What's the latest coronavirus information for business owners?
UPDATED July 5, 2021
Step four of the roadmap out of lockdown confirmed for July 19
As expected, the UK Prime Minister has confirmed that all lockdown restrictions will be lifted on July 19, 2021.
Although cases of Covid-19 are on the rise again in the UK, the ongoing success of the vaccine rollout has been the main driver behind the decision to end restrictions.
Here's what that means:
- No more legal requirement to wear face masks - including in hospitals, care homes and shops, on buses, trains and aeroplanes.
- No more limitations on the number of named visitors to care homes
- No more social distancing measures - removing restrictions on live music, theatre and sports events, weddings, hospitality and festivals.
- No more limitations on social contact. The rule of six indoors and the rule of 30 outdoors will both be scrapped, as will the 30-person limit for some “life events” such as bar mitzvahs and christenings.
- Nightclubs will be allowed to open with no restrictions on attendance, social distancing. There will be no need to wear masks and no need to show proof of Covid status on entry
As a business owner, you'll be able to set your own policies on masks and covid status, but any rules you put in place won't be legally enforceable. This could cause all sorts of issues if people aren't prepared to respect your wishes.
The government will no longer order people to work from home where possible, which means employers and employees can decide whether to return to the workplace.
Lockdown easing delayed
It was all going a bit too well, wasn't it? Just as we were all gearing up to lockdown restrictions being fully lifted on June 21, along comes another variant to put a spanner in the works.
The PM has announced that the current restrictions will not now be lifted until July 19, but there will be a review on June 21.
The good news is that the current restrictions are still very relaxed in comparison to what we've been used to for the best part of 15 months now. But that'll come as little consolation to large parts of the hospitality industry that have seen their businesses decimated by the pandemic.
It's also been suggested that facemasks might become optional from July 19, but may may still be "advisory" in some settings.
Here's what the new rules mean:
- There will still be a maximum of 30 people allowed at outdoor gatherings. This limit will be lifted for weddings and funerals, but venues must still adhere to social distancing rules. Although more guests will be allowed at wedding venues, table service will be required - with six people per table - and no indoor dance floors will be allowed.
- Some care home restrictions will be lifted, which means residents who return from visits outside their facility won't need to isolate for 14 days when they return.
- Other venues will need to stick to the current capacity limits, and all nightclubs will remain closed.
Essentially, this just means that we're staying at Step Three of the roadmap out of lockdown for another four weeks. While this might not affect the majority of businesses across the UK, it's a huge blow for the hospitality industry as many were gearing up for a big reopening later this month.
Spring Budget reveals extension to furlough
As part of the Spring Budget announcement, Chancellor Rishi Sunak has announced the government's Coronavirus Job Retention Scheme will be extended until September 31, 2020.
The Chancellor also announced that there'll be no extension to the deadline for Bounce Back Loans or CBILS loans, but both will be replaced by the Recovery Loan Scheme. No details on how to apply are available as yet, but the scheme will be open to businesses of any size throughout 2021, who will be able to borrow between £25,000 to £10 million.
For more detailed information on furlough and the Recovery Loan Scheme, check out Get ready for government coronavirus support ending.
For more on that increase in business taxes, go to our guide to corporation tax for small business, and check out the Bionic blog for more information on how the Spring Budget could affect your business.
Government announces 'roadmap' to come out of lockdown
The UK Prime Minister has today announced a roadmap to get the nation out of lockdown by summer. The four-step plan will be rolled out from March 8, with at least five weeks in between each step. If all goes to plan, a return to 'normal' is pencilled in for late June.
The easing of restrictions are subject to the following four key tests:
- The vaccine program continues to roll out as planned
- Evidence must show that vaccines are effective in reducing hospitalisations and deaths
- Infection rates don't rise and risk a surge in hospitalisations
- The risk of new variants must not increase
Here's how the roadmap for lifting lockdown breaks down for business owners:
The country will remain in full lockdown until restrictions begin to ease on March 8, which means the following rules will remain in place:
- All office spaces must close and employees must work from home wherever possible, whether paid or volunteering. The only exception to this is where it's 'unreasonable' to work from home, which includes work done by social workers, nannies, cleaners, tradespeople and construction workers. Teachers can also go to classes to teach the children of key workers.
- All 'non-essential' shops, including clothing and homeware stores, vehicle showrooms (other than for rental), betting shops, tailors, tobacco and vape shops, electronic goods and mobile phone shops, auction houses (except for auctions of livestock or agricultural equipment) and market stalls selling non-essential goods. These venues can continue to be able to operate click-and-collect and delivery services.
- All hospitality venues and accommodation, including pubs, restaurants, cafes, bars, social clubs, hotels, hostels, guest houses and campsites. Food and non-alcoholic drinks can still be provided for takeaway (up to 11 pm), which includes click-and-collect and drive-through, and alcohol can still be provided for delivery. Accommodation can remain open in specific circumstances, including where it acts as someone’s main residence or the person cannot return home. Accommodation can also remain open to provide housing or support to the homeless, or where it is essential to stay there for work purposes.
- All leisure facilities, including leisure centres and gyms, swimming pools, sports courts, fitness and dance studios, riding arenas at riding centres, climbing walls, and golf courses.
- All personal care facilities, including hair, beauty, tanning and nail salons. Tattoo parlours, spas, massage parlours, body and skin piercing services must also close. These services cannot be provided in other people’s homes.
- All entertainment venues, including theatres, concert halls, cinemas, museums and galleries, casinos, amusement arcades, bingo halls, bowling alleys, skating rinks, go-karting venues, indoor play and soft play centres and areas (including inflatable parks and trampolining centres), circuses, fairgrounds, funfairs, water parks and theme parks. Zoos, safari parks, aquariums and wildlife reserves must also close, as must indoor attractions at botanical gardens, heritage homes and landmarks, but the outdoor grounds of these premises can stay open for outdoor exercise.
The following businesses can remain open, providing they follow the necessary Covid-19 secure guidelines.
- Essential retail and market stalls, including food shops, supermarkets, pharmacies, garden centres, building merchants and suppliers of building products and off-licences. This also includes retailers of products and food for the upkeep and welfare of animals.
- Businesses providing repair services, including vehicle repair and MOT services and bicycle shops. Petrol stations, taxi and vehicle hire services, car parks and motorway service stations can also remain open.
- Businesses providing financial services, including banks, building societies, post offices, short-term loan providers and money transfer businesses.
- Places of worship, crematoriums, burial grounds and funeral directors.
- Launderettes and dry cleaners.
- Medical, dental and veterinary services, as well as animal rescue centres, boarding and grooming services provided for the welfare of animals.
- Agricultural supplies shops
- Mobility and disability support shops
- Storage and distribution facilities
Find out more information on the UK government website.
What are the general guidelines for lockdown 3?
The general guidelines for lockdown 3, which took effect from Tuesday, January 5, 2021, and will be reviewed in mid-February, are:
- Stay at home - only leave for work (where necessary), essential shopping, exercise or medical appointments.
- Exercise is allowed outdoors once a day, in your local area. This can be alone, with your household or support bubble, or with one other person.
- Schools are closed except for vulnerable children and the children of key workers. All universities and colleges are closed.
- No households can mix indoors or outdoors, except when they're part of a support or childcare bubble.
- All non-essential shops, leisure and entertainment venues are closed, as are pubs and restaurants, except for takeaway food or food and drink deliveries.
Scotland and Wales are now also in full lockdown.
What financial support is available for business owners affected by lockdown 3?
In light of the lockdown announcement, the government has put in place a one-off top up grant for retail, hospitality and leisure businesses. The one-off grant, which is in addition to the Local Restriction Support Grants, is based upon the rateable value, and breaks down as follows:
- £4,000 for businesses with a rateable value of £15,000 or under
- £6,000 for businesses with a rateable value between £15,000 and £51,000
- £9,000 for businesses with a rateable value of over £51,000
Any business which is legally required to close, and which cannot operate effectively remotely, is eligible for a grant. There's not yet any information on how to apply, so check back and we'll keep you updated.
The Coronavirus Job Retention Scheme (furlough) has been extended to run until the end of April and cover this latest lockdown.
Employees can be furloughed whether they're full-time, part-time, agency, flexible or on zero-hour contracts, but to qualify they must have been on your company payroll either on or before October 30.
Any eligible employees you then place on furlough will get 80% of their pay from the government, up to a maximum of £2,500 a month. Employers need only pay National Insurance and pension contributions, but this will be reviewed in January when a decision will be made on whether you'll need to contribute a greater proportion of their wages.
The government is also offering the following financial support to business owners:
- £1.1 billion will be made available for local authorities to help businesses in their area. This will be via the Local Restrictions Support Grant, which provides up to £3,000 per month to business owners who are forced to close their premises.
- The Kickstart scheme offers £1,500 to set up support and training for a six-month work placement for youngsters aged between 16 and 24 who are on Universal Credit.
- Claim up to £2,000 as an incentive payment if you hire an apprentice that starts with you between August 1, 2020, and January 31, 2021.
- An extension of the Bounce Back Loans scheme. The deadline for applications has been extended to March 31, 2021, while firms can top up existing Bounce Back Loans additional finance is needed.
- The Future Fund has also been extended until March 31, 2021.
- The application for both the CBILS and CLBILS loan schemes have also been extended until March 31, 2021.
What if you’ve made employees redundant following the end of furlough?
If you had to make staff redundant in preparation for the furlough scheme ending on October 31, or an employee left to take up a new role elsewhere that has since fallen through, you can re-hire them and place them on furlough. To qualify under this extension of the Coronavirus Job Retention Scheme, any affected employees must have been on your payroll by September 23, 2020.
How Bionic can help your business through lockdown 3?
We realise there’s no one-size-fits-all solution to help every business through lockdown, but there are a number of ways Bionic can help ease the financial burden.
Help if you can’t pay your business energy bills
If you’re struggling to pay your business energy bills because of the pandemic, you need to speak to your supplier to see if they can pause or reduce your repayments. Disconnection is always a last resort, so you should get in touch with your supplier as soon as possible.
Alternatively, you can give the team at Bionic a call on 0800 078 3506, and we'll help you work out the best way to arrange a repayment plan with your supplier. For more information, check out our guide to business energy and coronavirus lockdown.
It’s also worth considering switching to a better deal, which can help lower your bills if you’re not currently on the best-priced plan. For more information, go to our business energy page.
Help with your business insurance
If you’ve temporarily moved out of your business premises or if you’ve adjusted the way you operate to keep trading through lockdown, you’ll need to let your insurer know of your change in circumstances. For more information, check out our guide to unoccupancy and business insurance.
Help if employees are working from home
If you have employees who are working from home, they can claim tax relief on their work from home expenses. This means they can claim either of the following:
- £6 a week from 6 April 2020 (for previous tax years the rate is £4 a week). There’s no need to keep evidence of extra costs.
- The exact amount of extra costs you’ve incurred above the weekly amount. In this instance, employees will need evidence such as receipts, bills or contracts.
The amount of tax relief they can claim will be based on the rate at which they pay tax. Basic rate (20%) taxpayers, for instance, who claim tax relief on £6 a week will get £1.20 per week in tax relief (20% of £6).
For more information, go to the government guide to claiming tax relief for job expenses.
It might also help to replace your business landlines with a VoIP phone system, which is a phone system that allows you to make calls via an internet connection.
Switching to VoIP can give your business greater flexibility, help it work more efficiently and save money. For more information, check out our guide on business VoIP phone systems.
When does government coronavirus support end?
Government support for the coronavirus crisis is coming to an end. You need to make sure your business and employees are ready for the end of the furlough scheme and don't miss the application deadlines for financial support including CBILS and Bounce Back Loans. These deadlines have now been extended - all the information you need is in our blog: Is your business ready for the end of the government’s coronavirus support schemes?
How are business owners reacting to lockdown 3?
If you need some inspiring ways to keep your business running through lockdown, here are some of the ways in which Bionic businesses are adjusting to life.
- HART, a quirky family-run restaurant in the countryside town of Leamington is operating a takeaway service that will run for 14-hours-a-day, seven days a week.
- Hargreaves of Buxton, a 154-year-old homeware store and tea room in Derbyshire will spend the next four weeks as an online retail store and is offering free local delivery. It also offered late night shopping in the two nights leading up to the November 5 lockdown.
If you’d like to see more tips from like-minded business owners, or you want to share your own lockdown experiences, join our Bionic Business Network.
What help is available for small businesses during the coronavirus crisis?
The coronavirus lockdown is affecting businesses of all sizes in all industries, right across the UK.
If your business has been closed during lockdown, or if you've had to change the way you do things, now is a good time to start thinking about life after lockdown, especially as restrictions are gradually being lifted. The Bionic business blueprint for getting out of lockdown offers useful guidance on everything from reintegrating employees into the workplace to keeping that delivery service or online store running.
Even though lockdown restrictions look like they're being relaxed in certain circumstances, many businesses still aren't able to open or operate at full capacity.
If you're an employer who is unsure whether you can keep your business running or an employee with no idea of how long you'll have a job left to go to, the government is putting a range of measures are in place to help bring a bit of certainty to what is a fast-changing situation that is still full of unknowns.
In this blog, we’ll take a look at how your business could be affected by the COVID-19 outbreak, and we’ll update it as and when more information becomes available.
If you're worried about paying your business energy bills or concerned that your home energy supply might be cut off if being at home all day sees your bills spiral out of control, check out our guide to business energy help for coronavirus lockdown.
Coronavirus FAQ - How will coronavirus affect your business?
We are currently getting a high volume of calls from customers who have bought business insurance policies via Bionic (or Make It Cheaper, our old name) and have questions about Coronavirus.
Some businesses will still be able to function if offices close and staff work from home, but what about those that rely on staff being on-site or rely on customers coming through the door?
Will pubs and restaurants just have to put up with it? Are hairdressers just expected to take the hit? And will business insurance cover the cost of any closures?
Let’s take a look at some coronavirus FAQs and ways to help keep your business ticking over.
Business insurance FAQs - will business interruption insurance cover coronavirus COVID-19?
Health implications aside, business owners are understandably worried about the potential loss of income or profit they may face if their business is forced to close, or if the coronavirus pandemic means their flow of customers dries up.
Some business owners will also have concerns about stock arriving from suppliers, particularly those that may operate in other parts of the world, including Europe, which is now considered to be the ‘epicentre’ of the global coronavirus pandemic, according to Dr Tedros Adhanom, the head of the World Health Organization.
The government has said that if your business insurance includes both pandemics and government-ordered closure then should be covered, as the government and insurance industry confirmed on March 17 that advice to avoid pubs, theatres etc is sufficient to make a claim.
It's important you check the terms and conditions of your cover though, as insurance policies differ significantly and standard business interruption insurance policies are dependent on damage to property and often exclude pandemics.
Some business insurance policies will protect against these scenarios, but others won’t - the Association of British Insurers recently published information that if cover does exist, it will typically not be a standard inclusion. So here’s how to determine if you have cover in place to protect against the risks the coronavirus outbreak poses to your business.
Supreme Court backs SMEs in coronavirus business interruption insurance dispute
Insurers have rejected the business interruption insurance claims of around 370,000 UK businesses, on the basis that the coronavirus pandemic was not covered in their policies.
If your business is in this position, there could be some light at the end of the tunnel. A Supreme Court ruling means insurers included in a test case will need to pay out on disputed coronavirus business interruption claims, in a ruling that’s potentially worth £1.2 billion.
David Woodfield, Insurance Director at Bionic, said: “After a remarkably difficult 2020, the FCA Test Case ruling is a welcome result for those of the UK’s SMEs who had business interruption insurance.
"At a basic level, leaving legal principles to one side, we also view this as an important ruling since it sides with a customer’s expectation when they bought the policy. Insurance carries a difficult reputational challenge in that its products need to be complex and specific to generate underwriting profit, but need to be simple to meet customers’ expectation.
"The more complex they are, the more difficult the purchase becomes and the more disappointment the products create so our hope is that this will also lay the ground for a simpler future. That the legal cases have taken getting on for a year since the outbreak to conclude is another indication of the complexity which in the meantime has meant UK SMEs have gone bust where their claim may have otherwise saved them."
For more information, check out SMEs backed in Covid Business Insurance dispute
How to determine if your business insurance covers you for Coronavirus
Step 1 – Figure out if you bought Business Interruption Cover or not
Business insurance policies are broken into sections covering different types of events, which means you might have a section for damage to your property and another for injury to customers.
If you are covered at all, then the Business Interruption section of your policy will be the relevant one for coronavirus (note we are focusing on general cover for the business itself - some businesses will have other types of more specialist cover with its own sections and terms, such as Group Personal Accident or Health Insurance for your employees).
You can find this section by looking at your policy schedule to see if the Business Interruption section is included, then follow this into your policy wording to see what it covered and if there are any extensions applicable or restrictions to this cover.
Step 2 – Read the policy wording to see if you have cover against coronavirus COVID-19
Typically, business interruption cover can protect against virus outbreaks and diseases like coronavirus, but insurers tend to cover against known diseases rather than new viruses or diseases like COVID-19.
To find out if you’re covered, you need to:
- Look for a list of specific diseases that are covered. Generally, the insurer's list of covered diseases will include Acute Encephalitis, Acute Poliomyelitis, Anthrax, Chickenpox, Cholera, Diphtheria, Dysentery, Legionellosis, Legionnaires Disease, Leprosy, Leptospirosis, Malaria, Measles, Meningococcal Infection, Mumps, Ophthalmia Neonatorum, Paratyphoid Fever, Bubonic Plague, Rabies, Rubella, Scarlet Fever, Smallpox, Tetanus, Tuberculosis, Typhoid Fever, Viral Hepatitis, Whooping Cough or Yellow Fever.
- Look through this section for any applicable cover relating to ‘Notifiable Disease’ (without a specified list) or contagious and/or infectious disease. You may find this under the ‘Extensions’ section of your policy wording.
- Coronavirus COVID-19 has been labelled by the government as a ‘Notifiable Disease’, which means if your policy covers these diseases (without a specified list), you may have some cover in specific scenarios.
Step 3 – Read the wording to determine how broad your cover is and in what scenarios it applies
Even where coronavirus can be covered (as a Notifiable Disease, for example) your Business Interruption section won’t cover you simply because the virus exists, and certain events will need to happen before your insurance kicks in, such as:
- Your business being closed by the government or local authority.
- The Notifiable Disease is present at your premises or within a specified distance of your premises (refer to your individual policy wording for the specifics of your policy).
Insurance policies, and particularly the Business Interruption section, will be in place to potentially provide cover for loss of income or profit (depending on your policy) should your business be closed.
Proper hand hygiene is the best way to cut the risk of infection, so always wash your hands using hot water and liquid soap for 20 seconds or a 60% alcohol hand sanitiser.
If you’ve suffered a reduction in customers due to coronavirus or COVID-19, it’s unlikely there will be cover in place for this. Similarly, if there is a delay with suppliers or stock, it’s unlikely that cover will be in place to recover these costs or any money lost as a result of the delays or cancellations.
It’s also worth considering that the ‘normal’ risks involved in running a business, such as accidents, and thefts, could also increase as a result of the coronavirus outbreak, particularly if your business is operating with fewer staff, or if police forces are stretched and crime rates increase.
It’s worth making sure your business insurance is up to date and covers you against these ‘everyday’ risks.
Will our business insurance refund extra-statutory sick pay due to an employee because of a suspected coronavirus infection?
Businesses with fewer than 250 employees whose staff take time off due to coronavirus will be able to claim back the cost of providing statutory sick pay from the government.
If you have taken out extra insurance to cover sick pay for employees, this should cover you for any staff who have taken time off sick or self-isolated due to coronavirus.
Whether or not you’re covered will all depend upon the terms of your insurance, and if you’ve not taken out extra cover for sick pay, it’s unlikely this will be included as part of your policy.
If you’re unsure, check the wording on your policy documents or speak to your insurer or broker. Bionic insurance customers can call us on 0800 158 5263.
What evidence will we need to make a business interruption insurance claim?
When making a claim for business interruption, you usually need to provide evidence of the problem that has caused your business to close and an estimated loss of earnings, including any documents to prove your earnings.
If a business is forced to close due to an employee testing positive for COVID -19, we anticipate insurers will also request medical documentation so make sure you hold on to any of these.
What if you’re not covered by your current business insurance policy?
Some customers are asking if they can switch to an insurer that does cover coronavirus or COVID-19, but it’s not entirely clear whether this would actually be worthwhile.
Even if the policy wording covers coronavirus, you may still be unable to claim if you buy it now, since the virus is already present and is no longer an ‘unforeseeable event’, for which insurance is designed.
We’re already seeing travel insurers pull back cover for coronavirus COVID-19, and we have had one business insurer contact us to say they are removing coronavirus COVID-19 cover for all new policies.
And we’ve also noticed that some insurers are covering businesses under their business interruption extension if there is an outbreak within a 25-mile radius of their premises which then causes a loss to their earnings.
We are working closely with all our insurers to provide the most up to date responses to your queries.
If you’re still unsure whether or not you’re covered, get in touch with your insurance company or broker to discuss your options.
What government help is available and how can you access it?
As part of its budget announcement, the government announced a number of welcome measures to help small businesses cope with coronavirus, including support for those that need to pay statutory sick pay and changes to the benefits system to help employees on zero-hour contracts.
Although not part of the government's coronavirus rescue package, employers can now pay up to £6 a week (£26 a month) to cover additional costs for employees who work from home. For previous tax years, the rate is £4 a week (£18 a month). For more information, go to https://www.gov.uk/tax-relief-for-employees/working-at-home
To find out more detailed information on government-backed loans and funding, check out our blog on the financial support available for businesses affected by coronavirus and our guide 'Help with business finance during the coronavirus pandemic UK lockdown'.
What government help is available for businesses coming out of lockdown?
The government has announced the following package of measures to help businesses adjust to life after lockdown:
- Jobs Retention Bonus - All businesses who bring back employees from furlough will be eligible for a bonus of £1,000 per employee.
- Temporary VAT cut - Any businesses in the hospitality and tourism sector will pay a reduced VAT rate - down from 20% to 5%.
- "Eat Out to Help Out" scheme - During August, people will get a discount eating at cafes, restaurants and pubs. This will be funded by the government to encourage people to eat out.
- Help to get young people into work - A "kickstart scheme" to get unemployed 16 to 24-year-old into work and new payments for businesses hiring apprentices.
As more information becomes available, we'll update this page with details of which businesses are eligible and how to apply.
Following on from the £330 billion of support announced in the budget to help businesses and individuals, the government has announced £330 billion worth of guaranteed loans, which means businesses can access funds on ‘favourable terms’.
For SMEs, this means an extension of the Business Interruption Loan facility to allow businesses to borrow up to £5 million with no interest payments due for the first 12 months. This is an increase in the £1.2 million figure announced in the budget, and the scheme will be up and running by the start of next week.
Plans have also been announced to support businesses in the hospitality, leisure and retail industries that might be suffering from cash flow problems.
The business rates holiday will be extended to all businesses in these sectors, regardless of size and turnover, which means they’ll pay no rates for 12 months.
All businesses will be eligible for a cash grant of £10,000, and those with a rateable value less than £51,000 will have access to a cash grant of up to £25,000.
Businesses that pay little or no business rates because of Small Business Rate Relief (SBBR) or Rural Rate Relief may be able to claim a one-off grant to help meet their business costs through this crisis.
If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority – you do not need to apply.
Funding for the scheme was provided to local authorities by the government in early April.
To find out if you’re eligible for a grant, you can find your local authority at the GOV.UK website.
Do you have to pay back the small business grant coronavirus?
No, government grants for coronavirus don't have to be paid back. But if you take on a government-backed loan, such as CBILS or a Bounce Back Loan, you are liable to pay back the loan in full, including interest.
Can I still claim a grant if I'm self-employed and getting less work during the coronavirus disease pandemic?
Yes, if you're eligible for a government coronavirus grant, you'll still be able to claim it if you're getting less work as a result of the pandemic. The grants have been introduced to help businesses who are struggling to trade during the pandemic.
The Coronavirus Business Interruption Loan Scheme means that the government will encourage finance providers to continue lending to small businesses throughout the coronavirus crisis.
The funds are accessible via loans and other types of financial support through nearly 40 business lenders. Find out more about which lenders are part of the scheme along with the type of support each can offer by visiting the British Business Bank website.
But, in short, the government has announced the following measures to help small businesses:
|Government measures to help businesses through the coronavirus crisis|
|Bounce back Loans of up to £50,000 for small businesses|
|Statutory sick pay relief package for SMEs|
|12-month business rates holiday for all retail, hospitality and leisure businesses in England|
|£10,000 grants for all businesses that are eligible for small business rate relief or rural rate relief|
|£25,000 grants for businesses in retail, hospitality and leisure that have a rateable value between £15,000 and £51,000|
|Loans of up to £5 million for SMEs through the British Business Bank as part of the Coronavirus Business Interruption Loan Scheme|
|A new lending facility from the Bank of England to support cash flows for larger businesses|
|Help with tax through the HMRC Time To Pay Scheme|
|VAT deferrals. No business will pay VAT from now until end of June. Suspended for the next quarter.|
|Coronavirus Job Retention Scheme - Grants covering up to 80% of the salary of workers kept on by companies|
|Self-Employed Income Support Scheme - Grants covering up to 80% of a self-employed person's average income over the last three years (including freelancers and sole traders)|
|Changes to insolvency laws and the ‘wrongful trading’ rules|
|Covid-19 Corporate Financing Facility (CCFF) - Bank of England will buy short-term debt from larger companies.|
If you think a loan could be the right solution to help keep your business ticking over throughout the crisis, you need to be aware that the market for business finance is moving fast - some lenders are asking for security, while others are pulling out of the small business market completely.
But if you can find the right type of loan and provider for your needs, now could be a good time to sort your financing options. Talk to Bionic’s business finance team Think Business Loans on 0203 880 9880 to find out how to apply.
"New businesses may not have had chance to build reserves. We all recognise you don’t start a business without reserves but it doesn’t always happen."
The government has also announced the 'bounce back' loan scheme to give small business owners access to credit. Loans are available up to 25% of a businesses annual turnover and up to a maximum of £50,000.
Crucially, it appears that there will be no viability check and the government has agreed to take on 100% of the default risk, which means there is no risk to the provider and arguably the biggest barrier to lending has been removed.
For more information, check out our coronavirus business finance guide.
Help with tax and VAT
If your business is having trouble paying any tax it owes because of coronavirus, call HMRC's new dedicated COVID-19 helpline on 0800 0159 559 to talk about Time to Pay support.
If you are self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
The government has also announced a VAT deferral scheme, which means no business will pay VAT between March 20, 2020, and June 30, 2020. Suspended for the next quarter.
Business rates holiday
The government has introduced a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.
If your business paid discounted rates in the 2019 to 2020 tax year, you will be re-billed by your local authority as soon as possible.
Reclaiming sick pay
There will be new legislation to allow small businesses to reclaim two weeks’ worth of Statutory Sick Pay (SSP) to cover the costs of any absences due to COVID-19.
This refund is based on business size and will only be available to any businesses that employed fewer than 250 people on February 28, 2020.
Make sure you keep a record of staff absences due to coronavirus COVID-19, remembering that your employees don’t need to provide you with a note from their GP.
It's currently unclear how these refunds will be issued, but the government has said: "the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible".
Help with salaries
The government has announced that it will pay grants covering up to 80% of the salary of workers kept on by companies, up to a total of £2,500 per month, just above the median income.
Known as the Coronavirus Job Retention Scheme, employers who can't cover staff wages due to COVID-19 may be able to access support to continue paying part wages for staff.
Initially planned to run until June, the scheme has been extended until the end of October and you can apply here. Before you apply, have the following information to hand:
- Check which employees you can put on furlough
- Calculate 80% of your employees’ wages.
- Claim for your employees’ wages.
- Report a payment in PAYE Real Time Information.
To be eligible, you'll need to classify your staff as furloughed workers, which means employees are kept on the payroll, rather than being laid off, and they must not do any work for you during this time - this is really important as it will allow you to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month.
You can make up the shortfall between this payment and your employees' salaries, but you don't have to.
If you're the director of a business and you pay yourself a salary through PAYE, you'll also be able to claim this benefit, so long as you classify yourself as a furloughed worker and don't do any work while claiming this benefit.
If any employees have essentially taken a pay cut through being furloughed should check if they're eligible for support through Universal Credit and housing allowance.
Will I need to provide sick pay if employees self-isolate?
Yes, employers will have to provide sick pay to employees who self-isolate, and the workplace's usual sick leave and pay entitlements apply if someone has coronavirus.
Employees should let employers know as soon as possible if they're not able to go to work, but no longer have to provide a sick note if they're off work due to coronavirus. Instead, the government and NHS say staff will be able to use the 111 call service to get a notification that can be used as evidence of being unfit to work.
The government has also changed the rules on statutory sick pay, meaning it is now payable from day one of self-isolation instead of day four. But this change is a temporary measure to respond to the outbreak and will lapse when it’s no longer required.
There’s more information on the GOV.UK website.
Help with cash flow and insolvency
Changes to insolvency laws mean that businesses will have more leeway to continue trading even though cash flow is limited and the business is technically in financial difficulty.
The ‘wrongful trading’ rules mean it’s a criminal offence for a company director to keep trading if they know their business won’t be able to repay debts.
This means that borrowing additional funds offered by the government would have placed a director at risk of personal liability, even borrowing via the Coronavirus Business Interruption Loan Scheme, which has been brought in to help keep businesses running through the crisis.
But emergency amendments to UK bankruptcy rules mean this will no longer apply, and will work in tandem with the Coronavirus Job Retention Scheme and Self-Employed Income Support Scheme, to help make sure financially stable companies don’t go under.
What help is available for sole traders and the self-employed affected by coronavirus?
The government has announced that it will be launching the Self-Employed Income Support Scheme, to pay self-employed business owners, including freelancers and sole traders, who don’t qualify for the Coronavirus Job Retention Scheme, which pays up to 80% of employees’ wages.
The scheme will pay self-employed people who have been adversely affected by the coronavirus, a taxable grant worth 80% of their average income over the last three years, up to £2,500 per month, for at least three months.
The scheme will be open to business owners with an income of £50,000 or less, who make most of their income from self-employment, and will be based upon your previous three years’ tax returns to confirm income. If you only have one years’ worth of tax returns, this will be used to work out your income.
It was initially thought that business owners who pay themselves via dividends would be eligible to apply, it seems this is no longer the case, as dividends aren't regarded as income.
Speaking on BBC 5Live, Caroline Johnson, Conservative MP for Sleaford and North Hykeham, said: "Dividends aren't income, they're a return on investment. That's why they're not included as income. You pay yourself through PAYE as an employee of the company, and the only reason to pay yourself income as a dividend would be to reduce the tax liability you had on the money that your business had earned. But it isn't income and it isn't taxed as income."
Another issue with the scheme is that you won't be eligible if you started your business after April 5, 2019, as you won't have yet filed a tax return for HMRC to base your payments on. The advice seems to be to look into Universal Credit and housing allowance as soon as possible.
It's also possible that you won't qualify if your income is a mixture of part-time income and self-employment, and you'll not be eligible if anyone in your household earns more than £50,000. If, on the other hand, everyone in your household earns £49,000, you will all get full support.
If your application is successful, another issue is that the money won’t be available until the start of June. Again, the advice seems to be to apply for Universal Credit and housing allowance as soon as possible.
The welfare system has been adjusted so that self-employed people can now access Universal Credit in full. For instance, a self-employed person with a non-working partner and two children, living in the social rented sector, can receive welfare support of around £1,800 per month.
If you have a new continuous cough or high temperature, you should stay at home for 7 days and check NHS 111 online for advice.
There's still no concrete measures to help you if you're on a zero hours contract or one of the the millions of ‘gig economy’ workers across the UK. Currently, the only assistance available is through a #500m boost to the benefits system, including a temporary halt to the minimum floor in universal credit and quicker payments for employment and support allowance (ESA) claimants.
If you're in this position, you should look into what benefits are available and apply for them as soon as possible.
We’ll keep the blog updated with more information as soon as it becomes available.
What help is available for large businesses?
The government's Covid-19 Corporate Financing Facility (CCFF) means the Bank of England will buy short-term debt from larger companies, to help support them with cash flow and short term funding.
The scheme will be available for financially strong companies affected by the coronavirus crisis and will run for at least 12 months.
How do I prove my business has been affected by coronavirus?
In order to prove your business has been adversely affected by coronavirus, you should keep records of the following:
- Business accounts showing a reduction in turnover
- Dates your business had to close due to lockdown restrictions
- Dates you or your staff were unable to work due to Coronavirus symptoms, shielding or caring responsibilities due to school closures
If you need to provide reasons why your business has been adversely affected by coronavirus, you should consider the following:
- You or your staff were unable to work because you or they were shielding, self-isolating, on sick leave because of coronavirus or had caring responsibilities because of coronavirus.
- You had to scale down or temporarily stop trading because your supply chain has been interrupted, you had fewer or no customers or clients or your staff were unable to come into work.
Useful links for government-backed finance and grants
- Cash Grant for Retail, Hospitality and Leisure - https://www.businesssupport.gov.uk/cash-grant-for-retail-hospitality-and-leisure/
- Small Business Grant Funding - https://www.businesssupport.gov.uk/small-business-grant-funding/
- Coronavirus Business Interruption Loan Scheme - https://www.businesssupport.gov.uk/coronavirus-business-interruption-loan-scheme/
- Time to Pay from HMRC - https://www.businesssupport.gov.uk/time-to-pay/
- Income Tax Deferral for the Self-Employed - https://www.businesssupport.gov.uk/income-tax-deferral-for-the-self-employed/
- VAT deferral - https://www.businesssupport.gov.uk/vat-deferral/
- Business Rates Holiday for Retail, Hospitality and Leisure - https://www.businesssupport.gov.uk/business-rates-holiday-for-retail-hospitality-and-leisure/
- Statutory Sick Pay Rebate Scheme - https://www.businesssupport.gov.uk/statutory-sick-pay-rebate/
- Coronavirus Job Retention Scheme - https://www.businesssupport.gov.uk/coronavirus-job-retention-scheme/
- Covid-19 Corporate Financing Facility - https://www.businesssupport.gov.uk/covid-19-corporate-financing-facility/
Ideas to help keep your business running during the coronavirus crisis
If you run a salon, shop or any business that requires feet through the door and staff on hand, it can be difficult to know what to do for the best - the government is telling people to avoid people, pubs and the office, but can you afford to shut up shop?
The situation is ever-changing and we’ll update this blog as soon as things change, but as things stand any crowded venues and close contact with other people is to be avoided where possible, as should non-essential travel.
It is now believed that wearing facemasks can help stop the spread of infection and if you’re working closely with other people - in a salon, for instance - they should definitely be worn by both yourself and your clients.
If you are keeping your business running, make sure you follow the NHS advice outlined here, and make sure you and your staff are up to date with all of the following:
- Everyone's emergency contact details.
- The latest NHS advice on prevention.
- The official government guidelines.
- Who needs to self-isolate and why.
- Your pay and absence policies.
If you have to close your office or have employees self-isolating, it’s important to make sure staff can work from home as effectively as they can from the office.
This means kitting them out with all the hardware and software they need to do their job, such as a laptop with video conferencing capabilities, along with reliable business broadband and a secure VPN connection.
Bionic can help you and your workforce stay connected wherever they are and whatever the circumstances, with the following useful packages. For more information, give our business connectivity team a call on 0800 840 9056.
The period of lockdown has shown how businesses can really benefit from having a presence on social media - check out 8 ways to build your small business on Instagram for some useful tips and advice.
What If I can’t open my workplace?
If you can’t open for business because of the coronavirus crisis, you need to let your clients, staff and insurance company know as soon as possible. If you own your business premises, get in touch with your mortgage provider and let them know the situation, or get in touch with your landlord if you’re renting.
When contacting employees, reassure them that you’ll stay in contact to let them know what’s happening, when they should come back to work, and what the situation is regarding pay.
Employees will be entitled to statutory sick pay from you if:
- You are not paying them while they are laid off.
- They have been continuously employed for one month.
- They are available for work.
- They have not refused any reasonable alternative work, including work not specified in their employment contract.
Employees are entitled to £94.25 per week of Statutory Sick Pay (SSP) if they’re too ill to work, and this is paid by you, as their employer, for up to 28 weeks. If employees are self-isolating because of coronavirus (COVID-19), they can claim SSP (provided they are eligible), but new legislation means small business owners can reclaim two weeks’ worth of Statutory Sick Pay (SSP) to cover the costs of any absences due to COVID-19.
"Financial backing would be the only way to survive and the knock on effect of forced closure of suppliers would continue far after the crisis."
If you do have to self-isolate but can’t carry out the day job without the salon or workshop being open, it could be worth using a little of that spare time to sort a new business energy contract - simply switch business energy with Bionic to cut your business energy bills by hundreds of pounds a year.
But what exactly is coronavirus and what are the symptoms should we be looking out for? More importantly, what does each of us have to do to help stop it from spreading?
What is coronavirus and how can we help stop it from spreading?
Without going too far into the science of it all, coronavirus is a group of viruses that cause illnesses of varying degrees.
This latest coronavirus is called SARS-CoV-2 and it causes the disease known as COVID-19, the effects of which can range from a common cold to pneumonia, respiratory problems and even death.
But don’t confuse it with SARS (Severe Acute Respiratory Syndrome), which spread globally during an outbreak that lasted between 2002 and 2004, infecting more than 8,000 and killing at least 774.
Although in the same family of viruses, SARS is a completely separate viral respiratory illness caused by a coronavirus called SARS-associated coronavirus (SARS-CoV).
What are the symptoms of COVID-19?
The symptoms of COVID-19 include:
- A high temperature – you feel hot to touch on your chest or back.
- A new, continuous cough – this means you've started coughing repeatedly.
What if I have COVID-19?
Don’t panic, showing symptoms doesn’t necessarily mean you have the virus, but if you do have a high temperature or a new, continuous cough, you should stay at home for seven days.
If you live with other people, the advice is to stay at home for 14 days from the day the first person got symptoms.
It’s recommended that people work from home where possible and avoid any crowded venues, non-essential travel and close contact with other people wherever possible, particularly if you fall into any of the more vulnerable groups, which includes the elderly, anyone with underlying health conditions and pregnant women.
If you feel you can’t cope with your symptoms at home, your condition gets worse or your symptoms don’t get better after seven days you should use the NHS 111 online coronavirus service.
"From a business development perspective, businesses should always apply the ‘what if?’ question and have contingency planning in place."
Do not go to a GP surgery, pharmacy or hospital, as you could pass the disease on to other, more vulnerable people. And only call 111 if you cannot get help online.
And the government is also advising against non-essential travel and contact, this is why pubs, bars, restaurants and theatres all remain closed.
How is coronavirus spread?
Like the common cold, coronavirus SARS-CoV-2 infection is usually caused by close contact with a person who has the disease. This can be through coughs, sneezes or hand contact, or even by touching contaminated surfaces if they do not wash their hands - coronaviruses can live on surfaces for days at a time.
How to stop the spread of coronavirus
The most effective way to stop the spread of the virus is to simply keep on top of your everyday hygiene, and Public Health England is advising everyone to do the following:
- Always carry tissues with you and use them to catch your cough or sneeze. Then bin the tissue and wash your hands, or use a sanitiser gel.
- Wash your hands often with soap and water, especially after using public transport. Use a sanitiser gel if soap and water are not available.
- Avoid touching your eyes, nose and mouth with unwashed hands.
- Avoid close contact with people who are unwell.
- Proper hand hygiene is the best way to cut the risk of infection, so always wash your hands - using hot water and liquid soap for 20 seconds or a 60% alcohol hand sanitiser - in the following circumstances:
- After coughing, sneezing or blowing your nose.
- Before leaving home/arriving back home
- On arrival at school/workplace
- After travelling on public transport
- After using the toilet
- After breaks and sporting activities
- Before food preparation
- Before eating any food, including snacks
- Before leaving school/workplace
- And avoid touching your eyes, nose, and mouth with unwashed hands.
How to wash your hands
This handy infographic from Public Health England shows how to best wash your hands to help stop the spread of germs and viruses.
If you want to find out more on the reported cases of coronavirus in the UK, specifically in your local area, check out these live trackers from Public Health England:
To find out more about coronavirus COVID-19, including what to do if you think you might be infected, go to GOV.UK
If you need to speak to a member of the Bionic team about your insurance, give us a call on freephone 0800 158 5263.
What are small business owners saying about the threat of coronavirus?
We asked some Bionic businesses how they thought the coronavirus threat might affect them, and how they’re preparing for whatever comes next. Here’s what we found.
|Are small business owners ready for the coronavirus crisis?|
|97% are concerned about the impact of the coronavirus on their business|
|Almost half (47%) expect their businesses to be impacted|
|More than a quarter (27%) of businesses report they will be temporarily paralysed|
|More than a third (37%) of businesses plan to work remotely|
Financial backing is needed
"Financial backing would be the only way to survive and the knock-on effect of forced closure of suppliers would continue far after the crisis. I believe our business would survive but will require cash subsidising from ourselves.
“As a new business, we are fortunate enough to not have to rely on the income, however, two weeks could be devastating for those more established companies who provide a similar service, or have employees, for instance. We are really lucky at the minute that we don't have employees relying on us for their income.
“A forced closure would cause lots of problems for businesses. We are in a very fortunate situation, but in the future, I will seriously think about contingency plans for situations like this” says Mark Hepworth, owner of Flat Cap Coffee, a new business that was started over a year ago. Read more from Mark in our customer story Roasting the pandemic with Flat Cap Coffee.
Businesses who've not built up reserves could be in trouble
“From a business development perspective, businesses should always apply the ‘what if?’ question and have contingency planning in place. Small businesses as well as larger businesses.
"My primary concern, therefore, would be new businesses that may not have had the chance to build reserves. We all recognise that you don’t start a business without reserves but it doesn’t always happen" says Tina Heathcote, of Buxton Town Team, a support network for local small businesses.
Sick pay could be a problem
“Retail is still recovering from Brexit and Government handouts will be far too late judging from their track record so far. We’d have to rely on our online business.
“Most reasonable employers 'make up basic' pay when employees are off sick. SSP helps but businesses will not be able to afford to do anything if no revenue is brought into the business even if it is over just a few weeks. Retail is still recovering from Brexit, they are unlikely to have any reserves.” says Martin Coles-Evans, owner of Hargreaves of Buxton, a 154-year-old business high street business with an online retail arm.
Remember, for businesses with fewer than 250 employees, the cost of providing 14 days of statutory sick pay per employee will be refunded by the government in full. This will provide 2 million businesses with up to £2 billion to cover the costs of large-scale sick leave.
For more information, go to GOV.UK
Small business coronavirus planning checklist
If you are keeping your business running, make sure you follow the NHS advice outlined here and use the checklist below as a guide of things you need to keep on top of:
|Checklist for small business owners|
|Make sure staff emergency contact details are up to date||✔|
|Follow the NHS advice on prevention||✔|
|Keep up to date with official government guidelines||✔|
|Understand who needs to self-isolate||✔|
|Be clear about your pay and absence policies||✔|
Bionic Financial Services Limited. Registered in England & Wales Registered No: 07548195 Registered company address: 4th Floor, The Minster Building, 21 Mincing Lane, London, EC3R 7AG Bionic Financial Services Limited is authorised and regulated by the Financial Conduct Authority. Think Business Loans is a trading name of Think Business Finance Limited, registered in England and Wales, company number 07115888. Registered office address: The Minster Building, 21 Mincing Lane, 4th Floor, London, England, EC3R 7AG. Think Business Finance Limited are authorised and regulated by the Financial Conduct Authority 724300 and operate in accordance with the Data Protection Act 1998, ICO registration number Z2226484. As a mortgage is secured against your home or other property, it could be repossessed if you do not keep up the mortgage repayments. Think carefully before securing other debts against your home. Think Business Finance Limited act as a Commercial Finance Credit Broker and not a Lender