Coronavirus (Covid 19) Government Business Support - Updated 26/03/2020 The government has announced the following – announcements are being made on a frequent basis and so are subject to change. There is also limited information available and so the following represents out current understanding. This document has been updated to include the government announcements on Thursday 26th March and includes detail of additional support for the selfemployed and additional guidance on Coronavirus Job Retention Scheme. Links have been added to the Government Business Support Website which should provide additional information. https://www.businesssupport.gov.uk/coronavirus-business-support/ Powers have been devolved to Wales, Scotland and Northern Ireland and they may offer similar or alternative business support incentives. The following currently applies to England. Grants Grants which will be administered by local authorities will be available to small business that have business premises registered with their local authority for business rates purposes and have a rateable value of under £15,000 or up to £51,000 if they are within retail, hospitality and leisure sectors Information is currently quite sparse, but more should be available within the next week or two, but the current proposals are Business with a rateable value of up to £15,000 will be entitled to a cash grant of £10,000. The £10,000 grant will be paid to business that qualify for small business rate relief or rural rate relief and tapered relief. https://www.businesssupport.gov.uk/small-business-grant-funding/ Businesses within the retail, hospitality and leisure sectors with a rateable value of between £15,000 and £51,000 will instead be eligible for a grant of £25,000. https://www.businesssupport.gov.uk/cash-grant-for-retail-hospitality-and-leisure/ These Grant’s will be administered by your local authority and they will be writing to the businesses that will be eligible for these grants. No action is needed to claim this relief. It is not yet known when the payments will be made although funding for the scheme is expected to be made available to local authorities sometime during April. Further information may be available from the website of your local authority Business Rates relief Any business within the retail, hospitality and leisure sectors will not have to pay business rates for the year to 31 March 2021. https://www.businesssupport.gov.uk/business-rates-holiday-for-retailhospitality-and-leisure/
This relief has also now been extended to include Children’s Nurseries. https://www.businesssupport.gov.uk/business-rates-holiday-for-nurseries/ Rates relief will be given automatically, and no action is required. Self-Employment Income Support Scheme A new support scheme for the Self-Employed has been announced which will run for an initial period of three months and could be worth up to £2,500 per month. There are a number of conditions to be met and it is expected that no payments can be made until June. The grant payment when made will cover the 3 months to the end of May. This scheme will not apply to company directors who may be able to claim for their PAYE salaries under the Job Retention Scheme. Conditions You must be a sole trader or partner in a business Have lost trading/partnership trading profits due to COVID-19 Have traded during the years ended 5 April 2019, the current tax year and intend to trade for the year to 5 April 2021 Majority of your income must be from self-employment Have annual trading profits of less than £50.000 in the year to 5 April 2019 (can use an average over three years to 5 April 2019, if lower) You must have already filed your 2018/2019 tax return or file your return before 23rd April How much can you get? The grant will be calculated based on 80% of the average monthly profit for the three years to 5 April 2019 but will be capped at £2,500 per month. The average will be based on a shorter period if selfemployment commenced after 6 April 2016. Examples A self-employed individual with an average monthly profit of more than £3,125 (£37,500 per annum) would expect to receive a payment of £7,500 (£2,500 x 3) Someone with profits of £1,900 per month (£22,800 per annum) would expect to receive a payment of £4,560 (£1,520 x 3) The grant will be taxable HMRC will contact all eligible individuals and ask them to apply for the grant but this may not be until May with payment expected in the following months. https://www.businesssupport.gov.uk/self-employment-income-support-scheme/ https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employmentincome-support-scheme
Coronavirus Job Retention Scheme For many businesses, a large element of their costs is in staff wages. For businesses that are either forced to close or whose work will significantly reduce, often the only option would be to make their staff redundant or lay them off. The Job retention scheme has been introduced as a temporary measure to allow employers to retain staff but at a significantly reduced cost by an HMRC reimbursement of up to 80% of an employee’s wage cost up to a maximum of £2,500 per employee each month. In addition to the salary the employer is also able to reclaim employer’s national insurance and minimum employers autoenrolment pension contributions in respect of the reimbursed salary. This scheme is currently in operation from the three months from 1st March 2020 but may be extended. Any grants received under this scheme will be taxable although the full cost of the employee’s salary and associated costs is an allowable expense. An employer will need to designate an employee as a “furloughed worker” and the employee will need to be notified of the change to their employment status. A furloughed worker will not be able to undertake any work for you during the furloughed period. An employee must be furloughed for a minimum period of 3 weeks. It is currently unclear whether an employee who returns to work after this minimum period may subsequently be designated as a “furloughed worker”. During the furloughed period an employer you will continue to pay the employee and then make a claim for partial reimbursement from HMRC. The reimbursement system has yet to be set up and so it is not yet known how long it will take before payments start to be received by employers. Company directors may be able to benefit under this scheme in respect of their PAYE salary but not in respect of dividends although detailed guidance relating to directors has not been provided. It is likely that a director would only be able to claim where there would been either a closure of their business, such as a publican or the termination of their only contract where they are a personal service company. Sadly, under this scheme there is no reimbursement to employers where they choose to reduce a worker’s hours. In order to make a claim an employer will need to provide the following your PAYE reference number the number of employees being furloughed the claim period (start and end date – minimum 3 week period) amount claimed in the period your bank account number and sort code your contact name your phone number The employer will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim.
The amount to be claimed will normally be the based on the salary of an employee as at 28th February 2020, excluding any commissions or bonuses. Different rules apply for employees on variable pay such as employees who are paid based on hours worked rather than a regular salary https://www.businesssupport.gov.uk/coronavirus-job-retention-scheme/ https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme Interruption Loan Scheme Government backed loans will be available via the British Business Bank. These loans will be 80% guaranteed by the government and will be interest free for the first 12 months. Full details of the loans can be found at the British Business Bank Website https://www.british-businessbank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/ You should contact your own business bank to apply for these loans. https://www.businesssupport.gov.uk/coronavirus-business-interruption-loan-scheme/
Statutory Sick Pay Rebate (SSP) Business with less than 250 employees will be able to reclaim the cost of 2 weeks SSP per employee where the absence is due to Coronavirus related SSP. SSP will be Coronavirus related where someone is off work due to suspected Coronavirus or are self-isolating in accordance with government guidance. There is currently no mechanism in place to reclaim SSP from HMRC and it may be a while before claims may be made. Adequate records must be maintained to support any claim for Coronavirus related SSP Claims All employers are advised to seek guidance from an HR expert in connection with the contractual obligations in respect of their employees and the payment of SSP or full pay where time off is taken. https://www.businesssupport.gov.uk/statutory-sick-pay-rebate/ VAT Deferral Those businesses that are registered for VAT can have one quarters VAT liability deferred and this will relate to the period 20 March 2020 to 30 June 2020. These dates refer to payments falling due within those periods and not VAT return periods. There will be no need to claim the relief, but you will need to cancel any direct debit that you have in place and then put a new direct debit in place for the next quarter. Prompt action will be needed for those business due to pay their VAT in April. We have seen nothing to indicate that the VAT payment may be returned once taken. If you wish to pay your VAT as normal via direct debit, then no action will be required as HMRC will request the payment from your bank as normal. We have seen nothing to indicate that the VAT payment may be returned once taken. The VAT deferred during this period will need to be paid by March 2021. https://www.businesssupport.gov.uk/vat-deferral/
Income Tax Payment Deferral – Self-employed The July self-assessment payment that falls due in July 2020 will be deferred until 31 January 2021. This appears to apply only to those individuals that are self-employed, and relief will be automatic. It currently appears that Company Directors and Buy-to-let Landlords who are due to make a payment in July will still need to do so. This measure is a deferral only and the liability will need to be paid along with the any Selfassessment liabilities that fall due in January 2021 and so could result in future cashflow issues. https://www.businesssupport.gov.uk/income-tax-deferral-for-the-self-employed/
Outstanding tax liabilities – Time to Pay Where a business has outstanding tax liabilities then repayment plans should be discussed directly with HMRC. They have set up a new helpline for those businesses and individuals who are struggling to settle tax liabilities as a result of Coronavirus. The number is 0800 024 1222. https://www.businesssupport.gov.uk/time-to-pay/ State Benefits If you are unable to work, then you may be eligible to claim Universal Credit or Employment support You can make claims for these using the websites attached below: Universal Credit Website - https://www.understandinguniversalcredit.gov.uk/coronavirus/ Employment Support Website - https://www.gov.uk/guidance/new-style-employment-and-supportallowance Existing Business Loan and Overdrafts Businesses should discuss with the bank any difficulty in making loan repayments to establish whether options exist to defer payments or increase overdraft facilities.
The Old Schoolhouse 75A Jacobs Wells Road Clifton Bristol BS8 1DJ Tel 0117 9211222 Fax 0117 9211120 Website: www.wilkinsonpartners.co.uk Twitter: http://twitter.com/wp_accountants Wilkinson and Partners is the trading name of Wilkinson & Partners Limited, a company registered in England and Wales under company number 5747707