In these uncertain times, we wanted to do our best to keep you updated with the current support that is available from the UK government. Below is a summary of the different Govt initiatives to support and help business at this time. There are some initiatives that are specific to particular industries or large businesses which are not included here. I hope you find this helpful. There are still many unanswered questions regarding the initiatives and we will do our best to keep you updated as we get more clarifications from Govt and other agencies.
Support for businesses through the Coronavirus Job Retention SchemeUnder the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.
All UK Employers: · Businesses· Charities· Recruitment Agencies (for agency workers paid through PAYE)· Public Authorities
You will need to:· designate affected employees as ‘furloughed workers,’ and notify your 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· 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. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers. The payment will be by way of a Grant to the employer. The employer will first pay the payroll obligations and submit RTI returns to HMRC as normal (Salary + Employers NI + Pension Contributions).If your business needs short term cash flow support to make the payrolls, you may be eligible for a Coronavirus Business Interruption Loan. How about DirectorsIn theory directors can be furloughed in the same way as other employees. However, a condition of furloughing is that the individual must not undertake work of any kind for the company during this time. This is harder for a director to justify, particularly if they are the sole director. It may be necessary for the director to notify all suppliers, customers and other business contacts that the business has been suspended pending the end of the Coronavirus crisis. In many cases this is impractical and undesirable because the director may wish to use this time working on improving the business so that when trading commences the business performs well quickly. In these circumstances, furloughing is not permitted. Remember also that this only relates to PAYE income, not dividends.
Support for businesses through deferring VAT payments· We will support businesses by deferring Valued Added Tax (VAT) payments for 3 months.· The deferral will apply from 20 March 2020 until 30 June 2020.
All VAT Registered UK Businesses
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.
Support for businesses through deferring Income Tax paymentsIf you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
Any Tax Payer due to make payment on account by 31stJuly 2020.
This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period. 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.
Support for businesses who are paying sick pay to employeesWe 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:· 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 – 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· 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· the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible
You are eligible for the scheme if:· your business is UK based· your business is a small or medium-sized and employs fewer than 250 employees as of 28 February 2020
A rebate scheme is being developed. Further details will be provided in due course once the legalisation has passed.
Support for businesses that pay little or no business ratesThe 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 (SBBR), 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:· your business is based in England· you are a small business and already receive SBBR and/or RRR· you are a business that occupies property
You do not need to do anything. Your local authority will write to you if you are eligible for this grant. Guidance for local authorities on the scheme will be provided shortly. Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.
Support for businesses through the Coronavirus Business Interruption Loan SchemeThe temporary Coronavirus Business Interruption Loan Scheme will support 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.The government will provide lenders with a guarantee of 80% on each loan (subject to pre-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The scheme will be delivered through commercial lenders, backed by the government-owned British Business Bank.There are 40 accredited lenders able to offer the scheme, including all the major banks.Key pointsLoans are available from £25,001 to £5mAvailable from 1-6 yearsNo interest is Payable for 12 MonthsCapital Repayment Holidays are available for 12 months as well – so some clients will have no payments to make in the first yearLoans are limited to 25% of the business’ turnover in 2019, or double the annual wage bill
You are eligible for the scheme if:· your business is UK based, with turnover of no more than £45 million per year· 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. You can find out the latest on the best ways to contact them via their websites. Please note that branches may currently be shut down to enable social distancing. 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.
Support for businesses paying tax: Time to Pay serviceAll 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.
You are eligible if your business:· pays tax to the UK government· has outstanding tax 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. If you’re worried about a future payment, please call us nearer the time.