Coronovirus Update 4 - Financial support available
As promised here is a list of the various packages announced so far – there’s still a lot of unanswered questions but this is what we have collated to date – we are now aiming to update once a week unless there is a significant announcement from the government.
Apologies this is a long one!
We have also now launched a coronavirus update page on our website where we may post additional information - https://www.andynashac.com/blog.
This information is correct as of 9am Thursday 26 March 2020.
There are lots of emergency grant funds being announced to support charities during this time – we can’t list them all here, but we sent round the Martin Lewis link earlier this week. A few helpful hinters:
NCVO website - the NCVO are trying to pull together information as it arrives – keep an eye on their website – www.ncvo.org.uk
London Funders - London Funders have announced various pots of money being released to support charities and are updating on a daily bass - https://londonfunders.org.uk/our-blog/new-emergency-support-fund-announced-help-community-and-voluntary-organisations
National Emergencies Trust - NET launched an emergency appeal last week – these funds will be distributed via local community foundations – details to follow on their website soon - https://www.ukcommunityfoundations.org/
Small business rate relief grants - if you pay business rates and already receive small business rate relief, rural rate relief, or tapered relief on your business rates then you should automatically get a government grant of £10,000 to meet ongoing business needs – you shouldn’t need to do anything to get it and your local council should be in touch in due course.
Once again, we urge you all to speak to your funders about the options with them before going down any of the other routes below.
Financial support for wages
The government have announced two main schemes for meeting staff costs during this crisis:
Reimbursement of Statutory Sick Pay
Any employer who had fewer than 250 employees as of 28 February 2020 will be eligible to receive a refund of up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19.
The mechanism for the repayments has not been established yet and the government has announced it will be set up over ‘the coming months’ so please bear that in mind.
In the meantime all employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website.
Also please remember that under the new emergency legislation any employee who is off for COVID-19 related illnesses will be eligible for SSP from day 1 and does not have to face the normal wait until day 4.
Coronavirus Job Retention Scheme – also known as furloughing
We are getting a lot of queries about this one and I’ll be honest we would urge all clients to think carefully about this option before doing down this route.
Under the scheme, all UK employers with a PAYE scheme will be able to access a grant to cover up to 80% of their wages, up to a maximum of £2,500 per month. The aim is to support employees who would otherwise be laid off during this crisis – it’s not just there to help cover salary costs of all employees.
The scheme will cover the cost of wages backdated to 1 March 2020 and is initially open for 3 months.
Our understanding is that employers will not be forced to top up the salary to 100% of their current salary.
This has significant HR implications and we would strongly urge all our clients considering this option to get HR advice as you will be changing the status of employees and therefore this process remains subject to existing employment law, and depending on your contracts may require a two way negotiation with the employees affected, and either way you must discuss it with employees before going down this line. We cannot advice on this as we are not employment law specialists.
During the time employees are furloughed they should not complete any work for their employer – once again we keep getting queries about whether the furloughed employees can act as ‘volunteers’ during this time – we would urge caution as the simple facts will be that they will be receiving a salary as a furloughed employee and will be completing tasks for their employer – this does not sound like volunteering and sounds like employment! All of this has a potential impact on their employment rights and your eligibility for the support.
Once again the mechanism for this has yet to be announced but we have been told they are working on this as a priority.
Loans and delayed payments
There are also a number of ways to defer payments and access loan support but bear in mind this wil only defer the inevitable payment, and if you are looking at loans make sure your constitution allows it!
Here are some options:
Time to pay service - this has always existed but more businesses are using it and allows you to defer, for example, this months PAYE payment. Its done on a case by case basis but if you need to use this I’d suggest talking to your payroll provider.
Deferral of VAT payments - there will be an automatic deferral of VAT payments for three months from 20 March 2020 until 30 June 2020 with no application required – however if you pay by direct debit you need to cancel your direct debit to take advantage of this. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.
Coronavirus Business Interruption Loan Scheme - there are government backed loans available – see the government guidance below!
There’s lots of information out there but I would suggest stick with the official government page:
On the latter I would strongly suggest reading the section on use of reserves, and once again I would urge you to talk to all your funders before considering furloughing workers and/or taking out any type of financing.