Last updated: 10 July 2020
HMRC have now launched a Coronavirus financial support finder for business– This is a useful tool as you can enter in your specific details to find out what support you can apply for and the detailed information regarding it.
It is worth looking at this as there may additional support available which you had not considered.
Here’s our summary of what help is available for businesses affected by the Coronavirus
Please be vigilant for possible fraud. Scammers will use this uncertainty try to obtain bank details. If in doubt ask us.
New Coronavirus Bounce Back Loan announced 27 April 2020- will launch 4th May 2020
This scheme has been devised to help small and medium-sized businesses affected by coronavirus to apply for loans of up to £50,000. You cannot apply for this loan if you are already claiming funding under the Coronavirus Business Interruption Scheme, however, if you have received a loan of up to £50,000, you can arrange to transfer it to a Bounce back Loan with your lender until 4th November 2020.
Borrowing can be between £2,000 to £50,000, the government will guarantee 100% of the loan and there will not be any fees or interest to pay for the first 12 months.
There is specific eligibility criteria, we suggest that if you are thinking of applying for these loans you will need to have your accounts up to date.
You can apply through HMRC How to apply. There are 11 lenders participating in the scheme, you should approach a suitable lender yourself via the lender’s website. You will be required t fill in an application form and self declare you are eligible. The lender will decide whether to offer you a loan or another type of finance and you’ll be responsible for repaying 100% of the amount borrowed.
Top-up to local business grant funds scheme Updated 2nd May 2020
A discretionary fund has been set up to accommodate certain small businesses previously outside the scope of the business grant funds scheme.
Coronavirus Job Retention Scheme
The latest Government guidance is here.
New Job Retention Bonus announced 8th July 2020
A one-off ‘Job Retention Bonus’ of £1,000 has been announced to help incentivise employers to retain employees beyond October.
A one-off £1000 incentive paid to the employer for each one of their furloughed staff members, in a bid to help businesses retain employees beyond October 2020.
Essential points for qualifying employers include:
- An employee who has been furloughed at some point between April – October 2020
- An employee who is still employed on 31 January 2021
- An employee with average earnings for the period 1 November 2020 – 31 January 2021 above £520 month (lower earnings limit for NIC purposes)
The payments will be made in February 2021 and we expect to see more details released later this month.
Under the new Coronavirus Job Retention scheme, government grants will cover 80% of the salary of PAYE employees who would otherwise have been laid off during this crisis. The scheme, open to any employer in the country, will cover the cost of wages backdated to 1 March 2020 and will be open before the end of April. It will continue for at least three months, and can include workers who were on your PAYE payroll on or before 19 March 2020 and which were notified to HMRC on an RTI submission on or before 19 March 2020.
To claim under the scheme employers will need to:
– designate affected employees as ‘furloughed workers’, and notify 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; and
– 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.
While HMRC is working urgently to set up a system for reimbursement, we understand existing systems are not set up to facilitate payments to employers. Business that need short-term cash flow support, may benefit from the VAT deferral announced below and may also be eligible to apply for a Coronavirus Business Interruption Loan.
Can a company director furlough themselves?
HMRC have recently updated their guidance regarding company directors, here is the recording of our webinar from 8 April detailing the much needed updated information from HMRC for sole directors and the Job Retention Scheme
And a copy of the slides are available here.
Director Furlough Board Minute
Access that here
Self Employed Income Support Scheme
The latest Government details are listed here.
Our detailed guidance on this section can be found here.
We’ve produced our FAQ’s here
Financial Support available for businesses during Coronavirus
Cash flow spreadsheet
We strongly advise preparing a cashflow to cover the next 12 weeks.
Download a copy here
Make sure you save a copy locally (Use File/Save As) and don’t just edit this version or we’ll all see your business!!
The next quarter of VAT payments will be deferred, meaning businesses will not need to make VAT payments until the end of June 2020. Businesses will then have until the end of the 2020-21 tax year to settle any liabilities that have accumulated during the deferral period.
The deferral applies automatically and businesses do not need to apply for it. VAT refunds and reclaims will be paid by the government as normal. You do still need to complete your VAT return on time.
Update: HMRC have confirmed you need to cancel your Direct Debit or it will be collected as normal
July Income Tax payments
Income Tax Self-Assessment payments due on the 31 July 2020 will be deferred until the 31 January 2021. This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period.
Update: this originally stated self employed only but now covers all tax payers
The Government has promised a preferential loan scheme to support business through the difficulties.
There are more details here.
The Government has set up a helpline for businesses and the self employed who are concerned about not being able to pay their tax.
There are more details here.
Support for businesses that pay business rates
Government will introduce a business rates retail 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.
A £25,000 grant will be provided to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value between £15,000 and £51,000.
Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority. Guidance for local authorities on the business rates holiday will be published by 20 March.
Support for businesses that pay little or no business rates
The government will provide additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR). This will provide a one-off grant of £10,000 to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs.
If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority – you do not need to apply.
Funding for the scheme will be provided to local authorities by government in early April. Guidance for local authorities on the scheme will be provided shortly.
Billion pound support package for innovative firms hit by coronavirus
The chancellor announced 20th April a £1.25 billion government support package for UK businesses driving innovation and development.
This is described as Coronavirus Future Fund. The scheme is not available yet. It will launch in May 2020.
Official guidance for employers
For HMRC’s guidance for employers, please follow the link below:-
Please feel free to access the HR Support line available to our clients. If you require this then please contact us for the details.
Paying sick pay to staff absent through COVID-19
To support businesses experiencing increases in costs or financial disruptions:-
· The government 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:-
o This refund will cover up to two weeks’ SSP per eligible employee who has been off work because of COVID-19. Employers with fewer than 250 employees will be eligible.
o 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.
o Employers should maintain records of staff absences, but employees will not need to provide a GP fit note.
o The eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to self-isolators comes into force.
o The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible. Existing systems are not designed to facilitate employer refunds for SSP.
Filing Company Accounts
Companies House will consider extending the deadline on a case by case basis. It’s important to agree an extension before the accounts deadline.
More information here.
Usually asking for a holiday from mortgage payments has a detrimental effect on your credit rating. Banks are confirming this will not be the case for COVID-19. You should contact your own bank to request a payment holiday if one is required.
We’ve been given this guide to what lender are offering by way of mortgage holidays. We’ve not checked it’s accuracy but you may find it useful.
Delay to IR35
The changes to IR35 for contractors working in the private sector have been delayed by a year.