Chancellor of the Exchequer Rishi Sunak last week (Friday 20 March) announced the coronavirus job retention scheme, which will cover 80% of the salary of retained workers, up to a total of £2,500 a month as well as the coronavirus business interruption scheme being interest-free for 12 months.
Under the coronavirus job retention scheme, all UK employers with a PAYE scheme will be able to access financial support to pay employees that would otherwise have been laid off during the Covid-19 crisis.
This also applies to employees who have been asked to stop working but are being kept on the pay roll (furloughed workers).
HMRC will reimburse 80% of their wages, up to £2,500 a month and the scheme will cover the cost of wages backdated to 1 March. It is initially open for three months but will be extended if necessary.
Employers will need to designate impacted employees as ‘furloughed workers’ and notify employees of this change.
Changing the status of employees remains subject to existing employment law and depending on the employment contract, may be subject to negotiation.
Once the new portal is live, employers can submit information to HMRC about the furloughed employees and their earnings. HMRC will set out further details on the information required in due course, which The Morning Advertiser will monitor and report on.
The Government has stated HMRC is working urgently to set up a system for reimbursement and it expects the first grants to be pain within weeks, with the aim of getting it done before the end of April. This is something The Morning Advertiser will also keep an eye on and update for its readers.
If operators need short-term cash flow help, they could be eligible for a coronavirus business interruption loan, which is available through participating lenders.
Approved loan providers
List of accredited lenders currently offering the coronavirus business interruption loan:
- ABN-AMRO Commercial Finance
- Arkle Finance
- Art Business Loans
- Ask If Inclusive Finance
- Bank of Ireland
- Bank of Scotland
- BCRS Business Loans
- Business Enterprise Fund
- Calverton Finance
- Chamber Acorn Fund (Humber
- Clydesdale Bank/Yorkshire Bank
- Compass Business Finance
- County Finance Group
- Danske Bank
- DSL Business Finance
- Enterprise Answers
- Finance for Enterprise
- First Enterprise
- Business Finance
- Let’s Do Business Group
- Lloyds Bank
- Metro Bank
- Robert Owen Community Banking
- Secure Trust Bank Commercial Finance
- Skipton Business Finance
- Swig Finance
- Ulster Bank
This can provide facilities of up to £5m for smaller businesses across the UK, which are experiencing lost or deferred revenues, leading to cash flow disruption.
The Government will make a business interruption payment to cover the first 12 months of interest payments and any lender-levied fees.
To be eligible, businesses must be UK-based with an annual turnover of no more than £45m and have a borrowing proposal which, if it wasn’t for the current pandemic, would be considered viable by the lender, and for which, the lender believes the provision of finance will enable the business to trade out of any short to medium-term difficulty.
In the first instance, businesses should approach their own provider, ideally through the lender’s website as telephone lines are likely to be busy and branches may have limited capacity due to social distancing.
The scheme supports a wide range of business finance facilities, including term loans, overdrafts, asset finance and invoice finance. However, not every lender can provide every type of finance listed.
The Government has stated the scheme will be available as of today (Monday 23 March).