Live page: Accounting advice during business disruption

2. Small businesses can access cash grants of up to £25k

A grant is funding which in most circumstances does not need to be paid back. The government is offering grants of up to £25,000 for those businesses which are most affected.

How much will I be eligible for?

The amount of grant funding you are eligible for will depend on which criteria you meet.

If you're based in England, are paying business rates on a property, are in the retail, leisure or hospitality sectors and operating from a small premises (with a rateable value between £15,001 and £51,000) you should receive a £25,000 cash grant per property.

If you meet the criteria above but your premises has a rateable value of less than £15k, you should receive a £10k cash grant.

What do I need to do?

You do not need to apply for this grant, if you are eligible you should have already been contacted directly by your local authority. If you not, but believe you qualify for this grant, please contact your local authority.

What if i'm not in the hospitality, leisure or retail sectors?

If your business occupies a property and is based in England but you pay little or no business rates because of SBRR, rural rate relief and tapered relief you may be eligible for a £10,000 grant, regardless of what sector you work in. This will be a one-off grant to help businesses meet their ongoing costs.

Is it available now?

The government is currently making the grant payments to eligible businesses.

3. Statutory sick pay refunds for small businesses

The government has announced it will refund any statutory sick pay (SSP) paid out as a result of the Coronavirus for all UK-based businesses who had fewer than 250 employees as of the 28th of February 2020.

This will cover 2 weeks sick pay for every eligible employee. The scheme will kick in the day after the SSP is extended to those who are self-isolating - which is expected to come into force within the coming weeks.

Sick notes (or evidence of any form) will not be required to claim the refunds, however the government is advising firms to keep records of any staff absence and payments of SSP.

The government has suggested they will "work with employers over the coming months to setup the repayment mechanism". This suggests that there maybe a delay before any payments will be made. Organisations should consider alternative finance options in the meantime, which may be able to be repaid with any grants or refunds further down the line, assuming no repayment fees.

4. Business rate holidays for retail, leisure and hospitality 

If you are based in England, and your business is in the retail, hospitality or leisure sector you may be eligible for a 12-month business rate holiday. This means you will not pay any business rates in the financial year 2020/2021 - which started on the 1st of April.

Is my business eligible?

Your property will need to be mainly or wholly used as one of the following; shops, restaurants, cafes, drinking establishments, cinemas, live music venues, hotels, guest & boarding premises, self-catering accommodation or any other property used for assembly and leisure.

What do I need to do?

You do not need to do anything to apply, it will automatically be applied to your April 2020 council tax bill. You can work out how much this will save you with this business rates calculator. If you've already been issued your rates bill, you should receive a reissued bill in the near future.

Please note that the government have issues a warning that venues listed above must remain closed or they risk being fined.

5. Spreading your liabilities (Time to Pay Scheme)

Through HMRC's time to pay scheme, if you pay tax to the UK government, you have always been able to apply to spread your VAT and corporation tax liabilities over a more manageable timeframe.

However, the government has now announced that all VAT payments will be deferred for 3 months - between the 20th March and 30th June. All UK-based business do not need to pay VAT in this time if they choose not to do so. Any liabilities accumulated during this time will need to be repaid by the end of the 2020/21 tax year.

What do I need to do?

You do not need to apply for this service, you should simply not pay your tax bill during this period if you do not want to, or are unable to. If you wish to take advantage of this but have an existing DD set up with HMRC to pay your liabilities, we recommend cancelling these otherwise HMRC will attempt to take payment as usual.

However, remember, this tax will need to be repaid by the end of the tax year. So if you are able to pay we highly suggest you do so to avoid further bills down the line.

• Vat deferral advice sheet

What if I'm self employed?

If you're self-employed you will not need to pay your July 31st income tax bill until the 31st of January 2021. There is no application criteria, if you are UK-based and self-employed you are eligible. 

No penalty charges or interest will be charged during the deferral period.

Universal Credit

The government has confirmed that self-employed individuals will be able to access the equivalent of Statutory Sick Pay through Universal Credit. From 6th April the requirements of the Minimum Income Floor will be temporarily relaxed. Applications can be made online via the Department for Work and Pensions.

Action required for late filing of accounts

Companies House have confirmed that if the coronavirus (COVID-19) has affected your company and you need more time to file your accounts, you should act before your filing deadline. If you do not apply for an extension and your accounts have been filed late, an automatic penalty will be imposed. To apply for extension, click here for more information.

For further advice you should call HMRC’s dedicated helpline: 0800 0159 559

6. Support for larger businesses

Through the COVID-19 Corporate Financing Facility the Bank of England will buy short-term debt from larger businesses, helping them through short-term funding squeezes.

The scheme is now live and available for all UK-based businesses. Further details will be added here once available.

7. Extension to filing deadlines

UK businesses registered at companies house can now apply for a 3 month extension to their filing deadline for statutory accounts. It is worth noting that this extension is not automatic, nor is it guaranteed, and you must make an application online through a fast-tracked online system before your filing deadline.

Companies citing COVID-19 related issues as the reason for extension will typically be automatically and immediately granted the extension. However, companies that have already extended their filing deadline, or shortened their accounting period may not be eligible for extension.

If you don't apply for the extension and your accounts are filed late, an automatic penalty will be imposed.

More information on how to apply for the extension is available here.

8. Coronavirus Self-employment Income Support Scheme (SEISS)

Last month, the government announced its Self-employment Income Support Scheme to support the self-employed during this crisis, with an expected launch date of early June. The portal to make your claim is now open.

For full details on the scheme so far, check out our separate blog here.

9. Back Bounce Loan Scheme (BBLS)

Late April, the government announced a new scheme to support businesses unable to access the CBILS scheme. The scheme offers small businesses loans of up to up to 25 per cent of a company’s turnover (up to £50,000), and are 100% backed by the government.

For full details on the scheme so far and how to apply for a loan, check out our separate blog here.

Alternative funding options

During this period of disruption it may be necessary to bring on alternative finance - either to smooth the period before government support is available, or to bolster this support.

1. Coronavirus Business Interruption Loan Scheme (CBILS) 

We've included the CBILS loan scheme here as, although it is supported by the government, loans will ultimately be provided by banks or alternative lenders, and should therefore be treated in the same way as any form of private finance.

The CBILS helps UK-based SME businesses (with <£45m turnover) access finance, which they would not normally be able to.

The borrower will remain 100% liable for loans through the CBILS, however the government will provide lenders a guarantee of up to 80% on loans up to £5 million. Lenders will not be charged for these guarantees.

Businesses can access the first 12-months of finance interest free as the government will pay any interest during this period. After this period, businesses will be liable to pay interest at the rate set by the lender - whether interest rates will vary between lenders, or whether they will be capped in any way is not yet clear.

The scheme is now live, and you can apply for loans from over 40 accredited providers, including all major UK banks. Funding Circle, one of the largest small business lenders has just been approved as a CBILS lender. If you have an existing loan with Funding Circle, contacts us, as you may be able to refinance your existing debt.

To apply you should first talk to your current bank, not the British Business Bank.

For more information about the scheme click here.

2. Business bank overdrafts

If you're looking for short term, immediate access to finance you may want to consider extending your business bank overdraft.

Overdrafts often come with higher fees than other forms of lending. However, banks have already pledged to extend support without increased fees - Natwest have offered a £5 billion fund and Lloyds a £2 billion fund.

Be aware though, overdrafts are often one of the first facilities removed by lenders, so this should be considered a temporary solution - until government support or further finance options become available.

3. Flexible facilities 

You can set up a short term facility, which in many ways is similar to an overdraft. The only considerable difference is that short term facilities are normally separate from your usual bank. As such, finance will need to be transferred between the two.

The main benefit of this option is that access to finance will be relatively quick, you will also only pay for what you use - providing a comfort blanket that will only cost you if you need it. Unlike loans, which you'll need to repay regardless of whether they are necessary.

Rates for short term facilities can be reasonable, however they should be considered a temporary, short-term solution as lower rate finance is available. 

4. Business credit cards

Access to finance via business credit cards can be very quick, and can often help fill short-term cash flow gaps. However, interest rates are often high, so credit cards should be considered a temporary solution, until lower rate finance or government support becomes available.

5. Invoice Finance

Invoice finance allows you to secure finance against the amounts you are due from customers. Like many of the finance options here, this can provide very quick access to finance - to help you pay staff, suppliers other business commitments etc.

As many businesses have large amounts due at any given time, this option can allow greater access to finance than credit cards or overdrafts. However, rates can sometimes be expensive, so consider this a short-term option until cheaper finance or government support becomes available.

6. Merchant Cash Advance

Merchant cash advances allow you to lend 100% to 150% of monthly takings. This is calculated based on how much is taken through your credit card terminal and has an 80% approval rate.

This makes it particularly relevant for businesses in the leisure, retail and hospitality industries as monthly takings are often high.

7. Alternative finance loans

Non-bank, or peer-to-peer lending became popular after the 2008 financial crisis, as businesses and individuals lost trust in banking institutions.

The loans may well become popular in the current situation too - finance is easier to access than through a bank and often have competitive rates

Stay safe, stay vigilant! - New HMRC scams emerging

Whilst we keep telling everyone to stay safe, we also want to emphasise the importance of staying safe online. Unfortunately, there are some people in the world who are trying to take advantage of vulnerable business owners during this period, and it appears that there are some new scams surfacing.

HM Revenue and Customs are warning people to remain vigilant and not fall foul to online scams during the coronavirus outbreak. HMRC have advised taxpayers to be on the lookout for emails claiming to be from the department, offering tax rebates. 

HMRC have posted this message on Twitter: 

"We are aware of emails claiming to be from HMRC offering tax rebates as a result of coronavirus. If you receive an email, text or call claiming to be from us that asks you to click on a link or to give information such as your name, credit card or bank details, it’s a scam.Anyone who is unsure as to whether they've received such an email, or anyone wanting to report a scam, should report it online at www.gov.uk/report-suspicious-emails-websites-phishing".