Skip to main content

Covid-19 government support for business

Image
Coronavirus leaflet and mask

The UK and devolved governments have introduced measures to help businesses cope with the disruption caused by Covid‑19, including grants, tax reliefs and credit facilities.

What government support can your co-op access?

We want to ensure our members understand the support government is offering; the eligibility criteria; and means of accessing the various support measures. We know there is uncertainty around eligibility for certain schemes, for some types of co‑operative. Officials in government are working to get answers and assurances for us. There are some variances between different parts of the UK.

Check what support your co-op is able to access

Universally applicable

The following schemes are open to all employers, VAT registered entities and tax paying entities. 

What is this support?

This scheme has been extended until 30 September 2021. Under the scheme employees receive 80% of usual salary for hours not worked, up to £2,500 a month, with employers fronting this cost and reclaiming cost via HMRC.  From July, employers will be expected to pay 10% towards the hours their staff do not work increasing to 20% in August and September, as the economy reopens, as well as covering National Insurance and employer pension. 

Details of the employer contribution can be found on the gov.uk website 

Who is eligible? 

All employers in the UK are eligible. Employees can work part time or be fully furloughed.

Employees notified by RTI submission to HMRC on or before 30 October 2020 will be eligible.

How do you get this support?

claim online here

You will need to:

  • Designate affected employees as ‘furloughed workers’ and notify your employees of this change (our HR Advice Team can help).
  • Submit information to HMRC about the employees that have been 'furloughed' and their earnings through the online portal

You can claim either shortly before, during or after running payroll.

JRS payments should be received within six working days of your claim being accepted by HMRC via the online portal. 

For HR guidance on the Coronavirus Job Retention Scheme - including whether employees can be forced to go on furlough and whether wages can be reduced to the cap level - see the FAQs section on our Covid-19 HR Advice page.

What is this support?

Government allowed businesses to defer all VAT payments for three months (20 March 2020 until 30 June 2020). The scheme helped reduce outgoings in the short term. New  measures announced in September mean all businesses which deferred VAT due in March to June 2020 have the option to spread their payments over the financial year 2021-2022. Businesses must opt in. HMRC will put in place an opt-in process for the New Payment Scheme process in early 2021.

Note: you will still have to pay VAT for this period. This is a VAT deferral, not a VAT holiday. 

Who is eligible? 

All VAT paying businesses are eligible.

VAT discount for hospitality 

The VAT discount to 5% for food and drink sold in pubs and restaurants will last until the end of September 2021. After that it will increase to 12.5% - which is still below the normal rate of 20% - for a further six months.

All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s expanded Time To Pay service.

This could help reduce your outgoings and ease pressure on your business in this most challenging time. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.

Broad eligibility

The following schemes have broad eligibility criteria that apply to a significant proportion of co‑operatives and community businesses.

What is this support?

  • A new UK-wide Recovery Loan Scheme was announced on 3 March 2021, which replaces CBILs and BBILs.
  • Loans between £25,001 and £10 million are available for businesses of all sizes.
  • The government guarantees 80% of the finance to the lender.
  • Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.

Eligibility

You will be able to apply for a loan if your business:

  • is trading in the UK

You will need to show that your business:

  • is viable or would be viable were it not for the pandemic
  • has been impacted by the coronavirus pandemic
  • is not in collective insolvency proceedings - further details will be provided in due course

Business that have received support under the existing COVID-19 guaranteed loan schemes will still be eligible to access finance under this scheme, if they meet all other eligibility criteria.

Businesses from any sector will be eligible to apply, except:

  • banks, building societies, insurers and reinsurers (but not insurance brokers)
  • public-sector bodies
  • state-funded primary and secondary schools

How to apply

The scheme will launch on 6 April 2021 and run until 31 December 2021, subject to review. Further details on how to apply and details of accredited lenders will be released in due course.

NOTE: The Bounce Back Loans Scheme closes to applications on 31 March 2021 and will be replaced by a new UK-wide Recovery Loan Scheme.

What is the support?

  • Loans between £2,000 and £50,000
  • Interest set at 2.5 per cent per year
  • Interest free for the first 12 months
  • No repayments due in the first 12 months
  • Loans are 100 percent guaranteed by the government

Pay as you grow

Under this scheme all businesses that borrow under the BBLS will have the option to:

  • Extend the loan repayment period to up to 10 years
  • Move temporarily to interest-only payments for periods of up to six months (an option which they can use up to three times)
  • Pause their repayments entirely for up to six months (an option they can use once and only after having made six payments) 

Who is eligible?

You can apply for a loan if your business:

  • Is based in the UK
  • Has been negatively affected by coronavirus
  • Was not an ‘undertaking in difficulty’ on 31 December 2019

You are ineligible if you are already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS). But if you've already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender.

Note: Bounce Back Loans are still debts your business will be taking on. The loan guarantees government is making are to the lender, not to help you make repayments.

How do you access a Bounce Back Loan?

Apply to one of the lenders accredited by the British Business Bank. You see the full list, which includes The Co-operative Bank, on the British Business Bank website. The application deadline for Bounce Back Loans has been extended to 31 March 2021 (as announced in December 2020).

If your current banking provider is an accredited lender, we suggest approaching them for a Bounce Back Loan first, as it may well be faster and more straightforward. 

NOTE: The Coronavirus Business Interruption Loan Scheme closes to applications on 31 March 2021 and will be replaced by a new UK-wide Recovery Loan Scheme.

What is the support?

Loans of up to £5 million in value, with the first 12 months interest free. Government guarantees 80 per cent of the loan. CBILS is overseen by the British Business Bank (a state bank) and loans are made by its accredited lenders. There will be no arrangement fees or early repayment charges. 

CBILS covers a range of business loan products including term loans, overdraft variants, asset finance facilities and invoice finance facilities. Businesses have been given until the end of March 2021 to access the CBILS 

Note: CBILS loans are still debts your business will be taking on. The loan guarantees government is making are to the lender, not to help you make repayments.

Who is eligible?

  • UK-based businesses
  • Turnover of no more than £45 million a year
  • Business must generate more than 50 per cent of its turnover from trading activity, unless a registered charity, in which case this requirement does not apply
  • Borrowing must be for business purposes
  • Borrowing proposal must demonstrate commerical viability, but for COVID-19, and a plan to trade out of short-to-medium difficulties

The following are ineligible for CBILS: banks, building societies, insurers and reinsurers (but not insurance brokers); employer, professional, religious or political membership organisation or trade unions.

Fishery, aquaculture and agriculture businesses may not qualify for the full interest and fee payment.

We believe most co-operatives should and will be eligible for CBILS. But we also anticipate some co-operatives will experience difficulties in accessing CBILS. This might be because the scheme is designed in a way which makes some types of co-op ineligible or, more likely, makes their eligibility unclear. It might also be because CBILS lenders misunderstand co-ops' business model and/or legal structure, leading to co-ops that are very much eligible for CBILS encountering obstacles and delays.

How do you access a CBILS loan?

You should approach one or more of British Business Bank’s accredited delivery partners with your borrowing proposal. See here

You may need some specialist advice to evaluate the options in CBILS.

What is this support?

Government will pay employers a rebate to cover the cost of up to two weeks of SSP for any COVID-19 sickness absence. The relief covers absences that occurred from 14 March 2020 onwards.

Who is eligible?

SMEs that had fewer than 250 employees as of 28 February 2020.

How do you access this support?

You can claim on the government website. Make sure you keep a record of all absences. 

For HR guidance on the SSP Rebate and COVID-19 related absenteeism, see our HR Advice page 

Support for businesses in England

 

 

What is this support?

Businesses that were open as usual, but then required to close due to national lockdowns imposed by government may be eligible for the LRSG (Closed) Addendum schemes from 5 January 2021 onwards and between 5 November and 2 December 2020

Eligible businesses may be entitled to a cash grant from their local council for each period of national lockdown.

National lockdown from 5 January 2021

Grants for the period 5 January to 31 March 2021 are based on the rateable value of your business property on 5 January 2021 and are payable in two payment cycles ranging from £2,001 to £4,714 per payment cycle.

The first payment cycle covers the 42 day period from 5 January to 15 February 2021, and the second payment cycle covers 16 February to 31 March 2021.

You will also be eligible for the one-off Closed Businesses Lockdown Payment, which your local council should pay together with the grant from the first payment cycle of this scheme.

After 31 March 2021 Restart grants will apply (announced 3 March 2021).

National lockdown between 5 November and 2 December 2020

Grants for the period 5 November to 2 December 2020 will be based on the rateable value of the property on 5 November 2020, ranging from £1,334 to £3,000 for the 28-day qualifying restrictions period.

Who is eligible?

Your business may be eligible if it:

  • is based in England
  • occupies property on which it pays business rates (and is the ratepayer)
  • has been required to close because of the national lockdown from 5 January 2021 onwards, or between 5 November and 2 December 2020
  • has been unable to provide its usual in-person customer service from its premises

For example, this could include non-essential retail, leisure, personal care, sports facilities, tourism and hospitality businesses. It could also include businesses that operate primarily as an in-person venue, but which have been forced to close those services and provide a takeaway-only service instead.

Eligible businesses can get one grant for each non-domestic property.

You cannot get funding if:

  • you can continue to operate during the lockdown period because you do not depend on providing direct in-person services from your premises (for example accountants)
  • you have chosen to close, but have not been required to close as part of national restrictions
  • your business is in administration, insolvent or has been struck off the Companies House register
  • you have exceeded the permitted subsidy limit

How can you access this support?

Local authorities have their own systems for administering and distributing grants. Co-ops must apply to their local authority for support. We advise any co-op or community business that believes they need grant support to contact their local authority and local councillor without delay. Where co-ops are seeking discretionary support, we suggest preparing evidence of:

  1. The negative impacts of COVID-19 on your business
  2. What is at risk in terms of livelihoods and economic and social value added, if you do not receive support
  3. The social, economic and environmental contributions your co-op makes to the community, area and society

Visit your local council’s website to find out how to apply:

Find the website for your local council.

What is this support?

The Closed Businesses Lockdown Payment (CBLP) supports businesses that have been required to close due to the national restrictions that began on 5 January 2021.

The grant will be based on the rateable value of the property on the first full day of restrictions and ranges from £4,000 to £9,000.

Local councils will pay the same businesses that are eligible to receive the Local Restrictions Support Grant (Closed) Addendum for the national lockdown period that began on 5 January (See above).

Who is eligible? 

Your business may be eligible if it:

  • is based in England
  • occupies property on which it pays business rates (and is the ratepayer)
  • has been required to close because of the national restrictions from 5 January 2021 onwards
  • has been unable to provide its usual in-person customer service from its premises

This could include non-essential retail, leisure, personal care, sports facilities, tourism and hospitality businesses. It could also include businesses that operate primarily as an in-person venue, but which have been forced to close those services and provide a takeaway-only service instead.

Eligible businesses can get one grant for each non-domestic property.

You cannot get funding if:

  • you can continue to operate during the period of restrictions because you do not depend on providing direct in-person services from your premises (for example, accountants)
  • you have chosen to close, but have not been required to close as part of national restrictions
  • your business is in administration, insolvent or has been struck off the Companies House register
  • you have exceeded the permitted subsidy limit

How can you access this support?

Local authorities have their own systems for administering and distributing grants. Co-ops must apply to their local authority for support. We advise any co-op or community business that believes they need grant support to contact their local authority and local councillor without delay. Where co-ops are seeking discretionary support, we suggest preparing evidence of:

  1. The negative impacts of COVID-19 on your business
  2. What is at risk in terms of livelihoods and economic and social value added, if you do not receive support
  3. The social, economic and environmental contributions your co-op makes to the community, area and society

Visit your local council’s website to find out how to apply:

Find the website for your local council.

On 3 March 2021 the Chancellor announced a £5bn Restart Grant scheme to help businesses in England reopen after lockdown, with grants of up to £18,000 for hospitality, accommodation, leisure, personal care and gym businesses, and up to £6,000 for non-essential businesses impacted by lockdown.

We await further details of how to access this funding. 

NOTE: When national lockdowns apply LRSG (Open) ceases, as relevant businesses will receive funding from either the national restrictions grant (LRSG (Closed) Addendum) or local council discretionary grant (Additional Restrictions Grant).

What is this support?

Grants for businesses in Tier 2 or Tier 3 areas that have not been legally required to close but are still struggling as a result of COVID-19. Local authorities will have significant discretion in which businesses they target for grants and how they administer the scheme. 

Grants are based on rateable value ranging from up to £467 to up to £1,050 for each 14 day period.

    Who is eligible?

    Your business may be eligible if it:

    • is based in England
    • is in an area subject to Tier 2 or Tier 3 local restrictions since 1 August 2020 and has been severely impacted because of the local restrictions
    • was established before the introduction of Tier 2 or Tier 3 restrictions
    • has not had to close but has been impacted by local restrictions

    Local councils have the freedom to determine the precise eligibility criteria for these grants. However, we expect the funding to be targeted at hospitality, hotel, bed & breakfast and leisure businesses. 

    How can you access this support?

    Local authorities have developed their own systems for administering and distributing grants. Businesses need to apply to their local authority for support. We advise any co-op or community business that believes they need grant support to contact their local authority and local councillor without delay. If possible, have prepared evidence of:

    1. The negative impacts of COVID-19 on your business
    2. What is at risk in terms of livelihoods and economic and social value added, if you do not receive support 
    3. The social, economic and environmental contributions your co-op makes to the community, area and society 

    Visit your local council’s website to find out how to apply:

    Find the website for your local council.

    On 3 March 2021, the Chancellor announced an additional £300 million to support theatres, museums and other cultural organisations in England through the Culture Recovery Fund.

    We await further details of how to apply.

    What is this support?

    In the Budget announced on 3 March 2021 a new £150 million Community Ownership Fund was launched to help communities save local community assets, such as pubs, sports clubs, theatres and post office buildings. 

    Groups will be able to bid for up to £250,000 matched-funding, and in 'exceptional' circumstances applicants will be able to ask for up to £1 million to save local community buildings and spaces such as sports clubs or grounds.

    Who is eligible?

    This is a UK wide programme.

    The announcement said " In most circumstances, bids should be made from community and voluntary organisations with formal governance in place, such as a Community Trust. Bids may be considered from groups without formal governance, where there is a clear plan to set up community level governance to take over a facility – funding will be conditional on establishing a suitable governance structure." 

    Local authorities including parish councils will not be eligible to bid. Parish councils may play a role in working with community groups looking to submit a bid.   

    Funding will not be made available to pay off a businesses’ debts, nor to buy an indebted business.

    How to access this support

    Detailed guidance on eligibility criteria, how bids will be assessed and weighted, and how to develop a strong bid will be provided in the full bidding prospectus, due to be published by June 2021. 

    Support for businesses in Scotland

    Further funding for devolved nations was announced in the Budget on 3 March 2021.We would still encourage co-ops to apply ahead of any clarification. 

    What is this support?

    Businesses based in Scotland forced to close by law or to significantly change its operations due to Covid-19 restrictions from 2 November 2020, may be eligible to apply for grant funding.

    Temporary closure grants apply to premises forced to close:

    • £2,000 if your business premises has a rateable value of up to and including £51,000
    • £3,000 if your business premises has a rateable value of £51,001 or above

    Business restrictions grants are available if your business can remain open but is specifically required to modify its operations by law, for example having to close earlier than normal:

    • £1, 400 if your business premises has a rateable value of up to and including £51,000 
    • £2,100 if your business premises has a rateable value of £51,001 or above

    Both grants are payable every four weeks or as long as restrictions last. 

    Who is eligible?

    You can apply if:

    • your business has been directly impacted by restrictions, and the type/sector is specifically mentioned in the list provided on Scotgov's website
    • your business is registered for non-domestic rates  - if you pay rates through a landlord rather than directly to a  local authority you can still apply but must provide evidence through a copy of the lease agreement

    Businesses don't need to reapply if restrictions last longer than four weeks.

    Business are ineligible if:

    • They have breached wider COVID regulations/requirements prior to local restrictions
    • They have connections to tax havens, as set out in the Coronavirus (Scotland) (No.2) Act 2020
    • They are not included in the list provided on the Scotgov website

    Any co-ops, social enterprise and charities that fall within the above should be eligible. 

    How can you access this support?

    Apply via your local authority website. Find your local authority.

    What is this support? The programme is intended to help Scottish social enterprises and charities to adapt to the Covid era through packages of specialised advice and support, grants and patient, zero interest loans. The programme includes two strands:

    • Adapt and Thrive  - tailored, specialist advice, as well as grants and loans 
    • Communities Recovery Fund - grants, targeted at social enterprises, charities and mutual aid groups, and partnerships these, that are helping communities to weather Covid and recover

    Who is eligible? Scottish social enterprises, including many co-ops, and charities, that can help communities to respond to health and economic challenges - and build back better economically, socially and environmentally. You need to have been active prior to Covid-19 and to have been negatively affected by the pandemic. More information here.

    How do you access this support? Apply online until March 2021.

    Support for businesses in Wales

    Further funding for devolved nations was announced in the Budget on 3 March 2021. We would still encourage co-ops to apply ahead of any clarification. 

    What is this support?

    Grants of between £3,000 and £5,000 are available to businesses in the hospitality and non-essential retail sector that are in receipt of Small Business Rate Relief (SBRR).

    Tourism, leisure and supply chain businesses qualifying for SBRR are also eligible if they have greater than 40% reduction in turnover during the restriction period.

    • Businesses with a rateable value of £12,000 or less are eligible for a £3,000 payment.
    • Businesses with a rateable value of between £12,001 and £150,000 are eligible for a £5,000 payment. 

    Who is eligible?

    Businesses must be on the non-domestic rates (NDR) rating list for their local authority on 1 September 

    How to access this support

    • Businesses that received the Lockdown Business Grant in October via their Local Authority will begin receiving payments via the ERF Restriction Fund into their bank account during December. These businesses will not be required to re-register their details.
    • Other eligible businesses not previously registered will need to register their details and make a short on-line application to their respective local authority for the discretionary elements. These payments will start to reach businesses in January.

    Discretionary grants

    • Businesses not on the non-domestic rates (NDR) system can apply for a discretionary grant of up to £2,000 per business.

    Apply for a discretionary grant

    What is this support?

    Business grants from £2,500 to £150,000 targeted at hospitality, tourism and leisure businesses and supply chain companies who have lost more than 60% turnover since 4 December 2020 as a result of Covid-19 restrictions. It is aimed at supporting the operating costs of these businesses through the restriction period. As a condition of funding you will be expected to safeguard jobs for a minimum of 12 months.

    • Single employee businesses in Wales can apply for a minimum grant of £2500 
    • SMEs (employing 2-9 people) can apply for £1,500 per employee up to a maximum of 10 employees 
    • SMEs (employing 10-249 people) can apply for £1,500 per employee or self-declared operating costs for the restricted period (whichever is the lower amount). There is an upper limit of £100,000 for SME businesses with a digital system based application.
    • Large businesses (250+ employees) - can apply for £500 per employee or self-declared operating costs for the restricted period (whichever is the lower amount) for Welsh headquartered large business applicants to a maximum of £150,000, with a manual case by case application via the sector team.

    An eligibility checker calculates how much you may be eligible for.

    How do you access this support?

    Apply online from 11 January 2021. The applications will be open for 2 weeks or until the fund is fully subscribed. Use the eligibility checker to see if your business can access this support.

    What is this support? A grant and patient loan scheme specifically targeted at charities and social enterprise in Wales. Eligible organisation can apply for up to £100,000, 75% of which will be a grant and 25% will be a patient, initially interest free, loan. Organisations must demonstrate who the grant and loan will be instrumental in: survival; improvement of operations and impact; or in diversification. See more here.

    Who is eligible? Many co-ops are eligible but unfortunately a significant number are ineligible. Organisations must:

    • Be based in, and operating for the benefit of people, Wales
    • Have governing documents containing a “suitable asset lock and dividend distribution control” 
    • Have the ability to demonstrate suitable oversight and independence from a qualified and quorate Board with a minimum of three directors or trustees
    • Be a: company limited by guarantee;  a community interest company (limited by shares or by guarantee), community benefit society; a charitable incorporated organisation; company limited by shares where it is a subsidiary of another eligible legal form; a ‘financial mutual’

    We believe that subject to meeting other criteria, co-operative societies should be added to the list of eligible legal forms. We have approached the Welsh Government on this issue. See more here.

    How do you access this support? Apply online via the WCVA.

    Let us know if you have trouble accessing any of this funding

    Our COVID-19 advice web pages are regularly reviewed and updated. Get updates via email, TwitterFacebook and LinkedIn.

    Related content
    Image
    Hulme garden centre
    As we adapt to the impact of coronavirus, it’s really important to take time to look after yourself and strengthen your resilience.
    6 months ago