COVID-19 – Support for Businesses
Over the last few days, the Government has announced various schemes and grants that are being made available to small businesses in order to support them through these next few months. Below we will summarise and detail all relevant schemes to date, some may be relevant to you, others may not, but please don’t hesitate to contact us if you want to discuss any of these in more detail. More information is being confirmed and released on a daily basis and we will do our utmost to keep you up-to-date with all developments. Please keep an eye on our Facebook page as we will be posting and sharing updates regularly on our page.
We are still waiting for the Government to announce how they plan to support the self-employed through this difficult period. With pressure building on a daily basis we would expect to hear something in the next few days. Once the information is available we will be sharing this through our Facebook page.
Below are the main schemes announced at present:-
- Job Retention Scheme
- Deferring VAT and Income Tax payments
- Statutory Sick Pay relief package for SMEs
- 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses
- Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
- Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £12,000 and £51,000 (£15,000 and £51,000 in England)
- The Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
- The HMRC Time To Pay Scheme
Below is HMRC’s detailed guidance relating to each of the above:-
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.
Eligibility
All UK businesses are eligible.
How to access the scheme
You will need to:
- designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
- submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)
HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.
HMRC is still working on a new online portal to allow these claims to be made. As soon as this is available we will forward details to all clients. Please note, it is our understanding that furloughed workers cannot work during this period as you have effectively confirmed to HMRC that there is no work for them and they would have lost their jobs if it wasn’t for the grant being made available. If you have let staff go since 1st March you are able to backdate your claim to this date.
Deferring VAT and Income Tax Payments
We will support businesses by deferring Valued Added Tax (VAT) payments for 3 months. If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
VAT
For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.
Eligibility
All UK businesses are eligible.
How to access the scheme
This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.
Income Tax
For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.
Eligibility
If you are self-employed you are eligible.
How to access the scheme
This is an automatic offer with no applications required.
No penalties or interest for late payment will be charged in the deferral period.
Any VAT payments that are due to be made to HMRC between 20 March and 30 June will not have to be paid until the end of March 2021. It is our understanding that you are still expected to submit your VAT returns as normal.
Business Rates Holiday for Retail, Hospitality and Leisure businesses
We will introduce a business rates holiday for retail, hospitality and leisure businesses in England & Wales for the 2020 to 2021 tax year.
Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.
Eligibility
You are eligible for the business rates holiday if:
- your business is based in England & Wales
- your business is in the retail, hospitality and/or leisure sector
Properties that will benefit from the relief will be occupied hereditaments 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 & boarding premises and self-catering accommodation
How to access the scheme
There is no action for you. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible.
You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator.
There is no application process for this. Your local authority will contact you with amended calculations for 2020/21.
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.
For businesses in these sectors with a rateable value of under £12,000 (£15,000 in England), they will receive a grant of £10,000.
For businesses in these sectors with a rateable value of between £12,001 and £51,000 (15,001 and £51,000 in England), they will receive a grant of £25,000.
Eligibility
You are eligible for the grant if:
- your business is based in England & Wales
- your business is in the retail, hospitality and/or leisure sector
Properties that will benefit from the relief will be occupied hereditaments 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
You do not need to do anything. Your local authority will write to you if you are eligible for this grant.
Guidance for local authorities on the scheme will be provided shortly.
Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.
As above, there is no action required by you as your local authority will contact you if qualify for this grant.
The Coronavirus Business Interruption Loan Scheme
A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch early this week to support primarily small and medium-sized businesses to access bank lending and overdrafts.
The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value. No interest will be charged for the first 6 months (12 months in England).
Eligibility
You are eligible for the scheme if:
- your business is UK based, with turnover of no more than £45 million per year
- your business meets the other British Business Bank eligibility criteria
How to access the scheme
The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website. All the major banks will offer the Scheme once it has launched. There are 40 accredited providers in all.
You should talk to your bank or finance provider (not the British Business Bank) as soon as possible and discuss your business plan with them. This will help your finance provider to act quickly once the Scheme has launched. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.
The scheme will be available from early this week (week commencing 23 March)
Support for Businesses Paying Tax: Time to Pay service
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.
These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
Eligibility
You are eligible if your business:
- pays tax to the UK government
- has outstanding tax liabilities
How to access the scheme
If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559.
If you’re worried about a future payment, please call us nearer the time.
Whether it’s Corporation Tax, Income Tax, VAT or PAYE, you can contact HMRC to ask for additional time to pay due to the cashflow problems caused by COVID-19.