COVID-19 And Support For SMEs
Each week on Thursdays, between 9-10AM, we join The Law Society’s #SolicitorChat on Twitter to answer questions about various legal matters, with this week’s subject being COVID-19 and Support for SMEs.
Twitter handle @SolicitorChat asks:
“As the Coronavirus pandemic has caused many businesses to close, many small business owners may be worried about their future. But what support from the Government are SMEs entitled to? And what protection do they have against being evicted during this time?”
The questions explored in today’s chat are listed below, with fuller answers than appear during the Twitter chat from our Head of Commercial, Susan Lewis.
What Government grants are available for small businesses affected by Coronavirus?
There are numerous packages introduced by the Government to help support your business survive the pandemic including the Coronavirus Job Retention Scheme which pays 80% of your staff’s wages who are furloughed due to coronavirus, the Small Business Grant Fund which will pay £10,000 to a small business which occupied premises, the Retail, Hospitality and Leisure Grant Fund which will pay up to £25,000 to these businesses which occupy premises and there is also the Self-Employed Income Support Scheme which is available to the self-employed. In addition, there are a variety of loans available to support your business however these, unlike the grants, must be repaid.
What options are available for businesses that are currently unable to pay their tax bill due to Coronavirus?
If you are unable to pay your businesses VAT which is due or your self-assessment tax bill you may apply to HMRC to defer the payments until next year. VAT may be deferred for payment without penalty until 31 March 2021 and tax may be deferred until 31 January 2021. If you prefer to pay some tax now you can contact HMRC to discuss repayment instalments to lighten the burden.
What is small business rate relief and how can it help businesses affected by Coronavirus?
A business rates holiday has been introduced for the retail, hospitality and leisure sectors for the tax year 2020/2021. This means that these types of business do not have to pay business rates for the current tax year. You do not need to do anything to claim this relief, your local council will apply it automatically and they should send you out an amended bill to show there is nothing to pay this tax year.
What protection do commercial tenants have if they are unable to pay their rent due to the Coronavirus pandemic?
There is currently a legal halt on landlords being legally able to evict commercial tenants for failing to pay their rent due to the Coronavirus. This is not however a payment holiday or rebate; you will still be liable to pay the rent. Your business however cannot at this time and presently until 30 June 2020 (this date may be extended by the Government) be removed from your premises because you are not able to pay your rent. Your landlord could still choose to pursue you for payment of the rent by other methods, such as making demands for payment and sueing you in the County Court for non-payment of rent.
What top tips would you give to a business worried about the impact the Coronavirus pandemic has on them?
The Coronavirus pandemic and its consequential shut down has had an unprecedented impact upon businesses all around the world. Some business sectors have had to shut entirely and others have had to change their working methods significantly to adhere to social distancing rules for their staff and customers. Some businesses are currently working towards re-opening later in June.
If your business has been significantly impacted by Coronavirus now is the time to make sure you are claiming all of the financial support you are eligible in order to keep your business afloat until you are able to begin re-trading again. Speak to your landlord and any suppliers you owe money to in order to reach an agreement about when and how you will begin to repay monies which are owed such as rent which you are still incurring. Consider if there are innovative ways of running your business in order to keep within the law but still earn an income such as cafes which have converted to take away only. Plan ahead for when you can re-open so that you can implement the necessary changes to your business which will enable you to re-trade again safely and as soon as you can do so.
Do you have a commercial enquiry?
Worried about your business during COVID-19?
Our Head of Commercial, Susan Lewis, is here to help.
Jordans Solicitors has been helping people with their legal needs for over 70 years now.