25/03/2020
As you may be aware, the government have released many new packages designed for both small and large UK businesses being affected by the coronavirus pandemic. Along with HMRC, they are currently working to establish systems for their outlined schemes, detailed below.
They have also recently indicated more support specifically for self-employed and freelancers, paying 80% of their monthly earnings (possibly based on the last three years, up to a maximum of £2917). More on this will be announced in the coming days.
Coronavirus Job Retention Scheme
Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying some of their employees’ salary for those employees that would otherwise have been laid off during this crisis.
All UK businesses are eligible.
How to access the scheme
You will need to:
– designate affected employees as ‘furloughed workers,’ and tell your employees about this change
– changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
– submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will publish further details on the information required) HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500/month. HMRC are working quickly to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers. If your business needs short-term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.
Deferring VAT and Income Tax payments
The government will support businesses by deferring Valued Added Tax (VAT) payments for 3 months. If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be put off to January 2021. VAT For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.
All UK businesses are eligible.
How to access the scheme
This is an automatic offer with no applications required. Businesses will not need to make a VAT payment in this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will, as normal, be paid by the government.
Income Tax
For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.
If you are self-employed you are eligible.
How to access the scheme
This is an automatic offer, and no applications will be required. No penalties or interest for late payment will be charged in the deferral period. HMRC will also scale up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.
Sick Pay Support
The government will bring forward legislation to allow small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to the coronavirus.
The eligibility criteria for the scheme will be as follows:
– this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
– employers with fewer than 250 employees will be eligible
– the size of an employer will be determined by the number of people they employed as of 28 February 2020
– employers will be able to reclaim expenditure for any employee who has claimed SSP(according to the new eligibility criteria) as a result of COVID-19 employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website – eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force – the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible
Eligibility
You are eligible for the scheme if:
– your business is UK based
– your business is a small or medium-sized and employs fewer than 250 employees as of 28 February 2020
How to access the scheme
A rebate scheme is being developed. Further details will be provided in due course by HMRC once the legalisation has passed.
Support for retail, hospitality and leisure businesses that pay business rates
Business rates holiday for retail, hospitality and leisure businesses We will introduce a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year. Businesses that received the retail discount in the 2019 – 2020 tax year will be rebilled by their local authority as soon as possible.
Eligibility
You are eligible for the business rates holiday if:
– your business is based in England –
your business is in the retail, hospitality and/or leisure sector
Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:
– as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
– for assembly and leisure – as hotels, guest & boarding premises and self-catering accommodation
How to access the scheme
There is nothing for you to do. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible. You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator. Further guidance for local authorities is available in the expanded retail discount guidance.
Cash grants for retail, hospitality and leisure businesses
The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property. For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000. For businesses in these sectors with a rateable value of between £15,001 and £51,000, they will receive a grant of £25,000.
Eligibility
You are eligible for the grant if:
– your business is based in England
– your business is in the retail, hospitality and/or leisure sector
Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:
– as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
– for assembly and leisure – as hotels, guest and boarding premises and self-catering accommodation
How to access the scheme
You do not need to do anything. Your local authority will write to you if you are eligible for this grant. Guidance for local authorities on the scheme will be provided shortly. Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.
Support for nursery businesses that pay business rates
We will introduce a business rates holiday for nurseries in England for the 2020 to 2021 tax year.
You are eligible if your business is based in the UK.
Properties that will benefit from the relief will be hereditaments: – occupied by providers on Ofsted’s Early Years Register – wholly or mainly used for the provision of the Early Years Foundation Stage
How to access the scheme
There is no action for you. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill to exclude the business rate charge. They will do this as soon as possible. You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator. Further guidance for local authorities is available in the nursery discount guidance.
Support for businesses that pay little or no business rates
The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.
Eligibility
You are eligible if:
– your business is based in England
– you are a small business and already receive SBBR and/or RRR
– you are a business that occupies property
How to access the scheme
You do not need to do anything. Your local authority will write to you if you are eligible for this grant. Guidance for local authorities on the scheme will be provided shortly. Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.
Support for businesses through the Coronavirus Business Interruption Loan Scheme
A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch early next week to support primarily small and medium-sized businesses to access bank lending and overdrafts. The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value.
Eligibility
You are eligible for the scheme if:
– your business is UK based, with turnover of no more than £45 million per year
– your business meets the other British Business Bank eligibility criteria
How to access the scheme
The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website. All the major banks will offer the Scheme once it has launched. There are 40 accredited providers in all. You should talk to your bank or finance provider (not the British Business Bank) as soon as possible and discuss your business plan with them. This will help your finance provider to act quickly once the Scheme has launched. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow. The scheme will be available from early next week commencing 23 March.
Support for larger firms through the COVID-19 Corporate Financing Facility
Under the new Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies. This will support your company if it has been affected by a short-term funding squeeze, and allow you to finance your short-term liabilities. It will also support corporate finance markets overall and ease the supply of credit to all firms.
All UK businesses are eligible.
How to access the scheme
The scheme will be available early in week beginning 23 March 2020. We will provide information on how to access the scheme here shortly. More information is available from the Bank of England.
Support for businesses paying tax: Time to Pay service
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
Eligibility
You are eligible if your business:
– pays tax to the UK government
– has outstanding tax liabilities
How to access the scheme
If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559.
If you would like to discuss further any of the mentioned support schemes for your business, feel free to contact us for a free phone call with a Chartered Management Accountant.
We are here to help you.