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  • The COVID-19 pandemic is proving to be extremely challenging for businesses, as many are unable to work due to the need to social distance and stay at home where it is possible. The Government have been working hard to provide unprecedented support for individuals, employees and employers and have been trying to provide as much information as possible to assist with this. To help you understand and digest this, we have condensed the most relevant information below, along with ways in which Practical Business Solutions can help you.

    Coronavirus Job Retention Scheme (Furloughing)

    Business will have halted for many of you, meaning that there is no work for your employees. To avoid laying employees off, the government has introduced the Coronavirus Job Retention Scheme. This will allow employers to claim 80% of retained workers, up to a total of £2,500 a month.

    On 29th May, Chancellor Rishi Sunak, announced further changes to the CJRS (furlough scheme).
    The changes include a phased employer contribution to begin in August:
    • August – NI and pension contributions only
    • September – NI and pension + 10% employer contribution
    • October – NI and pension + 20% employer contribution
    ‘Flexible furlough’ will allow individual firms to decide what is best for them and it will be introduced one month early:
    • Starting on 1st July
    • Employers to pay employees for part time work, with the furlough scheme making up the balance
    • e.g. A worker usually working a 5 day week can be brought back for 2 days a week paid by the employer. The remaining 3 days will be covered by the furlough scheme

    To be eligible for the scheme the cut-off date was previously 28th Feb, however, this has been extended so that employees on the payroll on or before 19th March are now eligible.

    You will only be able to make your Coronavirus Job Retention Scheme claim online, not via telephone, as demand is already beyond capacity. This system went live in April.

    To apply you will need:

    • Your ePAYE reference number
    • The number of employees being furloughed
    • The claim period (start and end date)
    • Amount claimed (per minimum length of furloughing of 3 consecutive weeks)
    • Your UK bank account and sort code
    • Your contact name
    • Your phone number

    You will also need to calculate the amount that you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim and there will be some form of validation by HMRC at the point of submitting your claim.

    You should make your claim using the amounts in your payroll – either shortly before or during payroll. Claims can be backdated until 1st March where employees have already been furloughed or reinstated from redundancy.

    If appropriate, worker’s wages should be reduced to 80% of their salary within your payroll before they are paid. This adjustment will not be made by HMRC.

    Step by Step Guide for Claiming for Coronavirus Job Retention Scheme (CJRS)

    For more information, please see government guidance: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

    If you would like Practical Business Solutions to complete this claim on your behalf, please get in touch to discuss.

    Coronavirus Business Interruption Loan

    The Coronavirus Business Interruption Loan Scheme (CBILS) is a scheme that can provide facilities of up to £5m for smaller businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cashflow. CBILS supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance facilities.

    The scheme went live on Monday 23 March and will initially run for six months.

    CBILS is available through the British Business Bank’s 40+ accredited lenders, which are listed on the British Business Bank website here.

    In the first instance, businesses should approach their own provider – ideally via the lender’s website. They may also consider approaching other lenders if they are unable to access the finance they need.

    Decision-making on whether you are eligible for CBILS is fully delegated to the 40+ accredited CBILS lenders. These lenders range from high-street banks, to challenger banks, asset-based lenders and smaller specialist local lenders.

    You may need to prove that that were it not for the COVID-19 pandemic, your business would be considered viable by the lender, and for which the lender believes the provision of finance will enable your business to trade out of any short-to-medium term difficulty.

    Further information can be found: Coronavirus Business Interruption Loan Scheme

    Bounce Back Loan

    On 27th April, the Chancellor, Rishi Sunak made a statement on the government’s economic response to the Coronavirus outbreak, recognising the significantly negative impacts that Coronavirus will have on the UK and global economy.

    With that in mind, he launched the Bounce Back Loans scheme. This scheme will help many small and micro businesses that appeared to have fallen through the cracks and were ineligible for most of the support measures that had previously been announced.

    The new scheme will allow small businesses to borrow between £2,000 and £50,000 and access the cash, in most cases, within 24 hours of approval. The loans will have a 100% government guarantee and businesses can apply for a loan of up to 25% of their turnover. The government will also pay the interest of these loans for the first 12 months and no payments will be due during this time.

    Banks will not need to perform any forward-looking test of business viability or other complex eligibility criteria and that businesses will be able to apply for a loan online using a short and simple form.

    This scheme went live on 4th May, and firms will be able to access these loans through a network of accredited lenders.

    You can find more information gov.uk website.

    Self -Employed

    For those who are self-employed and are getting less or no work, you may be able to claim a grant through the Coronavirus Self-employment Income Support Scheme.

    This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £7,500 in total for the first application.  Individuals can continue to apply for the first SEISS grant until 13 July.

    There is now also the option to apply for a second grant and this will open in August. Individuals can claim a second taxable grant worth 70% of their average monthly trading profits, also paid out in one single instalment and capped at £6,750 in total.

    You do not need to have claimed for the first grant to be able to apply for the second. Further guidance will be provided on the second grant will be made available on Friday 12th June.

    You can claim for this scheme if you are self-employed individual or a member of a partnership and you:

    • Have submitted your Self Assessment tax return for the tax year 2018 to 2019
    • Traded in the tax year 2019 to 2020
    • Are trading when you apply, or would be except for coronavirus
    • Intend to continue to trade in the tax year 2020 to 2021
    • Have lost trading profits due to coronavirus

    You will need to confirm to HMRC that your business has been adversely affected by coronavirus. HMRC will as usual use a risk based approach to compliance.

    You will need to confirm to HMRC that your business has been adversely affected by coronavirus. HMRC will as usual use a risk based approach to compliance.

    Your trading profits must also be no more than £50,000 and more than half of your total income for either:

    • the tax year 2018 to 2019
    • the average of the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019

    3 Month Extension to File Accounts

    Businesses will be given an additional 3 months to file accounts with Companies House to help companies avoid penalties as they deal with the impact of COVID-19.

    Companies will still have to apply for the 3-month extension to be granted, those citing issues around COVID-19 will be automatically and immediately granted an extension. Applications can be made through a fast-tracked online system which will take just 15 minutes to complete.

    VAT Deferral

    To help businesses manage their cash flow, the government has provided the option to defer VAT payments until a later date if you are a UK VAT registered business and have a VAT payment due between 20th March and 30th June 2020.

    If you choose to defer your VAT payment as a result of Coronavirus, you must pay the VAT due on or before 31st March 2021.

    You do not need to inform HMRC that you are deferring this payment.

    More details can be found: https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19

    For full details on how the government is providing financial support for businesses see: https://www.gov.uk/government/collections/financial-support-for-businesses-during-coronavirus-covid-19


    Even after reading all of the information available, you still may have some unanswered questions.

    Please see this collection of FAQ’s for any remaining answers: COVID-19 services and FAQ’s v0.2

    If you require any additional support with any of the above and in helping your business survive the situation that we find ourselves in, please don’t hesitate to get in touch.

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