Update: The Local Authority Discretionary Grants Fund

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Guidance on how small businesses can apply for help from the Local Authority Discretionary Grants Fund has been issued by the Government.

The fund has been created to support small and micro businesses that are not eligible for other coronavirus grant schemes.

It plugs a loophole, which meant small businesses in shared office space missed out on a £10,000 cash grant, which is part of the government’s package of Covid-19 support measures.

The new additional fund is aimed at small businesses with ongoing fixed property-related costs.

The government has asked councils to prioritise small businesses in shared offices or other flexible workspaces, such as units in industrial parks or incubators.

Businesses with fixed property costs that are not eligible for the Small Business Grant Fund or the Retail, Hospitality and Leisure Grant Fund may be eligible.

Councils have discretion about how to prioritise the funding and businesses should check with their local authority for details of their scheme.

They should also visit their local council’s website to find out how to apply. https://www.gov.uk/find-local-council

Those that are eligible can get a grant of £25,000, £10,000 or any amount under £10,000.

Councils will run an application process and decide whether to offer a grant.

Businesses do not have to pay the grant back but it will be taxable. Only businesses which make an overall profit once grant income is included will be subject to tax.

You are potentially eligible if your business:

• is based in England
• has fewer than 50 employees
• has fixed building costs such as rent
• was trading on March 11, 2020
• has been adversely impacted by coronavirus

Other businesses on the government’s priority list include regular market traders, bed and breakfasts paying council tax instead of business rates.

Charity properties getting charitable business rates relief, which are not eligible for small business rates relief or rural rate relief, are also on the priority list.

You cannot apply if your business is in administration, insolvent or has received a striking-off notice.

And businesses are also ineligible if they are already claiming under another government grant scheme such as:

• Small Business Grant Fund
• Retail, Hospitality and Leisure Grant
• Fisheries Response Fund
• Domestic Seafood Supply Scheme
• Dairy Hardship Fund

However, they are still eligible if they’ve applied for the Coronavirus Job Retention Scheme or the Self-Employed Income Support Scheme. And businesses that apply for the discretionary grants scheme can still apply for coronavirus-related loans if they meet the criteria.

Payments of £10,000 or less count towards the total de minimis state aid allowed over a three-year period – €200,000. If you have reached that threshold, you may still be eligible for funding under the Covid-19 Temporary Framework.

Payments of £25,000 count as state aid under the Covid-19 Temporary Framework. The limit for the framework is €800,000.

Councils will ask businesses to complete a declaration confirming:

• They will not exceed the relevant state aid threshold
• They were not an ‘undertaking in difficulty’ on December 31 2019. This applies only to the Covid-19 Temporary Framework

Self-Employment Income Support (SEISS) is extended

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The government’s Self-Employment Income Support Scheme (SEISS) is being extended – with those eligible able to claim a second and final grant capped at £6,570.

Individuals will be able to claim the money in August. The grant will be worth 70 per cent of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total.

Individuals can continue to apply for the first SEISS grant until July 13 – so far there have been 2.3 million claims worth £6.8bn.

Under this first grant, eligible individuals can claim a taxable grant worth 80 per cent of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £7,500 in total.

Those eligible have the money paid into their bank account within six working days of completing a claim.

The eligibility criteria are the same for both grants, and individuals will need to confirm that their business has been adversely affected by coronavirus.

An individual does not need to have claimed the first grant to receive the second grant: for example, they may only have been adversely affected by Covid-19 in this later phase.

Further guidance on the second grant will be published on Friday June 12, Chancellor Rishi Sunak has announced.

The scheme was set up to benefit self-employed individuals or those in a partnership whose business has been adversely affected by coronavirus, covering most people who get at least half of their income from self-employment.

The extension has been widely welcomed. Mike Cherry, national chair of the Blackpool-headquartered Federation of Small Businesses (FSB), said: “Keeping the self-employed and those who work in a small business attached to the labour market is crucial to prevent scarring of the economy – the package gives certainty and support to millions.”

CJRS: Flexible furloughing

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Chancellor Rishi Sunak has outlined further details of the extension of the Coronavirus Job Retention Scheme (CJRS) and how it will work.

They include improved flexibility to bring furloughed employees back part time in July and a new taper requiring employers to contribute to furloughed salaries from August.

From July 1 businesses will be given the flexibility to bring furloughed employees back part-time.

Individual firms will decide the hours and shift patterns their employees will work on their return, so that they can decide on the best approach for them – and will be responsible for paying their wages while in work.

From August the level of government grant provided through the job retention scheme will be slowly tapered to reflect that people will be returning to work.

That means that for June and July the government will continue to pay 80 per cent of people’s salaries.

In the following months, businesses will be asked to contribute “a modest share”, but crucially individuals will continue to receive that 80 per cent of salary covering the time they are unable to work.

The scheme updates mean that the following will apply for the period people are furloughed:

• June and July: The government will pay 80 per cent of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything
• August: The government will pay 80 per cent of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions – for the average claim, this represents five per cent of the gross employment costs the employer would have incurred had the employee not been furloughed
• September: The government will pay 70 per cent of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10 per cent of wages to make up 80 per cent total, up to a cap of £2,500. For the average claim, this represents 14 per cent of the gross employment costs the employer would have incurred had the employee not been furloughed
• October: The government will pay 60 per cent of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20 per cent of wages to make up 80 per cent total up to a cap of £2,500. For the average claim, this represents 23 per cent of the gross employment costs the employer would have incurred had the employee not been furloughed

Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

Around 40 per cent of employers have not made a claim for employer NICs costs or employer pension contributions and so will be unaffected by the change in August if their employee’s employment patterns do not change.

Many smaller employers have some or all of their employer NIC bills covered by the Employment Allowance so will not be significantly impacted.

Around 25 per cent of CJRS monthly claims are below the thresholds where employer NICs and automatic enrolment pension contributions are due, and so no employer contribution would be expected for these payments to furloughed employees in August.

The government says that to enable the introduction of part time furloughing, and support those already furloughed back to work, claims from July onwards will be restricted to employers currently using the scheme and previously furloughed employees.

The scheme will close to new entrants on June 30, with the last three-week furloughs before that point commencing on June 10.

From July 1 employers will be able to agree any working arrangements with previously furloughed employees.

When claiming the CJRS grant for furloughed hours; employers will need to report and claim for a minimum period of a week, for grants to be calculated accurately across working patterns.

Announcing the changes, Mr Sunik said: “Our top priority has always been to support people, protect jobs and businesses through this crisis. The furlough and self-employment schemes have been a lifeline for millions of people and businesses.

“Now, as we begin to re-open our country and kickstart our economy, these schemes will adjust to ensure those who are able to work can do so, while remaining amongst the most generous in the world.”

Covid-19: Government issues back to work guidance

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The Government has published practical guidance for employers to help them get their businesses back up and running and their workplaces operating safely.

The guidance covers eight workplace settings which are allowed to be open, from outdoor environments and construction sites to factories and takeaways. https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19

Here are the five key points, which the government says should be implemented as soon as it is practical:

  1. Work from home, if you can

All reasonable steps should be taken by employers to help people work from home. But for those who cannot work from home and whose workplace has not been told to close, our message is clear: you should go to work. Staff should speak to their employer about when their workplace will open.

  1. Carry out a Covid-19 risk assessment, in consultation with workers or trade unions

This guidance operates within current health and safety employment and equalities legislation and employers will need to carry out Covid-19 risk assessments in consultation with their workers or trade unions, to establish what guidelines to put in place. If possible, employers should publish the results of their risk assessments on their website and the government expects all businesses with more than 50 employees to do so.

  1. Maintain two metres social distancing, wherever possible

Employers should re-design workspaces to maintain two metre distances between people by staggering start times, creating one-way walk-throughs, opening more entrances and exits, or changing seating layouts in break rooms.

  1. Where people cannot be two metres apart, manage transmission risk

Employers should look into putting barriers in shared spaces, creating workplace shift patterns or fixed teams minimising the number of people in contact with one another, or ensuring colleagues are facing away from each other.

  1. Reinforcing cleaning processes

Workplaces should be cleaned more frequently, paying close attention to high-contact objects like door handles and keyboards. Employers should provide handwashing facilities or hand sanitisers at entry and exit points.

The government has created a downloadable notice, which it says employers should display in their workplaces to show their employees, customers and other visitors to their workplace, that they have followed the guidance.

The guidance has been developed with input from firms, unions and industry bodies and in consultation with Public Health England (PHE) and the Health and Safety Executive (HSE), to develop best practice on the safest ways of working across the economy.

It applies to businesses that are currently open. It also includes guidance for shops which may be in a position to begin a phased reopening at the earliest from June 1.

The workplace settings the guidance covers are: construction and other outdoor work; factories, plants and warehouses; labs and research facilities; offices and contact centres; other people’s homes; restaurants offering takeaway or delivery services; shops and branches and vehicles.

Guidance for other sectors that are not currently open will be developed and published ahead of those establishments opening to give those businesses time to plan.

The government says it will also shortly set up taskforces to work with these sectors to develop safe ways for them to open at the earliest point at which it is safe to do so, as well as pilot re-openings to test businesses’ ability to adopt the guidelines.

Business Secretary Alok Sharma said: “These are practical steps to enable employers to identify risks that Covid-19 creates and to take pragmatic measures to mitigate them.

“And as we are able to reopen new sectors of the economy, we will continue our collaborative approach working with a wide range of stakeholders, to provide guidance for additional workplaces.”

Sarah Albon, HSE chief executive, said: “We have worked with BEIS to ensure businesses have access to the information they need to put in place measures to help them work safely. This will assist employers in carrying out risk assessments and putting practical measures in place.

“At the heart of the return to work is controlling the risk posed by the virus. Ensuring safe working practices are in place will help deliver a safe return to work and support businesses across the country.”

Furlough scheme will remain open until October

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The government’s Coronavirus Job Retention Scheme will remain open until the end of October, Chancellor Rishi Sunak has announced.

It means that furloughed workers will continue to receive 80 per cent of their current salary, up to £2,500 a month. (https://wnj.co.uk/job-retention/)

However, the Chancellor has also announced that the government will ask employers to start sharing the cost of the scheme from August.

And from the beginning of that month, furloughed workers will be able to return to work part-time – with employers being asked to pay a percentage towards their salaries.

Under the current scheme, which was launched in March in response to the coronavirus crisis, furloughed employees cannot work.

Thousands of businesses up and down the country have now furloughed members of staff.

More specific details and information around the implementation of the changes to the job retention scheme will be made available by the end of this month, the government has said.

Mr Sunak said: “Our Coronavirus Job Retention Scheme has protected millions of jobs and businesses across the UK during the outbreak – and I’ve been clear that I want to avoid a cliff edge and get people back to work in a measured way.

“This extension and the changes we are making to the scheme will give flexibility to businesses while protecting the livelihoods of the British people and our future economic prospects.”

New statistics have revealed the job retention scheme has protected 7.5 million workers and almost one million businesses.

Latest official figures also show businesses have benefitted from more than £14bn in loans and guarantees to support their cashflow during the crisis.

This includes 268,000 Bounce Back Loans worth £8.3bn, 36,000 loans worth over £6bn through the Coronavirus Business Interruption Loan Scheme and £359m through the Coronavirus Large Business Interruption Loan Scheme.

Mike Cherry, national chairman of the Blackpool-headquartered Federation of Small Businesses, has welcomed the extension to the Coronavirus Job Retention Scheme.

He said: “It is a lifeline which has been hugely beneficial in helping small employers keep their staff in work. Small employers have told us that part-time furloughing will help them recover from this crisis and it is welcome that new flexibility is announced.”

Covid-19: Taxman extends appeals deadline

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Taxpayers may be given an additional three months to appeal HMRC decisions or penalties if the usual 30-day deadline cannot be met because of the coronavirus crisis.

HMRC has announced it will accept delayed appeals against decisions or penalties dated as far back as February this year where the delay is down to the impact of Covid-19.

Businesses and individuals that have the right to appeal a decision are informed in writing and usually have 30 days to do so.

However, in new guidance, the taxman says: “If you or your business have been affected by coronavirus (COVID-19), HMRC will give you an extra three months to appeal any decision dated February 2020 or later. Send your appeal as soon as you can, and explain the delay is because of coronavirus.”

You must include:

• your name or business name
• your tax reference number (this will be on the decision letter)
• what you disagree with and why
• what you think the correct figures are and how you’ve calculated them
• your signature

You should also tell HMRC if you have any extra information or if you think it has missed something.

If you want to appeal a decision about ‘indirect tax’ – for example VAT, excise duty or customs duty – you can request a review by HMRC or appeal straight to the tax tribunal.

HMRC also says it will not object to taxpayers asking a tribunal to hear their appeal outside of the normal 30-day deadline where the decision is dated February 2020 or later – provided that the request to the tribunal is made within three months of the normal deadline.

The announcement comes after the Institute of Chartered Accountants in England and Wales (ICAEW) highlighted difficulties taxpayers were having in meeting the 30-day deadline during the crisis.

Support for small businesses in co-working spaces

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The Department for Business, Energy, Innovation & Skills (BEIS) has confirmed a new £617million scheme to support businesses in shared spaces, regular market traders and small charity properties.

The move plugs a loophole, which meant small businesses in shared office space missed out on a £10,000 cash grant, which is part of the government’s package of Covid-19 support measures.

The new additional fund is aimed at small businesses with ongoing fixed property-related costs.

Announcing the move, the government said: “A discretionary fund has been set up to accommodate certain small businesses previously outside the scope of the business grant funds scheme.”

The new money is an additional five per cent uplift to the £12.33bn funding previously announced for the Small Business Grants Fund (SBGF) and the Retail, Hospitality and Leisure Grants Fund (RHLGF).

The government says it is asking local authorities to prioritise businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for Small Business Rates Relief, and bed and breakfasts that pay council tax rather than business rates.

However, local authorities may choose to make payments to other businesses based on local economic need. The allocation of funding will be at the discretion of local authorities.

Businesses must be small, under 50 employees, and they must also be able to demonstrate that they have seen a significant drop of income as a result of coronavirus restriction measures.

There will be three levels of grant payments. The maximum will be £25,000. There will also be grants of £10,000. local authorities will have discretion to make payments of any amount under £10,000. The Treasury says it will be for councils to adapt this approach to local circumstances.

The move follows a campaign by small businesses, angry at missing out on the original support scheme. A petition was signed by almost 12,000 business owners.

The government says that further guidance for local authorities will be set out shortly.

Self-Employment Income Support Scheme (SEISS): an update

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HMRC has started to contact people who may be eligible for the government’s Self-Employment Income Support Scheme (SEISS) to explain the process and help them get ready to make a claim.

The claims service will open on Wednesday May 13, with payments reaching bank accounts by May 25, or six working days after the claim is made.

HMRC says the scheme will benefit self-employed individuals or those in a partnership whose business has been adversely affected by coronavirus, covering most people who get at least half of their income from self-employment.  

SEISS is a temporary scheme that will enable those eligible to claim a taxable grant worth 80 per cent of their average trading profits up to a maximum of £7,500 -equivalent to three months’ profits – in a single instalment.

HMRC is using information provided in 2018-19 tax returns – and returns for 2016-17 and 2017-18 where needed – to determine eligibility and is contacting those who may be eligible via email, SMS or letter.

It has also opened an online tool which will let people check their eligibility for themselves, as well as giving them a date on which they can apply.

To check if you are eligible visit: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

WNJ can’t process claims on behalf of our clients, they must calculate their claims themselves, but we can provide assistance if needed.

To check if you are eligible you will need your:
• Self Assessment Unique Taxpayer Reference (UTR) number
• National Insurance number

If eligible, you will need to register with HMRC and set up a Government Gateway Account ID and password (you are prompted to do both these after confirmation of eligibility).

Once registered, HMRC will confirm a both a date and time that clients can claim from.

People are eligible if their business has been adversely affected by coronavirus, they traded in 2019-20, intend to continue trading and they:   

• Earn at least half of their income through self-employment;
• Have trading profits of no more than £50,000 per year
• Traded in the tax year 2018 to 2019 and submitted their Self Assessment tax return on or before 23 April 2020 for that year.    

HMRC says it expects its phone lines to be very busy over the next few weeks as people enter this new scheme, so it is encouraging customers to only call if they can’t find what they need on GOV.UK, from their tax agent or via its webchat service.

If you are told you that you’re not eligible to make a claim, you can ask HMRC to review this after you’ve used the online tool. If you want to do this at a later time, you’ll be able to use the online tool more than once.

Bounce Back Loan scheme launches

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Small businesses will be able to apply for quick and easy-to access loans of up to £50,000 from today – with the cash expected to land within days.

Businesses will be able to borrow between £2,000 and £50,000. The loans will be 100 per cent government backed for lenders, and businesses can apply online through a short and simple form.

Thousands of small firms and sole traders – including hairdressers, coffee shops and florists – will be eligible for the loans, designed to help them make it through the coronavirus outbreak.

Business owners can apply to accredited lenders by filling out a simple online form, with just seven questions to answer.

The government has also agreed with lenders, who include the five largest banks, that an affordable flat rate of 2.5 per cent interest will be charged on these loans.

Any business that has already taken out a Coronavirus Business Interruption Loan of £50,000 or less can apply to have these switched over to the new scheme.

The full rules of the scheme and guidance on how to apply is available on the British Business Bank website. https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/

The Bounce Back Loan scheme is the latest step in a package of support measures launched by Chancellor Rishi Sunak.

You can apply for a loan if your business is based in the UK, has been negatively affected by coronavirus and was not an ‘undertaking in difficulty’ on December 31 2019.

You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS).

According to advice from the British Business Bank, (https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/for-businesses-and-advisors/) ideally should initially approach your own bank for a loan – but you don’t have to. And you can approach another lender if you are rejected by another

Your business must be able to self declare to the lender that it:

• has been impacted by the coronavirus (COVID-19) pandemic
• was not a business in difficulty at December 31 2019 (if it was, you must confirm your business complies with additional state aid restrictions under de minimis state aid rules)
• is engaged in trading or commercial activity in the UK and was established by 1 March 2020
• is not using the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS) or the Bank of England’s Covid Corporate Financing Facility Scheme (CCFF), unless the Bounce Back Loan will refinance the whole of the CBILS, CLBILS or CCFF facility
• is not in bankruptcy or liquidation or undergoing debt restructuring at the time it submits its application for finance
• derives more than 50 per cent of its income from its trading activity (this requirement does not apply to charities or further-education colleges)
• is not in a restricted sector

Bounce Back Loans are available to businesses in all sectors, except the following:

• Credit institutions (falling within the remit of the Bank Recovery and Resolution Directive)
• Insurance companies
• Public-sector organisations
• State-funded primary and secondary schools

Announcing the scheme Mr Sunak said: “Small businesses will play a key role creating jobs and securing economic growth as we recover from the coronavirus pandemic.

“The Bounce Back loan scheme will make sure they get the finance they need – helping them bounce back and protect jobs.”

Eligible companies will be subject to standard customer fraud, anti-money laundering (AML) and Know Your Customer (KYC) checks prior to any loan being made. Some State Aid restrictions may apply to applications. The borrower always remains 100 per cent liable for the debt.

‘Bounce Back Loan’ scheme to help SMEs

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A new coronavirus crisis aid scheme will offer small businesses up to £50,000 in loans that will be 100 per cent guaranteed by the government.

The ‘Bounce Back Loan’ scheme has been unveiled by the Chancellor Rishi Sunak. It will be launched on Monday, May 4.

It will help small and medium-sized businesses to borrow between £2,000 and £50,000.

The government will guarantee 100 per cent of the loan and there won’t be any fees or interest to pay for the first 12 months.

Loan terms will be up to six years. The government says it will work with lenders to agree a low rate of interest for the remaining period of the loan.

The scheme will be delivered through a network of accredited lenders.

Announcing the scheme to MPs, the Chancellor said: “Businesses will be able to apply for these new Bounce Back Loans for 25 per cent of their turnover, up to a maximum of £50,000, with the government paying the interest for the first 12 months.”

He added: “There will be no forward-looking tests of business viability; no complex eligibility criteria; just a simple, quick, standard form for businesses to fill in. For most firms, loans should arrive within 24 hours of approval.”

You can apply for a loan if your business:

• is based in the UK
• has been negatively affected by coronavirus
• was not an ‘undertaking in difficulty’ on December 31, 2019

The following businesses are not eligible to apply:

• banks, insurers and reinsurers (but not insurance brokers)
• public-sector bodies
• further-education establishments, if they are grant-funded
• state-funded primary and secondary schools

You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS).

If you’ve already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender until November, 4, 2020.

Rishi Sunak told MPs: “I know that some small businesses are still struggling to access credit.

“They are, in many ways, the most exposed businesses to the impact of the coronavirus; and often find it harder to access credit in the first place.

“If we want to benefit from their dynamism and entrepreneurial spirit as we recover our economy, they will need extra support to get through the crisis.

“Some businesses will not want to take on more debt; which is why our focus has been on cash grants, tax cuts and tax deferrals. But for others, loans will be part of the answer.

“So today, we are announcing a new micro loan scheme, providing a simple, quick, easy solution for those in need of smaller loans.”

More information about the scheme will be published by the government shortly.