COVID-19 SUPPORT PACKAGES
We understand during these unprecedented times, many of our clients will be worried about the effect this has on their personal and business situations.
Please review the schemes below that are available to assist – if you need any help or advice please do not hesitate to contact us:
Job Retention Scheme – Furloughed Workers
The job retention scheme is a temporary scheme open to all UK employers for at least three months starting from the 1st March 2020. It has been designed to support employers whose operation have been severely affected by coronavirus.
Such Employers are now able to access support to continue to pay 80% of their staff wages, to avoid redundancies.
To avoid fraud – HMRC will cross checks applications with PAYE records to avoid fraud.
Employers should discuss with any employees who will be affected (preferably in writing) that they will become furloughed staff – we do have an available template for this if it is required.
The employer can claim the lower of 80% of an employee’s regular salary or £2500.00 per month – plus associated Employers National Insurance Contributions and minimum automatic enrolment employer pension contributions associated with those wages.
The employer can choose to pay the additional 20% or not.
Furloughed workers should not undertake any work duties in their furloughed period.
If the employee’s salary has been reduced as a result of this, they may be eligible for Universal Credit
Employees must have been employed on the payroll at the 28th February 2020 to be eligible for the scheme. And the scheme does cover people who were made redundant at this date and rehired.
Employees on sick leave or self-isolating should get SSP from day 1 and can be furloughed after.
Directors are eligible for this scheme, but they must not be part taking in day to day activities to generate revenues. They can still fulfil statutory duties for filing. Please note the 80% is only applicable to salary and not dividend.
https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
Self- Employment Income Support Scheme
The scheme will allow self-employed taxpayers to claim a taxable grant worth 80% of their trading profits up to a maximum of £2500 per month and is available for the next 3 months and may be extended if needed. Grants can be claimed, and the self-employed can continue to do business.
The taxable grant will be worth 80% of your average monthly profits over the past three years – up to a maximum of £2500 per month.
Your self-employed profits must be less than £50,000 and more than half your income must come from self-employment.
If you started trading between 2016 and 2019, HMRC will only use those years for which you filed a self-assessment
Conditions to be eligible for the support:
A self-assessment return must have been submitted for tax year 2018-19
Traded in year 2019-20
Are trading when they apply, or would be expect for COVID-19
Intend to continue to trade in the tax year 2020-21
Have lost trading/partnership trading profits due to COVID-19
HMRC will contact taxpayers by June if they are eligible and invite them to apply online – once HMRC has received the claim and checked the eligibility for they grant they will contact the taxpayer to confirm amounts and obtain payment details.
https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme
Deferred VAT Payments
HMRC have offered support by deferring VAT payments for 3 months – if you have a VAT payment due between the 20th March 2020 and the 30th June 2020 you have 2 options:
Defer the payment to a later date – this will need to be paid in full by the 31st March 2021
Pay the VAT as normal
If you pay your VAT on a direct debit HMRC have stated, they will not cancel these, and it is your responsibility to contact your bank and cancel these payments.
https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19
Deferred Self-Assessment Payments on Account
If you are due to pay a self-assessment payment on account by 31st July 2020 but have been impacted by COVID-19 you can defer this payment to January 2021.
The deferment is optional you can still choose to pay your payment on account on 31st July if you wish to do so.
This is an automatic offer with no application required.
SSP – Payment Support
HMRC will bring forward legislation to allow small and medium sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence for to COVID-19.
To be eligible criteria for the scheme will be as follows:
this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19 employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020 employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19 employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible
A rebate scheme is currently being developed.
Support for Retail, Hospitality and Leisure Businesses
HMRC are introducing a business rates holiday for retail, hospitality and leisure businesses in tax year 2020 to 2021
To be eligible you must:
- have a business based in England
- your business must be in the retail, hospitality or leisure sector
- Properties that will be benefit from the relief will be occupied properties that are wholly or mainly used as: shops, restaurants, café, drinking establishments, cinemas and live music arenas
- for assembly and leisure
- for hospitality, as hotels or guest boarding
There is an expanded list available on HMRC’s website.
There is no action to take, local authorities will issue a new bill in due course.
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.
Businesses in these sectors with a property that has a rateable value of up to £15,000 may be eligible for a grant of £10,000.
Businesses in these sectors with a property that has a rateable value of over £15,000 and less than £51,000 may be eligible for a grant of £25,000.
Eligibility
You are eligible for the grant if:
your business is based in England
your business is in the retail, hospitality or leisure sector
your business has a rateable value of under £51,000
Properties that will benefit from the relief will be occupied properties 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
How to access the scheme
Your local authority will write to you if you are eligible for this grant.
Support for Nursery Businesses that pay Business Rates
The government have introduced a business rates holiday for nurseries in England for the 2020 to 2021 tax year.
Eligibility
You are eligible for the business rates holiday if:
your business is based in England
Properties that will benefit from the relief will be hereditaments:
- occupied by providers on Ofsted’s Early Years Register wholly or mainly used for the provision of the Early Years Foundation Stage
How to access the scheme
Your local authority will write to you if you are eligible for this grant.
SBRR and RRR – Small Business Grant
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
Your local authority will write to you if you are eligible for this grant.
Coronavirus Business Interruption Loan Scheme
The temporary Coronavirus Business Interruption Loan Scheme supports SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years.
The government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.
The government will provide lenders with a guarantee of 80% on each loan (subject to a pre-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The scheme will be delivered through commercial lenders, backed by the government-owned British Business Bank.
HMRC – Time to Pay Scheme
If you are struggling to make your tax payments throughout this current time – you can call HMRC on a dedicated COVID-19 Time to Pay Helpline to discuss potentially setting up a payment plan – each case is assessed individually.
The HMRC Time to Pay Helpline is 0800 024 1222