23rd March 2020
There are a number of reliefs, grants and loans available to
business and individuals following the latest round of announcements. This is a summary of where we are and what
can be done to utilise them.
- Coronavirus Job Retention
Scheme.
- Deferring VAT and Income
Tax payments.
- Statutory Sick Pay relief
package for small and medium sized businesses (SMEs).
- 12-month business rates
holiday for all retail, hospitality, leisure and nursery businesses in
England.
- Small business grant
funding of £10,000 for all business in receipt of small business rate
relief or rural rate relief.
- Grant funding of £25,000
for retail, hospitality and leisure businesses with property with a
rateable value between £15,000 and £51,000.
- Coronavirus Business
Interruption Loan Scheme offering loans of up to £5 million for SMEs
through the British Business Bank.
- HMRC Time to Pay Scheme.
1. 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.
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. They
expect this to be up and running by the end of April but claims can be
backdated to the date the employee was furloughed going back as far as 1st
March.
HMRC are working urgently to set up a system for
reimbursement. Existing systems are not set up to facilitate payments to
employers.
2. Deferring VAT
and Income Tax payments
VAT will be deferred for periods from 20 March 2020 until
30 June 2020, this deferral will happen automatically, no application is
required. 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.
VAT returns still need to be completed and submitted on
time.
Income Tax Self-Assessment payments due on the 31 July
2020 will be automatically deferred until the 31 January 2021.
3. Paying sick pay
to employees
Small-and medium-sized businesses and employers can
reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19
covering 2 weeks’ SSP per eligible employee.
The government will work with employers over the coming
months to set up the repayment mechanism for employers as soon as possible.
4. Business rates
holiday
A business rates 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.
This will be applied automatically to your next council
tax bill in April 2020. However, local authorities may have to reissue your
bill automatically to exclude the business rate charge. They will do this as
soon as possible.
5. £10k grant fund
For businesses in the retail, hospitality and leisure
sectors with a rateable value of under £15k there is a £10k grant
available. Your local authority should
write to you if you qualify and they are the ones to contact if you need to
check your eligibility.
6. £25k grant fund
For businesses in the retail, hospitality and leisure
sectors with a rateable value of £15k to £51k there is a £25k grant
available. Your local authority should
write to you if you qualify and they are the ones to contact if you need to
check your eligibility.
7. Coronavirus
Business Interruption Loan Scheme
The new Coronavirus Business Interruption Loan Scheme
supports SMEs with access to working capital (including loans, overdrafts,
invoice finance and asset finance) of up to £5 million in value and for up to 6
years.
The government will pay to cover the first 12 months of
interest payments and any lender-levied fees, so smaller businesses will not
face any upfront costs and will benefit from lower initial repayments.
The government will provide lenders with a guarantee of
80% on each loan (subject to a per-lender cap on claims) to give lenders
further confidence in continuing to provide finance to SMEs.
The scheme is now open for applications. To apply, you
should talk to your bank or finance provider.
All major banks are offering this scheme. If you have an
existing loan with monthly repayments you may want to ask for a repayment
holiday to help with cash flow.
8. Time to Pay
service
All 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.
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.
Staying in touch
Please feel free to contact your usual Easterbrook Eaton
contact(s) via email or by calling the office on 01395 516658 (Sidmouth) or
01404 815646 (OSM).
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