COVID-19 Emergency Measures (23.03.2020)
What help is there for business during this current crisis?
As you will appreciate the Government has made many announcements and promises to help. Currently, there is not the details of how or where to claim. All we can do is highlight those areas of help update you as and when more detail emerges. We will do this on our website under our news section found here: https://fwdaccounts.co.uk/news/practice-news/.
Please check regularly for updates and if there is significant news we will send an email.
The key areas of help outlined are as follows and then in more detail below;
- To dissuade employers from making staff redundant the Government has promised 80% of employees’ salary (up to £2500) if that Employee is ‘furloughed’ or told to not come to work as there is no work or the business is closed temporarily. This will be claimed by means of registering those workers on an HMRC portal but as yet that portal is not available.
- Rates Relief – if you pay business rates and you are in retail, hospitality, childcare, nursery providers & leisure you could be eligible for a business rates holiday .
- Grants – those businesses that don’t pay rates but occupy premises they pay rent on will get a £10,000 grant from the local authority. Grants of up to £25,000 are also being given for businesses in the retail, hospitality, & leisure industry.
- Time to pay/tax deferral – for VAT return payments that fall due in the coming 3 months the payment will be deferred to 5 April 2021. Corporation tax and other taxes that are due HMRC are offering time to pay if you contact them.
- SSP is reclaimable by the employer if an employee is off up to 2 weeks due to COVID-19.
- Speak to your bank as they are being supported to lend you more during this crisis by means of government guarantees.
- Sick pay for employees at £94.25 per week paid by your employer if you are sick or having to stay at home due to COVID-19 and from day 1 and not day 4 as normally.
- Self employed – currently looking at Universal Credit but expecting more announcements soon.
- Deferral of Self assessment payments on account due to be paid on 31/7/20 – deferred until 31 January 2021.
Employers – HELP TO PAY EMPLOYEE WAGES
The introduction of a new job retention scheme will cover up to 80 percent of monthly wage costs backdated to 1 March for a period of three months or longer, if needed, for small businesses, charities and not for profit organisations. The grant will be to a maximum of £2,500 per employee, per month. This applies to Directors too but all based on wages at end of February 2020.
The mechanism for recording and reclaiming these payments is being worked on by HMRC and will update this article as the details are confirmed.
Our understanding of the scheme currently is as follows:
- The scheme will be open to all UK employers to access financial support to continue to pay part of the Furloughed Workers (the new term) salary who would otherwise have been laid off from work during this crisis.
- You will need to designate the affected individual as a Furloughed Worker and tell them of this change, subject to the normal provisions of employment law.
- You must continue to process your employee’s wages through payroll and make the relevant deductions.
- This will be subject to providing HMRC with information about those furloughed and their earnings via a new online portal (yet to be created)
- HMRC will then reimburse up to 80% of the furloughed worker’s wage costs, to a cap of £2500/month
- Furloughed Workers cannot undertake any work for the employer whilst furloughed.
This scheme is in its infancy and we expect many more details to emerge in the coming days, there are many points that we do not yet have clarity on.
Employers – Statutory Sick Pay
Small and medium sized businesses (fewer than 250 employees) will be able to reclaim Statutory Sick Pay paid for absence due to COVID-19 for up to 2 weeks per employee.
Sick pay can be paid for those isolating with symptoms or isolating due to living with somebody with symptoms. Sick pay for COVID-19 can be paid on the first day of sickness for eligible periods ignoring the usual 3 qualifying days. Sickness under other grounds will follow the usual rules.
Sick pay is paid at a rate of £94.25 per week.
If evidence is required, those with symptoms, or living with somebody with symptoms, can get an isolation note from the NHS 111 online website: https://111.nhs.uk/isolation-note/
The rebate scheme is being developed by HMRC and will be set up over the coming months. We will provide further details as they are released.
Personal Tax – Deferred Payments
For those who were due to make a self-assessment payment on account by the 31st July 2020 this is now deferred to January 2021.
Self Employed – Universal Credit
Self-employed people can now access full universal credit at a rate equivalent to statutory sick pay which is £94.25 per week.
Grants are due to be available to business within weeks. Payments from Govt to Local Authorities are being made on 1st April after which Local Authorities will contact eligible businesses. There is nothing to apply for.
Every eligible business will receive a one-off grant of £10,000.
You are eligible if:
- your business is based in England
- you are a small business and already receive Small business rates relief or Rural rates relief
- you are a business that occupies property
Eligible businesses in the retail, hospitality and leisure sectors will receive a cash grant of up to £25,000 per property.
You are eligible for this full grant if:
- your business is based in England
- your business is in the retail, hospitality and/or leisure sector
- your business property has a rateable value of between £15,001 and £51,000,
Businesses within the retail, leisure and hospitality sectors with a rateable value of under £15,000 will instead receive the £10,000 grant as above.
Business Rates Reductions
Businesses in the retail, hospitality, leisure and childcare sectors will be eligible for a business rates holiday for the 2020/21 year.
This will apply to council tax bills from April 2020 and local authorities will automatically reissue bills to exclude the rates charge. There is no need to apply. Guidance has already been issued from government to local authorities to allow them to do this as soon as possible.
The business loans that were previously announced will be available from Monday 23 March and will now be interest-free for 12 months (was 6 months).
These loans are currently available through over 40 accredited lenders listed on the British Business bank website: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/accredited-lenders/
Applications can be made directly to the provider in the same way as a regular bank loan either via their websites or over the phone.
Key features and eligibility criteria of the loan scheme can be found here:
VAT Payment Deferral
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.
Human Resources Advice
We have contacts in the human resources, legal, corporate finance and a wealth of other functions that may be helpful to you at this time. If you would like a recommendation for one of these functions please get in touch with us and we would be happy to help.