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Financial relief for small business owners during coronavirus

11 July, 2017

A few points on the changes to VAT, furlough, CBILs and insurance for small business owners.

VAT deferral relief

VAT deferral relief applies to any VAT payments due between 21 March and 30 June 2020. The latest quarter end you can apply this to will be April – reportable by the end of May, payable by 7 June. The VAT deferred will need to be paid back by April 2021.

To make the most of this, it seems a good idea to invoice any future confirmed sales within this quarter, as this will put the VAT point date within the deferral scheme and qualify it for relief.

Read Government guidance (

Furlough and the Government rebate

The main components of furlough, a mandatory leave of absence which the government have agreed to support with salary rebates, are:

  • You identify and communicate with the pool of employees you identify as being capable of furlough

  • The employees must not work during the furlough period you set

  • The Government gives you a grant (rebate) of 80% of each employee's salary, up to a maximum of £2,500 rebate per employee per month

  • Employers are not required to make up the extra 20%

What many small businesses appear to be doing:

  • Identifying employees to be furloughed

  • Consulting with them and explaining that their salary is being changed to the LOWER of their current salary and £37,500pa until the end of June

  • Explaining that they will be paid 80% of their pay, as normal, through payroll

  • Explaining that the employer does not pay the remaining 20%

  • Preparing to claim the grant through the Government portal – yet to be made live

  • Expecting the grant to come through 3 months after payroll – however, teething problems with the new portal are widely expected, so it may take a little longer

Read Government guidance (

C19 Business Interruption Loans (CBILs)

The Government has agreed to underwrite 80% of the value of loans up to £5 million, to be issued by your own bank. If you apply for over £250,000, you'll have a few more hoops to jump through.

As banks are on the hook for 20% they will apply some form of commercial due diligence. It seems likely that applications with the best chances of success are for businesses that were viable for the type of loan they want before the virus started; can demonstrate the loss due to the virus; and can demonstrate they will have a future after the virus with the support of the C19 Business Interruption Loan.

Read Government guidance (

Insurance loopholes that could work against you

Check your business insurance contracts for 'continuous occupancy clauses'. It is often the case that a business premises must not remain unattended for 30 days or more, which poses an obvious issue now. If you think you may be caught by this, flag it up with your brokers ASAP.

Business Support resource from the Government

Visit the coronavirus financial relief site (