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Covid-19 government support for business

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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 April 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. Employers will only be asked to cover National Insurance and employer pension contributions which, for the average claim, accounts for just 5% of total employment costs. 

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?

Claims for the period 1 November onwards can be made from week commencing 9 November. 

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 a new 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.

On 5 November 2020 the Chancellor announced that the Job Retention Bonus scheme is cancelled as it has been superseded by the extension of the Job Retention Scheme to 30 April 2021.

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.

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 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. 

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 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].

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

Government has introduced grants to address issues faced by businesses in different tiers of restrictions.

This may be superseded by announcements of new grant funding following the announcement of a third national lockdown from 4 January 2021, and may become relevant again when the lockdown period ends. 

 

What is this support?

On 5 January 2021 it was announced that retail, hospitality and leisure businesses in England forced to close following the national lockdown announced on 4 January 2021 may be eligible for a one-off grant of:

  • £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

How to apply

  • Local authorities will be distributing the grants. 
  • You can check eligibility and search for your local council on the gov.uk website

Additional discretionary funding for business has made available to local authorities following the lockdown announcement on 4 January 2021. We await more details of changes to these grants. 

What is this support?

The rate payer for business premises that are forced to close by local restrictions in England can claim cash grants of £1,000 or £1,500 (depending on rateable value) for every three weeks of closure. Closed premises with a rateable value of less than £51,000 will receive £1,000 every three weeks. Closed premises with a rateable value of £51,000 or more will receive £1,500 every three weeks. Local authorities also have discretion to pay grants of up to £1,500 to businesses that are:

  • Closed but not the rate payer
  • Not legally closed but struggling because of COVID-19

Who is eligible?

Depending on the policy of the local authority, all types of struggling business, co-op, charity or social enterprise may be eligible for grants, regardless of whether they are in receipt of some rates relief (Small; Rural; Charitable Discretionary), are not the rates payer, or don’t operate from a premises at all. 

Legally closed premises - Government has instructed local authorities to pay grants to the rate payers for premises closed under local restrictions for any three week period. Discretionary grants - Local authorities also have significant discretion to pay grants to other businesses/organisations. They are encouraged to target discretionary support at:

  • Non rate payers forced to close / stop trading 
  • Micro/small businesses and traders severely impacted, directly or indirectly by local restrictions, that need help meeting fixed costs 
  • Businesses/organisations that are crucial for local economies and communities
  • Particular business types, which could include co-ops, social enterprise etc.

We will be pressing local authorities to ensure the struggling co-ops and community businesses are eligible and targeted for discretionary grants.

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

What is this support?

Grants for businesses in Tier 2 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. However, government clearly expects local authorities to target grants at hospitality, hotel, B&B, and leisure businesses. We will look into how multi-purpose/multi-use hubs might have been factored (or not) into this.

Local authorities will receive sums based on how many hospitality, hotel, B&B, and leisure businesses, of different rateable values, are in their areas. The sum each local authority receives will be based on:  

  • Properties in their area with an rateable value of £15k or under, getting £934 per month
  • Properties in their area with an rateable value of between £15k-£51k, getting £1,400 per month
  • Properties in their area with rateable value of £51k + getting £2,100 per month

Note: the above is just the method to determine how much each local authority receives. It appears that local authorities have a lot of freedom to determine which businesses actually receive grants, in what amounts and on what payment schedule. 

Who is eligible?

Businesses in Tier 2 regions only. While government clearly expects local authorities to target grants at hospitality, hotel, B&B, and leisure businesses, it appears that actual eligibility and targeting will be left to the discretion of local authorities. We will be pressing local authorities to ensure the following co-ops and community businesses are eligible and targeted for grants:

  • Any co-ops and community businesses struggling because of COVID-19 (i.e. because of any drops in income/business, rising costs, or disruptions to activity, caused directly or indirectly by COVID-19 and restrictions) 
  • Any hospitality and leisure businesses (e.g. pubs, cafes, venues, leisure centres)
  • Any multi-purpose hubs
  • Rate payers with or without reliefs (i.e. Charitable; Small Business; Rural; Discretionary)
  • Non-rate paying businesses 
  • Non-rate payers 

Note: While the scheme has clearly been designed with rate paying businesses in mind, it is not clear that local authorities will be told to set eligibility criteria in relation to rate paying status. Non-ratepayers and ratepayers receiving any relief (e.g. Charitable; Small Business; Rural; Discretionary) may well still be eligible and indeed targeted for grant support, depending on local authority policy. Furthermore local authorities will also receive a 5% top up amount to these implied grant amounts, to cover other businesses that might be affected by the local restrictions, but which may not be in the business rates system.

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 

This scheme will initially run until April, with a review point in January. More details here.

What is this support?

Grants are available from Arts Council England and National Lottery Heritage Fund to support struggling museums, galleries and heritage organisations until restrictions are lifted. 

Grants for arts and culture

Arts Council England will be awarding a maximum of £250 million in grants ranging between £25,000 and £3 million to cultural organisations able to evidence the need for financial support.

Who can apply?

Cultural organisations in England that are formally incorporated and registered with the relevant regulator. Co-operative and community benefit societies are included in the list of eligible types of organisation. Read the full list.

Applications can be made by organisations that have already received Round One Culture Recovery Fund support, but limits apply. 

How to apply

The deadline to have completed application for Round Two grants is 12pm (midday) on Tuesday 26th January 2021.

To start an application or read further information, click here.

Grants for heritage

The National Lottery Heritage Fund is distributing up to £36 million ringfenced for heritage organisations, with grants of between £10,000 and £3 million being made available to support businesses prior to full reopening.

Who can apply?

Businesses and organisation that own, work with or manage heritage in England. Organisations must be formally constituted and co-operative and community benefit societies are included in the list of eligible types of organisation. Read the full list.

How to apply

The deadline to have completed application for Round Two grants is 2pm on 26th January 2021, with all decisions set to be finalised and communicated to applicants by the end of March 2021. 

To start an application or read further information, click here.

Support for businesses in Scotland

Please note, we await further details around how the national lockdown, which commenced on 4 January 2021, may (if at all) affect these grants and support packages. 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

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.

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