SMEs - supporting you through lockdown and into recovery

  • 4th May 2020

We are now into week seven of the UK lockdown and we have had to adapt to remote working as have many other businesses. For some businesses however, this has not been an option. Many have seen business grind to a halt overnight.

With so much information out there in relation to funding and assistance, what are you actually entitled to as an SME? And more importantly, how easy is it to access and what future impact it will have on your business?

The Government website has released a handy tool that you can use to find out what support may be available to you.

Find coronavirus financial support for your business

So, now you know what you may be able to access, but how easy is it, and is it the right option for you?

Small Business Grant Scheme

Without a doubt, all businesses should be applying for the Small Business Grant if eligible.

On our Coronavirus support hub page, we have provided links to all our local authority pages where you can apply for this grant.

DON’T FORGET – this is a grant, you do not have to pay it back.

It is a very simple process, will take you about 5 minutes and then you can sit and wait for the funds to be deposited in your account.

From the experience of our clients who have applied for this, our local authorities are doing a fantastic job of processing these applications very quickly.

Apply now if you have not already. If you are not sure whether you are eligible, it will not hurt to apply. The local authority will assess your application and let you know if you’re not eligible.

Reports suggest that there are still significant numbers of eligible businesses who have not claimed their grant, so make sure you claim what you are entitled to.

Coronavirus Job Retention Scheme (JRS)

If you have had to furlough staff and met the relevant criteria, the JRS is now open for claims. Full details of the scheme, which was recently extended by another month to 30th June, are available on our Hub page. This support should help to alleviate any salary pressures in the short term.

What do I do next?

So, now you have applied for your grant and have sorted out payments of salaries for your furloughed staff. What is your next course of action?

There are a number of other support measures which have been announced but the key now is to work out your cash flow projections. How much money does your business need to survive in the short term, do you have that money, if not, can you access it and what do you need to be able to do so.

The importance of cashflow projections

Use our cashflow projection tool to work out how much money you need as a business owner to cover your commitments, and then how much you need in terms of incoming and outgoing funds to meet those commitments over the coming months and into recovery.

When considering your cash flow projections for the short term, you also need to consider the cost of recovery. This will be particularly relevant for any business that relies on perishable consumables or just in time deliveries. You may have a large up-front cost to get the materials or consumables needed for your business to re-start. You will need to factor this cost into your cashflow projections to ensure any funding not only addresses your business needs now, but also for the recovery.

Now you have your cashflow projections, the best advice is to talk to your accountant who will be able to advise you on any additional measures you may be able to take to either cut expenses, or defer some costs is needed. There can be implications further down the line for deferral of payments such as rent or mortgages so please do make sure this is a considered decision.

Other support measures

Other financial support measures that may assist include:

VAT Payment Deferral

  • All UK VAT registered business that have a VAT payment due between 20 March 2020 and 30 June 2020, now have the option to either defer the payment until a later date, or pay the VAT due as normal
  • If you choose to defer your VAT payment as a result of coronavirus, you must pay the VAT due on or before 31 March 2021 to avoid interest and penalties.

Statutory Sick Pay Relief

  • This refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
  • Employers with fewer than 250 employees will be eligible - the size of an employer will be determined by the number of people they employed as of 28 February 2020
  • Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19

Business Rates Discount for Retail, Hospitality and Leisure

  • Businesses that received the retail discount in the 2019 to 2020 tax year will be re-billed by their local authority as soon as possible.

Retail and Hospitality Grant Scheme

  • Businesses in retail and hospitality with a property that has a rateable value of up to £15,000 may be eligible for a grant of £10,000 however businesses in these sectors with a property that has a rateable value of over £15,000 and less than £51,000 may be eligible for a grant of £25,000 per property

Coronavirus Business Interruption Loan Scheme

  • Access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years. Under the scheme, Government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims)
  • Businesses can access the first 12 months of that finance interest free, as Government will cover the first 12 months of interest payments. Banks cannot ask for a personal guarantee for loans of under £250,000.
  • You must have a sound borrowing proposal – speak with your accountant to help with your proposal.

HMRC Time to Pay

  • 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 and liabilities.
  • If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.
  • Please note however that VAT deferral mentioned above and any 31st July 2020 self-assessment tax due can be deferred automatically, there is no need to apply. Please see our full guidance or contact us for more information.

Protection from eviction – commercial tenants

Please note: We would recommend that before you do anything, talk with your landlord and let them know if you are struggling. You may be able to come to a voluntary agreement between you. If this fails, revert back to your tenancy agreement and discuss with a commercial property solicitor to ensure you do not fall foul of any clauses within it. Your contract may apply penalties for non-payment of rent. Don’t forget, your landlord will also probably be suffering from the impact of Coronavirus so do try to come to an agreement that can work for you both in the first instance.

We appreciate for many businesses and business owners, this is an extremely fluid situation with no clear guidance on an exit strategy.

We are here for you.

If you need help to plan your cashflow, plan for recovery and ensure you have the right support in place, then call us for a no obligation initial discussion.

Any news or resources within this section should not be relied upon with regards to figures or data referred to as legislative and policy changes may have occurred.