The purpose of this note is to provide an update on the information circulated yesterday. You will undoubtedly be aware that the government issued further announcements yesterday afternoon.
Unfortunately, the overall picture remains quite unclear in terms of implementation of the announced measures, but we summarise below the information we have been able to obtain at this moment in time.
Statutory sick pay
We have covered this in a separate briefing note. If you require detailed guidance, please let us know.
Business grants
The government has announced two levels of grant:
A one-off cash grant of £10,000
Current guidance indicates that this will be available to all businesses currently eligible for small business rates relief. We are being advised that it will be made available through local authorities and does not need to be claimed, but will be distributed to all businesses registered with the local authority. The funding will be provided to local authorities in early April and presumably distributed by them soon after that.
It is not yet clear whether the grant will only be paid to small businesses that are actually registered with a local authority as exempt from business rates and whether, small businesses that do not occupy rateable premises are not able to claim. We are trying to find out more, but in any event, it does not seem that anything can be done for the next two weeks at least.
A one-off grant of £25,000
This grant appears to be restricted to retail, hospitality and leisure businesses operating from premises with a rateable value between £15,000 and £51,000.
It is understood that the same system will apply for this as the previous grant.
Rates holiday
All businesses in the retail, hospitality and leisure sector will also qualify for a holiday from business rates for the 2020/21 tax year.
We presume that all relevant businesses will be contacted directly by the local authority. Local authorities are being provided with guidance by governments on 20 March.
Business Interruption Loan Scheme
Clearly grants, where available, are infinitely preferable to loans which inevitably need to be paid back at some point. However, if alternative sources of funding are not available to you, we understand that loans of up to £1.2 million will be made available by the British Business Bank.
We do not have any further information at this time. We suspect that the process of obtaining finance is not going to be as straightforward as government suggests, but nevertheless, if you would like to follow up, we recommend you make initial enquiries on https://www.british-business-bank.co.uk/. We will provide whatever financial information we can to assist you in any application process.
HMRC liabilities and time to pay
As with the previous section, asking for extra time to pay taxes is only likely to be a short-term measure as the liability is deferred and not extinguished. However, it may be enough to help you through the present crisis.
It is usually the case that HMRC are more resistant to arrangements for payment of PAYE and VAT. However, whatever the tax, we recommend that you communicate any anticipated cash flow problems to HMRC as soon as you can. We would also strongly recommend that any such communication should be made by a director or senior finance person.
There is a dedicated time to pay hotline number which is 0800 0159 559.
And finally
We are here to help and support you as far as we can. The situation is far from clear and is changing rapidly. We are endeavouring to keep up to date with all relevant announcements and will pass on information as soon as we are able.
If you need assistance or further guidance, please let us know.
DM
18.3.20
