Here to Help: Explaining Government COVID-19 Support for Businesses
Government measures to support small business.
Over the course of the last week the Chancellor has set out a package of measures to support businesses through the disruption caused by COVID-19.
Deferring VAT and Income Tax payments
The government announced a 3-month deferment in Valued Added Tax (VAT) payments for all UK businesses. Consequently, there is no requirement to make a VAT payment from 20 March 2020 until 30 June 2020. Taxpayers will be given until the end of the 2020/21 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.
The chancellor also announced that the self-employed who have Income Tax Self-Assessment, payments due on the 31 July 2020 will have until the 31 January 2021 to make their payments.
Support with Business Rates
In addition to the above the chancellor also introduced business rates holidays for businesses in certain sectors that could be most adversely affected. These include:
- Business rates holiday for retail, hospitality and leisure businesses
- Cash grants for retail, hospitality and leisure businesses
- Business rates holiday for nurseries in England for the 2020 to 2021 tax year
- Businesses that pay little or no business rates because of small business rate relief (SBBR) or rural rate relief (RRR) are eligible for a one-off grant of £10,000 to help meet their ongoing business costs
SME’s could be eligible to access a new Coronavirus Business Interruption Loan Scheme allowing them to with access to working capital up to £5 million. The government will pay to cover the first 12 months of interest payments. To give lenders further confidence in continuing to provide finance to SMEs the government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims).
For larger companies there is a new Covid-19 Corporate Financing Facility, whereby the Bank of England will buy short term debt from larger companies.
This initiative supports companies that have been affected by a short-term funding squeeze, allowing them to finance short-term liabilities.
In addition, the chancellor announced specific measures to support employees who are designated as a “furloughed” workers, due to the Coronavirus pandemic. Further details can be found here.
For business or the self-employed who have concerns about paying taxes due to coronavirus, HMRC have a helpline for help and advice: 0800 0159 559.