The government has introduced a series of measures designed to helping the economy in these unprecedented times.
Whilst the situation is changing on a delay basis, a summary of the measures currently introduced is set out below.
Updates will be provided as and when changes or new measures are announced.
Summary: (UK-Wide Scheme)
Instead of making employees redundant as a result of COVID-19, a Company can ‘furlough’ its staff. The scheme is designed to prevent massive job losses.
A Company can claim a grant for 80% of an employee’s wages plus any employer National Insurance and pension contributions if they have been put on furlough.
140,000 UK Companies applied for the scheme, via the online portal, on its opening day, of Monday 20 April 2020. The feedback from users has been largely positive.
Details:
Employers can claim for furloughed employees that were employed and on their PAYE payroll on or before 19 March 2020.
The Treasury says funds to pay workers will land in a company’s bank account within six working days.
The Scheme is open for 4 months and may be extended.
Furloughed workers keep their rights during the period. Wages paid to Furloughed workers are still taxable.
To be eligible for the grant, when on furlough, an employee cannot undertake work for, or on behalf, of the organisation or any linked or associated organisation.
Salaried company directors are eligible to be furloughed and receive support through this scheme
More information:
https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme
Summary: (UK-Wide Scheme)
A scheme to help small and medium-sized businesses affected by coronavirus (COVID-19) to access finance of up to £5 million.
The latest figures from the finance industry show banks have received around 28,000 loan applications under the month-old scheme and agreed to make 6,000 loans.
It is not known if the remaining 22,000 applicants have been rejected or are still waiting to find out how their application has fared.
Details:
12-month interest free payments- The government will pay the interest for your business.
The government will provide lenders with a guarantee of 80% on each loan (subject to pre-lender cap on claims)
The scheme is delivered through commercial lenders, backed by the government-owned British Business Bank.
To qualify, a company must provide evidence that they were in good health prior to the crisis and make available records such as Cash flow forecasts and up to date management accounts.
The borrower remains fully liable for the debt.
Under the scheme, personal guarantees of any form will not be taken for facilities below £250,000. For facilities above £250,000, personal guarantees may still be required, at a lender’s discretion, but: recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied.
More information:
https://www.gov.uk/guidance/apply-for-the-coronavirus-business-interruption-loan-scheme
Summary: (UK-Wide Scheme)
The scheme is designed for the self-employed or a member of a partnership in the UK who have lost income due to coronavirus (COVID-19).
The online service to make the claim is not available yet. HMRC will contact eligible parties directly by mid May 2020, and will make payments by early June 2020 in lump sums for three months
The Taxable grant is equal to 80% of your average monthly profit, up to a max. of £2500 per month.
If you have only become self-employed after 5 April 2019, then unfortunately, you do not qualify for this scheme.
Details:
Claimants must have submitted their Self-Assessment tax return for the tax year 2018 to 2019 by 23 April 2020 and traded in the tax year 2019 to 2020.
Claimants must be trading when applying or would be except for coronavirus.
Claimants must intend to continue to trade in the tax year 2020 to 2021
Claimants must have lost trading profits due to coronavirus
N.B. Claimants cannot receive income as a mixture of salary and dividends, i.e. trading through a limited company
More information:
Summary: (UK-Wide Scheme)
VAT payments due from 20th March 2020 until 30 June 2020 have been deferred until 31 March 2021
Details:
You have the option to: defer the payment until a later date or pay the VAT due as normal
You do not need to tell HMRC that you are deferring your VAT payment.
HMRC will not charge interest or penalties on any amount deferred.
You will still need to submit your VAT returns to HMRC on time
VAT payments due following the end of the deferral period will have to be paid as normal.
More information
Summary: (UK-Wide)
As a result of Covid-19, the Government has announced a deferral of self-assessment income tax payments due in July 2020 to Jan 2021
Details:
The deadlines for paying your tax bill are usually: 31 January – for any tax you owe for the previous tax year (known as a balancing payment) and your first payment on account.
31 July for your second payment on account.
Because of coronavirus (COVID-19), you can delay making your second payment on account. If you choose to delay, you will have until 31 January 2021 to pay it.
Summary: (UK-Wide Scheme)
If you cannot pay any other tax bills, not covered by the above deferrals, because of coronavirus, you may be eligible to receive support through HMRC’s existing Time to Pay Scheme.
Details:
Agreements are made on a case-by-case basis and are adapted to individual circumstances and liabilities.
HMRC may relax the usual requirements of a Time To Pay application and may be more lenient when it comes to initial requests.
If you are concerned about not being able to pay your tax as a result to COVID-19, Inquesta can negotiate a Time to Pay agreement with HMRC on your behalf,
More Information:
For more information call us on 08000934270 or drop us an email on [email protected]
Whether you have a limited company or you are a self-employed sole trader, and if the recent coronavirus outbreak has created some uncertainties and if you are struggling to cover your liabilities, you can speak to us on 08000934270 OR drop us an email on [email protected] for a FREE no obligation consultation
Summary: (England Only)
12-month business rates holiday for all Companies in retail, hospitality, and leisure in England.
Nurseries in England do not have to pay business rates for the 2020 to 2021 tax year.
Details:
Businesses in the retail, hospitality and leisure sectors in England will not have to pay business rates for the 2020 to 2021 tax year.
You do not need to take any action. Your local council will apply the discount automatically.
More Information:
Summary: (England Only)
Small business grant funding of £10,000 for all businesses who get small business rate relief or rural rate relief.
Grant funding of £25,000 for retail, hospitality, and leisure businesses with a rateable value between £15,000 and £51,000.
Details:
Central Government will provide funding to Local Authorities that are responsible for business rate billing. Those Local Authorities will contact eligible businesses to arrange payment of the grants.
Businesses with a rateable value of £51,000 or over are not eligible for this scheme. Businesses which are not ratepayers in the business rates system are not included in this scheme.
More information:
Summary: (UK-Wide)
The Coronavirus Statutory Sick Pay Rebate Scheme will repay employers the current rate of SSP that they pay to current or former employees for periods of sickness starting on or after 13 March 2020.
Details:
The repayment will cover up to 2 weeks starting from the first day of sickness, if an employee is unable to work because they either: have coronavirus, cannot work because they are self-isolating at home or are shielding in line with public health guidance.
Employees do not have to give you a doctor’s fit note for you to make a claim.
You must keep records of all the statutory sick payments that you want to claim from HMRC
More information:
Summary:UK-Wide
This scheme will issue convertible loans between £125,000 to £5 million to innovative companies which are facing financing difficulties due to the coronavirus outbreak.
Details:
This scheme has only just been announced. It will launch in May 2020.
The Future Fund will provide government loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors.
These convertible loans may be a suitable option for businesses that rely on equity investment and are unable to access the Coronavirus Business Interruption Loan Scheme.
The scheme will be delivered in partnership with the British Business Bank.
More Information:
https://www.gov.uk/guidance/future-fund
Summary: UK-Wide
This scheme helps large businesses affected by coronavirus (COVID-19) through the purchase of their short-term debt.
Details:
The Bank of England will buy short-term debt from large companies. This scheme will support a company if it is been affected by a short-term funding squeeze.
It will also support corporate finance markets overall and ease the supply of credit to all firms.
The scheme is delivered through commercial lenders, backed by the Bank of England.
It will operate for at least 12 months, and for as long as steps are needed to relieve cash flow pressures on firms that make a material contribution to the UK economy.
More information:
https://www.gov.uk/guidance/apply-for-the-covid-19-corporate-financing-facility
