Covid -19 Update
The coronavirus is affecting every client as we enter a period of lock down. We are here to assist all of our clients during this very difficult and uncertain time. The government has announced a range of measures to assist businesses and individuals. We have outlined them here but this situation is fluid and may change.
Coronovirus Job Retention Scheme
If you have employees that you would lay off due to the current situation then you can “furlough” your employees. This is a category of worker and you must tell your employees that they have been furloughed. They must stop working for you. HMRC will reimburse 80% of furloughed workers wage costs up to £2500 per worker per month. All businesses are eligible. HMRC are working hard to set up the system and it should be in place by the end of April.
Practical Tip: You will not be reimbursed immediately so you should secure adequate cashflow until the scheme is up and running.
Deferring VAT payments from 20 March 2020 to 30 June 2020
Businesses will not to make VAT payments during this period. VAT not paid will not be due until end of 2020 to 2021 tax year (5th April 2021). All UK businesses are eligible. This an automatic offer and there is no need to make an application. No VAT should be paid in this period.
Practical Tip. Keep your records up to date, especially for any business expenses incurred. VAT refunds will still be paid so it will be possible to get a refund if it is due.
Deferring Income Tax Self Assessment payments due 31 July 2020 to 31st January 2021
Do not pay the 31st July 2020 installment of income tax. You can now pay this in January 2021. All self employed people will be eligible. This is automatic and no application is necessary.
Practical Tip. Make sure you record all of your business costs accurately as the return will still need to be filed by 31st January 2021 and taxes paid.
Business paying sick pay
Small and Medium -sized businesses (SME’s) can reclaim Statutory Sick Pay (SSP) paid for sickness absence due to Covid -19. It covers up to 2 weeks SSP for employees off work due to Covid-19. UK based SME’s are eligible with less than 250 employees as at 29th February 2020. No fit notes are required from GP’s. The rebate scheme is in development – so watch out for more information. This scheme started on March 13th.
Practical Tip. Employers should maintain records of staff absence to be in a position to claim.
Business rates holiday for Retail, Hospitality & Leisure businesses
No business rates in 20/21 for businesses in this sector for businesses based in England. This applies to shops, restaurants, cafes, drinking establishments, cinemas, live music venues, hotels and guest houses. You don’t need to claim this as your bills from councils will be adjusted and reissued.
Practical Tip. Contact your local authority if you don’t hear anything soon. Guidance for Local Authorities will be published by MHCLG by 20 March.
One off cash Grant
If your business is eligible for small business rate relief or rural rate relief in England, you are entitled to a one-off cash grant of £10,000: If your business is in the retail, hospitality or leisure sector in England, then you may also be entitled to a cash grant. If you have a property with a rateable value of less than £15,000 then you will be entitled to a grant of £10,000, whether or not you are entitled to small business rate relief or rural rate relief. If you have a property with a rateable value of between £14,999 and £51,000 then you will be entitled to a cash grant of £25,000.
The Department for Business, Energy and Industrial Strategy (BEIS) will provide guidance for Local Authorities on how to administer these grants shortly. If you are an eligible business, your Local Authority will then be in touch in the coming weeks to provide details of how to claim this money.
Practical Tip. Look out for further information on your local authority web pages for details on how to access this critical grant.
Coronavirus Business Interuption Loan Scheme
The Government will provide lenders with a guarantee of 80% on each loan up to £5m in value. The government will make business interruption payments to cover the first 12 months of interest payments and any lender levied fees. Primarily this scheme is designed to support SME’s to access bank lending where security is limited. All UK business are eligible subject to meeting the criteria British Bank.
Practical Tip. Start talking to your bank now. Look for a loan or an overdraft, Beware of banks who are looking for unreasonable security. Don’t just assume that the bank will support you, they may not.