This is a summary of our understanding of the current support being proposed by the UK Government as things stand 21st March 2020. It is intended as a quick guide for UK based SME agencies only and does not constitute financial advice.
You should check the details yourself or via your accountant before acting upon any of the information listed below.
This article is intended to make sense of the current support and give UK agency owners a helping hand as they cope with the changing world around them.
The UK Government will cover 80% of the salary of furloughed workers (to a max of £2,500 per month) through the Coronavirus Job Retention Scheme. Currently, this will cover 1st March to 31st May (but may be extended). Employers can choose to top up the salary (or not). Furloughed means that staff have no work and are not working for you. They will effectively be on a temporary leave of absence (they are not sick or on annual leave). You will need to designate affected employees as “furloughed workers” and notify them of this change. You will then need to submit information to the HMRC (details coming next week). It appears that the payments will be reimbursements i.e. you will need to pay staff first and claim back from HMRC.
If you have an existing loan, contact your provider and enquire about a repayment holiday and/or the Coronavirus Business Interruption Loan Scheme. The scheme will be administered by the British Business Bank but provided by 40 accredited lenders. You may have a relationship with one of them already. Finance products such as term facilities, overdrafts, invoice financing and asset finance will be available. More details will be available next week.
Eligibility criteria will apply but it’s designed for UK SMEs who will be unable to meet a lender’s normal lending criteria for a commercial loan or other facilities (but whose agencies are considered viable in the longer term). These facilities will be debt and the borrower will remain 100% liable for the debt. The Government will guarantee 80% of each loan giving lender’s security to make quick decisions. The Government will also cover the first 12 months of interest payments so businesses will have lower initial repayments
Agencies in financial distress with outstanding tax liabilities or those that are unable to make their next payment may be eligible for the HMRC’s Time to Pay scheme. Call HMRC’s dedicated helpline 0800 0159 559.
Payments will be deferred for 3 months (covering 20th March until 30th June). No application is required. You will not need to make a VAT payment during this period.
Some agencies will have employment contracts offering more than SSP. If your agency only pays Statutory Sick Pay (£94.25 per week) this now comes into affect on day one of the employee not reporting for work due to COVID-19 (or choosing to self-isolate). The Government will refund up to 2 weeks SSP per eligible employee who has been off work due to COVID-19. Employers will need to pay the employee and reclaim from the Government.
Business Rates – If you are a small agency and already qualify for small business rate relief (SBBR), you may be entitled to a one-off grant of £10,000 to help you meet your ongoing costs.
If you are a small agency and already qualify for small business rate relief (SBBR), you may be entitled to a one-off grant of £10,000 to help you meet your ongoing costs.