The government have recently announced a package of support measures to help businesses through this period of disruption caused by Covid-19. We have summarized this information below and hope you will find it useful.
If you have any questions, please don’t hesitate to call us. All our employees at Q are currently working from home and are fully equipped to do so, so for us its currently business as usual. We will run through the major announcements by category.
VAT
Firstly, there is the opportunity to defer VAT payments due between the 20th March to the 30th June. This is automatically applied so if a payment is due during this period there is no need to call HMRC to arrange, it will be automatically applied.
In addition to this, HMRC will allow any liability built up during this period to be paid back during the course of the 20/21 tax year (Tax year ends 5th April 2021). All UK VAT registered business is eligible and refund/reclaims will be paid as usual.
Self Assessment/Income Tax
Any payments on account which would have been due by 31st July 2020 will be deferred until 31 Jan 2021 – the usual self assessment deadline.
Again, there is no need to communicate with HMRC regarding this measure, this will automatically be applied and there will be no interest or penalties applied for any of these payments deferred
Time to Pay
For other forms of taxation HMRC (for example Corporation Tax and PAYE) have a ‘Time to Pay’ scheme. To apply for Time to Pay, each business is looked at on a case by case basis. In my experience HMRC are very amenable to these agreements and I would imagine being even more so in the current climate.
Job Retention Scheme
Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.
How to access the scheme
You will need to:
- designate affected employees as ‘furloughed workers,’ and notify your 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
- submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (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. HMRC are working urgently 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.
Coronavirus Business Interruption Loan
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.
Businesses can access the first 12 months of that finance interest free, as government will cover the first 12 months of interest payments.
All UK business with turnover of less than £45m and meet any other British Business Bank criteria can apply.
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 – link below.
https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/
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 could ask for a repayment holiday to help with cash flow. The scheme will be available from early next week commencing 23 March.
If your business pay’s business rates, you may be eligible for a government grant
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 to 2020 tax year will be rebilled by their local authority as soon as possible.
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 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 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.
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 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.
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 who are paying sick pay to employees
We 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 COVID-19. 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
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 once the legalisation has passed which I will of course forward on to you.
