Coronavirus Help Sheet
In the ever evolving developments of the world’s fight against Coronavirus (COVID-19), you will no doubt have seen that the UK government are releasing measures to support businesses and individuals. Although the help available is updated regularly, with new measures introduced daily, we have summarised below the current measures that are available:
Coronavirus Job Retention Scheme
All UK employers will be entitled to support through this scheme, whereby the government will reimburse 80% of employees’ salaries (up to a cap of £2,500 per month) who would have otherwise lost their jobs because of COVID-19. The affected employees are known as ‘furloughed workers’ and broadly this is employees who have been asked to take a temporary leave of absence, yet they will remain on the payroll.
In order to access this support, businesses must submit information through a new HMRC online portal, although we await more details on when this will be available, and how the reimbursements will be issued.
Support for businesses paying sick pay
Small and medium sized businesses with less than 250 employees will be entitled to reclaim 14 days of Statutory Sick Pay (SSP) for sickness absence due to COVID-19. It is important to note that the standard SSP is usually paid by the Employer with no reimbursement from the government. The repayment system is currently being set up and will be available to Employers in the near future.
SSP is also now due from day 1 for people with COVID-19, or who are self-isolating as they have possible symptoms, or who are caring for someone with symptoms, rather than from day 4 as would usually be the case with SSP.
Help for the Self-Employed
The government have agreed that self-employed tax payers should be entitled to an equivalent of SSP (£94.25 per week), however they are under pressure to announce further measures to help the self-employed. As further announcements are made, we will update our advice to clients.
VAT
Any VAT payments due from 20 March 2020 to 30 June 2020 will be deferred. This is an automatic system; therefore, businesses will not need to apply for this service. Any payments accumulated during this period will need to be settled on or before the end of the 2020/21 tax year, being 5 April 2021. If you currently pay your VAT by Direct Debit, you should log on to your government gateway account to stop the next Direct Debit payment.
Income Tax Payments
Self-employed individuals within the self-assessment regime who are due to make payments on account on 31 July 2020 will be allowed to defer this payment until 31 January 2021. This in effect means that these taxpayers will only need to pay the difference between their first payment on account and the final tax liability on 31 January 2021. Again, this is an automatic offer with no further applications required from taxpayers. No interest or penalties will be charged in the deferral period.
Coronavirus Business Interruption Loan Scheme
Financial support is available for small and medium sized businesses (SMEs), with finance available of up to £5 million for loans, invoice finance and asset finance, and covering periods of up to 6 years. The government are covering the first 12 months of interest payments and any related upfront costs and will provide lenders with a guarantee of 80% of each loan that is granted to provide lenders with reassurance to continue lending during this time. The scheme is available for SMEs with a turnover up to £45 million and can be accessed through 40 accredited lenders who are currently offering this scheme (listed on the British Business Bank website). As well as businesses contacting their own bank for help, we can put you in touch with Commercial Finance companies who can also offer advice on this scheme.
Assistance for Larger Businesses
The Bank of England is offering to buy short-term debt from larger companies with the intention of assisting with cash flow and funding for short-term liabilities. Companies need to evidence that their business is fundamentally strong and have experienced disruption to cash flows as a result of the pandemic. The scheme is now available for applications from the Bank of England.
Time to pay service
This is one of the measures that businesses can make use of straight away. Broadly, this covers all businesses and self-employed individuals who require assistance with outstanding tax liabilities (PAYE/ VAT/ Corporation Tax/ Self-Assessment) It is possible to reach an agreement with HMRC for deferred payment terms; however, it is important to note this is on a case-by-case basis. As this is a personalised service, it will need to be discussed with HMRC to tailor this to your individual circumstances. HMRC have a dedicated phone line (0800 0159 559) for businesses that want to agree a Time to Pay arrangement, and we suggest that this should done as soon as possible by all businesses worried about their future cash flows.
Support for retail, hospitality and leisure businesses that pay business rates
Businesses that use their properties for the following purposes will be entitled to additional relief from business rates: shops, restaurants, cafes, drinking establishments, cinemas, music venues, assembly, leisure, hotels, guest and boarding premises and self-catering accommodation.
· Business rates: A rates holiday will be introduced for retail, hospitality and leisure businesses in England for the 2020 -21 tax year. This is an automatic scheme and no action is required to access this relief.
· Cash grants: Businesses within the retail, hospitality and leisure sectors will be entitled to a cash grant of up to £25,000 per property. The amount available for each business depends on the rateable value of the property; those with a rateable value under £15,000 can receive a grant of £10,000 and for those with a rateable value between £15,000 and £51,000 are entitled to a grant of £25,000. Your local authority will write to you if you are eligible for a grant.
Businesses that pay little or no business rates
Grants are also available for those small businesses that already pay little or no business rates, because of certain reliefs. A one-off grant of £10,000 will be available provided your business is based in England, you currently receive reliefs on your business rates and your business occupies the property in question. Similar to the above arrangements, this is an automatic scheme and your local authority will contact all eligible businesses.
Companies House Deadlines
A deadline extension of up to 3 months is available for accounts deadlines, confirmation statements and other reports for all entities registered at Companies House. This is an application process and must be made prior to the deadline that you are intending on extending. Applications will be reviewed and a response will be received within 5 working days to inform you as to whether the application is successful or not.
It is important to note these schemes and services are in place to assist with cash flow and liquidity during these unpredictable times. It is therefore vital that you plan ahead, should COVID-19 continue to interrupt your normal day-to-day financial operations. Although you may have cash available now, you should consider how long this will last given the current circumstances, with this in mind it would be beneficial to consider how these schemes can not only help you in the present but also in the future. We will continue to monitor any further updates issued by the government on the help and support available, and any new measures announced and shall keep you informed of these updates. Please do not hesitate to contact a member of the team should you wish to discuss any of the above measures in further detail.
