COVID-19 UPDATE – Financial Assistance for Businesses

The Coronavirus Job Retention Scheme

-Available to all UK businesses

-HMRC will reimburse 80% of workers wage costs for those on a temporary absence of leave

-Those placed on leave should not undertake any work for the company

-The employer has no obligation to pay the remaining 20%

-Allows for 80% of wage costs to be recovered up to £2,500 per month per employee

-There is no limit on the number of employees or duration

-Wage costs are expected to include wages, pension contributions and employer national insurance (NI) contributions

-The scheme will continue for at least three months and will be back dated to 1 March 2020

-Mechanism for repayment not yet known as being developed by HMRC

-Only for employees who were employed on 28 February 2020

-The employees concerned will remain on the employer’s payroll and will continue to accrue holiday and service

-Employees cannot elect to be a furloughed worker without their employer’s agreement

-The scheme does not help with any situations where employees have agreed to reduce their hours, or to a pay cut but where are still required to work.

-There is no option to do a mixture of reduced hours and furlough leave

What you need to do:

-Designate & notify affected employees as “furloughed workers” i.e. those placed on a temporary absence of leave

-We recommend employers send a letter or email to each employee concerned and get them to agree to the change in status formally in writing

-If we assist in running your payroll please provide us with details of any employee this affects

-Await further info from HMRC about the reimbursement process – the system for reimbursement has not yet been set up by HMRC however Employer’s will submit details through a new online portal

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Statutory Sick Pay and Coronavirus
Statutory Sick Pay (SSP) will now be available for eligible individuals diagnosed with COVID-19 or those who are unable to work because they are self-isolating in line with Government advice. This is in addition to the change announced by the Prime Minister that SSP will be payable from day 1 instead of day 4 for affected individuals.

If you are a Director of a Limited company with less than 250 employees you can pay yourself 2 weeks SSP if you need to self-isolate subject to meeting the minimum payroll requirement for SSP. The government will refund £94 per week, maximum £188, to your company.

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Universal Credit
Self-employed people can now access full universal credit at a rate equivalent to statutory sick pay.

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Deferring VAT

Any VAT payable between 20 March and 30 June 2020 may be deferred to the 31 March 2021 (this effects quarters ending 29th February 2020 to 30th April 2020)

VAT refunds and reclaims will be paid as normal

Deferral applies automatically and businesses do not need to apply for it

 What you need to do:

-Prepare and file your VAT return as normal

-We understand that HMRC will automatically not collect on any direct debit if that is how you pay

-Make arrangement to pay before 31 March 2021, we will advise when it is clear as to how this is expected to be done

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Deferring Income Tax

-Income Tax payments due on 31 July 2020 under the Self-Assessment scheme will be deferred until 31 January 2021.

-Deferral applies to any taxpayer who was self-employed in the 2018/19 tax year on which the payment on account is based

-Eligibility is limited to the self-employed i.e. the deferral does not apply to those that are in self-assessment but are not self-employed – such as employed director shareholders in receipt of dividends

-No penalties or interest for late payment will be charged in the deferral period

-Deferral applies automatically and individuals do not need to apply for it

 What you need to do:

Cancel any arrangements in place to make the 31 July 2020 payment for Self-Assessment

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The retail, hospitality and leisure sector

12 months business rates holiday for all retail, hospitality and leisure businesses in England. Relates to 2020 to 2021 (i.e. from April 2020).

£25,000 grant for businesses operating from premises with a rateable value between £15,000 and £51,000.

Properties that benefit from the relief are shops, restaurants, cafes, drinking establishments, cinemas and live music venues, those used for assemblies and leisure, hotels, guest and boarding premises and self-catering accommodation

What you need to do:

-The business rates holiday and the grants are automatic and will be dealt with by your local authority – you do not need to do anything

-You can find out the rateable value of your business property by examining your National Non-Domestic Rate Demand.

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Nurseries that pay business rates

12 months business rates holiday for nurseries in England and this relates financial year 2020 to 2021 (i.e. from April 2020).

Properties must be occupied by providers on Ofsted’s Early Years Register and wholly or mainly used for the provision of the Early Years Foundation Stage

What you need to do:

The business rates holiday is automatic and will be dealt with by your local authority – you do not need to do anything

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Businesses that pay little or no business rates

One off grant of £10,000 to businesses that pay little or no business rates under the Small Business Rate Relief (SBRR) or rural rate relief.

What you need to do:

Nothing – if eligible you will be contacted by your local authority in April.

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Coronavirus Business Interruption Loan Scheme

Launched week commencing 23 March 2020

The Government will guarantee 80% on each loan

Maximum Loan of £5 million

First 12 months interest free (changed from 6 months as announced last week)

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. https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

What you need to do:

Speak to your lender as soon as possible

You may need to provide security or a personal guarantee for the remaining 20%

It is necessary to put forward a business case for the loan so if you require any assistance on revisions to financial plans please contact us.

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Support for businesses paying tax

You may be eligible to receive support to delay paying any outstanding tax liabilities through HMRC’s Time to pay service.

What you need to do:

Contact HMRC on 0800 0159 559.

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Insurance

You may have cover for Pandemics and Government-ordered closures. Advice given to avoid pubs and theatres may be covered. However standard business interruption insurance policies are dependent on damage to property only.

What you need to do:

Review your insurance policy and contact your provider or broker.