Accessing the Government’s COVID-19 business support funding
19 MAR 2020
At Budget 2020 last week, the UK Chancellor announced a set of temporary measures designed to alleviate pressure on businesses caused by the COVID-19 outbreak. This Note summarises what these measures are, which businesses are eligible for support, and how applications can be made.
Statutory Sick Pay Relief
The Statutory Sick Pay (SSP) relief will enable businesses to reclaim SSP paid to their employees that are absent due to COVID-19.
|· Businesses must have fewer than 250 employees as of 28 February;|
· The cost of up to 14 days of SSP per SSP-eligible employee can be reclaimed, starting with day 1 of absence instead of the standard day 4;
· Eligibility period: from 13 March onwards;
· SSP-eligible employees: those who tested positive; and who follow government advice to self-isolate at home and cannot work as a result (even without symptoms). No GP fit note will be required from employees. Employers should, therefore, maintain clear records of staff absences.
|· No repayment mechanism is currently set up by the government;|
· Caution: this will likely not solve short-term cash flow problems, as the government warned that it may take months to process reimbursements.
Business Rates Relief
This measure will offer businesses in England a business rates retail holiday for the 2020-2021 tax year.
|Businesses of any size (no rateable value threshold);|
Must operate in the retail, hospitality or leisure sectors;
Currently paying business rates to their local authority.
|Relief-related applications must be directed to businesses’ local authorities;|
Local authorities are expected to publish guidance when it is first issued to them by the Ministry of Housing, Communities and Local Government on 20 March.
Furthermore, businesses operating from smaller premises (with a rateable value between £15,000 and £51,000) will be eligible for a larger grant of £25,000.
Grants for smaller businesses
Small businesses which already pay little or no business rates will receive a further £10,000 grant to help them cope with operating costs.
|· Businesses must currently be eligible for the small business rate relief (‘SBBR’) or rural rate relief.||· No application necessary: local authorities will be contacting businesses themselves;|
· Businesses should nevertheless be proactive by establishing contact with their local authorities as soon as possible and staying up to date with government updates.
· Guidance is expected to be issued by the Business Secretary to local authorities by 20 March.
· Funding will only become available in early April.
Coronavirus Business Interruption Loan Scheme (‘CBILS’)
Businesses will be able to access government-backed loans, overdrafts and other products from accredited lenders through the new CBILS from week commencing 23 March onwards. The government will thereby encourage lenders to finance businesses which would ordinarily meet their requirements but have insufficient security and are therefore too risky. The government will therefore:
- Provide a guarantee of 80% of each loan to the
· Be UK based;
· Have yearly turnover of up to £41 million per annum;
· Operate within an eligible industrial sector;
· Have a sound business proposal, but insufficient security to meet normal requirements (Note: proposals to lenders should clearly show how it is COVID-19 – not broader underperformance – that led to the request of the loan);
· Request a loan of between £1000 to £5 million;
· Be able to confirm that it has not received
State Aid beyond €200,000 equivalent over the past 3 years;
· Further eligibility details will be published this and next week.
|· The CBILS will be available from 23 March.|
· As loans are provided by banks, applications are similar to – and should take no longer than – businesses’ standard dealings with their banks.
· Businesses should approach any lender participating in the scheme to discuss their borrowing needs.
· If a lender would ordinarily finance without the need to rely on CBILS, it will do so. Where, however, the business has insufficient security, the lender will consider support via CBILS.
· Further application details will be published this and next week.
Note that businesses with a turnover higher than £41 million should instead access funding from the Bank of England’s new COVID-19 Corporate Financing Facility offering the purchase of short-term debt. Further details will be available from the week commencing 23 March.
- HMRC’s tax suspension
Businesses facing cash flow problems and outstanding tax liabilities may negotiate a ‘time to pay’ agreement with HMRC, which could:
- Suspend debt collection proceedings;
- Defer tax payments and waive the usual 3.5% annual interest;
- Establish instalment arrangements
|All businesses and self-employed people that pay tax to HMRC.||· As each agreement is negotiated individually, businesses should contact HMRC’s dedicated hotline as soon as possible.|
· Businesses should reach such agreements with HMRC in advance of any payment deadlines.
Overall, for the time being a lot of the details, eligibility and application requirements are still in the process of being defined. Businesses seeking to access any of the above options should, therefore, (1) be as proactive in preparing for the above as possible, (2) get any relevant legal advice and (3) stay up to date with updates from the government and the Business Support Helpline.
Yulia BarnesManaging Partner
Yulia Barnes is our Managing Partner. She is an experienced solicitor and advises on a wide range of contentious and non-contentious matters for both private and corporate clients.Yulia started her legal career at a large international Magic Circle firm. She then became a partner at a regional law firm and headed a Dispute Resolution Department. She then moved in-house before starting her own Boutique practice, Barnes Law, with the aim of providing exclusive services to high net-worth individuals and privately-owned businesses. More details can be found on her LinkedIn profile.
Expertise Yulia and her team are widely recognised for their professional and practical approach to matters. She is committed to ensuring that her clients’ objectives are achieved in the most cost-effective way possible.
Approach Yulia has a wealth of experience working with businesses of all sizes: from large multinational corporations to start-ups. She has particular expertise in a hospitality industry, investment funds, private and corporate clients, and focuses on startups and technology-driven companies. Yulia brings the same level of attention to detail, professionalism and a personal touch to every case and client, and truly immerses herself in her clients’ businesses. She prides herself on her problem-solving, commercially astute approach and her track record of partnering with clients to help them achieve their strategic objectives.
Will joined Barnes Law as an Associate Solicitor in Spring 2023, shortly after qualifying in September 2022.
Will works mostly on real estate and corporate/commercial matters. Will enjoys providing advice on transactional matters.
Away from the office, Will can be found reading or playing golf. While he played rugby until university, and rowed throughout his degree, he now tends to watch both from the sidelines. During the winter he can also be found skiing.
Will plans to continue developing his legal skills and experience at Barnes Law, under the expertise and guidance provided by Yulia.
Mark is an experienced solicitor whose practice areas include intellectual property (IP), IT, data protection and general commercial law.
Mark advises businesses of all sizes – from sole traders to corporations. Among his clients are: clothing and lifestyle brands, restaurants and food suppliers, IT companies, banks, hedge funds and venture capital firms, education providers, medical and pharmaceutical brands.
Outside of his practice, Mark also advises members of the Institute of Directors as part of its Directors’ Advisory Service.
- Prosecuting a UK trademark application on behalf of an education provider and representing them in related UK IPO opposition and revocation proceedings;
- Advising a publisher and a delivery business on data protection matters, B2B and B2C Ts & Cs of sale, website and app Ts & Cs, all aspects of global brand protection;
- Advising footwear brands, alternative asset managers and hedge funds on their global brand protection, including overcoming various refusals, representing them in opposition proceedings and settlement negotiations;
- Representing a central bank in opposition proceedings before the UK IPO;
- Advising a lifestyle brand concerning trademark clearance and protection, negotiations for a website/app development and maintenance agreement.
Ioulia TatawatFamily Law Adviser
Ioulia has a solid background in family law and offers guidance, clarity, and support to clients during one of their most challenging times in their life.
She advises on all three pillars of separation: divorce, children matters and financial settlements. Ioulia is a member of Resolution and is keen to try to settle matters at early stages.
Ioulia is dedicated to assisting clients and navigating them through their legal matters with clarity and support.
Alex joined Barnes Law in September 2023 after finishing his master’s degree in law. Prior to joining Barnes Law, Alex worked in property litigation at Ashfords. Alex assists Yulia on a variety of both contentious and non-contentious matters.
Outside of the office, Alex enjoys reading and hiking. Prior to working in law, Alex was a competitive tennis player.
Alex continues to develop his skills in legal practice under Yulia’s guidance, he plans to sit the Solicitor’s Qualifying Exams (SQE) in 2024.
Mehves joined Barnes Law in August 2023, right after graduating from Queen Mary, University of London (LLB Senior Status). As part of her qualification journey, Mehves is currently pursuing her Legal Practice Course (‘LPC’) at the University of Law. She also holds a degree in European Union Law from Maastricht University, Netherlands.
Mehves works closely with Yulia on a variety of contentions matters and also writes Barnes Law’s legal blogs, manages social media accounts and is responsible for marketing.
Outside of work and studies, she enjoys running, tennis and yoga.
Mehves is looking forward to developing her legal skills at Barnes Law.
Julia PodgornovaInvestor Relationship Manager
Julia guides clients in making important business decisions based on comprehensive risk assessment and strategy. She supports investors in devising strategies designed to maximise each business’s potential from pre-seed to IPO.
Julia’s particular area of expertise are IT start-ups at different stages. Julia supports business through their fund-raising journey. As an Investor Relations Manager, Julia communicates with investors to facilitate a smooth round and legal part of each transaction.
In her free time Julia enjoys sailing, ballroom dancing, art exhibitions and travel.