What help is available for businesses experiencing increases in costs or financial disruption?
It is a worrying time for many businesses at present, so we thought it would be useful to highlight the following points that have been announced in recent weeks as well as a couple of practical points.
Coronavirus Job Retention Scheme
Under 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. The following has been announced:
• Grants of up to £2,500 per employee where those employees are unable to work (are ‘furloughed’) because of coronavirus, covering 80% of salary costs.
• You will have to designate your employee as furloughed and notify the employee of this change – this means that you will have to grant the employee a leave of absence so they will not be allowed to work in this period.
• Intended to run for three months in the first instance with the first payments expected in early April and the scheme fully up and running by the end of that month.
• The grants will be paid via HMRC and all UK employers will be eligible.
The employer would have to submit information through a new online portal and HMRC will be providing further guidance on how to apply.
No definition has been provided as what counts as furloughed and changing the status of employees remains subject to existing employment law as well as the employment contract.
Deferring VAT Payments
The deferral for VAT will apply from 20th March 2020 until 30th June 2020 and applies to all UK businesses.
This is an automatic offer with no applications required therefore businesses will just not be required to make a VAT payment during this period. Businesses will have until the end of the 2020/21 tax year to pay liabilities that have accumulated during this deferral period.
This measure has no impact if your business is due a VAT refund and these will be reclaimed as normal.
Deferring Income Tax
If you are self-employed the 31 July 2020 payment on account is deferred until 31st January 2021.
This is an automatic offer with no applications required and the government has stated that no penalties or interest will be charged in this deferral period.
HMRC Dedicated Helpline – Time to Pay Service
HMRC have set up a helpline to support all businesses and self-employed people who are concerned about paying taxes due to the impact of coronavirus.
The helpline number is 0800 0159 559; hopefully you will not require this but if your cash flow is impacted or a key member of staff is off who deals with payments it would be worthwhile contacting HMRC to make them aware.
Sick Pay Rebates
Qualifying small and medium sized businesses will be able to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The scheme will be open to employers who employ fewer than 250 (as at 28th February 2020) people and the following guidance has been issued:
• The amount of SSP that can be reclaimed is 2 weeks per eligible employee who has been off work due to COVID-19
• Employers should maintain records of staff absences, but employees will not need to provide a GP fit note.
The eligibility period for the scheme is from 13th March 2020 being the day after the regulations on the extension of SSP to those that are asked to self-isolate comes into force.
The weekly allowance for SSP is currently £94.25 rising to £95.85 as from 6th April 2020. The mechanism to make the refund claim is not yet in place but the government have stated they hope to get in place as soon as possible. This may be a claim against PAYE/NI or possibly a standalone claim.
Business Rates Holiday for Retail, Hospitality and Leisure Sectors
It was announced that all businesses in England within retail, leisure and hospitality sectors will receive a 100% business rates holiday for the next 12 months.
Properties that will benefit from the relief will be 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
There is no action for you to take as the relief will apply to your next council tax bill in April 2020. Due to the business rate bill having already been issued your local authorities may have to reissue your bill which will be done automatically to exclude the business rate charge. This should be done as soon as possible but if you have any queries please contact your local authority.
Rates Holiday for Nurseries
Nurseries in England will be eligible for a business rates holiday in 2020/21. Those properties that are eligible for the relief will be occupied by providers on Ofsted’s Early Years Register and used wholly or mainly for Early Years Foundation Stage.
No action is required if you are eligible as your local authority will contact the business and reissue business rate bill to exclude the business rate charge.
£10,000 One-off Grant
This is a one-off grant of £10,000 available to those businesses in England that are currently eligible for Small Business Rates Relief or Rural Rate Relief to help meet their ongoing business cost.
Due to the eligibility for the grant being based on those that are currently eligible for Small Business Rates Relief or Rural Rate Relief if the business qualifies your local authority will contact you therefore no need to apply. If you have any queries regarding eligibility please contact your local authority.
£25,000 One-off Grant
This is a one-off grant of £25,000 available to those businesses in England operating in the retail, hospitality and leisure sector from smaller premises that have a rateable value over £15,001 but below £51,000.
You do not need to apply as your local authorities will write to you if your business is eligible for the scheme. Due to only certain sectors qualifying you may wish to contact your local authority to confirm eligibility but hopefully further guidance should be issued shortly.
Interruption Business Loan Scheme
Ian Walker in our Corporate Finance Team is keeping an eye on this area and will be happy to discuss any questions you may have but the basic details are:
• Maximum turnover for eligible businesses was previously set at £41 million per year; it has now been increased to £45m.
• The interest-free period has been increased from six months to twelve.
• The scheme is being managed by the British Business Bank but businesses will access them via one of 40 accredited lending providers, including most major banks.
• The maximum value of a facility provided under the scheme will be £5 million – higher than the £1.2m announced initially.
• Loans will be available from Monday 23 March 2020.
Delay in IR35 Changes
It was announced that the IR35 off-payroll changes that were due to come in effect from April 2020 have been delayed for 12 months until April 2021 due to the current situation. This legislation impacted on contractors and the companies that used their services. We can provide further details on this if you are affected.
Mortgage lenders have agreed they will support customers that are experiencing issues with their finances as a result of COVID-19. The type of support mentioned is a payment holiday of up to 3 months. It would be worthwhile contacting your lender to discuss your situation and seeing what help they can provide.
Access to Universal Credits for the Self-Employed
The minimum income floor for access to universal credit has been suspended for self-employed people affected by the economic impact of coronavirus. You can apply online via the gov.uk website (https://www.gov.uk/universal-credit) or contact the helpline on 0800 328 5644 to see what you are entitled to.
Relaxation on Planning Regulations
To support the food industry and help to provide meals for those that self-isolate the government is relaxing planning regulations to allow pubs and restaurants to start providing takeaway meals without a planning application.
We will continue to post updates as they arise, please register to our Resource area to be kept up-to-date via our newswire.