The outbreak of Coronavirus (COVID-19) has bought on a challenging time for us all, nationwide. On Thursday 19th March 2020, Boris Johnson announced the government’s plans to support businesses over the country throughout this time. Today, we push aside the rumours and reveal the factual truths which stand at the time of writing this, about business support during this difficult time.
Please note: Over the coming days and weeks, the government are to release further information on their plans to support businesses and how you can apply for this.
Coronavirus job retention scheme
The government have announced that they will cover 80% of the salary of PAYE employees who would otherwise be laid off from their jobs. The payments will cover the wages of employees working for UK employers dating back to 1st March 2020 and are thought to be made available before April 30th 2020. So far, we know that the scheme will operate for a minimum of three months.
Here is how you can claim under the scheme:
- As employers, you must appoint any affected employees as furloughed workers. The employee should be made aware that their status remains subject to existing employment laws and that the employment may be subject to negotiation depending on the contract.
- As employers, you must submit any and all PAYE information on your furloughed employees through an online portal. In the coming days, HMRC will release further guidance and information on what else will be required.
- HMRC will compensate 80% of their wage up to £2,500 pm
HMRC are working busily to set up a secure system to aid and simplify the above needs.
Deferring VAT payments
For the next quarter, until the end of June 2020, all VAT payments that businesses are required to make, will be deferred. They will have until 5th April 2021 to settle any liabilities that they have acquired during the deferral period.
The scheme is automatic and businesses will have no need to apply.
Deferring income tax
If you work under the self-assessment system and had an income tax payment due on 31st July 2020, it will now be deferred until 31st January 2021. No penalties or interest will be charged during this deferral phase.
This is also automatic and does not require any form of application.
Coronavirus business interruption loan scheme
This scheme will be presented by any lenders working with The British Business Bank. The lender will receive a guarantee of 80% of the loan amount from the government. These loans will be available for UK based businesses with a turnover of £45m or below.
Loans of up to £5m are available but remembering that the borrower is liable for 100% of the debt. There will be no interest on these loans for the first full year.
To apply for this loan, you will need to speak with your bank as soon as possible. Running through your business plan with them will ensure that they act quickly and assuredly. You may also wish to discuss payment holidays to assist with your cashflow if you have any existing finance facilities.
Sick pay support
Employers with under 250 employees can reclaim Statutory Sick Pay (SSP) for sick leave due to COVID-19. This will allow a cover of up to two weeks SSP per eligible employee whose absence is due to COVID-19. These employees will not be required to present a note from their GP. If evidence is required for the employer, staff who are on sick leave are able to visit NHS’s 111 online service to receive an isolation note. Employers should keep a record of any staff absences and payments of SSP.
HMRC are working hard to set up a secure repayment mechanism between employers and themselves.
Business rates holiday for retail, hospitality and leisure businesses
If you have a UK based retail, hospitality or leisure business, you will be eligible for a business rates holiday for the 2020/21 tax year.
This is also an automatic scheme and needs to application. The holiday will be applied to your next council tax bill in April 2020. This will be reissued if you have already received a bill.
Cash grants for small businesses and retail, hospitality and leisure businesses
This scheme provides retail, hospitality and leisure businesses with a grant of up to £25,000 per property. You will be eligible to receive a cash grant of up to £25,000 if your ratable value is between £15,000 and £51,000.
Any business which receives small business rates relief (including the above-mentioned sectors) will receive a cash grant of £10,000.
There should be no need to apply for this scheme as the grants will be conducted by local authorities and operated automatically.
Support for businesses paying tax – HMRC’s time to pay scheme
HMRC’s Time to Pay scheme allows a delayed payment of outstanding tax liabilities for individuals, as well as businesses, suffering from financial stress due to COVID-19.
Anyone suffering with stress or financial worry during this time should use HMRC’s COVID-19 helpline (0800 0159 559) to access advice and support.
For more information as we get it and a more detailed conversation on how the government plan to support businesses throughout this period, feel free to contact our friendly team at Cain & Co by giving us a call on 020 8087 1341 or emailing us on firstname.lastname@example.org, as well as making full use of HMRC at www.gov.uk/.