tool from Champion Health

 

Happiness is a Positive Cash Flow

Click here for the Quickbooks website Xero Gold Partner Accountants Sage accountants, experts in cloud accounting, Sheffield, South Yorkshire 

ICAEW Chartered Accountants Click here for the ACCA website Connect Yorkshire  Sheffield Chamber of Commerce Click here for the Caunce O'Hara website 

Knowles Warwick Financial Services Limited is authorised and regulated by the Financial Conduct Authority (in respect of regulated investment, insurance and mortgage business). For regulated financial services, the Financial Ombudsman Service is the alternative dispute resolution provider.