With the coronavirus pandemic having a significant impact on the UK’s economy across 2020 and into 2021, the UK and Scottish governments have announced various help and support packages aimed at tackling both the immediate impacts of COVID-19 and offsetting any potential longer-term economic slowdown.
An initial package of measures was announced as part of the March 2020 Budget and these have been supplemented by significant further support as the crisis deepened.
In his 2021 Budget, delivered on 3 March, Chancellor Rishi Sunak announced a number of further measures aimed at supporting businesses through what is hoped will be the last few months of restrictions, as well as setting out plans for economic recovery.
(Please note: the information in here was correct at the time of publication. We aim to keep the page updated, but in this fast-moving situation things are changing all the time. Updated April 2021).
So what help is available to businesses and how can they access it?
Recovery Loan Scheme
The Recovery Loan Scheme (RLS) launched on 6 April 2021 and supports access to finance for UK businesses as they recover and grow following the Covid-19 pandemic.
RLS aims to help businesses affected by Covid-19 and can be used for business purposes, including, managing cashflow, investment and growth. It is designed to support businesses that can afford to take out additional finance for these purposes. Businesses who have taken out a CBILS, CLBILS or BBLS facility are able to access the new scheme.
A key aim of the Recovery Loan Scheme is to improve the terms on offer to businesses, but if a lender can offer a business the choice of a commercial loan on better terms, without requiring the guarantee provided by the RLS, they should do so.
The Scheme will run until 31 December 2021, subject to review. You can borrow between £25,001 and £10 million, from 1 to 6 years. Find out more and check eligibility.
BBLS, CBILS, CLBILS - Government-backed lending schemes now closed
Several government-backed lending schemes introduced in March 2020 closed to new applications on 31 March 2021, including:
- Bounce Back Loan Scheme (BBLS)
- Coronavirus Business Interruption Loan Scheme (CBILS)
- Coronavirus Large Business Interruption Loan Scheme (CLBILS).
If you submitted an application for one of these schemes by 31 March 2021 we will process it and issue the relevant documentation in due course.
If you have taken out a Bounce Back Loan, before your first repayment is due, your lender will contact you about the option to:
- repay back some or all of your loan
- stick with your current payment arrangement
- provide additional support, including Pay As You Grow options or help to deal with financial difficulties.
Pay As You Grow Options include:
- extending your loan term to 10 years
- moving to interest-only repayments for six months (you can do this up to 3 times)
- deferring repayments for six months (you can do this once).
Find out more information on government-backed lending schemes.
Covid Corporate Financing Facility (CCFF) - now closed
The Covid Corporate Financing Facility (CCFF) provided funding to large corporate businesses by purchasing commercial paper of up to one-year maturity. It was open to firms ‘making a material contribution to the UK economy' such as employing large numbers of people or having their corporate HQ in the UK.
The CCFF closed to new applications on 31 December 2020.
Businesses that have used the CCFF can make an early repayment if they wish. This gives them greater flexibility to move to alternative sources of funding, if appropriate. The Bank of England will usually apply a fee to the price offered for early repayment.
For full details of the scheme, see the Bank of England’s website.
Coronavirus Job Retention Scheme to cover employee wages
The Coronavirus Job Retention Scheme (CJRS) was launched in March 2020 to help employers retain jobs for the longer term, even if they can’t afford to pay staff currently. The scheme has now been extended to run until 30 September 2021.
When the scheme started, it was set up so that government grants would cover 80% of the salary of furloughed workers up to a total of £2,500 a month – including minimum wage employees.
At various points the scheme has been altered to taper the amount of payment from the government to reflect changing economic circumstances.
From November 2020, the government resumed paying 80% of furloughed workers’ salaries for the hours they are not working. Employers are responsible for paying ER NICs and pension contributions.
From 1 July 2021, the level of grant will be reduced each month and employers will be asked to contribute towards the cost of furloughed employees’ wages.
From 1 July until 31 July, the government will pay 70% of furloughed employees’ wages for hours not worked up to a maximum of £2,187.50 a month. Employers will pay 10% of employees’ wages not worked up to a maximum of £312.50 a month. Employers remain responsible for ER NICs and pension contributions.
From 1 August until the end of September, the government will pay 60% of furloughed employees’ wages for hours not worked up to a maximum of £1,875 a month. Employers will pay 20% of employees’ wages not worked up to a maximum of £625 a month. Employers remain responsible for ER NICs and pension contributions.
You can continue to choose to top up your employees’ wages above the 80% total and £2,500 cap for the hours not worked at your own expense.
To be eligible for the extended CJRS which started in November 2020 you must have:
• a PAYE payroll scheme
• enrolled for PAYE online
• a UK bank account.
Until 30 April 2021, you can claim for employees who were employed on 30 October 2020.
From 1 May 2021 onwards you can claim for employees who were employed on 2 March 2021.
They do not need to have been furloughed previously.
You don’t need to have previously furloughed any of your employees to use the extended scheme.
Any organisation with a UK payroll can apply, including businesses, charities, recruitment agencies and public authorities.
Apprentices can be furloughed in the same way as other employees and they can continue to train while furloughed.
See if you can claim for wages through the Coronavirus Job Retention Scheme.
Since 1 July 2020, employers have been able to furlough staff part-time for any amount of time and any shift pattern, while still being able to claim a CJRS grant for their normal hours not worked. Organisations are responsible for paying their staffs’ wages while in work.
Employers are required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked. To be eligible for the grant, employers must agree with their employee any new flexible furloughing arrangement and confirm that agreement in writing.
See guidance on calculating claims for flexibly furloughed employees.
Scottish Strategic Business Framework Fund
Scotland’s Strategic Framework Business Fund has provided grants to businesses required to close or significantly change their operations due to COVID-19 restrictions.
The scheme closed to new applicants on 22 March 2021.
On 19 April 2021, all Strategic Framework Business Fund recipients should have automatically received a combined final two-week payment from the Fund and a one-off Restart Grant to help them reopen.
England, Wales and Northern Ireland are running their own schemes to support businesses facing restrictions.
See details of England’s Restart Grants.
See details of Wales’ Restrictions Business Fund.
See details of Northern Ireland’s Localised Restrictions Support Scheme.
Statutory Sick Pay
Employees are entitled to Statutory Sick Pay (SSP) for every day they are off work if they are self-isolating because:
- they or someone they live with have coronavirus symptoms or have tested positive
- they’ve been notified by the NHS or public health authorities that they have been in contact with someone with coronavirus
- someone in their support bubble (or extended household in Wales and Scotland) has coronavirus symptoms or has tested positive
- they’ve been advised by a doctor or healthcare professional to self-isolate before surgery
- they live in an area with local restrictions in place and have been asked to shield because they are at very high risk from coronavirus.
The Chancellor pledged that the government will support small and medium-sized businesses and employers to cope with the extra costs of paying COVID-19 related SSP by refunding eligible SSP costs. It was confirmed in the 2021 Budget that this scheme will remain in place until further notice. The eligibility criteria for the scheme are:
- this refund will be limited to two weeks per employee
- employers with fewer than 250 employees (as of 28 February 2020) will be eligible
- employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
- employers should maintain records of staff absences, but should not require employees to provide a GP fit note
- the eligible period for the scheme will start on the day on which the regulations extending SSP to self-isolators come into force.
If you need more help to understand what your responsibilities are then see the Statutory Sick Pay: employers guide.
Find out more about claiming back Statutory Sick Pay.
Help for the self-employed
The Self-Employed Income Support Scheme supports self-employed people who have been adversely affected by the coronavirus by providing a taxable grant based on their average monthly profits over the last three years, up to £2,500 a month. The Chancellor said 95% of people who are majority self-employed should be able to benefit from this scheme – about 3.8 million people. Under the scheme, five grants have been made available.
The first, second and third grants covered the months between March 2020 to January 2021. Applications for these grants are now closed.
The fourth grant covers the three months from the start of February to the end of April. It will provide a taxable grant worth 80% of three months’ average trading profits, capped at £7,500 total. It will be paid in a single instalment and individuals will be able to claim from late April, with applications remaining open until 31 May 2021.
As part of the 2021 Budget, a fifth and final SEISS grant was announced covering the period between May and September 2021.
The amount of the fifth grant will be based on how much your turnover has been reduced in the last tax year.
Individuals will be able to claim:
- 80% of 3 months’ average trading profits, capped at £7,500, if they’ve experienced a turnover reduction of 30% or more
- 30% of 3 months’ average trading profits, capped at £2,850, if they’ve experienced a turnover reduction of less than 30%.
Applications for the fifth grant are expected to open at the end of July 2021.
To make sure only the genuinely self-employed benefit and help minimise fraud, to apply for the SEISS grants you have to meet certain eligibility criteria.
To be eligible for the fourth grant you must:
- have had a trading profit of less than £50,000 in the 2020-21 tax year
- make at least half your income from self-employment
- traded in both the 2019-20 and 2020-21 tax years, and submitted your tax return for 2019-20 by 2 March 2021.
If you aren’t eligible based on your 2020-21 profits, HMRC will look back at previous years to 2016-17.
You must also declare that:
- you intend to continue trading
- you reasonably believe there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus.
Eligibility for the fifth grant will be determined by how much your turnover has been reduced in the year April 2020 to April 2021. Further details are expected in the coming months.
If you are self-employed but pay yourself a salary and dividends through your own company, you will not be covered by the scheme but will be covered for your salary by the Coronavirus Job Retention Scheme if you are operating a PAYE scheme.
Business Rates Reliefs
Administering rates is devolved, so available help can differ between UK regions.
In Scotland the government has announced various rates relief measures, including:
- a 100% rates relief for retail, hospitality and leisure sectors until the end of March 2022 – in the 2020-21 tax year this was applied to bills without the need to apply, from April 2020 businesses will need to submit an application form with their local council.
- Scottish airports will get 100% rates relief until the end of March 2022, as will organisations providing handling services for scheduled passenger flights at Scottish airports, such as baggage handling, re-fuelling and waste servicing.
- 1.6% rates relief for all properties across Scotland, effectively reversing the planned below inflation uplift in the poundage from 1 April 2020 to the end of March 2021.
Because of the role that Loganair plays in providing connectivity in the Highlands and Islands, the Scottish government has also given them 100% rates relief until the end of the 2021-22 financial year. No other airline will receive rate relief in Scotland.
In England all retail, leisure and hospitality businesses will be eligible for a tax holiday from business rates until the end of June 2021. This will be followed by 66% business rates relief for the period from 1 July 2021 to 31 March 2022, capped at £2 million per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties. The measure applies to:
- cinemas and theatres
- restaurants and hotels
- museums and art galleries
- caravan parks
- gyms and sports clubs
Nursery businesses on Ofsted’s Early Years Register or properties wholly or mainly used for the provision of the Early Years Foundation Stage are also eligible.
These rate relief measures are available alongside small business rate relief, which you can access if your property’s rateable value is less than £15,000. You will not pay business rates on a property with a rateable value of £12,000 or less.
For properties with a rateable value of £12,001 to £15,000, the rate of relief will go down gradually from 100% to 0%. For example, if your rateable value is £13,500, you’ll get 50% off your bill. If your rateable value is £14,000, you’ll get 33% off.
If your property in England has a rateable value below £51,000, your bill will be calculated using the small business multiplier, which is lower than the standard one. This is the case even if you do not get small business rate relief.
The small business multiplier is 49.1p and the standard multiplier is 50.4p from 1 April 2019 to 31 March 2020. The multipliers may be different in the City of London.
In Wales the government, which has devolved responsibility for rates, has also announced business rates relief for small businesses with shops, leisure and hospitality businesses seeing their rates cut, and in some cases removed entirely.
- Retail, leisure and hospitality businesses with a rateable value below £500,000 will receive 100% business rate relief in 2020-21 and 2021-22.
In Northern Ireland, eligible businesses will pay no rates in the 2020-21 and 2021-22 financial year. It applies only to certain sectors and is available whether the property is occupied or vacant for:
- hospitality, tourism and leisure
- retail (excluding certain supermarkets and off-licences) and retail services
- Belfast City Airport, Belfast International Airport and the City of Derry Airport.
Hardship Rate Relief
Hardship Rate Relief is available for non-domestic ratepayers who have been affected by exceptional circumstances.
Hardship Rate Relief is only available on rates that are due – so you can’t claim it for months when the rates holiday is in place. Applications for Hardship Rate Relief must be made online.
The Regional Rate has been adjusted downward to offset the change in the total rateable value due to Reval2020.
Check your relevant government website for more information on business rates:
If you need any further information, talk to the business rates team at your local council.
The Northern Ireland government has put together answers to common questions that may be useful for local business.
The Welsh government has information on support for Welsh businesses.
UK government advice and support for business.
VAT payments deferred
VAT payments due between 20 March 2020 and 30 June 2020 were deferred by the Chancellor. That meant businesses did not have to make any VAT payments to HMRC during that period. Originally, people had until the end of the financial year to repay those bills, however, there is now the option to spread the cost over up to 11 smaller payments until 31 March 2022, interest free.
Businesses will need to opt into the scheme by 21 June 2021.
VAT cuts for hospitality sector
As part of efforts to boost hospitality as lockdown eases, the Chancellor announced a VAT cut from 20% to 5% for the hospitality and tourism sectors.
It will remain in place until 30 September 2021 and will be followed by six months of a discounted 12.5% rate before returning to the standard 20% on 31 March 2022. The VAT cut and discount applies to:
- food and non-alcoholic beverages sold for on-premises consumption, for example, in restaurants, cafes and pubs
- hot takeaway food and hot takeaway non-alcoholic beverages
- sleeping accommodation in hotels, holiday accommodation, pitch fees for caravans and tents, and associated facilities
- admissions to various attractions that are not already eligible for the cultural VAT exemption, including theatres, circuses, fairs, amusement parks, museums, zoos, cinemas, concerts and exhibitions.
Self-assessment taxpayers were given the option to defer payments due in July 2020 and will also be given more time to pay taxes due in January 2021.
Taxpayers with self-assessment liabilities of up to £30,000 can use HMRC’s Time to Pay facility to arrange a payment plan over an additional 12 months. This means liabilities originally due in July 2020 now don’t need to be paid in full until January 2022.
Any self-assessment taxpayer struggling to pay their tax bill on time can use Time to Pay to agree a payment plan. A Time to Pay arrangement is a time-limited deferral period on HMRC liabilities owed, and a pre-agreed time period to repay these. HMRC will also consider cancelling penalties and interest and suspending debt collection proceedings. HMRC will also waive late payment penalties and interest where a business experiences administrative difficulties contacting HMRC or paying taxes due to COVID-19.
Alternatively, you can now apply online to set up an online payment plan for tax liabilities of up to £30,000. Previously the limit was £10,000.
Extended loss carry back for businesses
To help UK businesses which would otherwise have been viable but have been pushed into a loss-making position, the trading loss carry-back rule will be temporarily extended from one year to three years. It will be available for both incorporated and unincorporated businesses.
Plan for Jobs
As part of efforts to help the economy bounce back from the effects of the first lockdown, the Chancellor has unveiled a number of measures under his Plan for Jobs in the Summer Statement 2020 and added further support as part of the 2021 Budget. These included:
- The £2bn Kickstart Scheme which will fund six-month work placements for 16 to 24-year-olds on universal credit. Payments under the scheme will cover national minimum wage for 25 hours per week, plus national insurance and pension contributions. Employers will be able to apply to be part of the scheme from August 2020 and it is expected to run until December 2021. There will be no limit to the number of placements available under the scheme.
- £1,000 trainee grants for employers in England who provide trainees aged 16-24 with work experience. The grants are open for applications and will be available until 31 July 2021. Businesses can claim funds for all work placements that have been completed since 1 September 2020.
- Payments for apprenticeships − the government will pay employers in England £2,000 for every new apprentice they hire aged under 25, and £1,500 for each new apprentice they hire aged 25 and over, from 1 August 2020 to 31 March 2021. This payment will double to £3,000 per new apprentice between 1 April and 30 September 2021.
The UK government said it is providing funding to Scotland, Wales and Northern Ireland for similar initiatives.
Help to Grow programme
The Help to Grow programme was launched as part of the 2021 Budget and aims to help small and medium-sized businesses learn new skills and reach new customers. It is made up of two parts:
- Help to Grow: Management – an executive development programme designed to accelerate business growth
- Help to Grow: Digital - free online advice and money off software.
Getting help from Bank of Scotland
As a bank, we have been committed to protecting our small business customers from the impacts of the coronavirus since the pandemic began. That is why we launched a £2 billion package in March 2020, that provided capital repayment holidays alongside other support, to help minimise disruption. For more information on the support currently available please see our dedicated page.
Also, if you are not sure which government support you qualify for use the online government tool to help you.