The Chancellor has set out a package for people and businesses through this period of disruption caused by COVID-19.
Here is an overview of what is included:
Coronavirus Job Retention Scheme
All UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis.
This applies to employees who have been asked to stop working, but who are being kept on the payroll, otherwise described as furloughed workers. HMRC will reimburse 80% of their wages, up to £2,500 per month.
Backdated to 1 March and is initially open for 3 months, but will be extended if necessary.
You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to.
To access the scheme, you will need to: designate affected employees as ‘furloughed workers’ and notify your employees of this
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 are working urgently to set up a system for reimbursement and it is expected in April. Existing systems are not set up to facilitate payments to employers.
Deferring VAT and Income Tax payments
Valued Added Tax (VAT) payments will be deferred for 3 months.
Income Tax payments due in July 2020 under the Self-Assessment system may be deferred until January 2021.
The deferral will apply from 20 March 2020 until 30 June 2020.
All UK businesses are eligible.
This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during 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 be paid by the government as normal.
Customers who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay.
You will still need to submit your VAT returns to HMRC on time.
It does not cover VAT MOSS payments.
Self-employment Income Support Scheme
The Self-employment Income Support Scheme (SEISS) will support self-employed individuals (including members of partnerships) who have lost income due to coronavirus (COVID-19).
This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed.
Many owner managed company director/shareholders pay small salaries and the balance of income as dividends. The scheme does not extend to dividends. Only the salary is relevant to the scheme. Such companies must have been paying a salary through a payroll to be eligible for a grant.
If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020
You cannot apply for this scheme yet. It is expected to be up and running by June 2020
HMRC will contact you if you are eligible for the scheme and invite you to apply online.
Full details can be found here www.gov.uk/guidance
Statutory Sick Pay relief package for small and medium sized businesses (SMEs)
Small and medium-sized businesses and employers can reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme is 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 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
Anyone not eligible to receive sick pay, including those earning less than an average of £118 per week, some of those working in the gig economy, or self-employed people, is able to claim Universal Credit and or contributory Employment and Support Allowance.
The rebate scheme is being developed.
Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
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 (SBRR), 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 you are a small business that occupies property and already receive SBRR and/or RRR
For more information from Oldham Council follow this link www.oldham.gov.uk
12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England
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.
For more information from Oldham Council follow this link www.oldham.gov.uk
Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
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.
Businesses in these sectors with a property that has a rateable value of up to £15,000 will receive a grant of £10,000.
Businesses in these sectors with a property that has a rateable value of between £15,000 and less than £51,000 will receive a grant of £25,000.
Businesses which don’t pay business rates are not included in this scheme.
HMRC Time To Pay Scheme
HMRC have also scaled 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.
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.
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
Protection from eviction for commercial tenants
Commercial tenants who cannot pay their rent because of COVID-19 will be protected from eviction.
These measures will mean no business will automatically forfeit their lease and be forced out of their premises if they miss a payment up until 30 June.
There is the option for the government to extend this period if needed.
This is not a rental holiday. All commercial tenants will still be liable for the rent. Commercial tenants are protected from eviction if they are unable to pay rent.
Commercial insurance
Most commercial insurance policies are unlikely to cover pandemics or unspecified notifiable diseases, such as COVID-19.
However, those businesses which have an insurance policy that covers government ordered closure and pandemics or government ordered closure and unspecified notifiable disease should be able to make a claim (subject to the terms and conditions of their policy).
Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers.
If your office is unoccupied for 30 days you might not be covered. It is worth communicating with your insurer if this is the case.
Don’t miss your insurance payments as this could void your insurance.
Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
The temporary Coronavirus Business Interruption Loan Scheme supports SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years.
The government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.
There are 40 accredited lenders able to offer the scheme, including all the major banks.
You are eligible for the scheme if your business is UK based, with turnover of no more than £45 million per year and your business meets the other British Business Bank eligibility criteria
The scheme is now open for applications. All major banks are offering this scheme.
To apply, you should talk to your bank or one of the 40 accredited finance providers (not the British Business Bank) as soon as possible, to discuss your business plan.
The full rules of the scheme and the list of accredited lenders are available on the British Business Bank website.
If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.
New lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
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 non-financial companies that meet the criteria set out on the Bank of England’s website are eligible.
The scheme is now available for applications.
More information is available from the Bank of England.
HMRC also has a dedicated Coronavirus helpline 0300 456 3565
For more information get in touch wendy@lunaraccounting.co.uk