What the UK Government’s response to COVID-19 means for your estate agency

Things are moving fast in this new COVID-19 world. The information below is intended as a guide only.

Support for business through the Coronavirus Business Interruption Loan Scheme (CBILS)

CBILS essentially provides lenders with a government-backed, partial guarantee of 80% to encourage them to lend to smaller UK businesses who are losing revenue and seeing their cashflow thrown into disarray by COVID-19.

British Business Bank operates CBILS via its accredited lenders—a collection of over 40 high-street banks, challenger banks, asset-based lenders and smaller specialist local lenders. These lenders can provide eligible businesses with up to £5 million (up from the initially announced £1.2 million per business) in the form of:

  • term loans
  • overdrafts
  • invoice finance
  • asset finance

available on repayment terms of up to six years.

If you’re eligible and decide to get a loan under this scheme, the Government will cover the first 12 months of interest payments as well as any lender-levied charges (although, you’ll remain 100% liable for the debt).

Review the eligibility checklist.

Support for large businesses through the Coronavirus Large Business Interruption Loan Scheme (CLBILS)

CLBILS has been set up to give banks the confidence to lend to even more businesses. Under this scheme, the government provides a guarantee of 80% to enable banks to make loans of up to £25 million to businesses with an annual turnover of between £45 million and £500 million.

Businesses will need to have a borrowing proposal which the lender would consider viable (if not for the COVID-19 pandemic) and which would enable them to trade out of any short-term to medium-term difficulty. Similar to CBILS, it’s anticipated that this scheme will be available through a range of accredited lenders.

Exemptions from business rates

Estate agencies were initially omitted from a long list of high street businesses that would receive help to pay their rates. However, on 25 March 2020, HM Treasury announced that estate agencies and letting agencies in England that have closed as a result of the pandemic will now be exempt from business rates in 2020-21.

Eligible businesses will either receive a new bill reflecting that discount or, if they have already made payments, a refund.

The Devolved Administrations will receive funding under the Barnett formula to support businesses in Scotland, Wales and Northern Ireland.

Grant Relief From Business Rates

The government has announced a £20 billion package for local English authorities. Small businesses that already pay little or no business rates (because of small business rate relief, rural rate relief or tapered relief) will be eligible for a one-off coronavirus grant worth up to £10,000 to help them meet their ongoing business costs.

Coronavirus Job Retention Scheme

This scheme allows employers to claim 80% of furloughed employees’ usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.

This scheme is open to all UK employers that had created and started a PAYE payroll scheme on 28 February 2020. The scheme will be available for at least 3 months, starting from 1 March 2020, and employers can use it any time during that period.

VAT payments deferral

This is another initiative to help businesses manage their cash flow. If you have a VAT payment due between 20 March 3030 and 30 June 2020, you can either defer the payment until a later date or pay as normal.

HMRC’s Time to Pay service

If your estate agency is unable to pay its tax bill, you could avoid late payment penalties by contacting HMRC. Who you need to contact depends on the type of payment.

Self-Assessment payments deferral

If you’re due to pay a self-assessment payment by 31 July 2020, then you may defer payment until January 2021 (without penalties or interest). You don’t have to be self-employed to be eligible.

Self-employment Income Support Scheme

This Scheme is specifically for the self-employed (including members of partnerships) who have lost income due to this pandemic.

It’ll allow you to claim a taxable grant worth 80% of your trading profits (up to a maximum of £2,500 per month) for the next 3 months—with extensions possible, if needed.

Reclaim Statutory Sick Pay

Small-and medium-sized businesses and employers with fewer than 250 employees will be able to reclaim up to two weeks of Statutory Sick Pay per employee, if there have been staff absences due to COVID-19.

The government will set up the rebate scheme over the next few months. For now, you just need to maintain records of staff absences and payments of statutory sick pay.

Protection from eviction

Commercial tenants in England, Wales and Northern Ireland who can’t pay their rent due to this pandemic will be protected from eviction. This means that if your estate agency business misses a payment up until 30 June 2020, you won’t forfeit the lease and be forced out of the premises.

It’s important to note that this isn’t a rental holiday—your business will still have to pay that rent at some point.

Specific support for businesses in Scotland

On 18 March, the Scottish Government announced a package of measures worth £2.2 billion to support Scottish businesses—superseding the £320 million package announced on 14 March.

Specific to small business, it includes:

  • a 1.6% rates relief for all non-domestic properties in Scotland, which will automatically be applied to your bill by your local council
  • a one-off £10,000 grant for eligible small businesses, through the Business Support Fund

Keep checking the government’s business support website for more information.

Specific support for businesses in Wales

On 30 March, the Welsh government announced a £1.1 billion supplement to its original £1.4 billion support package for businesses affected by coronavirus.

The most important things to note are:

  • a £500 million Economic Resilience Fund will be set up to help businesses, charities and social enterprises survive the crisis. It’s broken down as:
    • £100 million for the Development Bank for Wales, to help businesses with cashflow problems. This money will be used to give limited companies, partnerships and sole traders who have been trading for over two years access loans up to £250,000 fixed at 2% with an interest and capital repayment holiday for the first 12 months; and
    • £400m for another emergency fund, which will give grants of £10,000 to businesses employing less than nine people, grants of £100,000 to businesses with 10 to 250 employees as well as support for particular larger companies that are significantly important to Wales. Applications aren’t yet open.
  • Separate from that fund, there are also two grants available to support businesses registered to pay rates on their premises. Estate agencies may be eligible to receive the second of those grants—a £10,000 grant for small businesses with a rateable value of £12,000 or less.
  • The Development Bank of Wales will also offer all of its business customers a three-month capital repayment holiday, to help them manage the financial fallout.

Specific support for businesses in Northern Ireland

In Northern Ireland, businesses in Northern Ireland may be able to access financial assistance through:

  • the COVID Small Business Grant, which will provide small businesses (those with a Net Assets Value up to £15,000) with a £10,000 grant.
  • the £100m emergency rates package for businesses, which provides a three month rates holiday for all businesses