Government Guidance | Manufacturing Growth Programme

The Department for Business, Energy and Industrial Strategy has set out a package of temporary, timely and targeted measures to support public services, people and businesses through this period of disruption caused by COVID-19.

This includes a package of measures to support businesses including:

  • small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
  • a statutory sick pay relief package for SMEs
  • the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
  • a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
  • the HMRC Time To Pay Scheme
  • a 12-month business rates holiday for all retail, hospitality and leisure businesses in England
  • grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000

More information can be found on the Government website here.

 

Support for businesses through deferring VAT and Income Tax payments

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.

Customers who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay. Please do so in sufficient time so that HMRC do not attempt to automatically collect on receipt of your VAT return.

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.

Customers who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay. Please do so in sufficient time so that HMRC do not attempt to automatically collect on receipt of your VAT return.

HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.

 

Small Business Rate Relief (SBRR)

The government will provide additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR). This will provide a one-off grant of £10,000 to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs.

If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority – you do not need to apply.

Funding for the scheme will be provided to local authorities by government in early April.

This is a £20bn package for local authorities. Sunak advised any small businesses in distress to speak directly to their local authorities.

 

Support for businesses who are paying sick pay to employees

Government will bring forward legislation to allow small and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:

  • this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
  • employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020
  • employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
  • employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note
  • eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to those staying at home comes into force
  • the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible

 

Helpline

A dedicated helpline has been set up to help businesses and self-employed individuals in financial distress and with outstanding tax liabilities receive support with their tax affairs. Through this, businesses may be able to agree a bespoke Time to Pay arrangement. If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.

 

Coronavirus Business Interruption Loan Scheme’ (CBILS)

Provided by the British Business Bank through participating providers with the aim of supporting the continued provision of finance to UK businesses during the Covid-19 outbreak, available from 23rd March 2020.
More information can be found here.

 

Extra protection for businesses with ban on evictions for commercial tenants who miss rent payments

Commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction.

Many landlords and tenants are already having conversations and reaching voluntary arrangements about rental payments due shortly but the government recognises businesses struggling with their cashflow due to coronavirus remain worried about eviction.

These measures, included in the emergency Coronavirus Bill currently going through Parliament, will mean no business will be forced out of their premises if they miss a payment in the next 3 months.

This builds on the unprecedented package of support announced for businesses who are affected by coronavirus.

As commercial tenants will still be liable for the rent after this period, the government is also actively monitoring the impact on commercial landlords’ cash flow and continues to be in dialogue with them.

Communities Secretary, Rt Hon Robert Jenrick MP, said: “We are protecting both people and their businesses by providing the urgent support they need.

“We know many commercial landlords are already setting a great example by working closely with tenants and offering rent deferrals or holidays.

“However, these new measures will provide reassurance to businesses struggling with cashflows and ensure no commercial tenant is evicted if they cannot pay their rent because of coronavirus over the next 3 months.”

 

Companies to receive 3-month extension period to file accounts during COVID-19

Businesses will be given an additional 3 months to file accounts with Companies House to help companies avoid penalties as they deal with the impact of COVID-19.

This joint initiative between the government and Companies House will mean businesses can prioritise managing the impact of Coronavirus.

There are approximately 4.3 million businesses on the Companies House register, and all companies must submit their accounts and reports each year. Under normal circumstances, companies that file accounts late are issued with an automatic penalty.

As part of the agreed measures, while companies will still have to apply for the 3-month extension to be granted, those citing issues around COVID-19 will be automatically and immediately granted an extension. Applications can be made through a fast-tracked online system which will take just 15 minutes to complete.

Business Secretary Alok Sharma said: “We have outlined a business support package on an unprecedented scale, backing companies and their employees through these challenging times.

“But it is important that our support is not limited to financial assistance. We are determined to help businesses in any way we can, so that they can focus all their efforts on dealing with the impact of Coronavirus, and this new offer of a 3 month extension for filing accounts is part of that.”

Companies House Chief Executive, Louise Smyth said: “We recognise that these are uncertain times for businesses and that’s why we’re doing all we can to help.

“By easing the burden, we can help businesses through this period and enable them to thrive in the future. I would encourage companies who believe they would benefit from this new flexibility to make an application in good time.”

Head of Corporate Governance, Institute of Directors, Roger Barker said: “These measures will be welcomed by directors impacted by COVID-19. Our members will be pleased to see government taking proactive steps to support them through this difficult time. By easing the administrative burden that comes with running a business, the government is supporting businesses to focus on the fundamentals during this exceptional period.

The government is also in close consultation with company representative bodies, legal practitioners and others, to look at solutions for the impact COVID-19 may have on companies’ ability to hold Annual General Meetings. Updated guidance on this matter will be published in due course.

 

For further support and guidance at this time, please contact your local Manufacturing Growth Manager.