Since our last email regarding COVID-19, there have been a number of new announcements by the Government. This email contains a summary of each of the key points that we believe are relevant to our clients.
If relevant developments continue then we will send another email early next week outlining any new key points that may arise.
For a full breakdown and up to date guidance on the support available to businesses click Government Guidance on COVID.
Deferring VAT and Income Tax Payments
HMRC are deferring all VAT payments owed to them between 20th March 2020 and 30th June 2020. Businesses will not need to make a VAT payment during this period.
When will I need to pay the deferred VAT bill?
You will have until the end of the 2021 tax year (5th April 2021) to pay your deferred tax bill.
How to apply/join this deferral scheme?
This is an automatic scheme and you do not need to apply to join this scheme. You will not need to make a VAT payment during this period.
However, if you have a Direct Debit mandate setup with HMRC then you MUST cancel your Direct Debit, otherwise payment of your VAT bill will still be taken automatically.
What about VAT refunds?
VAT refunds will be repaid by HMRC as normal.
Will this scheme be extended beyond 30th June 2020?
We do not know if this scheme will be extended beyond 30th June 2020, but we will update you as and when necessary.
Paying Sick Employees
HMRC are introducing legislation that will allow small-and-medium-sized businesses to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19.
The refund will cover up to 2 weeks' SSP per eligible employee who has been off work because of COVID-19.
The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible. We will update clients looking to make such a claim as soon as we receive more information.
Job Retention Scheme (furloughed workers)
The Government is trying to ensure that all UK employers continue to pay employees that would otherwise have not been laid off had it not been for this crisis. Because of this, they have announced the Job Retention Scheme. HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2500 per month.
Will I be eligible for this scheme?
All UK businesses are eligible for this scheme.
If you (or your employees) are still able to work then you/they will not be considered as furloughed and this scheme will not apply.
How to access the scheme?
Full details for this scheme are still to be announced. However, current guidance is that you will need to:
- Designate affected employees as 'furloughed workers' and notify each of them of the change.
- Submit information to HMRC about the employees that have been furloughed through a new online portal (we will handle this where appropriate, however details have still not been provided).
If you have employees that are genuinely furloughed then please notify us and as soon as additional guidance is provided we will notify you.
Support for businesses that pay little or no business rates
The government will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.
How will I be eligible for this grant?
You are eligible if you meet the following three conditions:
- Your business is based in England
- You are a small business and already receive small business rate relief (SBRR) and/or rural rate relief (RRR)
- You are a business that occupies a property
This means that if your business is based from home, you will not qualify for this grant.
How to access the scheme?
Official guidance is that you do not need to do anything and that your local authority will write to you if you are eligible for this grant. However, if you believe you are entitled to this grant we suggest that you contact your local authority to ensure that you are included on any list that they may have. Find your local authority.
Business Interruption Loan Scheme
A loan scheme is going to be made available for businesses to access bank lending and overdraft facilities. The government will not charge for this lending facility.
We are still waiting on full guidance for these loans to be provided by the Government. What we know so far:
When will the loan scheme start?
The scheme is being made available from early this week commencing today, 23rd March 2020.
Will I be eligible for a loan?
You will be eligible if:
- You are a UK based business
- You have a turnover of less than £45m
- You must have a borrowing proposal which, were it not for the COVID-19 pandemic, would be considered viable by the lender.
The key point on the above that will apply to the majority of our clients seeking a loan is the third point. Whether or not your loan is considered as viable. To answer this question you must first speak with your lender (see below).
Which lenders are providing loans?
You can find a full list of registered lenders here.
How to apply for a loan?
Current guidance is that you should apply to a lender directly via their website (see list of websites above).
Self Employed Support
The Self-employment Income Support Scheme (SEISS) will support self-employed individuals (including members of partnerships) who have lost income due to coronavirus (COVID-19).
This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed.
Who can apply?
You can apply for SEISS if you are sekf-employed or a member of a partnership and you:
- Have submitted your Self Assessment Tax Return for the year 2019-19
- Traded in the yeartax yer 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 profits due to COVID-19
Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment.
How much will you get?
You will get a taxable grant which will be 80% of the average profits from the preceding three tax years (where applicable).
To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.
It will be up to a maximum of £2,500 per month for 3 months.
It will be paid directly into your bank account, in one installment.
How to apply for the SEISS scheme?
You cannot apply for this scheme yet.
HMRC will contact you if you are eligible for the scheme and invite you to apply online.
Updates to guidance
This situation is evolving and we are continuing to monitor the situation. If we receive updated guidance we will normally update this post and send you a message if we think that a new development requires immediate action on your part.