As we face the greatest pandemic of modern time, the Government announced a COVID-19, updates for businesses designed to give small businesses financial aid these uncertain times require. In these uncertain times, we wanted to reach out to all our clients, to let you know that we are here to offer any support and guidance over the next few months.
As the situation is changing on a daily basis, we want to reach out to all our clients to let them know we are here to offer the support they may need over the next few months. We will regularly as we continue to monitor and offer more news and guidance on COVID-19 Updates for businesses as they become available.
Health and wellbeing of our teams are the most important things right now. Thankfully all our team are currently fit and healthy, however if the need arises, we have a thought-through plan to roll out remote working during periods of self-isolation, and we will continue to follow Government advice and we will provide updates from time to time.
As some off our staff fall into ‘at risk’ category, we have taken to the decision not to offer face to face appointments at this time, however should you need to call into our office, we kindly requested, that should you have a ‘new’ cough, accompanied with a fever and high temperature, you drop any paperwork on our door step, clearly marked for our attention and to give us a call to let us know you have dropped something off.
We will always strive to complete your accounts, VAT, payroll and Tax Returns in a timely manner. However please bear in mind, that if you provide us with manual records, this may prove difficult in the event of a lock down situation.
Please scan and email documents where possible and if you are in a position to provide your records now, then please do so.
In the spring Budget on the 11th March the Chancellor announced an unprecedented package of government-backed and guaranteed loans to support businesses, making available an initial £330bn of guarantees – equivalent to 15% of GDP. These measurements are designed to help small businesses, navigate these turbulent times
Business 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 (SBRR), 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 are eligible if:
- your business is based in England
- you are a business that occupies property
- you are receiving small business rate relief or rural rate relief as of 11 March
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.
Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.
Coronavirus Business Interruption Loan Scheme (CBILS)
The scheme will be delivered by the British Business Bank and, as well as business loans, there are many other types of finance supported by the programme, depending on the provider. You can find out what type of finance is provided on the British Business Bank partner page.
Am i eligible for finance under CBILS?
The scheme is designed to support smaller businesses (SMEs) who don’t meet a lender’s normal lending requirements for a fully commercial loan or other facility, but who are considered viable in the longer-term.
To be eligible for a facility under CIBLS, your business must:
- Be UK based in its business activity with annual turnover or no more than £45m
- Have a borrowing proposal which, were it not for the COVID-19 pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable your business to trade out of any short-to-medium term difficulty
- Smaller businesses from any sector can apply for the full amount of the facility.
Government to help businesses by paying up to 80% of employee wages
As well as the above announcements, Chancellor Rishi Sunak has also pledged that the Government will help businesses financially affected by the coronavirus by paying the wages and safeguarding millions of workers.
Mr Sunak explained that these “unprecedented measures for unprecedented times” would see HM Revenue and Customs (HMRC) reimburse 80% of workers wage costs, up to a maximum of £2,500 per month, as many companies face collapse as a result of the COVID-19 outbreak.
All UK businesses are eligible to access the scheme and to do so they would need to:
- Designate affected employees as ‘furloughed’* workers and notify employees of this change.
- Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal. HMRC are expected to provide further details of how this will work in due course.
Business Rates and Cash Grants in England
The Business Rate Relief announcement in budget have been extended as a result of the coronavirus pandemic. This will mean that the Business Rates Retail Discount will now be available for all businesses occupying retail, leisure and hospitality properties for 2020/21, in most cases reducing the Business Rates bill for 2020/21 to nil.
Self-employment Income Support Scheme
As most of you will be aware, The Chancellor has announced a significant support package for self-employed people affected by the coronavirus outbreak but warned the complexity of building a new system could mean the first payments could be made in June.
He announced that the government will pay self-employed people adversely affected by coronavirus a taxable grant worth 80% of their average monthly trading profit over the last three years, up to £2,500 per month, for at least three months (in line with the employed scheme). Supporting those who work for themselves, calling it “among the most generous and comprehensive packages to support those who are self-employed in the world”.
The scheme will apply to people who have filed a 2018/19 tax return and late filers will have another four weeks to file (at time of writing a deadline of 23 April 2020). However, it will not apply to anyone who started trading in 2019/20 i.e. those that have started a new business in the last 12 months. The scheme will be open to those with trading profits of £50,000 or less, who make the majority of their income from self-employment.
HMRC will contact self-employed people eligible to receive financial support by the beginning of June. Using an online form, they can then apply directly to HMRC for the grant, and the tax authority will pay the grant straight into their bank accounts.
You can apply if you are a self-employed individual or a member of a partnership and you:
- have submitted your Income Tax Self-Assessment tax return for the tax year 2018-19
- traded in the tax year 2019-20
- are trading when you apply, or would be except for COVID-19
- intend to continue to trade in the tax year 2020-21
- have lost trading/partnership trading profits due to COVID-19
Your self-employed trading profits must also be less than £50,000 and more than half of your income comes from self-employment. This is determined by at least one of the following conditions being true:
- having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
- having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period
If you started trading between 2018-19, HMRC will only use those years for which you filed a Self-Assessment tax return.
First payments in June
The Chancellor stated that due to the complexity of designing a completely new system at pace, the government would be looking to make the first payments “no later than the beginning of June.” Grants will be paid in a single lump sum instalment covering the three months for which the scheme is applicable.
For self-employed people who the Chancellor said “may be struggling now”, most will be able to access the Business Interruption Loan Scheme, and the government has also changed the welfare system so that self-employed people can now access Universal Credit in full. Unlike employed workers furloughed during the outbreak, self-employed workers can also continue working and claim the grants.
Look at Statutory Sick Pay (SSP) arrangements
The Government is introducing legislation to allow employees to reclaim Statutory Sick Pay (SSP) relating to absences as a result of COVID-19. This refund will cover up to two weeks’ SSP per eligible employee. The repayment mechanism is still being developed by the Government, but it’s important that you maintain records of any staff absence and payments of SSP to ensure you can claim when the system is up and running.
The current rate of SSP is £94.25 per week. Note that SSP can now be paid from the first day of absence.
It is inevitable that the Government will relax some regulations which apply to business. We will keep you updated regards changes which could impact your business.
The Government has already said that to support the food industry and help provide meals for people who need to self-isolate, the Government have relaxed planning regulations to allow pubs and restaurants to start providing takeaways without a planning application.
Payments on Account Deferred
Self-employed individuals paying income tax under self-assessment, payment due on account on 31st July 2020 will now be deferred until 31st January 2021. No penalties or interest will be charged during the deferral period.
VAT payment holiday
The Government will support businesses by allowing them to defer VAT payments for three months.
The deferral will apply for payments that would normally arise from 20th March 2020 to 30th June 2020, for VAT periods ending February, March and April 2020.
Businesses will now be given until April 2021 to pay any liabilities that have accumulated during this deferment period. No penalties or interest will be charged in the deferral period.
All UK VAT registered businesses will be eligible for the deferment and it will be applied automatically.
Importantly, HM Revenue and customs will continue to pay VAT refunds as normal.
Talk to HMRC
Among the series of Government support packages, there was an enhancement to HMRC’s ‘Time to Pay’ arrangement scheme to help those with upcoming tax bills plan how they can pay with an individual plan. To support this, it has also launched a dedicated helpline – 0800 0159 559 – with increased staff numbers, to help those businesses and self-employed people who are concerned about being able to pay their tax due to coronavirus.
As the situation is changing on a daily basis, we’ll continue to provide COVID-19 Updates for businesses as they become available. We’ll continually to monitor and offer more news and guidance as it becomes available.