Business insurance and coronavirus

Coronavirus and your business

Are you a business owner, self-employed worker or landlord trying to navigate the impact of coronavirus? Here’s what you need to know

Updated 14 May 2020

First published 21 April 2020

The government has published detailed guidance on the support available to businesses during the coronavirus pandemic. Here’s a basic round-up of what it includes.

The Coronavirus Job Retention Scheme

If you own a business which is enrolled for PAYE Online and your staff are on a PAYE payroll scheme, you can apply for the Coronavirus Job Retention Scheme.

It allows you to ‘furlough’ staff and pay them 80% of their salary (gross) up to £2,500 a month – funded by a government grant.

The scheme, in its current form, runs for four months from 1 March 2020, and then in a reduced capacity between August and the end of October.  Online applications are now open at HMRC’s website.

The Coronavirus Business Interruption Loan Scheme

If you have a small- to medium-sized business (SME) with an annual turnover of no more than £45m, you can apply for the Coronavirus Business Interruption Loan Scheme. It allows you to access loans, overdrafts and business finance of up to £5m.

The government will cover the first 12 months’ interest payments and provide a government-backed guarantor to scheme participants (which includes all the major banks) of up to 80% on business loans. Find out more here

Future Fund Loans

On Monday 20 April, the government also announced a £1.25bn package to support fledging firms that would not qualify for the Coronavirus Business Loan Interruption Scheme. in a bid to It power growth and innovation in UK business once the coronavirus crisis is over.

The scheme will provide start-ups with ‘Future Fund’ loans of between £125,000 and £5m.  To be eligible, your business must have raised at least £250,000 from private investors in the last five years.

Money put in by the government must be matched by private investors – or the government will take an ownership stake in the company.

The scheme, which you can find out more about here, will open in May 2020.

Bounce Back Loan scheme

The government’s Bounce Back Loan scheme provides quicker-to-access loans to small- to medium-sized business of between £2,000 and £50,000.

You can take up to six years to pay the loan back and you won’t have to make any repayments for the first 12 months. No interest or fees will be payable either for the first 12 months.

The government will guarantee 100% of the of the loan and will work with a network of lenders to ensure that interest rates remain low for the duration of the loan.

The scheme is now open and you can apply here. Bear in mind you will not be eligible if you’re already claiming under the Business Loan Interruption Scheme.

Coronavirus business grants

If your business is in the retail, hospitality or leisure sector with a rateable value between £15,001 and £51,000, coronavirus business grants are available of up to £25,000.

For smaller businesses (those with a rateable value of £15,000 or less) one-off grants of up to £10,000 are available. The government will write to you if you’re eligible.

Relief on business rates

The government is temporarily cutting business rates to zero for all retail, leisure and hospitality businesses – and some nurseries. This reduction applies in England for the tax year 2020-21 for properties with a rateable value of less than £51,000. You can use the government’s business rates calculator to find out what saving this could amount to.

Money back for staff statutory sick pay

SMEs with fewer than 250 employees can apply for a full refund from the government on 14 days of statutory sick pay per employee who has been off sick with coronavirus.

More time to pay your tax bill

HMRC’s Time to Pay service is available for all businesses that will struggle to pay outstanding tax bills because of coronavirus. Call on the hotline on 0800 0159 559 to see if you qualify for a payment extension.

Leeway with rent on your business premises

If you miss a rent payment up until 30 June on your commercial premises, the landlord or company cannot force you out. This period may be extended by the government.

Help for the self-employed

There is a package of support available for the self-employed, too. Here’s a round-up.

The Self-Employed Income Support Scheme

If you work for yourself and are affected by coronavirus, you can apply to the Self-Employed Income Support Scheme. Like PAYE workers, it pays 80% of your salary up to £2,500 a month (gross) – OR an average of your profits taken over the last three years.

To qualify, you’ll need to earn less than £50,000 (profit), with the majority of your income coming from self-employment. You’ll also need to have a tax return for 2018/2019.

HMRC will contact you directly if you’re eligible. You’ll then need to fill in a simple online form and the money will be paid directly into your bank account.  The first payments are due at the start of June.

What if I’m self-employed and need cash now?

If you can’t wait until June, the government has introduced other flexibility to ease cash flow for the self-employed:

  • If you are due to make a ‘payment on account’ to HMRC in July 2020, you can defer payment until January 2021. This deferral will be automatically applied but, of course, you don’t have to take it

  • If you’re VAT-registered, you can opt to defer VAT payments that are due between 20 March and 30 June 2020 until 31 March 2021. However, you’ll need to make payments due after 30 June as normal. The deferred VAT payment deadline will be applied automatically – but again, you don’t have to take it

  • If your business is registered with Companies House, you can apply for a three-month extension to the deadline for filing your accounts. If you are granted the extension, you won’t be charged the usual late payment penalty

  • If you are sick or self-isolating in line with government advice and do not qualify for Statutory Sick Pay because you are self-employed, you may be eligible for Universal Credit as the government has relaxed the minimum income floor. Find out more about claiming

  • Local authorities will also have access to a new £500 million Hardship Fund which they can allocate at their discretion.

  • The government is also implementing three-month payment freezes on mortgages, credit cards and loans, which you can find out more about at our guide.

Help for landlords – and their tenants

The government has put in place to a further package of support to help tenants affected by coronavirus – and their landlords:

  • If your tenant is unable to pay their rent due to coronavirus, landlords will be eligible to apply for the same three-month payment freeze on buy-to-let mortgages as is available on residential mortgages – contact your lender

  • At the end of this period, landlords and tenants will be expected to work together to establish an affordable repayment plan which accounts for tenants’ individual circumstances

  • From 26 March, landlords must give tenants at least three months’ notice if they want possession of the property (ie, to serve the end of the tenancy) – even if the tenant has not paid the rent

  • Landlords cannot apply to start eviction proceedings until after three months has passed. Currently this means until the end of September although the ‘buffer’ could be extended

  • All ongoing possession action has also been suspended initially for three months (from 27 March). This means that eviction cases in progress or about to start cannot reach a point where a tenant can be evicted
  • The government has relaxed access to Universal Credit and Housing benefit and said that Local Housing Allowance would cover at least 30% of market-area rents

If you’re self-employed in Scotland, Wales and Northern Ireland

Some of the support measures available to help small businesses through the pandemic are administered by the devolved governments. You can find out more about at the respective .Gov websites for Scotland, Wales and Northern Ireland.

What impact will coronavirus have on business insurance?

Existing policies: If you already have business insurance in place with our partner Simply Business, which includes cover for business interruption, whether you are covered for coronavirus claims will depend on your insurer and the claim itself.

If you have further questions, give Simply Business a call on 0333 0164 504.

New policies: If you are looking to take out a new business insurance policy that includes business interruption, note that it will not cover claims relating to coronavirus.

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