Covid-19

Following the announcement by the Chancellor on Friday 20th March 2020, the Government is committed to ensuring business continuity during these difficult times.

As a business owner your main concerns will be focused around:

• Employment & Self Employment
• Cashflow
• Funding
• Financing

The Government have introduced the following measures to hep support you:

EMPLOYMENT & SELF EMPLOYMENT

Coronavirus Job Retention Scheme

• HMRC will re-imburse 80% of gross wages, up to £2,500 a month, for those not working and who would otherwise have been laid off. These can be backdated to March and the scheme will last three months at least.
• HMRC are setting up a new online portal that will be used to make claims for the scheme
• To be eligible an employee must be classed as a “furloughed worker”
• Changing an employees employment status will be subject to existing employment law and the employment contract

Self Employed Income Support Scheme

• HMRC will re-imburse 80% of your average monthly profits, up to £2,500 a month, for those not working. The scheme will last three months at least.
• HMRC will contact the individuals with a view to filing out a claim form. It is anticipated that funds will be available early June with a view to getting 3 months in one go.
• To be eligible you must have submitted a 2019 tax return and not have earned over £50,000
• With the self-employed raising such concerns, it is likely that the Chancellor will increase taxes going forward to put more in line with employment taxes

Statutory Sick Pay

• Businesses will be able to reclaim Statutory Sick Pay for employees who are absent as a result of Covid-19
• Employees who are off work due to Covid-19 will be entitled to sick pay from the first day of their absence
• The employer must have less than 250 employees as at 28th February 2020
• HMRC are still working on how employers claim back the sick pay

CASHFLOW

VAT payments deferral

• VAT payments can be deferred for up to 3 months
• All UK businesses will be eligible and the scheme will run between 20 March 2020 and 30 June 2020
• There is no need to apply for this scheme
• Businesses will be given until the end of 2020/2021 to settle outstanding VAT liabilities that have accumulated as a result of the 3-month deferral

Income Tax deferral for the self employed

• If you are self employed and pay income tax in instalments you are able to defer the second payment on account for the 2020/21 tax year
• Instead of making a payment by the 31st July 2020, you can choose to defer this payment until 31st January 2021
• You do not need to apply for this relief it is automatic
• No penalties or interest for late payment will be charged in the deferral period

Time to pay

• Any business that pays tax to the UK government and has outstanding tax liabilities will be able to apply for their case to be reviewed by HMRC with a view to arranging a bespoke time to pay agreement
• This applies to all businesses including the self-employed
• HMRC has set up a dedicated helpline: 0800 0159 559

FUNDING

Cash grants for retail, hospitality and leisure businesses

• The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.
• For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000.
• For businesses in these sectors with a rateable value of between £15,000 and £51,000, they will receive a grant of £25,000.
• You are eligible for the grant if:
  • your business is based in England
  • your business is in the retail, hospitality and/or leisure sector

  Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

  • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
  • for assembly and leisure
  • as hotels, guest and boarding premises and self-catering accommodation
• You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

Small Business Grant Scheme

• The 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 do not need to do anything. Your local authority will write to you if you are eligible for this grant.

FINANCING

Coronavirus Business Interruption Loan Scheme (CBILS)

• The British Business Bank will launch a scheme from the week commencing 23 March 2020 to support businesses with a turnover of no more than £45 million per year.
• The government will provide lenders with a guarantee of 80% on each loan. This applies for loans of up to £5m in value and for up to 6 years.
• No interest will be charged for the first 12 months
• The scheme is now open for applications as from Monday 23 March
• 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
• The major high street banks are on this list of 40 providers

We are on hand to offer advice, call us on 0330 043 1909 and speak to one of our team.