COVID-19: An Overview of the relief schemes available

Adam Pritchard

By Adam Pritchard
March 23, 2020

At Linford Grey, we’ve been keeping on top of the latest Covid-19 relief schemes available to businesses due to the Coronavirus.

Here’s what’s new as of Monday 23 March:

1. The job retention scheme

This is possibly the most significant intervention that the government has made to prop up businesses and the economy whilst simultaneously bringing everything to a halt.

This scheme offers employers a contribution towards the wages and salaries of payroll workers who are kept on but would have otherwise been laid off as a result of the pandemic and subsequent government restrictions.

The relief will be equal to 80% of the employee’s salary up to a maximum £2,500 per employee.

All UK businesses are eligible and to access the scheme you must:

  • Designate affected employees as ‘furloughed workers’.
  • Submit information to HMRC about the ‘furloughed workers’ and their earnings via a new but currently non existing HMRC portal.
  • HMRC are working on a portal that will manage the reimbursement process.
  • This relief and its mechanisms are currently forecast to be available at the end of April with the capacity to claim retroactively from 1st March 2020.

2. VAT Deferral

  • The VAT deferral will apply from the 20th March to 30th June 2020.
  • This is an automatic offer with no applications required and is designed to improve cash flow in small business.
  • Tax payers will be given until the end of the financial year 2020/21 to settle any liabilities incurred during the deferral period.
  • Importantly VAT refunds will be paid as normal.

3. Income Tax

  • Any interim income tax payments payable on 31 July 2020 will be deferred until 31 Jan 2021.
  • This is an automatic offer, no applications are required and no interest or penalties will be charged in the default period.

The support we knew about recapped:

1. Employers Paying sick pay

  • Small and medium-sized employers with fewer than 250 employees will be able to reclaim up to 2 weeks of statutory sick pay (SSP) where the absence is a result of the COVID-19 pandemic.
  • Employers should keep a record of absences, a fit note will not be required but if employers do require evidence, those with symptoms can get an isolation note from NHS111 online.
  • A rebate scheme is being developed and HMRC will provide further information when unavailable.


2. Business Rates Holiday for retail, hospitality and leisure businesses

  • This relief will apply for the 2020/21 tax year.
  • It will be automatic, no application is required.
  • It will be applied to your next council tax bill in April 2020.
  • The local council may have to reissue your bill but they will do so as soon as possible.

The properties that will benefit are inclusive of but not limited to:

  • Occupied property wholly or mainly being used as:
    • Shops
    • Restaurants / Café / Drinking establishments
    • Cinemas
    • Music venues
    • Hotels

3. Cash grants for retail, hospitality and leisure businesses

The ‘Retail and Hospitality Grant Scheme’ provides businesses in this sector with a cash grant of up to £25,000 per property.

For businesses in this sector with a rateable value of between £15,001 to £51,000 they will receive a grant of £25,000.

For businesses in this sector with a rateable value of under £15,000 they will receive a grant of £10,000.

You do not need to apply for this scheme your local authority will contact you if you are eligible for this grant.

4. Support for businesses who pay little to no business rates

The government will provide additional grant scheme funding for local authorities to support small businesses that already qualify for small business rate relief or rural rate relief. The grant will be a grant of £10,000.

You do not need to apply for this scheme your local authority will contact you if you are eligible for this grant.

5. The Business Interruption Loan Scheme:

  • This loan is a government-backed business loan for small and medium-sized businesses that turnover less than £45 million.
  • The loan will be interest-free for the first 12 months and funds of up to £5 million can be borrowed, subject to eligibility criteria.

You are eligible for the scheme if:

  • You are a UK-based business.
  • You turnover less than £45million.
  • You meet the British banking eligibility criteria.

The British banking eligibility criteria:

  • You are a UK-based business.
  • You turnover less than £45million.
  • Operate in an eligible sector.
  • Confirm that you have not received de minimis state aid of more than 200,000 euros over the current and previous 2 fiscal years.
  • Be unable to meet a normal lender’s requirement for a commercial loan but would be considered viable in the longer term.

How to access the scheme:

  • The scheme opens the week commencing 23rd March.
  • There are 40 accredited providers of the loan.
  • You should talk to your bank or finance provider – not the British Bank.

The CBIL scheme provides a number of finance options including:

  • Term loans
  • Overdrafts
  • Invoice finance facilities
  • Asset Finance Facilities

There are a number of excluded or restricted sectors and that list can be found here:

Ineligible and Restricted Eligibility Sector 2017.pdf

In Summary:

Many of these reliefs are being made available through local councils and you will be relying on their systems and processes to make sure you get the reliefs and grants you are entitled to.

Do not leave it in their hands. Make your voice heard, stay informed and apply gentle but consistent pressure making sure you’re checking in with the council and on their radar.

There is no guarantee that you will receive a loan on favourable terms under the CBIL scheme even if your business has been affected by the COVID-19 pandemic.

The conditions surrounding whether you could qualify for a commercial loan may exclude you from qualifying for a government-backed loan at 0% interest for the first 12 months and I imagine this will be the rub for a lot of people in need of cash. Keep an open mind and make no assumptions.

We will help you in any we can.

Contact us today.