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Govt support for Businesses and Charities

This paper sets out my summary thoughts focused on mosques, charities and small businesses like gyms and tuition centres. Please contact Dua Governance (details below) if any further information is required on this topic or advise on how to manage the challenging financial circumstances.


Support through the Coronavirus Job Retention Scheme


1. All charities including mosques are eligible to claim this support.


2. The Govt will reimburse 80% of the salary of employees (those on payroll) up to a maximum of £2,500 per month – all Mosque employees will fall within this category.


3. This scheme applies to employees that would have been laid off as a result of the crisis. Mosques, tuition centres, gyms and leisure centres are all eligible. They had to shut due to Govt advise and now the employees in these establishments have no work – keeping them on payroll is not an option as the income that was funding their salaries is no longer available, for example no Friday prayers means no Friday cash collection, no evening schools, no fees. Same applied to gyms and tuition centres and similar businesses.




1. Employees on payroll will have to be formally sent on “leave of absence” as per their contracts. Many Establishments may not have employee contracts in place – this gap needs to be addressed urgently so that there are no issues of conflicts in the future.


2. The Govt is yet to work out the process of reimbursement – The Govt is expected to set up a online portal through which claims can be paid.


3. Once the online portal is made available, I expect teething issues and delays due to the volume of businesses applying and the limited HMRC capacity for responding – In the meantime, organisations may need to consider the Coronavirus Business Interruption Loan Scheme (see below).


4. The Govt will not be funding 100% of the salary – businesses, Mosques and charities will need to determine if they will fund the 20% gap – this will have to be negotiated between the employees and employers. No organisation is obliged to cover the 20% gap.


5. Unfortunately, the consultants (self-employed) will not be covered by this scheme. This is applicable to many mosques and charities where many workers are on consultancy contracts. Maybe these organisations need to consider placing such workers on payroll to retain their services – again this is a conversation many of these Establishments need to be having with workers on such consultancy arrangements.


Support through the Coronavirus Business Interruption Loan Scheme


1. All mainstream banks will provide this and the Govt is providing a guarantee of 80% on each loan – This scheme will support loans of up to £5m. Banks will issue guidance shortly.


2. This is also applicable to all Mosques and charities and for the first 12 months – there is no interest rate charged as the Government will cover this.


3. There is a cap of income of £45m to be eligible, making all mosques and Muslim charities eligible expect for a few with annual income above £45m.


4. Many Mosques have ongoing construction projects that depend on qard-e-hassan. Due to Mosques closing, suddenly this option may no longer be available to Mosques.


5. I don’t envisage international relief charities to benefit from this unless they have committed costs and they are not able to raise the budgeted funds during Ramadan. They may want some cashflow support in the medium term and this is where this support becomes relevant.


6. Small businesses like gyms and tuition centres, may need cashflow support for various reasons to pay salaries, rent or other bills. This scheme then becomes relevant to them.




1. Banks will have their own eligibility criteria – this will focus on how the Mosque or charity intend to pay the loan back – historic numbers with good forecasts will be required. Many Mosques and charities can provide this as these are sustainable businesses.


2. How fast will the banks process the applications is also a question mark when their own staff are expected to be impacted by the virus. I expect some time lag between application and cash hitting the organisations bank account. In the meantime, organisations must prepare all the historic costs / accounts and potential forecasts need to be prepared for the bank applications.


Business rates


Councils should cover business rates for charities and mosques – normally they cover 80%, I can see the exemption being extended to 100%. The Govt will waive this for leisure businesses, gyms may fall into this category. Again, local councils will use the existing business rates system to cover this.


Support for businesses that pay little or no business rates – mosques and charities that occupy a building can potentially qualify for this as they pay little or no business rate – the local council will be able to make a one off grant of £10,000. Again, local councils will manage this process.




Cash grants of £10k are available for small retail, hospitality and leisure businesses – this may include gyms – the local councils will introduce a process for this.


Written by Nasir Rafiq, (BA, FCA)

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