Covid-19 Updates: All About Government Support & Guidance
Estimated reading time: 20 minutes
All information in this article is up to date as of 03rd March, 2021. For more Covid-19 updated, follow our blog.
Covid-19 pandemic hit the world amidst the New Year celebrations, as 2019 was ending with 2020 at the horizon, claiming the first human life in January of the said year. Human consciousness was jolted out of its deep slumber as the toll on human life rose (2.4 million dead so far) and the economic fallout surged to unprecedented levels (world economy shrunk by 3.5%). The economic recession that resulted from the enforced lockdowns worldwide is argued to be even bigger than the recession that ensued the Great Depression of 1929. Countries and administrations all around the globe scrambled to counter the unseen situation brought to play by the pandemic,i.e. securing human health amid falling economies.
According to the estimates rolled out by IMF’s World Economic Outlook (Jan 2021), the UK’s economy shrunk by 10% in 2020 and is forecasted to grow by 4.5% in 2021. The UK government has launched a number of measures to neutralise the impacts of Covid-19 on businesses and the economy in general. The specialists within our Accounting Firm have organised all the information in one place to keep businesses updated about the grants offered by the UK government.
Government Funding and Support
In the UK, the government has announced a number of measures to counter the financial constraints and cash flow issues faced by local businesses. Apart from financial aid, the government is actively dispatching guidance on workplace safety measures and testing facilities. Following are the government’s financial support schemes.
Coronavirus Job Retention Scheme
As coronavirus unravelled, its ripples were felt by many businesses, leading them to take drastic cost-cutting measures and implement employee redundancies, to stay afloat. The government introduced a scheme in which businesses battered by the pandemic can claim 80% salary of a furloughed employee to a maximum of £2500/month.
An employer can claim for employees who were employed on 30 Oct 2020, and the employer has submitted PAYE RTI to HMRC (starting from 20 Mar 2020 to 30 Oct 2020) on their earnings. This scheme also allows employers to reverse any redundancies made after 23 Sept 2020 and put them on furlough to claim the amount allowed.
Employers can furlough employees for any amount of time until 30 Sept, 2021, the date when the scheme will expire. Business entities, charities, recruitment agencies and public authorities are eligible to apply if they had:
- a PAYE payroll scheme in place on or before 30 Oct 2020
- enrolled for PAYE online
- a UK bank account, Isle of Man or Channel Island bank account
Statutory Sick Pay Rebate Scheme
Statutory Sick Pay (SSP) is the minimum amount, £95.85/week,an employer is bound to pay, for 28 weeks, to an employee who is too sick/ill to work. As the virus’s transmission is rampant, employees who get affected are allowed to take day-offs while being covered by the SSP. The government has introduced a scheme under which an employer can reclaim two weeks worth of the SSP outflow resulting from a corona affected employee; the scheme has no termination date as of now.
This came as a sigh of relief for businesses that are already finding it hard to keep their workforce intact amid the coronavirus pandemic, thus laying them off. All types of contractual and permanent employees are allowed as per the rebate scheme while the employers can utilise the scheme only if:
- The employer has already paid the SSP.
- The employee meets the criteria of sick pay due to coronavirus.
- The employer has a PAYE payroll scheme in place from or before 28 Feb, 2020.
- The employer has less than 250 employees as per all PAYE payroll schemes.
VAT Deferral New Payment Scheme
The government introduced a scheme for deferred VAT payments between 20th Mar to 30th Jun, 2020. Initially, the government gave the facility to defer VAT payments related to the aforementioned period but citing the prolonged crisis and the second wave of Covid-19, the government has introduced a new scheme that allows the payee to pay his tax liability through interest-free instalments, the number of which can vary from 2 to 11 depending on the month one gets registered. The scheme can be joined online from 23 Feb to 21 Jun, 2021.
To join the scheme, one must:
- have a Government Gateway account.
- submit any outstanding VAT returns for the past four years.
- make sure that his/her VAT returns are correct.
- join the scheme without assistance from his/her agent.
- have deferred VAT to pay.
- join by 21 Jun 2021.
- pay the first instalment upon joining.
- pay instalments by direct debit.
Self Assessment Payment Deferral
The government has allowed Self Assessment taxpayers to defer the July 2020 ‘Payment on Account’ until Jan 2021. The government has further facilitated the payment by allowing a Time to Pay (TTP) arrangement, breaking the payment down into instalments.
The scheme was for the 2nd payment on account, i.e. for July 2020 and has already been availed.
Business Rates Discount
According to the business rates relief scheme, certain designated businesses such as retail, hospitality and leisure will not be liable to pay business rates for the tax year 2020-21. There is no specific process to apply; the relevant local council authority will apply the discounts automatically after ascertaining whether a business meets the criteria i-e to be based in England and associated with the retail, hospitality or leisure sector.
This relief is also extended to nurseries in England, provided the business is registered on Ofsted’s Early Years Register and provides education for children up to 5 years old.
Self Employed Income Support Scheme (SEISS)
The government has launched SEISS to extend relief to the self-employed and partners in a partnership. The grant intends to substitute the loss of profits/income due to Covid-19 triggered circumstances limiting businesses to operate freely. The last of the three grants issued under the SEISS was 80% of the average monthly profit of the applicant’s business, paid out in a single instalment and was meant to substitute three months worth of profits.
The grant will not be a liability for the recipient but will be subjected to income tax and self-employed National Insurance as it replenishes lost profits. The grant should also be accounted for on the Self Assessment tax return 2020-21. In order to claim the third grant (now closed, as 29 Jan, 2020 was the last date) applicants had to be self-employed or a partnership member with a history of trading in both the tax years of 2018-19 (with submitted Self Assessment tax return on or before 23 Apr, 2020) and 2019-20.
The applicant’s viability also subjected to his/her trading status, i.e. the applicant should either be trading with trade affected due to the pandemic or was trading and unable to continue due to the pandemic. The applicant should intend to continue trading and be aware that prevailing conditions will affect profits adversely.
The third grant had a cap of £7500 while the fourth grant will be worth 80% of average trading profits of three months. The grant will cover the period from February 2021 to April 2021, further details are yet to be announced, however, self-employed individuals who have already filed their tax returns for the year 2019-20 will be eligible for the grant.
Corona Business Interruption Loan Scheme (CBILS)
SMEs account for 90% of the global businesses and almost 50% of the global employment. It will not be an exaggeration to designate them as tiny engines driving a major chunk of the global economy. Their size is not proportional to their importance worldwide, so is the case with the toll that they’ve taken at the hands of coronavirus. Most of the SMEs don’t have vertical economic integration, excessive cashflow or the required political clout to influence policies and these vulnerabilities were at a spotlight display as the pandemic struck the economies worldwide.
The UK government has introduced BILS in a bid to support the SMEs through the prevalent crisis and to catalyse their recovery. The scheme helps SMEs with loans, overdrafts, asset finance and invoice finance of amounts as significant as £5 million. The government will finance 80% of the lending amount along with the interest and any fee relevant to the first 12 months of the loan period. The scheme will remain open until 31 Mar 2021.
Businesses based in the UK with an annual turnover of £45 million, along with supporting evidence confirming that the entity was a going concern prior to the pandemic and that the pandemic has affected its operations adversely, were eligible to apply. Moreover, if the amount claimed exceeds £30,000, the applicant was liable to prove that the business has not been facing difficulties as of 31 Dec 2019.
The facility’s term will be ascertained by its nature, i.e. up to 3 years in case of overdrafts or invoice finance facility and up to 6 years in case of loans or asset finance facility. The applications are to be made through the lenders, i.e. 118 in total, including most of the UK’s main banks.
All entities can apply except banks, insurers and reinsurers; public-sector bodies and state-funded primary and secondary schools.
Bounce Back Loan Scheme (BBLS)
BBLS is also a support scheme by the government to uplift the SMEs struggling with cash flow issues because of Covid-19. The business can borrow between £2000 to 25% of its turnover with a borrowing limit of £50,000. The loan is backed by a 100% government guarantee with no interest or fee payable within the first 12 months with a subsequent interest rate of 2.5% a year. The deadline for submitting applications was again 31 Mar, 2021. BBLS allows multiple loans to a particular business until the allowed limit is reached but the deadline for all the arrangements is 31 Mar, 2021.
All UK based businesses established before 1 Mar, 2020, who have been adversely affected by the pandemic are eligible to apply under BBLS. The term of the loan will be six years, with the first repayment due after 12 months. The loan term can be discussed with the lender and can be extended to 10 years, and repayments can be paused for the first six months (a one time option) citing financial difficulties, or they can be only interest-based for a period of 6 months (option can be used thrice).
Coronavirus Large Business Interruption Loan Scheme (CLBILS)
The nature of the damage inflicted by Covid-19 is universal; its reach went global in a very short span of time without any discrimination between the developed and the underdeveloped, forcing everyone into lockdowns irrespective of their social status. Economies all across the globe jolted, with ripples being felt everywhere as the supply chains disrupted. Some of the industries were shattered entirely irrespective of their magnitudes, such as the tourism and hospitality industry and the airline industry.
The government of the UK introduced the CLBILS scheme to support its medium and large size businesses. Businesses will be helped through the provision of borrowing facility (80% of amount backed by sovereign guarantee), term based on three months to three years, up to 25% of their annual turnover with a maximum limit of £200 million. The applications to the scheme were open till 31 Mar,2020.
UK based businesses, having an annual turnover exceeding £45 million, are eligible to apply for the facility if they haven’t received support under the COVID-19 Corporate Finance Facility (CCFF). Supporting evidence should prove that the business is viable, is affected by the pandemic, and, if supported by the facility, can steer out of any short or medium-term difficulty resulting from the pandemic. Borrowing more than £50 million will accompany restrictions regarding dividend payments, senior pay, and share buyback during the loan period.
Businesses can claim relief through the 27 designated lenders, including some of the main banks and the nature of the facility approved depends on the lender. In case a lender rejects an application, the applicant retains the right to apply again through another lender.
All entities could apply except banks, insurers and reinsurers; public-sector bodies and state-funded primary and secondary schools.
COVID-19 Corporate Finance Facility (CCFF)
CCFF is a scheme that helps large businesses, ease strains on their cash flow, who make significant contributions to the UK economy. Under the scheme, the Bank of England will buy short-term debts of businesses facing cash flow difficulties, thus relieving them of their short term obligations. The scheme’s primary focus is to ease the credit facilities throughout the corporate finance markets. The scheme is expected to run for at least 12 months and can be extended till the material contributor entities of the UK economy, the entities eligible to apply for relief under CCFF, get out of the cash flow constraints.
The applicants can take help from the Bank of England’s website to submit their applications.
Additional Governmental Support
Apart from the financial support, the UK government has also laid out a number of services for businesses, employees, and self-employed people affected by the Covid-19 dictated environment. Following are the additional supports available:
Business Support Helpline
The government has launched helplines to support businesses across the country. Following are the regions and their respective helplines that can be accessed for free advice:
Businesses based in England can call at 0800 998 1098, stays operational from Monday to Friday, 9 am to 6 pm, to talk to a business advisor. Apart from the helpline, a ‘local growth hub’ has been launched, which dot England’s map at 38 different locations. Growth Hubs operate as public-private partnerships, i.e. Local Enterprise Partnerships (LEPs), which link the local and national business support creating a synergy in helping businesses. Businesses can also access the helpline via webchat, Facebook, Twitter and YouTube.
Businesses based out of Scotland can get help through phone,0300 303 0660, or text,0800 023 2071, from Monday to Friday, 8:30 am to 5:30 pm. Apart from this, the government uses a website, FindBusinessSupport.gov.scot, to provide support and guidance to businesses by connecting them to the relevant agencies.
Businesses operating out of Wales can get help through Business Wales Helpline,0300 060 3000, which stays operational from Monday to Friday, 8:30 am to 5:30 pm. Help from the government can also be accessed online using BusinessWales.gov.wales.
The government of Northern Ireland is helping out businesses through a helpline, i.e. Invest Northern Ireland helpline, 0800 181 4422, operational from Monday to Friday, 8:30 am to 5 pm. Businesses can also access help through a designated website NIBusinessinfo.co.uk.
Coronavirus pandemic has resulted in lost livelihoods and incomes, causing distress among all spheres of life. This has resulted in people facing difficulties in paying their taxes; HMRC has launched a helpline,0800 0159 559, along with online support for people who have been affected by the pandemic.
Businesses and self-employed people who pay their taxes to the UK government and have outstanding tax liability can apply for relief. HMRC will solve issues from case to case, providing tailored solutions to applicants breaking their liabilities down to instalments. The most effective way to reach out to HMRC is online since fewer people are available on-premises to answer phone calls amidst pandemic.
The Pandemic has taken a toll on human life, forcing lockdowns across the globe, including the UK. Prime Minister Borris Johnson, while addressing the nation on 23 Mar 2020, when the UK imposed its first nationwide lockdown, used the term ‘silent killer’ to describe the threat Covid-19 posed to human life. The lockdowns have rooted out the chances of human interaction, corporate meetings or face to face contact with authorities. This has created room for webinars and webchats, shifting the interaction online.
The UK government is also using webinars to disseminate advice, support, and guidance to businesses and individuals. Webinars are used across departments guiding businesses on making the workplace secure, retaining and supporting employees amid coronavirus and providing recorded videos to help small businesses and self-employed people with tax and regulation updates.
The Skills Toolkit
The pandemic has rendered a large workforce out of job with lockdowns limiting their potential to grow and learn new skills. To counter this, the UK government has launched the Skills Toolkit, which offers free courses in multiple subjects, practical maths, digital design and marketing, personal growth and well being, professional development, business and finance, computer science and coding, to help the jobless and general population learn new skill sets for better employment prospects.
Find a Job
The UK government has launched a ‘find a job service’, where businesses can post their vacancies to further facilitate the people who have lost jobs due to coronavirus. The government has also started the Kickstart scheme to tackle unemployment while supporting struggling businesses.
Support for Self-employed People & Sole Traders
Self-employed people can apply for relief in accordance with the Self-employment Income Support Scheme as explained earlier.
Self-employed people can also access Universal Credit,a monthly payment to help,if they’re unable to work or have income below a certain threshold. People living in the UK can apply for Universal Credit if:
- living with low income or out of work
- their age is 18 or over (except in some cases if it is 16 to 17)
- they’re under state pension age
- they,both, if couple,have savings less than £16,000
If someone is already getting help through the Self-employment Income Support Scheme, their Universal Credit relief may end or drop from the levels received previously. A monthly assessment,in which an applicant needs to submit details about any income they made from self-employment, any money paid into pension and information about their business,is carried out to gauge an applicant’s eligibility for the support.
Video: Covid-19 Government Support & Guidance
The spread of coronavirus triggered a health emergency worldwide; even the most robust healthcare systems touched exhaustion. The state resources were overstretched and so was the case with employers, who, on the one hand, encountered closure of their businesses and, on the other hand, paid employees from their depleting cash flows. The UK government provided a set of reliefs to employers, acting as a cushion between them and the hard blows of Covid-19.
Employers are provided with the facility to reclaim coronavirus related sick pay under the Statutory Sick Pay Rebate Scheme.
Coronavirus affected businesses with employees working from home can claim some expenses against their tax.
Training institutions, employers and end-point assessment organisations (EPAOs) should ensure that training should be done remotely where possible, citing the UK’s second coronavirus led lockdown. It is allowed to train and appraise employees on-premises,if necessary,where necessary safety measures have been in place.
Support Regarding Coronavirus Testing
Businesses can get in touch with the National Health Service (NHS) to get coronavirus rapid lateral flow antigen testing in place for their employees. This testing is done using lateral flow technology, which detects the proteins associated with the Covid-19 virus, i.e. antigens, to identify symptomless corona positive patients. The test concludes in 30 minutes, thus making it easy for the authorities to identify covid carriers.
Employees who have apparent symptoms should isolate themselves and book a normal Covid-19 test. Businesses based in England with more than 50 employees, who cannot work from home, are eligible to get listed for lateral flow testing. This service is exclusive only for employers based out of England.
A free of cost coronavirus test can be booked with the NHS if you have at least three symptoms, high temperature, continuous cough and have either lost your sense of smell or, if it’s changed, of Covid-19. Testing facilities are operational around the week; if it is impossible to visit a testing site, a home testing kit can be ordered.
Guidelines to Ensure Business Safety
Businesses can arrange for coronavirus rapid lateral flow testing for their workforce to track any non-symptomatic virus carriers.
England is going through a lockdown, but exceptions are in place for employees who cannot work from home. Special guides,14 in total, have been formulated to dispatch guidance to cover the diverse workforces operating in different market sectors.
Businesses should carry out regular Covid-19 risk assessments to take timely measures and curtail its transmission. This measure is advised in light of the government’s efforts to keep the workplace safe, thus operational. Employers must carefully assess which sort of work is more prone to be a transmission channel for the virus, which employees are more likely to catch the virus and how the risk can be minimised if the activity cannot be discarded altogether. According to the guidance provided by the government, employers should:
- ensure social distancing on-premises
- manage the workforce in shifts
- install additional handwashing facilities
The government has also provided guidance to keep the offices tidy to root out any traces of the virus from the premises.
The government has also made it binding on certain sectors to set up designated venues to record clients, visitors, and employees’ contact details. The venues must have a QR poster of the NHS on display which upon scanning, through the NHS Covid-19 app, will get their contact details listed. If a particular venue turns out to be a Covid-19 hot pocket, the NHS can track the visitors associated with it and send them an alert carrying appropriate health advice. The sectors which are covered under the scope of this guidance are hospitality (including pubs, bars, restaurants and cafes), tourism and leisure (hotels, museums, cinemas and amusement arcades), close contact services (hairdressers, barbershops and tailors), community centres, libraries and village halls.
National Lockdown Rules
The second wave of Covid-19 hit the country, forcing it into lockdown, UK’s second. The government has laid out a certain set of rules and regulations to be followed during the lockdown. The primary purpose of a lockdown is to keep the population safe and limit human to human contact to curtail the spread of coronavirus.
Leaving the premises of your home is not permitted, but some exceptions are allowed:
- You may leave home for needs-based shopping,either for you or someone prone to catch the virus.
- You may leave home for work if it can’t be done from home.
- To workout,allow yourself to be accompanied by someone from your kiln or support group and one other person,once a day, within your local area while ensuring that a gap of 2 meters is maintained between you and others.
- To meet your support bubble or childcare bubble, only if you can legally afford to constitute one.
- If you need medical attention and are suffering from illness or harm,domestic violence included.
- For educational or childcare purposes.
Leaving the safety cover of your home under exceptional circumstances still binds you not to go further than your local area, i.e. your village, town or burrow, except for work. If you have a history of medical illness or are suffering from a severe disease, you must only leave home to attend medical appointments.
Covid-19 has radically changed the world and how it works. It has fast-paced the digital revolution to the extent that might have taken decades to reach. Some industries have been shattered badly, such as the aviation industry, with many airliners expected to shut down indefinitely, while some industries have been hailed as winners, such as the tech industry. The pandemic has forced both countries and organisations to look for innovative ways to operate.
The UK is one of the worst affectees of the prevailing pandemic with an exhausted healthcare apparatus, over 100,000 deaths,and a contracted economy, shrunk by almost 10%.
These circumstances have given businesses a historic pounding; both the employers and the employees are struggling to make ends meet. In this crucial time, governments stepped in to mitigate the damage through financial aid and safety guidance. As the country is passing through the second wave of the coronavirus, the businesses that forecasted to get back on their feet in 2021 depend even more on governmental support to survive.
Anam has a degree in accounting from the Prestigious St John’s University, and works as a senior director in Clear House.
Before working in Clear House, Anam worked in various commercial roles, the last one being the VP Operations for a prestigious business organisation,working on improving the organisation’s operational efficiency, growth and high level client management.
Anam manages clients ranging from software companies to large property developers and managers. Notably, she recently worked with a large property development company building large scale developments in London and the surrounding area.