Coronavirus Support Resources – Finance

AIM Advice on government support available for museums in response to Covid-19

This page summarises current financial support made available to museums by the UK Government following the Chancellor’s announcement on Friday 20 March.

As that support is evolving this page will be reviewed frequently. It was last reviewed 3 April 2020.

Check the government webpages for the very latest business support developments.

AIM Advocacy
AIM is actively lobbying for further sector support. Should you have an emergency financial situation you wish us to raise as part of that lobbying, email info@aim-museums.co.uk

What is available?
Support currently includes:
– Coronavirus Job retention scheme
– Business rates holiday for retail, hospitality and leisure businesses (includes museums)
– Cash grants for retail, hospitality and leisure businesses
– Cashflow support through the tax system – including deferred VAT payments
– Business Interruption Loan Scheme
– Self-employed support measures (to date)

CORONAVIRUS JOB RETENTION SCHEME (updated 03 04 20)

What is it?
• employers can reclaim up to 80% of their wage costs up to a cap of £2,500 per month, plus (not including) associated employer NICs and minimum auto enrolment pension contributions on that wage. Fees, commissions and bonuses not included. The employer can top up to 100%, but does not have to.
• if an employee’s pay varies, the employer can claim for the higher of (i) the same month’s earning from the previous year (eg earnings from March 2019); or (ii) average monthly earnings in the 2019-20 tax year
• individuals only entitled to the minimum wage for the hours they work. If they are furloughed and do not work, and 80% of their normal earnings would take them below the minimum wage based on their normal working hours, they still only receive 80% as they are not working. However, they are entitled to be paid the National Minimum Wage for any time spent training.
• furlough leave must be taken in blocks of three weeks. Nothing in guidance which prohibits rotating furlough leave amongst employees, provided each employee is off for a period of at least three weeks
• employers can only claim once every three weeks, claims can be backdated to 1 March 2020.

Eligibility
• open to all UK organisations with employees that had a PAYE scheme in place on 28 Feb 2020
• to be eligible, the employee must have been on the payroll on 28 February 2020. Anybody on the payroll on 28 Feb and has since been made redundant can be rehired and put on scheme.

How to access?
You will need to:
• Designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
• the employee should agree to the change in hours (and acceptance of 80% pay)
• the furloughed employee must not be working at all. However, they can undertake training and do volunteer work, provided they do not provide services to or make any money for their employer, they can’t do volunteer work for their own employer.
• employees on sick pay or self-isolating cannot be furloughed but can be furloughed afterwards. Employees who are shielding can be placed on furlough.
• employees on maternity (or similar) leave can continue to draw statutory maternity payments.
• Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required once that portal is set up). We’re expecting further guidance on mechanics of claiming shortly, with the scheme up and running by the end of April.

Read the latest Government guidance on this support (27 03 20) here.

See The HR Dept’s online resources here.

CFG have shared a Q&A on furloughing here.

BUSINESS RATES HOLIDAY

What is it?
• There will be a business rates holiday (i.e. no business rates to pay) for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.
• Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.

Eligibility
You are eligible for the business rates holiday if:
• your business is based in England
• your business is in the retail, hospitality and/or leisure sector

Properties that will benefit from the relief will be occupied hereditaments (buildings) that are wholly or mainly being used:
• as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
• for assembly and leisure
• as hotels, guest and boarding premises and self-catering accommodation

How to access?
This will apply to your next council tax bill in April 2020. Local authorities may have to reissue your bill automatically to exclude the business rate charge and they will do this as soon as possible.

Update 31 03 20 – Colin Hunter, of Lambert Smith Hampton outlines COVID-19 impact on Business Rates

CASH GRANTS FOR RETAIL, HOSPITALITY AND LEISURE BUSINESSES (updated 03 04 20)

What is it?
• The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.
• For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000.
• For businesses in these sectors with a rateable value of between £15,000 and £51,000, they will receive a grant of £25,000.

Eligibility
You are eligible for the grant if:
• your business is based in England
• your business is in the retail, hospitality and/or leisure sector

Properties that will benefit from the relief will be occupied hereditaments (buildings) that are wholly or mainly being used:
• as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
• for assembly and leisure
• as hotels, guest and boarding premises and self-catering accommodation

How to access?
You do not need to do anything. Your local authority will write to you if you are eligible for this grant. Charities whose bills are nil due to reliefs should still be considered to be eligible for the grants, according to paragraph 16 of the guidance. Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.

CASH FLOW SUPPORT VIA TAX SYSTEM

What is it?
• The next quarter of VAT payments will be deferred (with nothing to be paid until the end of June).
• Businesses will have until the end of the financial year to pay bills

Eligibility
All UK businesses are eligible.

How to access?
No action is needed. This is an automatic offer with no application required.

BUSINESS INTERRUPTION LOAN SCHEME

What is it?
• Access to working capital (including loans, overdrafts, invoice finance and asset finance) of up to £5 million in value and for up to 6 years
• Following announcements on 17 March, the interest free period will be extended to 12 months (up from 6 months).
• Loans will be available to applications now.

Eligibility
You are eligible for the scheme if:
• your business is UK based, with turnover of no more than £45 million per year
• your business meets the other British Business Bank eligibility criteria

How to access?
The scheme is open now. To access talk to your bank or an approved partner as soon as possible to discuss your business plan.

SUPPORT FOR SELF-EMPLOYED (updated 27.03.20)

What is it?
• Safety net for self-employed people – can now access Universal Credit at rate equivalent to Statutory Sick Pay.
• Self-employed – next self-assessment payments deferred until January 2021.

Eligibility
If you are self-employed you are eligible.

How to access?
This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period.

Self employment income support scheme

The Self-employment Income Support Scheme (SEISS) will support self-employed individuals (including members of partnerships) whose income has been negatively impacted by COVID-19. The scheme will provide a grant to self-employed individuals or partnerships, worth 80% of their profits up to a cap of £2,500 per month.

The scheme will be open for an initial three months with people able to make their first claim by the beginning of June.

Eligibility

To be eligible you need to:

  • Be self-employed or a member of partnership;
  • Have lost trading/partnership trading profits due to COVID-19;
  • File a tax return for 2018-19 as self-employed or a member of a trading partnership. Those who have not yet filed for 2018-19 will have an additional 4 weeks from this announcement to do so;
  • Have traded in 2019-20; be currently trading at the point of application (or would be except for COVID 19) and intend to continue to trade in the tax year 2020 to 2021
  • Have trading profits of less than £50,000 and more than half of your total income come from self-employment. This can be with reference to at least one of the following conditions:
  • Your trading profits and total income in 2018/19
  • Your average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19.

How to access?

Individuals should not contact HMRC now. HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational. HMRC will then pay the grant directly to eligible claimants’ bank account. HMRC is urgently working to deliver the scheme; grants are expected to start to be paid out by beginning of June 2020.

You can find out more on the government pages here.

INSURANCE
Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim as long as all other terms and conditions are met.

Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.

Scottish Government support measures LINK
o a full year’s 100% non-domestic rates relief for retail, hospitality and tourism
o £10,000 grants for small businesses in receipt of the Small Business Bonus Scheme or Rural Relief
o £25,000 grants for hospitality, leisure and retail properties with a rateable value between £18,000 and £51,000
o 1.6% relief for all properties, effectively freezing the poundage rate next year
o extending the “go live” date for the deposit return scheme to July 2022
o halting the introduction of the Visitor Levy Bill
Coronavirus advice for businesses in Scotland: The Coronavirus Business Interruption Loan Scheme (CBILS) has opened for applications. It supports term loans, overdrafts, invoice finance and more. It can provide facilities of up to £5 million for smaller businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cashflow.

Welsh Government support measures – updated 03 04 20
For business LINK; for third sector LINK
– Shops, leisure and hospitality businesses will receive 100% business rates relief in 2020 to 2021
– Shops, leisure and hospitality businesses with a rateable value of:
o £12,001 and £51,000: will automatically receive a grant of £25,000
o £12,000 or less: will automatically receive a grant of £10,000
o Organisations do not need to do anything to apply for the grant as they will be administered through the business rates system. You do not need to contact your local authority: they will contact you.
– New small business grant: Businesses will be able to apply for a new business grant. Details about how to apply will be available shortly.
– Business Interruption Loan Scheme: The UK government has set up a new temporary Coronavirus Business Interruption Loan Scheme – see above

Thanks to the Welsh Government, the Welsh Museums Federation has secured £325,000 in funding to create a COVID-19 Resilience grant scheme for Welsh museums and heritage attractions. Details and links here.

Northern Ireland support measures
Measures specific to Northern Ireland are being developed and can be read here.

USEFUL LINKS

UK Government COVID-19: support for businesses
Charity Tax Group Coronavirus information hub
Charity Finance Group Coronavirus resources

AIM Coronavirus resources
All AIM Coronavirus resources can be found here.