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Updated Measures to Support Businesses and Individuals through Coronavirus COVID-19 Crisis

21st March 2020 | Written by In Accountancy | Categories : CoronaVirus, Limited Companies, News, Personal Tax, Small Business Advice, Sole Traders
Updated Measures to Support Businesses and Individuals through Coronavirus COVID-19 Crisis

Following last night’s announcements about increased support for businesses, employers and self employed please find below a summary of what is in place as well as links to some useful documents.

I am doing my best to respond to all of your individual emailed queries as quickly as I can, but please bear with me as things are changing quickly and we do not yet have all the answers

Gov.uk Link to Covid-19 Support for Businesses

Summary of support measures announced:

Paying Wages and Salaries:

  • The government is to step in to help pay people’s wages through a coronavirus job retention scheme.
  • Businesses can apply for a grant of up to £2,500 a month to cover 80% of salary for those retained but not working
  • This measure will be backdated to 1 March 2020.

What you need to do to access this if you are an employer.

  • designate affected employees as ‘furloughed workers’
  • 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.

We will let you know as soon as we have more information relating to this.

VAT and Corporation Tax

  • VAT for all businesses will be deferred until the end of June

How to access the scheme

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.

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.

This applies to VAT, Corporation Tax and Income Tax liabilities.

HMRC’s dedicated hotline for Time to Pay Arrangements is: 0800 0159 559

Income Tax

For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.

Eligibility

If you are self-employed you are eligible.

How to access the scheme

This is an automatic offer with no applications required.

No penalties or interest for late payment will be charged in the deferral period.

To help you plan as best as possible for your January 2021 tax liability, which will include the deferred July 2020 payment on account payments, we would urge you to send us the information to complete your 2019-20 tax return as early as possible after 5 April 2020.

If you are expecting to be adversely affected by the current situation in the tax year to 5 April 2021 we will work with you to ensure we reduce your payments on account for that year as much as is possible.

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.

HMRC’s dedicated hotline for Time to Pay Arrangements is: 0800 0159 559

Coronavirus Business Interruption Loan Scheme (CBILS)

Coronavirus business interruption loan scheme will now be interest free for 12 months as opposed to 6 months as previously anticipated.

We expect banks to be in a position to offer these loans on Monday morning and would encourage you to contact your bank directly, or via the dedicated website linked below:

This scheme will be backed by government providing 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 government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value.

The link above now been updated since my previous communication and also contains more information about eligibility as well as restrictions. Please do read carefully.

For the Self Employed

  • The self employed will get full Universal Credit at a rate equivalent to statutory sick pay – approximately an additional £20 per day / £1000 per year.
  • Working tax credits are to be increased by the same amount.
  • Payments on account due in July will be deferred until January 2021

For Renters

  • A further £1bn is to be released for those struggling to pay rent, through increases in housing benefit and Universal Credit

Update on Grants for businesses that pay business rates

There are three types of grants available:

Business rates holiday for retail, hospitality and leisure businesses.

Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible for the 2020-2021 tax year.

Eligibility

You are eligible for the business rates holiday if:

  • your business is based in England
  • your business is in the retail, hospitality and/or leisure sector
  • wholly or mainly being used:
    • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
    • for assembly and leisure
    • as hotels, guest & boarding premises and self-catering accommodation

How to access the scheme

There is no action for you. This will apply 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.

You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator.

Further guidance for local authorities is available in the expanded retail discount guidance.

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 £15,001 and £51,000, they will receive a grant of £25,000.

Eligibility as above

How to access the scheme

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.

Find your local authority.

Support for businesses that pay little or no business rates

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 releif.

This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

Eligibility

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

How to access the scheme

As above, you do not need to do anything.

Catch up on the full press call from Friday evening on the BBC Website here