COVID-19: Practical Business Advice
Below is a summary of the practical business help notified by the Chancellor. You can read the latest advice and guidance from the government for business on its coronavirus pages.
COVID-19: Financial Support Mind Map <- Click this link to access interactive mind map
Please feel free to contact us, if you think we can help support your business during COVID-19.
Job Retention Scheme
Government grants will cover 80% of the salary of PAYE employees who would otherwise have been laid off during this crisis. The scheme is open to any employer in the UK. This will cover the cost of wages backdated to 1 March 2020 and will be open before the end of April, 2020. It will continue for at least three months and can include workers who were in employment on 28 February. Employers can choose to top up salaries.
How to Claim Under this Scheme
To claim under the scheme employers will need to designate affected employees as ‘furloughed workers’, and notify employees of this change. Changing the status of employees remains subject to existing employment law and depending on the employment contract, may be subject to negotiation. Information about the employees that have been furloughed and their earnings will be submitted to the HMRC through a new online portal. HMRC is working urgently to set up the online portal and system for reimbursement, and we will update you when we have further information. (HMRC will set out further details on the information required). HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. Business that need short-term cash flow support, may benefit from the VAT deferral announced below and may also be eligible to apply for a Coronavirus Business Interruption Loan.
Conditions of This Scheme
Furloughed members of staff must not work for the employer during the period of furlough.
Furlough can be backdated to 1 March 2020 and will last for at least 3 months
A firm will only be eligible to the grant from the date they have agreed the furlough with staff
It is available to employees on the payroll at 29 February 2020.
All UK businesses are eligible.
The grant will be paid to the employer through a new online system which is yet to be built.
The scheme pays a grant (not a loan) to the employer
The employer will pay the employee through the payroll Real Time Information (RTI)
Employers will submit information to HMRC through the new online portal
The next quarter of VAT payments will be deferred, meaning businesses will not need to make VAT payments until the end of June 2020. Businesses will then have until the end of the 2020-21 tax year to settle any liabilities that have accumulated during the deferral period. The deferral applies automatically and businesses do not need to apply for it. VAT refunds and reclaims will be paid by the government as normal.
Income Tax Payments
Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021. Income Tax Self-Assessment payments due on the 31 July 2020 will be deferred until the 31 January 2021. This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period.
HMRC Time to Pay
Firms and individuals in temporary financial distress as a result of Covid-19 to delay payment of outstanding tax liabilities. HMRC’s dedicated Covid-19 helpline provides practical help and advice on 0800 0159 559
Business Rates Holidays and Grants
No business rates payable for the 2020-2021 tax year for any business in the retail, hospitality or leisure sectors. In those sectors, if your rateable value is between £15K and £51k, you’ll also receive a cash grant of up to £25,000 per property. Any business which gets small business rates relief, including those in the retail, hospitality or leisure sectors, will receive a cash grant of £10,000. (Increased from £3,000 announced in the 11 March Budget).
How to Claim Under This Scheme
The business rates holiday and cash grants will be administered by local authorities and should be delivered automatically, without businesses needing to claim.
Business Interruption Loan
From Monday 23 March these loans are delivered by lenders that partner with the British Business Bank, including all the major banks. The lender receives a guarantee of 80% of the loan amount from the government. They are available for UK-based businesses with turnover of no more than £45 million and can provide for a facility up to £5 million. The borrower remains liable for 100% of the debt. No interest will be charged for the first 12 months. Please approach your bank if required.
Mortgage and Rent Holiday
Mortgage borrowers can apply for a three month payment holiday from their lender. Both residential and buy-to-let mortgages are eligible for the holiday. It is important to remember that borrowers still owe the amounts that they don’t pay as a result of the payment holiday. Interest will continue to be charged on the amount they owe. Tenants can apply for a three-month payment holiday from their landlord. No one can be evicted from their home or have their home repossessed over the next three months
Statutory Sick Pay (SSP)
If you’re a director of a limited company with less than 250 employees, you can pay yourself two weeks of SSP if you need to self-isolate subject to meeting the minimum payroll requirement for SSP. The government will refund £94 per week and a maximum £188 to your company. It will also refund SSP for staff of businesses with less than 250 employees for up to two weeks.
Off-Payroll Working IR35 Deferral
This legislation has now been delayed for a year until 6 April 2021 for freelancers and consultants.
In order to protect our staff we have taken the decision to close our 8c High Street office, and have all our staff work from home. Our offices will therefore not be an available location for physical record drop off or face to face meetings. Please send us any requested records electronically.