For the latest information on Government assistance for businesses and individuals
As businesses and individuals are impacted by the Corona virus COVID-19 outbreak, the government is announcing various funding support mechanisms.
Our team of business advisers and tax specialists are publishing updates in line with Government announcements and highlighting key areas that businesses need to consider.
Self-Employment Income Support Scheme (SEISS)
The Government announced on 26 March that it will support self-employed individuals and members of partnerships, providing a grant of 80% of their monthly profits up to a cap of £2,500 per month.
HMRC will calculate the size of the grant using the average monthly profits from self-assessment tax returns submitted for 2016-17, 2017-18 and 2018-19. The scheme will only be open to those with trading profits of less than £50,000 and where the majority of their income comes from self-employment.
The scheme will initially be open for an initial three months with people able to make their first claim by the beginning of June 2020.
HMRC will invite eligible individuals to apply once the scheme is operational….Read More
Corona virus Job Retention Scheme
The Government announced yesterday that all employers will be able to access funds to pay 80% of an employee’s salary, backdated to 1 March and up to a cap of £2,500 per month, for those employees that would have otherwise have been laid off as a result of the COVID-19 pandemic.
The relevant employees need to be designated as ‘furloughed workers’ and the employee needs to be informed. Details need to be uploaded to HMRC to a separate online portal (not yet active) to obtain the reimbursement.
The payment mechanism for the Coronavirus Job Retention Scheme is not yet active and is expected to be operational by April 2020…..Read More
The Government announced on 17 March 2020 that it is increasing grants to small businesses eligible for Small Business Rate Relief, from £3,000 to £10,000 and providing further £25,000 grants to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value over £15,000 and below £51,000.
No action is required to obtain the grants. Your local authority will write to you if you are eligible to receive these grants.
Business Rates Holiday
The Government has announced a 12 months business rates holiday for all retail, hospitality and leisure businesses in England.
No action is required to obtain the business rates holiday and your local authority will write to you if you are eligible.
The above supersedes any information previously provided in earlier updates.
Time to Pay (HMRC)
Time to Pay is a service offered by HMRC, to spread tax payments (PAYE, VAT, Corporation Tax) over a period of time (usually 3 – 12 months).
Contact HMRC on the Coronavirus Helpline on 0800 024 1222 (lines open Monday to Friday 8am to 4pm) to discuss further.
VAT & Income Tax Deferral
The Government announced on 20 March that all VAT payments due from 20 March to 30 June can be deferred and that taxpayers will be given until the end of the 2020/21 tax year to pay any liabilities that have accumulated during the deferral period.
VAT returns will still need to be submitted during this period and if the business has a Direct Debit in place, this will need to be cancelled to ensure that HMRC does not automatically try to take payment. No application to HMRC is required and no penalties or late payment interest will be charged in this deferral period.
If you are self-employed, any Income Tax due on account in July 2020 will be deferred to January 2021. No application to HMRC is required and no penalties or late payment interest will be charged in this deferral period…Read More
Statutory Sick Pay (Employees)
The Government has announced that people who cannot work due to coronavirus and are eligible for Statutory Sick Pay will get it from day one, rather than from the fourth day of their illness – and the Government intends to legislate so that this measure applies retrospectively from 13 March 2020.
Statutory Sick Pay will be payable to people who are staying at home on Government advice, not just those who are infected, from 13 March 2020 – employers are urged to use their discretion about what evidence, if any, they ask for.
Employers with fewer than 250 employees will be able to reclaim Statutory Sick Pay for employees unable to work because of coronavirus. This refund will be for up to 2 weeks per employee.
The repayment mechanism for the SSP is not yet active.
Coronavirus Business Interruption Loan Scheme (CBILS) (British Business Bank)
The chancellor on 17th March 2020 announced an extension to the loan scheme first introduced in the budget on 11th March.
The measures announced on 17 March 2020 extend the amount available to small and medium businesses from the initial announced limit of £1.2m up to £5m. The loan will also have no interest payable in the first 12 months of the term (the Government will cover the first 12 months of interest payments). This new facility will be available from the start of the week commencing 23 March 2020.
Funding to lenders will come via the British Business Bank and details of how to apply are due to be shared by British Business Bank partners from 23 March 2020.
The British Business Bank’s CBILS facilitates business finance to smaller businesses that are viable but are unable to obtain finance due to having insufficient security to meet the lender’s normal requirements. It is important to note that the borrower always remains 100% liable for the debt.
In this situation, CBILS provides the lender with a Government-backed 80% guarantee against the outstanding facility balance, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’. Essentially the Government is acting as a loan guarantor to help banks get funds out to businesses with undue delay. The Government will not charge businesses or banks for this guarantee.
To be eligible for the funding businesses must meet the following criteria:
• Be UK based, with turnover of no more than £41 million per annum
• Operate within an eligible industrial sector (a small number of industrial sectors are not eligible for support – see link for details https://www.british-business-bank.co.uk/wp-content/uploads/2020/03/Ineligible-and-Restricted-Eligibility-Sector-2017.pdf)
• Have a sound borrowing proposal, but insufficient security to meet a lender’s normal requirements