Chancellor Rishi Sunak Announces More Support for Businesses
On 22 October, the government announced it will increase the generosity and reach of its winter support schemes.
Business Grants for Tier 2
The grant system for businesses will be extended to businesses who are not forced to close by law but have been adversely impacted by the restrictions in high-alert level areas. Businesses will be eligible for cash grants of up to £2,100 a month.
These grants will be retrospective, with businesses in any area that has been under enhanced restrictions able to backdate claims to August.
Based on the business’s rateable value, grants will come via Westminster Council, and come on top of higher levels of additional business support for Local Authorities moving into Tier 3.
Check if you’re eligible for the coronavirus Local Restrictions Support Grant here.
Job Support Scheme
When originally announced, the JSS, which will come into effect on 1 November, saw employers paying a third of their employees’ wages for hours not worked, and required employers to be working 33% of their normal hours.
The employer contribution to the hours not worked will now reduce from 33% to five percent, and the number of hours an employee needs to work to be eligible to enter the scheme will be reduced from 33% to 20% of their hours.
Employers will continue to receive the £1,000 Job Retention Bonus. The Job Support Scheme Closed for businesses legally required to close remains unchanged.
This Job Support Scheme factsheet explains what is covered by the grant, which employers and employees are eligible, and how to claim.
The amount of profits covered by the two forthcoming self-employed grants will increase from 20 per cent to 40 per cent, meaning the maximum grant will increase from £1,875 to £3,750.
Find out more on the Government website
Job Support Scheme expanded to firms required to close due to Covid Restrictions
On 9 October, Chancellor of the Exchequer Rishi Sunak announced an expansion of the government’s Job Support Scheme (JSS) for businesses that are required to close as a result of coronavirus restrictions during winter. The Government will pay two-thirds of employees’ salaries up to a maximum of £2,100 a month and offer cash grants for businesses required to close in local lockdowns of up to £3,000 per month.
Further details on the expanded JSS can be found on this factsheet: Job Support Scheme Expansion for Closed Business Premises
For more information, please click here.
The Chancellor’s Winter Economy Plan
New Job Support Scheme
A new Job Support Scheme will be introduced from 1 November to protect viable jobs in businesses who are facing lower demand over the winter months due to coronavirus.
The new scheme, which will run for six months, is designed for employees working at least a third of their normal hours. Employers will continue to pay the wages of staff for the hours they work – but for the hours not worked, the government and the employer will each pay one third of their equivalent salary.
All small and medium-sized businesses are eligible, but larger businesses must show their turnover has fallen during the crisis. Employers can use it even if they have not previous used the furlough scheme it replaces.
In order to support only viable jobs, employees must be working at least 33% of their usual hours. The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.
It is designed to sit alongside the Jobs Retention Bonus and could be worth over 60% of average wages of workers who have been furloughed – and are kept on until the start of February 2021. Businesses can benefit from both schemes in order to help protect jobs.
In addition, the Government is continuing its support for millions of self-employed individuals by extending the Self Employment Income Support Scheme Grant (SEISS). An initial taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus. The initial lump sum will cover three months’ worth of profits for the period from November to the end of January next year. This is worth 20% of average monthly profits, up to a total of £1,875.
Tax cuts and deferrals
As part of the package, the government also announced it will extend the temporary 15% VAT cut for the tourism and hospitality sectors to the end of March next year.
In addition, up to half a million business who deferred their VAT bills will be given more breathing space through the New Payment Scheme, which gives them the option to pay back in smaller instalments. Rather than paying a lump sum in full at the end March next year, they will be able to make 11 smaller interest-free payments during the 2021-22 financial year.
Self-assessment taxpayers will be able to benefit from a separate additional 12-month extension from HMRC on the “Time to Pay” self-service facility, meaning payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.
Giving businesses flexibility to pay back loans
The burden will be lifted on more than a million businesses who took out a Bounce Back Loan through a new Pay as You Grow flexible repayment system. This will provide flexibility for firms repaying a Bounce Back Loan.
This includes extending the length of the loan from six years to ten, which will cut monthly repayments by nearly half. Interest-only periods of up to six months and payment holidays will also be available to businesses. These measures will further protect jobs by helping businesses recover from the pandemic.
In addition, the Chancellor also announced he would be extending applications for the government’s coronavirus loan schemes until the end of November.
You can find the Winter Economy Plan update in full here.
The Chancellor’s Plan for Jobs
On 8 July 2020, The Chancellor announced a boost for the hospitality sector through a raft of measures to help speed up economic recovery as we emerge from the Covid-19 crisis. From VAT cuts for the hospitality sector to a boost for eating out, the package supports jobs, businesses and the housing market. Marble Arch London BID welcomes this injection, following extensive lobbying as part of our Recovery Plan, to bolster businesses and jobs in the hardest hit sector across our district.
Hospitality VAT Cut from 20% to 5%
The rate of VAT applied on most tourism and hospitality-related activities will be cut from 20% to 5% from next Wednesday 15 July until 31 March 2021.
This cut will apply to eat-in or hot takeaway food from restaurants, cafes and pubs, accommodation in hotels, B&Bs, campsites and caravan sites, attractions like cinemas, theme parks and zoos.
Job Retention Bonus
The Chancellor also announced a Job Retention Bonus, giving £1,000 to businesses who bring back employees from furlough. The government will also pay firms a £1,000 bonus for every staff member kept on for three months when the furlough scheme ends in October.
“If you’re an employer and you bring back someone who was furloughed – and continuously employ them through to January – we’ll pay you a £1,000 bonus per employee. So for businesses to get the bonus, the employee must be paid at least £520 on average, in each month from November to the end of January – the equivalent of the lower earnings limit in National Insurance.”
A new £2 billion scheme will also be launched to create hundreds of thousands of new, fully subsidised jobs for young people across the country. Those aged 16-24, claiming Universal Credit and at risk of long-term unemployment, will be eligible. Funding available for each six-month job placement will cover 100% of the National Minimum Wage for 25 hours a week – and employers will be able to top this wage up.
Employment and support schemes
A total of £1.6 billion will be invested in scaling up employment support schemes, training and apprenticeships to help people looking for a job. The plan will also create tens of thousands of jobs through bringing forward work on £8.8 billion of new infrastructure, decarbonisation and maintenance projects. In addition, £5.8 billion will be spent on shovel-ready construction projects to get Britain building.
A temporary increase to the Nil Rate Band of Residential SDLT (Stamp Duty) from £125,000 to £500,000 has been introduced until 31 March 2021.
Full details of the announcement can be found here.
Eat Out to Help Out Discount
To encourage people to safely return to eating out at restaurants the Government’s new discount scheme will provide a 50% reduction for sit-down meals in cafes, restaurants and pubs across the UK from Monday to Wednesday every week throughout August 2020, up to a maximum discount of £10 per head. Alcohol is excluded.
Mr Sunak says the “Eat Out to Help Out” discount would help protect 1.8 million jobs.
Businesses will need to register, and can do so through a simple website, open next Monday. Each week in August, businesses can then claim the money back, with the funds in their bank account within 5 working days.
Click here to find out more about the Eat Out to Help Out scheme, including how to register for the scheme.
Free Advice to Small Firms
The Recovery Advice for Business scheme, supported by the government and hosted on the Enterprise Nation website, will give small firms access to free, one-to-one advice with an expert adviser to help them through the coronavirus pandemic and to prepare for long-term recovery.
The platform is now live, click here to access it.
Advice offered will include bespoke, specialist assistance from accountancy, legal, and advertising to marketing, recruitment and digital to help businesses adapt to difficult circumstances and to bounce back as the UK economy recovers.
Further details on the announcement and how it works can be found here.
Code of Practice for Commercial Property Sector
The Government has published a code of practice to provide clarity for businesses when discussing rental payments and to encourage best practice so that all parties are supported. Please see the full announcement here.
The Government will lay secondary legislation to prevent landlords using Commercial Rent Arrears Recovery unless they are owed 189 days of unpaid rent. The time period for which this measure is in force will be extended from June 30 to September 30.
An amendment to the Corporate Insolvency and Governance Bill has been tabled which will extend the temporary ban on the use of statutory demands and winding-up petitions where a company cannot pay its bills due to coronavirus until 30 September.
Loans and grants
Coronavirus Business Interruption Loan Scheme
The Coronavirus Business Interruption Loan Scheme supports small and medium-sized businesses, with an annual turnover of up to £45m, to access loans, overdrafts, invoice finance and asset finance of up to £5 million for up to six years.
The scheme will be delivered through commercial lenders, backed by the Government-owned British Business Bank. 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 also make a Business Interruption Payment to cover the first 12 months of interest payment and any lender-levied fees, so businesses will benefit from no upfront costs and lower initial repayments.
100% government backed loan scheme for small business
The new Bounce Back Loans scheme announced by the Chancellor on 27 April, will allow businesses to borrow between £2,000 and £50,000 and access the cash within days. Loans will be interest free for the first 12 months, and from 4 May businesses can apply online through a short and simple form.
The Government will provide lenders with a 100% guarantee for the loan and pay any fees and interest for the first 12 months. No repayments will be due during the first 12 months.
The loans will be easy to apply for through a short, standardised online application. Loans should reach businesses within days – providing immediate support to those that need it as easily as possible.
The scheme will launch for applications on Monday 4 May. Firms will be able to access these loans through a network of accredited lenders. The government will work with lenders to ensure loans delivered through this scheme are advanced as quickly as possible and agree a low standardised level of interest for the remaining period of the loan.
Cash Grant for Retail, Hospitality and Leisure
If your business is in the retail, hospitality or leisure sector, you may receive a cash grant of up to £25,000 per property. Businesses in these sectors with a property that has a rateable value of £15,000 and under may be eligible for a grant of £10,000. Businesses in these sectors with a property that has a rateable value of over £15,000 and less than £51,000 may be eligible for a grant of £25,000.
Small Business Grant Funding
The Government is providing additional funding for Local Authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.
Statutory Sick Pay Rebate
The Government will bring forward legislation to allow small and medium-sized businesses to reclaim Statutory Sick Pay (SSP) paid for staff sickness absence due to coronavirus. This refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of coronavirus.
Covid-19 Corporate Financing Facility
The new Covid-19 Corporate Financing Facility (CCFF) means that the Bank of England will buy short-term debt from larger companies. This will support companies which are fundamentally strong, but have been affected by a short-term funding squeeze. It will also support corporate finance markets overall and ease the supply of credit to all firms. The scheme will be funded by central bank reserves – in line with other Bank of England market operations. It will operate for at least 12 months, and for as long as steps are needed to relieve cash flow pressures on firms that make a material contribution to the UK economy.
Business Support Helpline
You can call the Business Support Helpline (England) on 0300 456 3565 Monday to Friday, 9am to 6pm.
Due to the lack of support for businesses with a rateable value of more than £51,000 in the Budget and with many high street businesses facing severe cash-flow problems, on 16 March 2020 the Marble Arch London joined major national trade bodies and campaigners to call for the Budget’s business rate holiday for small high street businesses to be extended immediately to the other 70% of high street companies, regardless of size.
The Chancellor announced additional support on 17 March 2020 for the retail, leisure and hospitality sectors during the outbreak in response to the main concerns expressed to the Government by national industry bodies, the Retailer Rates Action Group, Marble Arch London, and our fellow BIDs. If your business occupies a property in the hospitality or retail sector, you will be eligible for a 100% discount on your business rates bill for 1 year. There is no need to contact Westminster council as they will be amending your account and will issue a communication confirming the position in due course. Find out more.
Following our lobbying, business rates relief was extended to the following sectors on 25 March 2020: employment agencies, estate agents, casinos, clubs, wellness centres and spas. For more information on Business Rates relief, please read Business Rates – Expanded Retail Discount 2020/21: Coronavirus Response – Local Authority Guidance
VAT Deferral and Time to Pay
The Government will support businesses by deferring Valued Added Tax (VAT) payments for 3 months. If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
For VAT, the deferral will apply from 20 March 2020 until 30 June 2020. All UK businesses are eligible. This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period.
Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.
For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.
If you are self-employed you are eligible. This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period.
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
You are eligible if your business:
- Pays tax to the UK government;
- Has outstanding tax liabilities.
HMRC have set up a COVID-19 helpline. Advisers can talk to you about problems paying your taxes due to COVID-19 via webchat or phone.
The UK Government announced that commercial tenants who cannot pay their rent because of the impacts of the COVID-19 crisis will be protected from eviction for at least three months. Read the announcement here.
You might find this factsheet from London Growth Hub on how to negotiate a rent holiday helpful.
Coronavirus Job Retention scheme and furlough
Furlough leave has been temporarily introduced by the government during the coronavirus pandemic to mean leave offered which keeps employees on the payroll without them working.
The Treasury has issued a Direction to HMRC under powers conferred by the Coronavirus Act 2020, containing authority and instructions for making payments under the Coronavirus Job Retention Scheme. Although amendments are possible, it is likely to be the definitive guidance on how the Job Retention Scheme works.
Accounting and Corporate Governance
On 28 March 2020, Business Secretary Alok Sharma outlined a series of temporary relaxation of regulations to ease further the pressure on businesses. This gives companies a three month extension for filing of annual accounts, improve the insolvency system to help keep companies trading, and temporarily suspends certain personal obligations on company directors to remove threats regarding insolvency.
The Charity and Voluntary Sector
Mayor contributes £1m to new emergency support fund
The Mayor of London has contributed £1 million to create a new emergency fund for community and voluntary sector organisations affected by the impact of the virus. The Mayor joined City Bridge Trust, the City of London Corporation’s charitable funder, and London Funders, a network of investors of London’s civil society, to launch the new fund – with an initial £1 million provided by City Hall and £1 million from City Bridge Trust.
The Community Contribution Fund – COVID-19 grant scheme
In response to the coronavirus outbreak, The City of Westminster Charitable Trust has launched a new COVID-19 grant scheme as part of the Community Contribution, which was created to give Westminster residents in the top Council tax bands the opportunity to give more to their local community, on a voluntary basis.
The COVID-19 fund will help frontline voluntary and community organisations that are providing vital services to support the most vulnerable in Westminster. Grants of up to £15,000 are available for projects that:
- Provide extra support to help rough sleepers off the street or to keep them protected during the outbreak
- Provide youth support
- Offer support to people who are suffering from social isolation or loneliness.
All organisations must operate in Westminster and the following organisations can apply: voluntary and community organisations, registered charities, constituted groups or clubs, not-for-profit or community interest companies, social enterprises and schools.
Applications for the COVID-19 grant scheme can be made here.
Help for the Self Employed
The Self-employment Income Support Scheme (SEISS) will support self-employed individuals (including members of partnerships) whose income has been negatively impacted by COVID-19. The scheme will provide a grant to self-employed individuals or partnerships, worth 80% of their profits up to a cap of £2,500 per month.
HMRC will use the average profits from tax returns in 2016-17, 2017-18 and 2018-19 to calculate the size of the grant. The scheme will be open to those where the majority of their income comes from self-employment and who have profits of less than £50,000. The scheme will be open for an initial three months with people able to make their first claim by the beginning of June.
Regional and Westminster Information
You can also read Westminster Council’s business help pages here.
Marble Arch London BID has launched its Recovery Plan, helping our members get back to business.
You can use this business support finder to see what support is available for your business.