Business Support For SMEs Following the COVID 19 Pandemic

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The Government has put forward a series of proposals to assist businesses in relation to the ongoing COVID-19 outbreak. The Government reaction to the outbreak has been developing rapidly. The measures summarised below are designed to support small and medium-sized businesses and set out the position announced to date.

The Coronavirus Business Interruption Loan Scheme (CBILS)

CBILS allows small and medium-sized businesses to borrow up to £5 million. The Government will provide lenders with a guarantee of 80% on each loan in order to give lenders further confidence to continue to provide finance to small and medium-sized businesses. The Government will cover interest payments for the first 12 months, but capital repayments will still have to be made. The products included are term loans, overdrafts, invoice finance facilities and asset-based lending facilities.

To be eligible under the CBILS the applicant must be UK based, have an annual turnover not exceeding £45 million and operate within an eligible sector (a small number of sectors are not eligible). Full eligibility criteria will be published by the Government shortly.

Applications should be made to a British Business Bank accredited lender. For many businesses interested in CBILS the obvious first step would be to make enquiries of their existing bank. However, it should be noted that there are alternatives where an incumbent lender cannot help. We will see over the coming weeks how this will be implemented, including how flexible incumbent banks will be with security/prioritisation with a new lenderIt should be noted that there are alternative options as the lending panel authorised to operate CBILS includes various challenger banks and asset-based lenders.

Coronavirus Job Retention Scheme (CJRS)

Any employer in the UK, including charitable organisations and not for profit organisations, will be eligible to apply to the CJRS. Employers can contact HMRC for a grant to cover 80% of wages of employees who would otherwise have been laid off during the crisis. This will extend up to £2,500 per month per employee.

The CJRS will be backdated until 1st March 2020 and will be available for at least three months. The Government has confirmed that this period will be extended if required and that unlimited funding will be made available for the scheme. The Government has also advised that further details will be provided as to how to apply for CJRS, but have stated that the first grants will be paid within a matter of weeks and at the very latest before the end of April.

This will be a welcome relief for both employers and employees.

Business Rates and Grants

The Government has introduced a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year. In addition, grants of between £10,000 to £25,000 will be provided to retail, hospitality and leisure businesses operating from smaller premises (with a rateable value between £15,000 and £51,000). Any enquiries on eligibility for or provision of the reliefs should be directed to the applicable local authority.

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 (SBRR). 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.

You are eligible for SBRR if your property’s rateable value is less than £15,000 and your business only uses one property.

Extending Statutory Sick Pay

The Government has brought forward legislation to allow small and medium-sized businesses and employers to reclaim statutory sick pay (SSP). The refund will cover up to 2 weeks SSP per eligible employee who has been off work due to COVID 19. Employers with less than 250 employees will be eligible. Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note.

Time to pay tax

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. 

If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.

Separately, the Government has also confirmed:

  • the deferment of VAT for 3 months. The deferment will apply from 20 March 2020 until 30 June 2020. 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 deferred period. This will apply to all UK businesses and is an automatic offer with no applications required. VAT refunds and reclaims will be paid by the Government as normal;
  • for the self-employed, income tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021. This also and automatic offer with no applications required.


You will need to check your insurance to policy in order to establish that it covers both pandemics and government-ordered closure. Where your policy provides the appropriate cover, the Government has confirmed that their advice to avoid pubs, theatres etc is sufficient to make a claim.

Next Steps

This is a significant package of measures and given the evolving situation it is certainly recommended that businesses should consider how such assistance is relevant to their own circumstances. It is likely that the Government will announce further measures in the coming weeks and we will keep you appraised of this.  Please contact us if you have any questions or require further guidance in relation to any of the issues raised in this article on 0161 941 4000.

Business Support For SMEs Following the COVID 19 Pandemic

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