WHO WOULD HAVE THOUGHT WE MISS OUR WORK COLLEAGUES?
23rd November, 2020
David Irving believes it is too premature to predict the death of the office. Who would have thought we miss our colleagues?
As the Coronavirus pandemic has caused many businesses to close, many small business owners may be worried about their future. But what support from the Government are SMEs entitled to? And what protection do they have against being evicted during this time? We’ll be discussing this and more during #SolicitorChat.
Join The Law Society and other firms discussing a different topic each week on Thursday mornings at 0900-1000.
What Government grants are available for small businesses affected by Coronavirus?
The Small Business Grant Fund
The Small Business Grant Fund (SBGF) supports eligible businesses in England with their business costs during the Coronavirus pandemic. Small businesses in England which pay little or no business rates and who meet the eligibility criteria will get a one-off cash grant of £10,000 from their local council.
Your business will be eligible if it:
- is based in England
- occupies property
- was eligible for small business rate relief (including tapered relief) or rural rate relief on 11 March 2020
Your business cannot get funding for:
- properties occupied for personal uses, such as private stables, beach huts and moorings
- car parks and parking spaces
Retail, Hospitality and Leisure Grant Fund
Businesses in England whose premises are used to run a retail, hospitality and/or leisure focused business are entitled to a one-off cash grant of up to £25,000 from their local council.
If your business has a property with a rateable value of:
- £15,000 or under, you may be eligible for a grant of £10,000; or
- over £15,000 but less than £51,000, you may be eligible for a grant of £25,000.
Your business will be eligible if it:
- is based in England
- is in the retail, hospitality or leisure sector
- had a rateable value of under £51,000 on 11 March 2020
Properties eligible for the grant will be those that are wholly or mainly being used as a hospitality, retail, or leisure venue. Examples include:
- shops
- restaurants, cafés, bars or pubs
- cinemas or live music venues
- estate agents or letting agencies
- assembly or leisure property – for example, a bingo hall, a sports club, a gym or spa
- hospitality property – for example, a hotel, a guest house or self-catering accommodation
Your business cannot get funding for:
- properties occupied for personal uses, such as private stables, beach huts and moorings
- car parks and parking spaces
Top-up to local business grant funds scheme
A discretionary fund has been set up to accommodate certain small businesses previously outside the scope of the Small Business Grants Fund (SBGF) and the Retail, Hospitality and Leisure Grants Fund (RHLGF).
Further details are still to follow. However, we understand that local authorities will be able to disburse grants to the value of £25,000, £10,000 or any amount under £10,000. The value of the payment to be made will be at the discretion of the local authority.
What options are available for businesses that are currently unable to pay their tax bill due to Coronavirus?
Tax Bill
If you cannot pay your tax bill on time because of Coronavirus, you may be able to delay it without penalty using HMRC’s Time to Pay service. You may be eligible if you are a UK business that pays tax to the UK government and has outstanding tax liabilities.
VAT
If you are a UK VAT registered business and have a VAT payment due between 20 March 2020 and 30 June 2020, you have the option to defer payment until 31 March 2021.
What is small business rate relief and how can it help businesses affected by Coronavirus?
Retail, hospitality and leisure sectors
The Government has confirmed that businesses in the retail, hospitality and leisure sectors in England will not have to pay business rates for the 2020 to 2021 tax year.
Your business will be eligible if the property in question is a:
- shop
- restaurant, café, bar or pub
- cinema or live music venue
- assembly or leisure property – for example, a sports club, a gym or a spa
- hospitality property – for example, a hotel, a guest house or self-catering accommodation
Nurseries
The Government has confirmed that nurseries in England do not have to pay business rates for the 2020 to 2021 tax year.
Your business will be eligible if it:
- is on Ofsted’s Early Years Register
- provides care and education for children up to 5 years old
What protection do commercial tenants have if they are unable to pay their rent due to the Coronavirus pandemic?
Significant changes have been made to landlords’ remedies during the Covid-19 pandemic, particularly relating to the landlord’s ability to end a lease and secure possession of premises. Sections 82 and 83 of the Coronavirus Act impose a three-month moratorium on landlords’ ability to forfeit leases of commercial property for non-payment of rent in England and Wales, and Northern Ireland, respectively.
The relevant provisions of the Coronavirus Act apply to the vast majority of commercial leases, but not most leases for terms of less than six months. They prevent landlords from taking any action to forfeit for non-payment of rents or other sums, including service charges and insurance rent, from 26 March until 30 June 2020. This period may be extended. The Act provides that in any existing proceedings there can be no order for possession before 30 June. However, you should note that forfeiture by peaceable re-entry may still be available to a landlord for breaches unrelated to non-payment of rent or other sums due.
It is important to note that the Coronavirus Act does not suspend the right to rent or other payments, only the right to forfeit the lease for non-payment until the moratorium ends. While the moratorium applies, landlords retain the right to charge interest on the arrears at a rate specified in the lease; to bring debt recovery proceedings against tenants; and to have recourse to parent company or other guarantors, rent deposits or other forms of security for payment. Equally, during this period, no action by a landlord (other than giving an express waiver in writing) will be regarded as waiving a right of re-entry or forfeiture for non-payment of rent. However, some changes have been made to the legislation governing debt recovery proceedings and insolvency proceedings, which do impact upon these rights and these should be considered in more detail before any action is taken.
What top tips would you give to a business worried about the impact the Coronavirus pandemic has on them?
- Stay calm and carefully consider what your next steps are.
- Take full advantage of financial support being offered by the Government (many of which have been mentioned above).
- Make contingency plans. For example, what will you do if your supply-chain is delayed because more time is being spent at ports disinfecting them before they are shipped?
- Keep in contact and engage with customers. For example, expand your social media presence, as this is where customers are now. Remind them you are there, and work together to find out if there is a way you can still serve them. It is important to communicate clearly and regularly with your customers.
- Look after your employees. Try to be as honest and transparent as possible and reassure them that the priority is to keep their jobs and the business going forward. Without a unified, driven and dedicated workforce, it will be difficult for any business to weather this crisis.
The contents of this article are intended as guidance for readers. It can be no substitute for specific advice. Consequently we cannot accept responsibility for this information, errors or matters affected by subsequent changes in the law, or the content of any website referred to in this article. © Mundays LLP