Coronavirus: Help for small businesses

We know these are incredibly uncertain times for small businesses. First we had Brexit to contend with, now we have the Coronavirus outbreak forcing small businesses to close and even cut jobs to stay afloat.

We wanted to give you an update on the latest news and advice.

Yesterday, the Chancellor announced a huge package of support specifically for small businesses to help them get through.

First was a £330 billion – yes billion – fund made up of government-backed and guaranteed loans only for small businesses affected by Coronavirus. The Chancellor said these loans would be available to any business struggling to pay rent or salaries, or purchase new stock.

He said the government would do “whatever it takes” to help small businesses right across the country and would increase that £330 billion fund is demand is greater.

Having already announced a 12 month ‘holiday’ from business rates for businesses with a rateable value of less than £51,000 in the Budget last week, Rishi Sunak said those businesses would also be able to access a £25,000 grant. And businesses in the hospitality industries will pay no business rates for 12 months no matter their rateable value.

So that’s the latest news for small businesses, but what about the latest advice?

The team at our partners Mazuma have put together the following advice (You can find the original blog here):

Speak to your mortgage company and ask to defer payments

Many mortgage companies are offering payment holidays for mortgages during this time. As your mortgage is often one of your largest outgoings, this is the first place to start when you look at preserving cash. 

Speak to your bank

Many banks are offering emergency loans to small businesses, loan repayments breaks, increased credit limits and waiving penalty charges if people need to access fixed savings early. Many credit card companies are also offering relief on payments for businesses and individuals.

Government support

The Department of Work and Pensions announced additional support for individuals, employees, self-employed and employers. Employers with fewer than 250 employees will be able to reclaim Statutory Sick Pay for employees unable to work because of coronavirus. This refund will be for up to 2 weeks per employee. If we do your payroll then we will handle this for you. 

There is full advice around the support the government has put in place for small businesses which covers rates, SSP and paying your tax bills. You can read the full advice here.

Support for businesses through the Coronavirus Business Interruption Loan Scheme

A new temporary loan scheme delivered by the British Business Bank will launch in a matter of weeks to support businesses to access bank lending and overdrafts. The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap) to give lenders further confidence in continuing to provide finances to SMEs. The government has pledged not to charge businesses or banks for this guarantee and the scheme will support loans of up to £1.2m in value.

Cash up front

Where possible see if you can take deposits for future bookings and work and make full use of your supplier credit terms. Companies like Morrisons have announced that they will be paying their small business suppliers immediately – see who you supply and if they can accelerate your payments.

Delay tax payments to HMRC

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.

If we are handling your accounts and tax affairs, we can let you know any potential future liabilities so that you can effectively budget for your cash flow in the future.

Support other small businesses

It’s really easy to cut payments to businesses during this time – your local takeaway, local shops and cafes, smaller suppliers or memberships and subscriptions to services from other businesses. Remember that if you want those businesses to survive after this, you need to support them through it. They have staff and bills to pay too – if you pay it forward by helping them then it will come full circle back to you. 

Our hope is that the advice we have supplied here will allow you to seek emergency support from government and banks before you need to look inside the small business community. 

Don’t fall behind on your admin

If you need to report to an external body for your business, make sure you keep on top of it. It’s easy to let things like that slide when times get tough and you’re focused on surviving, but organisations like HMRC and Companies House still expect you to file things on time. Save yourself an extra headache amongst everything else and make the time to get your admin sorted.

Keep in touch with your accountant, HR advisor, IT support company etc. These are professionals who will go above and beyond to help your business succeed – use their expertise in times of crisis, you may be surprised how much they can put your mind at ease and provide practical advice for you.

Talk to us

We’re here to help you through this tricky time. If you need clarity on your financial situation, potential liabilities or advice on how to make it work, then pick up the phone or drop us an email. 

For us, it is business as usual – we’re constantly in touch with HMRC and our clients to make sure that everything is filed on time and without penalty – the last thing anyone needs right now is HMRC to send a scary letter!

We have clients to support, taxes to file and bills to pay. Our team will do all that they can to not let you down at this difficult time for us all.

We will keep updating this page as more information becomes available.