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Coronavirus: How businesses are being supported through pandemic

Coronavirus: How businesses are being supported through pandemic

Published by Local Democracy Reporter Jake Webster at 12:12pm 25th March 2020.

Support for Harrogate Borough businesses

  • The government's announced a raft of measures to support Harrogate businesses during the pandemic but what are they and how can they help?
  • They include loans, grants, wage support and tax relief packages.
  • Here Stray FM breaks down what help is available.

The UK government has announced a raft of loans, grants, wage support and tax relief packages to help Harrogate businesses get through the coronavirus crisis.

Nationally, there are £330billion of loans and £20billion of tax breaks being made available to help keep companies afloat and prevent them laying off staff.

Around £40million of that money will be made available to support Harrogate businesses in the coming weeks.

This comes as all ‘non-essential’ businesses have been told to shut shop for at least the next three weeks to prevent the spread of Covid-19 virus.

But with three consecutive announcements coming from chancellor Rishi Sunak in just a few days – it has been difficult to keep up with what exactly is being made available to who.

And on top of this, Mr Sunak is promising “further announcements” will be made – particularly for the self-employed – as he warned “there are genuine practical and principled reasons why it is incredibly complicated to design.”

But with what has been announced so far, here is a run-down of what is on offer.

Wages

Through its coronavirus job retention scheme, the government said it will reimburse employers for 80 per cent of wages for staff members which are temporarily not working – as long as they are on the pay as you earn (PAYE) system.

The maximum payment will be £2,500 per month – and payments will be backdated to begin on March 1.

And employers do not have to pay the money back – but they do have the option to top-up the wage payments for their staff.

Any employees on zero-hours contracts will be covered by this – again – as long as they are on the PAYE system. More details on how this will work with zero-hour contracts will be announced soon by the government.

But what the government has already said is the grants will be paid through HMRC in the next few weeks. Companies must apply for the cash through a new portal on the HMRC website, which as of Tuesday is not yet up and running.

There is still no support package in place for the five million self-employed people in the UK – and pressuring is mounting on the government to act soon. The government say they are working hard on this.

Sick pay

Businesses with fewer than 250 employees are entitled to money towards Statutory Sick Pay during the coronavirus pandemic.

The government said it will refund the cost of two weeks of sick pay per employee – at a rate of £94.25 per week. And if the employee is off work because they have the Covid-19 virus, a doctors’ sick note will not be needed to prove it.

VAT

Valued Added Tax (VAT) payments for all businesses can be deferred for three months from 20 March 2020 until 30 June 2020.

This is an automatic offer and no applications are required. Businesses will also be given until the end of the 2020/2021 tax year to pay any liabilities.

And for the self-employed, income tax payments due in July 2020 will be deferred to January 2021.

Business rates

Hospitality, leisure, retail and nursery businesses do not have to pay business rates for a year starting from April 2020.

This includes all shops, restaurants, cafes, pubs, bars, cinemas and live music venues, hotels and guest houses.

Hospitality, leisure and retail businesses will also be able to apply for up to £25,000 in grants per property.

And companies in these sectors with a property that has a rateable value of £15,000 and under will receive a £10,000 grant.

Grants of £25,000 will also go to companies with a property that has a rateable value of between £15,000 and £51,000.

And what happens now? 

Harrogate Borough Council says it is in the process of contacting retail, hospitality and leisure organisations in relation to their business rates – with new bills being prepared and sent out. There is no need to contact the council directly about this.

The authority has also given the following advice for businesses in the retail, hospitality and leisure sectors;

    • If you pay your business rates by standing order – cancel the standing order
    • If you pay your business rates by cash, bank transfer or credit card each month – don’t pay
    • If you pay your business rates by direct debit – do nothing
    • The borough council’s direct commercial tenants will be offered three months’ rent free and the council will be encouraging all other landlords in the district to consider what support they can offer their tenants.

Council leader Richard Cooper said:

“We know businesses are struggling. Our business rates team are geared up to process tens of millions of pounds of government cash to support local businesses. As soon as it hits our bank account we will be getting it in to the bank accounts of local businesses.

“We have also been lobbying government on behalf of freelancers and the self-employed who make up a significant part of our local workforce. We are expecting announcements on this over the coming days.

“But we want to go further. So we will be offering nearly all our commercial tenants three months’ rent free. This includes some shops on our high streets, Harrogate Theatre and other offices and business premises around the district. It is time for other commercial landlords to show the same leadership by talking to their tenants about how best they can support them at this time.

“We know that landlords need to make a profit. But the larger ones especially need to look at how much they can trim this – or like us offer zero rent periods – to ensure their tenants are still in business when this crisis is over.”

How to find out more? 

The government has launched a new website that helps businesses find out how to access the support. Click here to access it.

And a dedicated helpline has also been set up to help businesses and the self-employed with their tax affairs.

Anyone who is concerned about being able to pay their tax should call HMRC’s helpline on 0800 0159 559.