In 2019, “furlough” typically meant a leave of absence from the military. In 2020, Freddie or Francesca or just about anyone in any business can be furloughed at government expense. Fiscal prudence is out of the window and the government has smashed open it’s golden piggy bank to help save the UK economy. However, it might not be enough to prevent a 35% dip. Let’s run through some of the assistance available to employers and self-employed.
The Coronavirus Job Retention Scheme seeks to protect employees who would otherwise have been laid off during the lockdown, which is about to be extended for another 3 weeks. You can receive government grants worth up to 80% of your employee’s wage up to £2,500 per month plus employer’s NIC and pension contributions on this amount, if you designate the employee as “furloughed” for a minimum of three weeks. Your employee is not allowed to undertake any work during this period. You can choose whether to top up to the employee’s original full salary. You have to wait until the end of April 2020 for it to go live though. Similar support is available for the self-employed. UPDATE 20/4/20: THE SCHEME IS NOW LIVE.
The Coronavirus Business Interruption Loan Scheme will provide loans of up to £5m with no interest due for 12 months. These loans will be delivered through the British Business Bank. You will be eligible for this if you’re based in the UK, with turnover of no more than £45m per year and subject to certain other British Business Bank requirements. It’s already live, but it’s not proving that straightforward to get one.
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. The government will allow businesses to reclaim Statutory Sick Pay paid to employees absent due to Covid-19. Also, all businesses can defer VAT payments due between 20 March 2020 and 30 June 2020 at their request until 31 March 2021.
Further measures include:
- A 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England
- Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
- Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
If you need advice, contact me firstname.lastname@example.org or +44 (0) 20 7611 2338.