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Covid-19: Help for Business Update 22nd March 2020

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Here is an update with the measures so far put in place by HM Government to hep support businesses

For self employed, sole traders, partnerships and owner run Limited Companies:

At the moment the assistance offered to this group is very limited however there is further downward pressure on the Chancellor to provide something more tangible to this sector and I’m hopeful that something will be announced next week. As soon as it is I will let you have a update with this information.

At the moment here is all that has been offered:

Unable / unemployed to work due to sickness

As a self employed person you are able to claim Universal Credit, providing you meet the usual eligibility criteria.

The previous requirements of the Minimum Income Floor have been temporarily relaxed and the amount receivable has been increased to match the amount available to employees under Statutory Sick Pay (SSP), ie £94.25 per week.

New claimants will not need to attend the local Jobcentre to demonstrate gainful self-employment but evidence my be required via the online application process.

Income Tax

As a self employed person any income tax Payments on Account due on the 31 July 2020 will be deferred until the 31 January 2021. Please note this is a deferral NOT a write-off so payment of this tax is simply being pushed back to January 2021 making the payment due then that much bigger.

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.

HMRC have also scaled up their Time to Pay Offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities. You can contact HMRC directly regarding this by calling 0800 0159 559.

Mortgage Payment Holiday

Mortgage payment holidays of up to three months are available to all homeowners who are up to date on their mortgage payments.

They’re also available to buy-to-let landlords whose tenants have been financially affected by the coronavirus. Landlords who take payment holidays are expected to pass on this relief to their tenants.

Homeowners who are in arrears on their mortgage should contact their lender, who will review any changes to their circumstances and discuss their options.

For Employers:

Support for businesses through the 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.

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 soon and I will assist with this)

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 as existing systems are not set up to facilitate payments to employers.

Support for businesses who are paying sick pay to employees

HMRC are intending to bring forward legislation to allow employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility 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

Eligibility

You are eligible for the scheme if:

  • your business is UK based
  • your business employs fewer than 250 employees as of 28 February 2020

How to access the scheme

A rebate scheme is being developed by HMRC. I will let you know further details if you wish to take advantage of this scheme once I have heard the details from HMRC

For those businesses that are VAT registered:

Support for businesses through deferring VAT payments

HMRC will support businesses by deferring Valued Added Tax (VAT) payments for 3 months.

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 abs businesses will not need to make a VAT payment during this period.

Please note that this is a deferral of this tax NOT a write-off so you will be given until the end of the 2020/2021 tax year (April 2021) to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.

For those businesses that can take on or require finance:

Support for businesses through the Coronavirus Business Interruption Loan Scheme (Update 23rd March…Details of how to apply for this scheme have now been released and can be found HERE)

A new temporary Coronavirus Business Interruption Loan Scheme is being delivered by the British Business Bank which will launch early next 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 businesses. The government will not charge businesses or banks for this guarantee and the Scheme will support loans of up to £5 million in value.

Businesses can access the first 12 months of that finance interest free, as government will cover the first 12 months of interest payments.

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 and you will need to have a business loan proposal that is acceptable to the lender but perhaps doesn’t come with sufficient security for the bank to lend under its normal terms.

All the major banks will offer the Scheme once it has launched with 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 although anecdotal evidence I have received so far is that most banks are not yet set up to proceed with applications as they do not have details of the criteria themselves yet.

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 is due to launch from early next week commencing 23 March.

For those businesses in the retail, leisure or hospitality sector that pay business rates:

Support for businesses that pay business rates

Business rates holiday for retail, hospitality and leisure businesses

HMRC are introducing a business rates holiday for retail, hospitality and leisure businesses in England for the 2020/2021 tax year.

Businesses that received the retail discount in the 2019/2020 tax year will be re-billed by their local authority as soon as possible.

Eligibility

You are eligible for the business rates holiday if:

  • your business is based in England
  • 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 and 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.

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 £15,000, they will receive a grant of £10,000.

For businesses in these sectors with a rateable value of between £15,001 and £51,000, they will receive 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 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 as the local authority will write to you if you are eligible for this grant.

Support for businesses that pay little or no business rates

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 releif. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

Eligibility

You are eligible if:

  • your business is based in England
  • you are a small business and already receive SBBR and/or RRR
  • you are a business that occupies property

How to access the scheme

You do not need to do anything as the local authority will write to you if you are eligible for this grant.

Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.

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