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Home » Covid 19 – significant announcements for business

Covid 19 – significant announcements for business

Posted on 23/03/2020

It is clearly a challenging and fluid time with much uncertainty for business and the economy. We have no doubt that you are aware that the Government is working frantically on measures to support businesses throughout the current disruption and these are changing daily. What follows is a summary of the significant announcements as of this morning and has largely been taken from HMRC’s guidance.

Coronavirus 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. HMRC will reimburse 80% of designated furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are currently working on a system for notification and reimbursement.

To qualify for this scheme, the employee must be designated as furloughed and should not undertake work for you during this period. This will allow you as the employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month.

Your employee will remain employed while furloughed. Employers can choose to fund the differences between this payment and their salary but does not have to.

Initially this scheme will run for three months from 1 March 2020.

VAT payment deferral

All UK businesses are entitled to defer any VAT payments that would otherwise be falling due between 20 March and 30 June 2020 meaning you will not need to make a VAT payment during this period. This is an automatic offer with no applications required. Taxpayers will be given until 5 April 2021 to pay any liabilities that have accumulated during the deferral period. VAT refunds are not affected by this measure and liabilities falling outside of this window are due as normal.

Income tax deferral

For Income Tax Self-Assessment, payments falling due on 31 July 2020 will be deferred until 31 January 2021.This is an automatic offer with no applications required and no penalties or interest for late payment will be charged in the deferral period. This will of course mean that your payment on 31 January 2021 will be larger so please try to put money aside to meet the liability between now and then.

HMRC Time To Pay Scheme

All businesses and self-employed people in financial distress, and with outstanding tax liabilities, can speak to HMRC about time to pay. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities, however HMRC will clearly be more sympathetic at present.

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.

Statutory Sick Pay relief package for SMEs

Legislation will be brought forward to allow small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19 and will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19. A rebate scheme is being developed. Further details will be provided in due course once the legislation has passed.

12-month business rates holiday for all retail, hospitality and leisure businesses in England

A business rates holiday for retail, hospitality and leisure businesses in England for the 2020/21 tax year will be introduced. 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 – this will be done as soon as possible.

Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief

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 (SBBR), 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 do not need to do anything. Your local authority will write to you if you are eligible for this grant.

Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000

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, the amount of the grant will depend on the rateable value of the property and will be either £10,000 or £25,000. You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

The Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank

A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, is being offered 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 and will cover the first 12 months of interest on behalf of the business.

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.

A new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans

Under the new Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies in order to support companies affected by a short-term funding squeeze and allow you to finance your short-term liabilities. Information on how to access the scheme will be published shortly.

The exact processes and timings of some of the above are still not entirely clear and patience will be required for the moment. However, if you have any questions please do not hesitate to contact us. As further significant developments arise, we will let you know.

Otherwise, all of us at Clarkson Hyde hope that you, your families and your colleagues stay safe and well throughout.

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