As the coronavirus continues to impact businesses with local and regional lockdowns, we have set up this FAQ page, which will be continually updated to support and guide you.
- How can I limit the financial impact?
- What support is available to businesses?
- What are the measures to protect UK high streets?
- What if I can't pay my tax bill on time?
- What if my accounts are due to be filed?
- What do we do if we can't hold our Annual General Meeting?
- What do the changes to the insolvency rules mean?
- What support is available to charities?
- What is happening with Brexit?
- What do the changes to the implementation of Making Tax Digital mean?
- Landlords and tenants - what are my rights?
- What should we be advising employees?
- Should I be weary of scam emails?
- How could Coronavirus impact my contractual rights?
- What precautions are Gerald Edelman taking?
It is difficult to say at this time what the full impact will be on businesses; however, we are advising clients to focus on items within their control and think about their 'cash'. Profit may take a hit, but you can control your overheads. Some items to think about:
- Insurance. Have you checked your insurance to see if it includes disruption for public health closures? On 17 March, it was confirmed that advice to avoid pubs, clubs and theatres is enough to make a claim if your business has insurance cover for pandemics and government-ordered closers. There is a concern that most businesses will not be covered by standard business insurance policies though so make sure you check your terms and conditions. For further advice on insurance and your rights, visit our article: Insurance for COVID-19.
- Business interruption insurance. Many insurers refused to cover for losses of revenue or profit, which businesses experienced because of Covid-19. The FCA v Arch and Others  EWHC 2448 (Comm) case changed this to make it a legal obligation. To see if you can now claim, read more here.
- Property. Can you get a break clause or rent-free period in your lease?
- Stock. If you hold stock, have you reviewed your orders and considered if you need less stock or need to order more now as a contingency for future shortages? Can you source your stock from elsewhere?
- Review contracts and cancellation clauses with your suppliers and customers.
To read more about the practical steps you can take to reduce the impact of the coronavirus, view our article: Top Ten Tips for Business Owners.
Coronavirus Job Retention Scheme - unlimited grants, covering 80% of an employee's salary, up to a total of £2,500 a month, will be available to help employers cover wages of their employees who they would otherwise have laid off during this crisis. The scheme has been extended until 30 September 2021. However, the current 80% government payment level will only be maintained until the end of June 2021. The government payment will then drop to 70% in July and 60% in August and September.
- Eligibility - you can claim for any employee you have furloughed because of the crisis, as long as they were on your PAYE payroll on or before 30 October 2020.
- How to apply - keep up to date on how to claim for the extended grant here.
Covid Corporate Financing Facility - this facility is available to larger firms through the Bank of England, where the Bank of England will buy short-term debt. This will help businesses who have been affected by short-term funding squeezes.
- Eligibility - all non-financial companies.
- How to apply - you will need to liaise with your bank to access the scheme. Or, you can visit the Bank of England page to see if you are eligible and for further details.
Coronavirus Business Interruption Loan Scheme - the scheme, delivered by the British Business Bank, supports small and medium sized businesses through loans of up to £5 million in value and for up to six years (no interest will be due for the first 12 months). To instil confidence for lenders, the government will guarantee them 80% of each loan.
- Eligibility - you can access the scheme if your business is UK based with a turnover of no more than £45 million per annum. You also need to meet the British Business Bank's eligibility criteria, which includes having a borrowing proposal which, were it not for COVID-19, would be considered viable by the lender.
- To apply for the scheme - the scheme is now available, view the list of lenders here.
Coronavirus Business Interruption Loan Scheme changes
A number of small businesses have been unable to access the CBILS due to historic losses on their balance sheet which automatically meant that they were classed as a ‘business in difficulty’. This is no longer the case and following EU changes in State Aid Law, the ‘undertaking in difficulty’ test has been updated by the British Business Bank in relation to the CBILS.
This change affects businesses with 50 or fewer employees and turnover and/or balances sheet less than £9 million. Should a business below these thresholds carry accumulated losses of more than half its share capital, they will not be considered to be an ‘undertaking in difficulty’ unless any of the following apply:
- is subject to collective insolvency procedure under national law
- or in receipt of rescue aid (which has not been repaid) or restructuring aid (and are still subject to a restructuring plan).
The amendment came into effect on 30 July 2020 meaning that even more businesses will now qualify for CBILS giving them a lifeline during these testing times. Read more here.
Coronavirus Large Business Interruption Loan Scheme. The scheme has been extended and now provides businesses with loans of up to £200 million. However, companies borrowing more than £50 million through the CLBILS will be asked to agree to not pay dividends and to exercise restraint on senior pay.
- Eligibility - you can access the scheme if your business is UK based with an annual turnover of above £45 million per annum. You also need to meet the British Business Bank's eligibility criteria, which includes having a borrowing proposal which, were it not for COVID-19, would be considered viable by the lender.
- How to apply - the scheme is now open and lenders are listed on the British Business Bank website.
Future Fund - for early stage businesses that are not eligible for existing coronavirus schemes. The scheme will provide government loans ranging from £125,000 to £5 million, subject to at least equal match funding from private investors.
- Eligibility - your business must be UK based and have raised at least £250,000 in equity investment from investors in the last five years. You must also be able to match the funding you claim for from third party investors.
- How to apply - the scheme is now open, visit the British Business Bank website to apply.
Small business bounce back loan - the scheme will give small businesses affected by the coronavirus access to loans of up to £50,000. The government will provide a 100% guarantee to the lender and the interest rate is set at 2.5%.
- Eligibility - Businesses must be UK based and have been negatively affected by the coronavirus.
- How to apply - the scheme is now open and the list of lenders can be viewed on the British Business Bank website.
New lockdown support measures - New one-off grants for closed retail, hospitality and leisure businesses have been announced.
- Eligibility - The amount will be determined by the business property’s rateable value as follows:
- £4,000 for businesses with a rateable value of £15,000 or under
- £6,000 for businesses with a rateable value between £15,000 and £51,000
- £9,000 for businesses with a rateable value of over £51,000
- How to apply - It is likely that applications for the new grants will need to be made to local councils - as was the case with the funding made available in November 2020. Businesses should therefore check with their local authority over the coming days as more information is made available.
Other support available:
- The Coronavirus Statutory Sick Pay Rebate Scheme (SSP). Businesses with fewer than 250 employees can recover SSP they have paid to employees affected by the coronavirus. The repayment will cover up to two weeks for employees that have been unable to work because: they have coronavirus symptoms, are self-isolating because someone they live with has symptoms or they have been told by their GP or the NHS to stay at home. Details on how to claim can be found here.
- Ban on evictions for commercial tenants. If you cannot pay your rent because of coronavirus, you will be protected from eviction until the end of 2020. Landlords and tenants are asked to have open dialogue and reach voluntary arrangements. Read more here.
- Small business grants. This support is available to businesses that pay little or no business rates. This will provide a one-off grant of £10,000 to businesses to help meet their ongoing business costs.
- Eligibility - Must be UK based and already receive the SBRR or RRR.
- To access the grant. This scheme is closed.
- Business rates support.
- Retail, leisure and hospitality sectors - rates suspended for one year (until 31 March 2021).
- Eligibility - Must be UK based. Properties to benefit include, shops, restaurants, cafes, drinking establishments, cinemas, live music venues, assembly and leisure, and hotels, guest and boarding and self-catering accommodation.
- To access the scheme - you do not need to do anything. It will automatically apply to your council tax bill.
- Retail, leisure and hospitality sectors - a cash grant of up to £25,000 will be available to businesses in this sector that operate from smaller premises, with a rateable value of over £15,000 and less than £51,000. Those with a rateable value under £15,000 will receive a grant of £10,000.
- Eligibility - Must be UK based.
- To access the scheme. Your local authority will write to you if you are eligible.
- Nursery businesses - these businesses will receive a business rates holiday for one year (until 31 March 2021).
- Eligibility - Must be UK based and the property must be occupied by providers on Ofsted’s Early Years Register and used primarily for Early Years Foundation Stage.
- To access the scheme - you do not need to do anything. It will automatically apply to your council tax bill.
- Retail, leisure and hospitality sectors - rates suspended for one year (until 31 March 2021).
- Compliance checks. HMRC is suspending VAT and Corporation tax checks. This applies to new cases and we believe, ongoing checks. With ongoing checks there is the option of continuing if desired. Checks are still likely to apply to large repayment returns and others that HMRC feel need reviewing. However, there has been no consistency in the messages from HMRC and the only thing we can be sure about is that there will be no visits from HMRC in the short-term. Although, with the current level of borrowing, we should expect that HMRC will ramp up compliance checks when we get back to normal.
- Local Authority Discretionary Grants Fund. The government has set up this fund for small and micro businesses that are outside of the scope of existing grants and loan schemes. The maximum grant is £25,000. Local authorities have the discretion regarding how to prioritise this finding.
- Eligibility - Must be based in England, have fewer than 50 employees, have fixed building costs (i.e. rent), have been trading on 11 March 2020 and adversely impacted by Covid-19. Additionally, you cannot apply if you are already claiming under another government grant scheme.
- To access the scheme - The scheme is now closed. You should have received your grant by 30 September 2020 if you were eligible.
The government has announced temporary measures to protect high street shops from aggressive rent collection and have asked them to pay what they can during the crisis. This includes:
- A temporary ban on the use of statutory demands and winding up orders where a company cannot pay their bills due to coronavirus;
- Preventing landlords using Commercial Rent Arrears Recovery unless they are owed 90 days of unpaid rent.
The government has also asked landlords and investors to work collaboratively with high street businesses unable to pay their bills, but have called tenants to pay rents where they can afford it.
If you are concerned about your cashflow and covering the tax you owe, then you should contact the ‘time to pay’ section at HMRC. The new helpline is operational and allows you to discuss, deferring payments, suspending debt collection proceedings or cancelling late payment penalties and (unusually) interest.
All businesses that pay tax to the UK government or have outstanding tax liabilities are eligible.
To access the scheme, call HMRC 's helpline. The helpline number is 0800 0159 559 - and is an addition to other HMRC phone contact numbers. The helpline is open from Monday to Friday 8am to 8pm, and Saturday 8am to 4pm (excluding bank holidays).
From 25 March 2020, companies have an additional three months to file their accounts with Companies House. This is to help companies avoid penalties during the coronavirus crisis. Companies will have to apply for the extension through an online system, which will take 15 minutes to complete. The government has said that companies citing issues around COVID-19 will be automatically and immediately granted an extension. However, this is not guaranteed, so we must stress that you need to apply before your deadline and give as much justifying information as possible.
In addition, companies issued with a late filing penalty due to the coronavirus will have appeals treated sympathetically.
Companies House has also announced that they have temporarily suspended the striking off process to prevent companies being dissolved due to late filings. This will give companies more time to update their records and avoid being struck off the register. Please also note that for companies applying for voluntary dissolution, their DS01 will be registered at Companies House and notice published in the Gazette but after that, no further action to dissolve the company will be taken.
More information on extending your deadline can be found here or speak to one of our relationship partners who will be able to advise.
Companies House has announced that there will be temporary increased flexibility where AGMs are concerned. If companies are required to hold AGMs by law, but can't do so because of the restrictions to movement, you may be able to hold these online or postpone the meeting. The government will be introducing legislation on the matter shortly.
To protect businesses from insolvency, the government has announced measures to change and relax their rules.
Currently, the insolvency rules stipulate that directors are personally liable for business debts if they trade when uncertain about whether their business can continue to meet their debts. Relaxation of these rules mean directors can continue to trade and not have to think now, during these exceptional circumstances about the future of their business.
The changes include:
- New restructuring tools, including:
- Extra time with creditors that are enforcing debts whilst directors seek a rescue or restructure;
- Protection of supplies to allow businesses to continue trading;
- A new restructuring plan, binding creditors to that plan
- Temporarily suspension of the wrongful trading provisions to allow directors to continue to trade, without the threat of personal liability should the company fall into insolvency
The proposals will include safeguards for creditors and suppliers to ensure they are paid while a solution is sought.
On 8 April 2020, the Government announced a £750 million package for charities supporting vulnerable people and providing frontline work.
- £370 million will support small, local charities working with vulnerable people. The funds will be provided through organisations, such as the National Lottery Communities Fund in England.
- £60 million will be allocated to Wales, Scotland and Northern Ireland, accessible through the Barnett formula.
- UK government will provide £360 million directly to charities providing essential services and supporting vulnerable people.
- Up to £200 million of this will go to hospices
- The remaining amount will be allocated to organisations such as St John’s ambulance, the Citizens Advice Bureau, victims of domestic abuse or disabled people.
- Charities will also qualify for 100% rate relief as well as the Job retention scheme.
In response to the current COVID-19 situation, HMRC has formally deferred the implementation of the second phase of MTD (“digital links” requirement). All businesses now have until their first VAT return period starting on or after 1 April 2021 to fully comply with MTD requirements and implement digital links. HMRC realises that businesses are juggling MTD compliance with a number of competing priorities, not least the impact of COVID-19.
Please note that the requirements (and timings) to submit VAT returns digitally and to maintain digital records have remained unchanged. For further information please speak to your usual contact or email VAT@geraldedelman.com
The government has announced a range of measures to protect landlords and tenants. These include:
- Legislation to suspend new evictions from social or private rented accommodation
- No new possession proceedings through applications to the court to start during the crisis
- Those on Help to Buy equity loans will be offered interest payment holidays
- The government urges landlords to show compassion and allow tenants to stay in their homes where possible
- Landlords will be protected as the three-month mortgage payment holiday is extended to Buy to Let mortgages. Once the current situation has passed, the government also expect landlords and tenants to work together to discuss repayment plans
- We recommend tenants and landlords review their insurance policies to identify potential cover for business interruption or loss of rent that might be responsive to the coronavirus outbreak.
Employers have a duty under health and safety legislation to take steps to ensure the health, safety and welfare of all their employees.
The latest advice is:
- Anyone showing symptoms (fever or persistent cough) should self-isolate for seven days if they live alone or 14 days if they live with others. Anyone who lives with someone displaying coronavirus symptoms should also stay at home for 14 days. An employee who has self-isolated because they are demonstrating symptoms of COVID-19 will be entitled to Statutory Sick Pay (SSP) and whatever additional sick pay is payable under their contract of employment.
- People should stop non-essential contact with others. This is particularly important for people over 70, those with underlying health conditions and pregnant women.
- Where possible, people should work from home.
- People should stop all unnecessary travel.
With these in mind, it is recommended that you take the necessary steps to keep your employees informed and ensure they are taking responsibility for theirs and their colleagues' health. Government guidance for employers can be viewed here.
If you or any of your employees are concerned that they have coronavirus, it is advised to ask them to stay at home and get advice from NHS 111. Following the advice given, it will guide what the employee and employer need to do.
For those that need to test for coronavirus or self-isolate, the government is supporting businesses with sick pay.
Some people have reportedly received text messages or emails claiming to be from HMRC and offering a tax refund/rebate. Whilst such scams have been around for a while they are likely to become increasingly prevalent under the current conditions with ‘promises of refunds to help you through financial difficulties’ being the hook to initiate the procurement of personal information. We advise you to be weary of any emails and make sure you verify who sent the email or text.
In light of these changing circumstances, many events will need to be cancelled. With pre-paid deposits and cancellation policies, cancellations can incur large, unprecedented costs. If you have a contract which is affected by Coronavirus, you may still be liable to pay for cancellation fees, even if government mandates are the cause of a cancellation.
As the situation evolves, we are carefully monitoring the ongoing developments related to COVID-19.
Our priority is the health and well-being of our people and our clients, whilst ensuring we are able to continue to deliver our services to you.
As a proactive measure to ensure our business continuity, we are currently operating at normal levels but have implemented remote working our employees. We have the technology and training to allow us to operate remotely and therefore are confident that this will not interfere with our service to you. You can be rest assured that we will continue to be contactable via the normal channels.
If you already have meetings with any of our employees in the coming weeks, our team will be in touch to discuss how best to proceed. We ask that if you have been travelling recently or are showing any flu-like symptoms (fever, coughing), that you let us know before arranging any future meetings. We can then agree if the meeting can take place in our office or over the telephone.
We will continue to monitor the situation closely and will provide you with updates as appropriate.
If you have any concerns or would like advice, please contact your relationship partner or me at firstname.lastname@example.org.