In the wake of the coronavirus outbreak, Motor Transport looks at the ways operators can build new business and benefit from government support schemes. John Kendal reports.
The government recently announced a range of measures for businesses, providing loans, tax deferrals, sick pay and other support for COVID-19 affected workers.
Like so much else in this crisis, the information is being updated as things progress. The position regarding the self-employed was clarified with measures announced by Chancellor of the Exchequer Rishi Sunak on 26 March, giving the self-employed similar treatment to employees.
Before we look at the government packages, there are other steps that haulage companies and drivers can take to see if there is work available that they may not normally do. We know there has been a large decrease in work in some sectors such as container transport, while others, such as supermarket deliveries are facing unprecedented demand.
“Can we actually match up haulage firms that are going without business with those areas that have suddenly got more to do than ever – obviously the food retailers?” asks FTA head of policy Christopher Snelling.
“So the first recourse, and we are working on this with DfT and others, is to try and better match up the hauliers who have now lost work with the hauliers and businesses that have now got massive demand for work, so that they can stay employed and active. Then it’s only those concerns that really have no other way to do business who can access the loans and other support.”
The FTA has launched a campaign to support this which it is calling #LogisticsHelpsLogistics. The plan is to help connect drivers who have spare capacity with businesses that have a temporary need for their services. The FTA is encouraging those looking for a driver, warehouse operator or transport manager to post the vacancy accompanied by the hashtag.
Government support schemes
For those who need financial support, the government is offering loans and grants through a range of schemes. The Coronavirus Job Retention Scheme is available to all UK employers and will pay up to 80% of workers' costs designated as “furloughed workers” up to a cap of £2,500 per month.
Businesses needing short-term cashflow support may be eligible for a Coronavirus Business Interruption Loan ICBIL). This new temporary scheme, available from the British Business Bank is aimed at small and medium-sized businesses that need bank lending or overdrafts.
Lenders will get a government guarantee of 80% on each loan which will not carry a charge for businesses or banks for the guarantee. Businesses with a turnover up to £45m per year should be eligible and the scheme offers support for loans up to £5m.
Businesses can discuss details with their bank or finance provider or directly with the British Business Bank. All major banks will offer the scheme.
But some banks have already come under fire for pursuing personal guarantees from businesses seeking a CBIL, while others have not. A personal guarantee could make a loan unaffordable for small businesses.
An alternative governnment scheme is called the COVID-19 Corporate Financing Facility which will provide short-term debt purchase from larger companies.
The self-employed can claim a grant through the Self-Employment Income Support Scheme, worth 80% of trading profits up to a maximum of £2,500 for the next three months. The scheme may be extended if necessary.
Businesses registered for VAT will automatically qualify for VAT payment deferral with effect from 20 March and the scheme will be active until 30 June 2020. If your VAT payment falls due in this period, you will not have to pay it and no penalties or interest for late payment will be applied during this period. Obviously the payment will need to be made later.
Some relief for the self-employed is offered by deferring self-assessment income tax payments due on 31 July until 31 January 2021. Like deferred VAT payments, the scheme is automatic and you don’t need to apply for it. Firms and individuals facing financial hardship as a result of the pandemic will be given more time to pay from HMRC.
Legislation is promised to provide support to businesses paying sick pay to employees. Up to two weeks statutory sick pay for eligible employees affected by COVID-19 will be available. Employers with less than 250 employees will be eligible for this scheme.
Local Authorities will receive funding for the Additional Small Business Grant Scheme to support small businesses already paying little or no small business rate relief, rural rate relief or tapered relief. A one-off grant of £10,000 will be available to eligible businesses in England and Wales. Local authorities will contact eligible businesses.
Links:
Freight Exchange/Return loads/Back loads
HGV Alliance: https://www.hgvalliance.com/
Return Loads: https://www.returnloads.net/
Shiply: https://www.shiply.com/service_providers/
Truckspace: http://www.truckspace.co.uk/
Barron Wood Distribution: https://www.bwdreturnloads.co.uk/
Government support schemes:
Government guidance on support for businesses:
https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
Coronavirus Business Interruption Loan scheme information: (https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/ )
