Last month, the Chancellor of the Exchequer Rishi Sunak announced more than £350 billion to keep the UK economy afloat during the coronavirus outbreak. He also provided unprecedented help for the self-employed. The aid packages are for the whole of the United Kingdom, but it’s important to know that there are also specific measures for businesses in Wales, Scotland and Northern Ireland.
As everyone knows, the situation is evolving every day, so it’s best to keep checking the Welsh, Scottish and Northern Irish government websites for the latest updates.
The Welsh government has delivered two separate packages to support businesses dealing with the coronavirus, worth £1.9 billion.
On 18 March, it announced £1.4 billion of business aid, enabling all but the largest businesses in the retail, hospitality and leisure sector to have a 12-month business rates holiday and provided business grants (see the section below, ’Rates relief in Wales’ and ’Business grants’).
Then, on Monday 30 March the Welsh First Minister, Mark Drakeford, announced an additional £500m for an Economic Resilience Fund to "help businesses to survive the coronavirus challenge.” Despite generous help from Westminster, Drakeford said the fund was needed as certain businesses and charities in Wales could still face insolvency due to fixed and operating costs that won’t be covered by the UK-wide measures.
The Economic Resilience Fund is made up of:
- £100 million worth of loans for businesses
- £400 million of grants
The grants and loans are only available for Welsh-based businesses that would not qualify from the existing measures that Westminster has put and is putting in place. Read more about those UK-wide measures for businesses on the government’s website.
The Economic Resilience Fund has two aims:
- To help businesses go into ’hibernation’ if they won’t be able to trade during the lockdown
- To help them move to a remote way of working
How do the Economic Resilience Fund loans work?
The £100m pot of loans from the Development Bank of Wales will seek to help businesses whose cash flow has been negatively affected by the pandemic, providing loans of between £5,000 and £250,000.
Whatever the size of loan, there is an interest rate of 2% for six years (after a 12-month holiday in repaying capital and interest) and no arrangement or monitoring fees.
This loan set-up is separate to the Coronavirus Business Interruption Loan Scheme. For more information on that, visit the British Business Bank’s website.
Who is eligible for a loan?
Any Welsh SME, including sole traders, partnerships and social enterprises, which has considered or tried all other avenues of financial support and who has been trading for two years or more.
Applicants can only apply once and must prove they were able to deal with the debt of the loan before coronavirus hit.
How can I apply for a loan?
Visit the Development Bank of Wales’s website.
- Provide three months worth of bank statements if you seek between £5,000 and £100,000
- Sole traders and partnerships seeking between £5,000 and £25,000 also need to provide a statement of assets and liabilities
- Provide two years of annual accounts, management information and a cash flow forecast for loans above £100,000
- After you apply, you will be told how long you will be expected to wait for a decision
The loan you receive is according to either the number of employees and / or a calculation based on profit and turnover. Depending on the size of the loan, it is partially secured by the bank.
If you are already a Development Bank of Wales customer, the new 12-month repayment holiday is an addition to the three-month holiday for existing loans, up to 30 June 2020, which you can get on request by applying here.
Grants make up £400m of the Economic Resilience Fund. The grants do not have to be paid back.
How much you can apply for depends on your number of employees
- Micro businesses, with up to nine employees, and which also include sole traders, can apply for a grant of up to £10,000
- Grants go up to £100,000 for small and medium sized enterprises (SMEs) that have as many as 250 employees
Separate support for larger companies, which are headquartered in Wales and which are described as ’of critical social or economic importance to Wales’, is also available (the exact amount has not been specified).
When can I apply for a grant?
- Micro businesses can apply by mid-April
- SMEs can apply the week starting 6 April
- Larger Welsh companies should be able to start applying by 13 April (two weeks from Drakeford’s announcement)
How can I apply for a grant?
The Welsh Government are finalising the details. We will update our website as information becomes available.
Rates relief in Wales
Retail, leisure and hospitality businesses with a rateable value of less than £500,000 in Wales have been given a year-long holiday from paying business rates. Local authorities in Wales will send businesses an updated bill as soon as possible.
As well as the rates holiday, businesses in these sectors with a rateable value of between £12,001 and £51,000 can get a cash grant of up to £25,000, and any business with a rateable value below £12,000 might qualify for a grant of up to £10,000.
You will need to visit your local authority website and check how they are administering the grants. Some will be applied automatically while in some authorities you need to fill in a form with details such as your bank details. A link to your local authority can be found on the Welsh government website.
Help for the self-employed in Wales
Financial support for self-employed people in Wales is the same as in England. You do not need to contact HMRC. If eligible for help, you may receive a lump sum of up to £7,500 in your bank account. This applies if:
- You have a 2018/19 tax return proving your self-employed status
- You made more than 50% of your income from self-employment
- You do not pay yourself a salary and dividends through your own company
More information can be found on our blog post about government help for the self-employed.
Business Wales has a general advice helpline for businesses and you can call them on 03000 6 03000.
The Scottish government announced a £2.2 billion support package on 18 March for local businesses, going above and beyond what’s available from Westminster, including £1 billion worth of grants and business rates relief. More information is below.
Rates relief in Scotland
- Business properties will get rates relief of 1.6% for 2020/21
- Retail, hospitality and leisure businesses will get 100% relief in 2020/21
- In both cases, the local council will sort out the new bill — you don’t need to apply
See more information on non domestic rates in Scotland during coronavirus.
Grants in Scotland
- Small businesses might be able to get a grant worth £10,000 if they also qualify for Rural Relief, Small Business Bonus Scheme Relief or if they applied for various schemes like Fresh Start.
- Retail, hospitality and leisure businesses with a rateable value between £18,000 and £51,000 can apply for a grant of £25,000
- To apply, visit your local council’s website and fill in an application form
The Northern Irish government provides three separate measures for local businesses that are different to the UK-wide package, including business rates relief and grants.
- All businesses will receive a three-month rate holiday between April and June, except public sector and utility companies
- The Regional Rate has also been lowered by 12.5% in 2020/21
- The discount will be applied automatically, without having to apply
Small business grants
- All businesses with a rateable value of up to £15,000 and are eligible for the Small Business Rate Relief Scheme should be able to get a grant of £10,000
- The award is automatic for businesses who pay their rates by direct debit, while other businesses must register through this link.
Hospitality, tourism and retail sectors grant scheme
- Any business in the hospitality, tourism and retail sectors will be immediately eligible for a grant of £25,000 as long as they have a rateable value of between £15,000 and £51,000
- Details of how to apply are yet to be announced
The above is intended as general information and does not constitute advice in any way. You should take independent advice if you have any questions about your specific circumstances.