Coronavirus small business Grants and reliefs
In these uncertain times we are here to support British Small Businesses.
We have compiled a list of key points arising from recent announcements by Government that will positively impact businesses affected by the Corvid-19 virus.
Please note that as this is a fast moving situation more information will be issued over the coming days and weeks as more information becomes available.
We will endeavour to keep you fully updated on any developments.
Coronavirus Job Retention Scheme
This scheme will be open to any employer in the country. Up to 80% of wages paid to employees will be covered by the government for employees who would otherwise have been laid off during the current crisis.
Employees who were on the business payroll on 1 March 2020 will be eligible for the scheme. Payments are expected to be made in April and can be backdated to 1 March.
Applications to HMRC should be possible from the beginning of April. The scheme will be open for three months, at which point it will be assessed and will continue if necessary.
To claim under the scheme employers will need to:
- Designate affected employees as ‘furloughed workers’
- Notify these workers of this change.
- Submit information to HMRC about the furloughed employees through a new online portal – HMRC will set out details of the required information.
- HMRC will reimburse the employer with 80% of furloughed workers salary up to a cap of £2,500 per month
- The employer can make up the difference between the employees normal pay and this 80% figure but does not have to
- Employees whose salary is reduced as a result of these changes may be eligible for support through the welfare system, including universal credit.
A ‘furloughed worker’ is a member of the workforce who remains on the payroll but who is temporarily not working during the coronavirus outbreak.
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 (see below) and may also be eligible to apply for a Coronavirus Business Interruption Loan.
All UK businesses are eligible to defer their VAT payments from 20 March 2020 until 30 June 2020.
Any liabilities accumulating during this period will need to be settled before the end of the 2020/21 tax year (i.e. 31 March 2021)
This deferral applies automatically, there will be no need to apply to HMRC. Returns will still need to be filed on time as normal under the 2020 MTD rules.
Foreign (non-resident) UK VAT registered businesses fall outside the scope of this deferment, they must still make payments of VAT on time (by the 7th of the second month following the reporting quarter or month)
Self Assessment Income Tax Payments
Instalment payments due in July 2020 will be deferred until January 2021.
This will be automatic with no need to apply to HMRC.
No penalties or interest on late payment will be charged in the deferral period.
Business Rates Holiday and Cash Grants
All rates holidays and cash grants will be administered by local authorities and will be delivered automatically. There will be no need for a business to claim
- No rates payable for 2020/21 tax year for business in the retail, hospitality, or leisure sectors
- If you are in the retail, hospitality, or leisure sector and your rateable value is between £15,000 and £51,000 you will receive a cash grant of up to £25,000 per property. Your council will contact you if you are eligible for this grant
- Any business that gets small business rates relief will receive a cash grant of £10,000. There will be no need to apply for this. Note you must occupy property to qualify for this grant.
Individuals who are self employed can access universal credit at a rate equivalent to statutory sick pay (£94.25 per week)
HMRC Time to Pay
HMRC’s dedicated Covid-19 helpline (0800 0159 559) has been set up to provide practical help and advice regarding your tax affairs.
The Time to Pay Scheme can allow firms to delay payment of their outstanding tax liabilities
Coronavirus Business Interruption Loan Scheme
- Loans for businesses with a turnover of up to £45m can take out loans of up to £5m
- The lender will receive a guarantee from the government of 80% of the loan amount
- No interest will be charged for the first 12 months
- It is important to remember that the borrower remains liable for 100% of the debt
- These loans should be available from lenders partnered with the British Business Bank from 23 March 2020
Mortgage and Rent Holiday
If you are struggling to pay your mortgage, it may be possible to apply for a three-month payment holiday from your lender.
It is important to remember that as a borrower, you still are liable for the full loan amount and interest will be charged on the outstanding balance. It is only the repayment that will be deferred.
Both residential and buy to let mortgages are eligible for the holiday.
If you are a tenant you can apply for a three month payment holiday from your landlord. No one can be evicted form their home or have their home repossessed over the next three months.
Businesses with cover that includes pandemics and government ordered closures should be covered. The advice to avoid certain businesses given on 17March 2020 is sufficient for these businesses to be covered and has been confirmed by both the government and the insurance industry.
Before you contact your provider, ensure you have checked the terms of your insurance policy as policies differ.
Statutory Sick Pay (SSP)
Directors of small companies (fewer than 250 employees) based in the UK can pay themselves up to two weeks of SSP if they meet the minimum payroll requirements for SSP and need to self-isolate
The government will refund £94 per week, up to a maximum of £188 to the company
For small companies SSP paid to staff for two weeks will also be refunded
Employers will need to keep records of staff absences and payments of SSP. If evidence is required by an employer, those with symptoms can obtain a note from NHS 111. Those living with someone with symptoms can obtain a note from the NHS website
A rebate scheme is currently being developed. Further details will be available in due course
Off Payroll Working (IR35) deferral
Freelancers and consultants worried about the impact of these new rules and the possibility of being taxed as an employee from 6 April 2020 have a one year reprieve, with the new rules set to come in on 6 April 2021
We at Villars Hayward are here to help you with your questions and provide advice and guidance where needed. If you require assistance with any of the areas discussed above, please contact your designated member of staff or contact us using the usual channels:
Tel: 01491 411 077