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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 new 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, 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 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 eligible for

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 31 March 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 31 March 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.

In England properties forced to close under the new lockdown will get grants of £1,334 to £3,000 per month depending on rateable value. Local authorities will be distributing. More information is yet to be provided. It remains unclear how this affects the new Tier 2 grants announced on 22 October (possibly postponed until after lockdown). We await clarification. 

More money will be given to devolved governments to increase their grant schemes. Again, we await more detail. 

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 30 November 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.

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 information may well have been superseded by lockdown grants announced on 31 October and may become relevant again after the lockdown period.

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. It is likely that these will be paid monthly until the end of April 2021, with a review in January 2021. Details remain unclear, though it appears that 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 will receive their funding soon and will be developing their own systems for administering and distributing grants. Businesses are likely to 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? The rates payer for business premises that are forced to close by local restrictions in England (i.e. Tier 3 restrictions) can claim cash grants of £1,000 or £1,500 (depending on rateable value) for every there 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 hep 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 are developing 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

Support for businesses in Scotland

What is this support? The business closure fund will provide one-off grants to businesses with non-domestic rates registered premises that have been forced to close under Scot Gov restrictions.

  • Each closed premises with a rateable value up to £51,000 will get a one off grant of £2,875
  • Each closed premises with a rateable value of £51,000 or more will get a one off grant of 4,310, but business with multiple premises cannot receive more than £21,000 

Who is eligible? Non-domestic rates registered premises closed under Scot Gov’s COVID-19 restrictions. Businesses that do not pay domestic rates directly, but rather via a lease (etc.) are eligible. 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 provide takeaway food as its core and established basis of main operation

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 before the Tuesday 3 November, 5 pm deadline. Find your local authority.

What is this support? The Business Hardship Fund will provide one off grants to businesses with non-domestic rates registered premises that, while not legally forced to close, are negatively impacted by these closures. Businesses with premises with a rateable value up to £51,000 will get a one off grant of £1,440. Businesses with premises with a rateable value of £51,000 or more will get a one off grant of £2,155, but business with multiple premises cannot receive more than £14,000 in total. 

Who is eligible? For the discretionary business hardship fund, you must be:

  • A hospitality business or gym required by the regulations to operate in a restricted way
  • A producer/wholesale business based in Scotland supplying primarily short-life goods or produce to hospitality businesses affected by the regulations. You must be able to show your turnover has dropped by at least 25% during the brake period

To be eligible for either fund, your business must:

  • Have been open and trading before 9 October 2020
  • Have a business bank account 
  • Have premises registered for non-domestic rates. Businesses that pay rates through their landlords rather than directly to a council are eligible to apply 

Any co-ops, social enterprise and charities that fall within the above should be eligible. While local authority eligibility may only mention companies, sole traders, trusts and partnerships, co-operative and community benefit societies are eligible and should apply. 

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 provide takeaway food as its core and established basis of main operation

How can you access this support? Apply via your local authority website before the Tuesday 3 November, 5 pm deadline. 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 specialized 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? Every Welsh business occupying a premises with a rateable value of £12,001 or less will be eligible for a £1,000 payment. Where these premises have been forced to close because of the firebreak lockdown, they can also apply for a further £2,000 top-up grant. Every Welsh business occupying a premises forced to close during the firebreak lockdown with a rateable value between £12,001 and £51,000 will be eligible for a £5,000 payment.

More details on eligibility and how to apply should be available shortly.

What is this support? Business development grants from £10,000 to £150,000 to assist with recovery from the effects of the Covid-19 pandemic and future sustainability. Micro businesses (1-9 employees) in Wales can apply for up to £10,000 on the condition they match this with their own investment of at least 10%. Tourism and Hospitality micro businesses, and those micro businesses forced to close due to the Fire Break lockdown, may not be required to provide the 10% match investment.  

SMEs (employing between 10 and 249 people) will be able to apply for up to £150,000. Small businesses (up to 50 employees) will be required to match this with their own investment of at least 10% and medium businesses (between 50 and 249 employees) with at least 20% of their own funding. Tourism and Hospitality micro businesses, and those micro businesses forced to close due to the Fire Break lockdown, may not be required to provide the 10% match investment.  

Who is eligible? All Welsh business, co-ops, social enterprises and charities that employ at least one person (which can include the owner) are eligible. Grant applications must be to support projects that address one or more of the calls to action in the Welsh Government’s Economic Action Plan. More details.

How do you access this support? Apply online from the week commencing 26 October 2020. The support will remain open for four weeks or until funds are fully committed.

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 or LinkedIn

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