Economy & Employment
The Business Wales and Development Bank of Wales websites are excellent points of reference, which are updated regularly:
Information about the financial support and grants that are available to employers, including the Economic Resilience Fund (ERF) can be found at:
Rates relief information can be accessed at:
Where possible, the relief will automatically be applied to non-domestic rates bills for eligible properties. Local authorities also have the power to provide discretionary relief to ratepayers who fall outside the established non-domestic rates relief schemes.
Some of the support schemes available in Wales are led by the UK Government. Key points of reference include:
UK Government guidance to employers and businesses about Coronavirus including information and guidance on areas such as Statutory Sick Pay, advice for employees which have travelled to high risk areas and home working
HMRC Coronavirus helpline for businesses and self-employed people - 0800 0159 559.
British Business Bank - https://www.british-business-bank.co.uk/
Bounce Back Loan Scheme - https://www.british-business-bank.co.uk/…/bounce-back-loans/
Coronavirus Job Retention Scheme - https://www.gov.uk/…/claim-for-wages-through-the-coronaviru…
Self-Employment Income Support Scheme - https://www.gov.uk/…/claim-a-grant-through-the-coronavirus-…
Support for businesses through the Coronavirus Job Retention Scheme
Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. The UK Government has published guidance on the scheme aimed at businesses and workers. I welcome the announcement from the Chancellor, Rishi Sunak MP, that the furlough scheme will be extended for a further four months.
This is clearly a shot in the arm for the 7.5 million UK employees currently covered by the scheme, and shows the UK Government’s level of backing for people hit by the pandemic. It’s a measured, sensible approach, too. We know that the lockdown will ease and that a gradual approach to returning to normal life will, in fact must, return at some point.
The Chancellor and the UK Government are not rushing, and that is the right course of action.
Eligibility: All UK businesses are eligible, as are charities, recruitment agencies (for agency workers paid through PAYE) and public authorities. However, the UK Government expects that organisations who receive public funding for staff costs should continue to pay staff in the normal fashion, and not furlough them.
Furloughed employees must have been on your PAYE payroll on 28 February 2020, and can be on any type of contract, including:
- full-time employees
- part-time employees
- employees on agency contracts
- employees on flexible, temporary or zero-hour contracts
The scheme also covers employees who were made redundant since 28 February 2020, if they are rehired by their employer.
To be eligible for the subsidy, when on furlough, an employee can not undertake work for or on behalf of the organisation. This includes providing services or generating revenue. While on furlough, the employee’s wage will be subject to usual income tax and other deductions.
If an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for this scheme and you will have to continue paying the employee through your payroll and pay their salary subject to the terms of the employment contract you agreed.
If the employee has been employed (or engaged by an employment business) for a full twelve months prior to the claim, you can claim for the higher of either:
- the same month’s earning from the previous year
- average monthly earnings from the 2019-20 tax year
If the employee has been employed for less than a year, you can claim for an average of their monthly earnings since they started work. If the employee only started in February 2020, use a pro-rata for their earnings so far to claim.
The minimum period to furlough employees under the scheme is for 3 weeks, although an employer can furlough an employee more than once, and one period can follow straight after another provided that the scheme is still open.
To access the scheme you will need to:
I. 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.
II. submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal that is expected to be available by the end of April 2020 (HMRC will set out further details on the information required)
HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.
If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.
Launch of "Bounce Back" Loans
Small businesses are now able to apply for quick and easy-to access loans from accredited lenders of between £2,000 and £50,000 at an affordable rate of 2.5% interest, to make it through the Coronavirus outbreak.
Any business that has already taken out a Coronavirus Business Interruption Loan of £50,000 or less can apply to have these switched over to this new scheme.
The UK Government will provide lenders with a 100% guarantee and cover the cost of any fees and interest for the borrower for the first 12 months. No repayments will be due during this period to enable firms to get back on their feet. The loans are available through a network of lenders, including the five largest banks.
Self-Employed Income Support Scheme
Under the Self-Employed Income Support Scheme, self-employed individuals will be eligible for a direct cash grant of 80% of their average monthly trading profit, up to £2,500 per month. The scheme will last for at least three months.
UK Government guidance states that the scheme will be open to those with a trading profit of less than £50,000 in 2018-19 or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19. HMRC will use the average trading profits from tax returns in 2016-17, 2017-18 and 2018-19 to determine the size of the grant.
It will be open to individuals for whom more than half of their income comes from self-employment.
To minimise fraud, only those who are already in self-employment and meet the above conditions will be eligible to apply. HMRC will identify eligible taxpayers and contact them directly with guidance on how to apply.
The income support scheme, which is being designed by HMRC from scratch, will cover the three months to May. Grants will be paid in a single lump sum instalment covering all 3 months, and will start to be paid at the beginning of June.
Individuals should not contact HMRC now. HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational.
The scheme also applies to members of partnerships.
Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.
Calls for a Self-Employed Hardship Fund
I have called on the Welsh Government to introduce a Self-employed Hardship Fund to help those people who are missed by the various Covid-19 business support packages.
I have also continued to call on the Welsh Government to amend business grants to ensure those businesses that don’t meet the eligibility criteria don’t continue to fall through the gaps and get the support they deserve at this time. Crucially, companies had to be VAT registered in order to obtain support which not all small and micro businesses are due to their size.
Businesses come in all shapes and sizes which has made ensuring support for everyone at this time has been difficult. However, I’d like to see the Welsh Government follow the example of elsewhere in the UK to introduce a hardship fund for those people who have been recently self-employed, or that being self-employed has now become their full-time status which currently excludes them from support.
Sadly, it might not be possible to support them with their full amount that they would receive but a hardship fund of £2,000 or more could ensure that they are able to see through the rest of the pandemic and be a part of Wales’ economic recovery when we come out of lockdown.
Support for businesses through deferring VAT and Income Tax payments
The UK Government will support businesses by deferring Valued Added Tax (VAT) payments for 3 months. If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
VAT: For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.
Eligibility: All UK businesses are eligible.
How to access the scheme: This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020/21 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.
For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.
Eligibility: If you are self-employed you are eligible.
How to access the scheme: This is an automatic offer with no applications required.
No penalties or interest for late payment will be charged in the deferral period. HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.
Support for businesses who are paying sick pay to employees
- The UK Government will bring forward legislation to allow small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:
- this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
- employers with fewer than 250 employees will be eligible - the size of an employer will be determined by the number of people they employed as of 28 February 2020
- 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 and payments of SSP, but employees will not need to provide a GP fit note
- eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force
- the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible
Eligibility: You are eligible for the scheme if your business is UK based and your business is a small or medium-sized and employs fewer than 250 employees as of 28 February 2020.
How to access the scheme: A rebate scheme is being developed. Further details will be provided in due course once the legalisation has passed.
Support for businesses through the Coronavirus Business Interruption Loan Scheme
A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, has launched to support primarily small and medium-sized businesses to access bank lending and overdrafts. The scheme went live on 23 March, and will initially run for six months.
The government provides lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme supports loans of up to £5 million in value.
Businesses can access the first 6 months of that finance interest free, as government covers the first 6 months of interest payments.
Eligibility: You are eligible for the scheme if: Your business is UK based, with turnover of no more than £41 million per annum, and your business meets the other British Business Bank eligibility criteria.
How to access the scheme: The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website. There are more than 40 accredited providers.
You should talk to your bank or finance provider (not the British Business Bank) as soon as possible and discuss your business plan with them. This will help your finance provider to act quickly once the Scheme has launched. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.
It is a particularly challenging and worrying time for those in the tourism sector which rely on seasonal business in the Spring and Summer months.
However, I’m sure you will agree with me that, although lockdown measures have resulted in financial pressures on the tourism sector, social distancing measures and ‘stay-at-home’ guidelines have been necessary at this unprecedented time to protect the NHS and save lives.
With regards to financial support, I understand that the sector is in discussions with the Welsh Government as to how greater flexibility can be introduced on accessing business support. I am also urging the Welsh Government to cut down on the bureaucracy preventing businesses from accessing support and to provide tailored support to the needs of specific businesses in the tourism sector.
I have had the opportunity of raising this matter recently with the Minister for Economy in the Economy, Infrastructure & Skills Committee, which I Chair. I will continue to exert pressure on the Welsh Government to deliver the support which the sector needs during these unprecedented times.
Local authorities in Wales have been given the power to waive the standard tests required for the awarding of the Small Business Relief Grant. I have been made aware that these regulations have not been applied equally across Wales. Therefore, I encourage all Local Authorities to pay this grant and to use their discretion.
Support for larger firms through the COVID-19 Corporate Financing Facility
Under the new Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies. This will support your company if it has been affected by a short-term funding squeeze, and allow you to finance your short-term liabilities.
It will also support corporate finance markets overall and ease the supply of credit to all firms.
Eligibility: All UK businesses are eligible.
How to access the scheme: The scheme will be available early in week beginning 23 March 2020. The UK Government will be providing information on how to access the scheme here shortly.
More information is available from the Bank of England.
Support for businesses paying tax: Time to Pay service
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.
These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
Eligibility: You are eligible if your business pays tax to the UK government and has outstanding tax liabilities.
How to access the scheme: If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559. For more information, please check the HMRC site.
If businesses are worried about a future payment, the UK Government’s advice is to call HMRC nearer the time.
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.
Commercial tenants in England, Wales and Northern Ireland who cannot pay their rent because of COVID-19 will be protected from eviction.
These measures will mean no business will automatically forfeit their lease and be forced out of their premises if they miss a payment up until 30 June.
There is the option for the government to extend this period if needed.
This is not a rental holiday. All commercial tenants will still be liable for the rent. Commercial tenants are protected from eviction if they are unable to pay rent.
Filing accounts with Companies House
From 25 March, businesses will be able to apply for a 3-month extension for filing their accounts with Companies House. Under normal circumstances, companies who file their accounts late are issued with an automatic penalty.
As part of the agreed measures, while 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 up to 15 minutes to complete.