Coronavirus (COVID-19): Government support for business

The UK and devolved governments are introducing new measures to help businesses cope with the disruption caused by COVID-19, including new grants, tax reliefs and credit facilities.

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We want to ensure our members understand the support government is offering, what the eligibility criteria are and how they might access it. We know there is some uncertainty about eligibility for some schemes, for some types of co-operative. Officials in government are currently working to get answers and assurances for us. There is also some variance between different parts of the UK. 


Universally applicable

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

Coronavirus Job Retention Scheme

What is this support?
Government will reimburse employers for 80 per cent the wages of 'furloughed' workers (those employees that would otherwise have been laid off during this crisis) up to a cap of £2,500 per month per worker. ​This is retrospective to 1 March 2020. The could help you reduce costs in a way that avoids lay-offs. However, you may not receive the reimbursements from government until the end of April 2020 and will need to carry these costs in the meantime.

Who is eligible? 
All employers in the UK are eligible, with the Chancellor making specific mention of 'not-for-profit' enterprises and charities. 

How do you get this support?
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 a new online portal.

The legislation, systems and processes under the scheme are in development. However, the scheme will have retrospective effect to 1 March 2020. If you want to place workers on furlough, you can do so now, but will have to pay their wages in the meantime until the scheme for reimbursement is established by HMRC. This might not be until the end of April 2020. The scheme is stated to last for three months, but this may be reviewed.

For HR guidance on the Coronavirus Job Retention Scheme - includinng 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 HR Advice page

Please let Co-operatives UK know as soon as possible if you have trouble accessing this scheme. We will be actively lobbying central and local government to provide support for as many of our members as possible. Email: [email protected].

VAT Deferral

What is this support?
Government is allowing businesses to defer all VAT payments for three months apply from 20 March 2020 until 30 June 2020.

This will help you reduce outgoings in the short term. 

Note: you will still have to pay VAT for this period before the end of the 2020-21 tax year. This is a VAT deferral, not a VAT holiday. 

Who is eligible? 
All VAT paying businesses are eligible.

How do you get this support?
No applications required. You just don't make a VAT payment during the 20 March 2020 until 30 June 2020.

Time to Pay

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. 

Coronavirus Business Interruption Loan Scheme (CBILS)

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.

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
  • 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 well need some specialist advice to evaluate the options in CBILS. Co-operatives UK is working with its partners on a COVID-19 business advice package, which we will share details about shortly. 

Please let Co-operatives UK know as soon as possible if you have trouble accessing CBILS. We will be working with government to ensure all co-operatives that are eligible for CBILS can access support. We also need to understand when schemes like CBILS are not working for co-operatives and community businesses. Email: [email protected].

Statutory Sick Pay Rebate

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?
Government is developing its systems. Make sure you are recording all absences in the meantime. 

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

Small Business Grant Scheme

What is this support?
A one off £10,000 grant to help small businesses meet ongoing business costs.

Who is eligible? 

Government information to business in England and Scotland says that any rate paying business that already receives either the Small Business Rate Relief or Rural Rate Relief, will be eligible for the Small Business Grant Scheme.

Note: Properties that receive the Retail, Hospitality and Leisure Grants (see below) will not receive the Small Business Grant as well.

In England, guidance to local authorities says that eligibility for the grant rests on whether a rateable premises was 'eligible' for Small Business Rate Relief or Rural Rate Relief on 11 March 2020. If you have had to close your premises to the public since then, and maybe trade another way, this should not affect your eligibility for the Small Business Grant. 

We are awaiting detailed guidance for Scotland.

For variations in Wales see here.
For variations in Northern Ireland see here.

Charitable Rate Relief: uncertainity and hope

Our take on this has changed twice already, because of seemingly contradictory information from government. Government information to business says that any rate paying business that 'already receives' either the Small Business Rate Relief or Rural Rate Relief, will be eligible for the Small Business Grant Scheme. However government's guidance to local authorities in England says eligibility for the grant rests on 'eligibility' for Small Business Rate Relief or Rural Rate Relief, which is based on rateable value of premises, not necessarily on being in receipt of particular rate reliefs. This could mean that businesses that currently get Charitable Rate Relief meet the eligibility criteria for the Small Business Grant. 

We are checking with government.

We suggest any member who believes their premises has a rateable value to meet the Small Business Rate Relief (in England, under £15,000, see here) but currently receives Charitable Rate Relief, should argue the case with their local authority, citing paragraphs 16, 17 and Annex 1 of the government guidance.

How do you get this grant?

  • England - government says your local authority should contact you if you are eligible 
  • Scotland - an application process is yet to be finalised

We are concerned that the Small Business Grant may end up doing nothing for community businesses which get Charitable Rate Relief, but still rely heavily on trading income to be sustainable and so might be in serious difficulties. We are pressing government to bring forward a support package for such businesses.

In Scotland, the Third Sector Resilience Fund might be an alterative source of help (see further down). We have also heard concerns from struggling co-ops that do not operate out of rateable properties. We will be raising these concerns with government. 

Please let Co-operatives UK know as soon as possible if you have trouble accessing this grant. We will be actively lobbying central and local government to provide support for as many of our members as possible. Email: [email protected]


Self-employment

The following scheme is applicable to the self-employed.

Self-employment Income Support Sceheme

What is this support?
Government is offering the self-employed a taxable grant worth 80 percent of their average profits from the tax years 2016-2017, 2017-2018 and 2018-2019, up to a maximum of £2,500 per month.

Who is Eligible?
For clarity, co-operatives are not eligible, though any members who are self-employed will be eligible, subject to the following criteria. You must:

  • Be a self-employed individual or a member of a partnership
  • Have submitted your Income Tax Self Assessment tax return for the tax year 2018-19
  • Have traded in the tax year 2019-20
  • Be trading when you apply, or would be except for COVID-19
  • Intend to continue to trade in the tax year 2020-21
  • Have lost trading profits due to COVID-19
  • Have trading profits less than £50,000
  • Earn more than half of your income from self-employment

For more details see here.


Retail, leisure and hospitality/tourism

The following schemes are targeted at helping businesses in retail, leisure and hospitality/tourism cope with the impacts of social distancing. It appears that within this, co-ops and community businesses that are ratepayers should be as eligible as any others, including those that receive Charitable Rates Relief and other discretionary rates reliefs. 

100% business/non-domestic rates holiday

What is this support?
Business / non-domestic rates tax holidays for retail, hospitality/tourism and leisure businesses, for the 2020-21 tax year.

In England this measure is officially called the 'Expanded Retail Discount' (which covers retail, hospitality and leisure).

Who is eligible?
England: All retail, hospitality and leisure businesses in England who pay business rates, including those that receive rates reliefs, such as Charitable Rates Relief. Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

a. as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
b. for assembly and leisure; or
c. as hotels, guest and boarding premises and self-catering accommodation

For the avoidance of doubt, rateable properties that receive Charitable Rate Relief will be eligible for the 100% rates holiday.

See government's guidance to local authorities regarding eligibility here

Scotland: All retail, hospitality and tourism businesses in Scotland. Scottish Government is releasing more details all the time, see here.

Wales: Qualifying properties with a rateable value of £51,000 or less. Welsh Government is releasing more details all the time, see here.

How do you get this tax holiday?
In England, government says there is no action you need to take to get this holiday. However, some councils might have sent 2020-21 bills before this was finalized.These should be ignored. In these cases councils will need to reissue updated bills to confirm the rates holiday. 

In Scotland and Wales processes are still being worked out. 

If you are unsure whether your co-op qualifies for this rates holiday, please inquire with your local authority as soon as possible. 

Please let Co-operatives UK know as soon as possible if you have trouble securing the rates holiday. Email: [email protected].

The Retail and Hospitality Grant Fund (England only)

What is this support?
A grant of £25,000 or £10,000 per qualifying property, for retail, hospitality and leisure businesses.

What is the eligibility?
Business ratepayers in England that are also benefiting from the 100% rates holiday outlined above will receive:

  • £25,000 grant per qualifying property with a rateable value between £15,000 and £51,000
  • £10,000 grant per qualifying property with a rateable value under £15,000 

Property usage qualifications are the same as for the 100% rates holiday outlined above. It depends on usage and qualification as of 11 March 2020. See here for more information. 

How do you get this grant?
Your local authority will write to you if you are eligible for this grant. 

If you are unsure whether any of your properties are eligible, inquire with your local authority. Please let Co-operatives UK know as soon as possible if you have trouble accessing this grant. Email: [email protected].

Retail, hospitality and leisure grant scheme (Scotland only)

What is this support?
Grants of £25,000 for retail, hospitality and leisure businesses operating out of smaller premises.

Who is eligible?
Retail, hospitality and leisure businesses with a rateable value between £18,001 and up to and including £50,999 will be able to apply for a one-off grant of £25,000. Scottish Government has provided more details on which properties this applies. 

How do you get this grant?
Enquire with your local authority.

Please let Co-operatives UK know as soon as possible if you have trouble accessing this grant. Email: [email protected].

Retail, leisure and hospitality grant scheme (Wales)

The Welsh Government is offering a grant of £25,000 to retail, leisure and hospitality businesses with a rateable value of between £12,001 and £51,000. The Welsh Government is making more details available.


Social economy support

We know many organisations and businesses in the social economy will either be ineligible for many of these schemes, or will find of little practical help. We are pressing governments to do more to support the social economy. 

Where schemes are put in place, they are listed below.

Third Sector Resilience Fund (Scotland only)

What is this support?

  • Grants: Between £5,000 and £100,000 
  • Interest free loans: 0% interest loans starting at £50,000

These measures are to  help ensure the health and continued viability of third sector organisations affected by cash flow and other problems.

Who is eligible?
Social enterprises, charities and other third sector organizations working in and for Scottish communities. While co-ops are not specifically mentioned in the eligibility criteria, a significant number of co-ops in Scotland are eligible, as they meet definitions of social enterprise and/or 'other third sector'. This is especially the case if they:

  • have social / community purposes (perhaps alongside mutual ones)
  • reinvest a significant proportion of their surpluses back into their business 

Co-ops in Scotland should not self-exclude because of the scheme's language. 

How do you get this support?
The Fund will be delivered by Firstport, Social Investment Scotland and the Corra Foundation. The application process is now open, see here.

Please let Co-operatives UK know as soon as possible if you have trouble accessing this funding. Email: [email protected].

Please let Co-operatives UK know as soon as possible if you have trouble accessing any of the funding measures listed on this page. Email: [email protected].