Job Retention Scheme
Under the Coronavirus Job Retention Scheme, HMRC will reimburse 80% of ‘furloughed workers’ (to allow or force someone to be absent) wage costs, up to a cap of £2,500 per month. Employers can choose to top up this amount. To access the scheme employers need to (i) designate affected employees as ‘furloughed workers,’ and notify employees of this change; and (ii) submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (details to follow). Changing the status of employees remains subject to existing employment law and may be subject to negotiation. — HMRC are working urgently to set up a system for reimbursement and the intention to start payments in April. We are clarifying with HMRC how certain aspects of the scheme will operate.
Business rate reliefs
12-month business rates holiday for all retail, hospitality and leisure businesses in England and Scotland for the 2020 to 2021 tax year. Your local authority should adjust the next council tax bill to remove the business rates charge. Businesses may also be able to request Hardship Relief via their local authority
Tax measures
Businesses can defer VAT payments which would have been due between 20 March and 30 June 2020 until 31 March 2021. Self-employed individuals with income tax payments due in July 2020 under the Self-Assessment system can defer payment until January 2021. HMRC have also scaled up their ‘Time to Pay’ service and requests can be made to defer other tax payments including corporation tax and PAYE which are due (or overdue) to HMRC by calling a dedicated HMRC Coronavirus helpline on 0800 015 9559. 3 month deferrals have been agreed through this process during the last week.
Business Interruption Loans
Under the Coronavirus Business Interruption Loan Scheme (CBILS) UK businesses with annual turnover of no more than £45m can borrow up to £5m interest-free for 12 months under a British Business Bank (BBB) scheme where the Government provides the lender with a guarantee for 80% of each loan (subject to a per-lender cap on claims) and covers the cost of the first 12 months of interest. The scheme will launch during the w/c 23 March 2020. Access to CBILS is through 40 BBB accredited lenders. Ask your bank manager if you are eligible.
Grants
Under the Retail and Hospitality Grant Scheme businesses can access cash grants of £25,000 for each property in England with a rateable value of £15,001- £51,000 and £10,000 for each property in England with a rateable value of £15,000 or lower. Small businesses which occupy premises in England and already receive small business rate relief or rural rate relief are eligible for a one-off grant of £10,000 to help meet their ongoing business costs. Your local authority should be able to confirm if you are eligible for a grant. Statutory Sick Pay — Businesses with less than 250 employees can obtain a refund from the Government for Statutory Sick Pay paid for up to 2 weeks’ absence due to COVID-19. This also covers absence due to self-isolating in line with Government advice.
Self Employed - Corona Support
The Chancellor announced the help he can currently provide for self employed people. It was good and bad. In addition to the existing support ie Universal Credit (UC) & Employment Support Allowance. Search for the .Gov website application forms. The telephone route is possible but there is a huge backlog.
The good news is anyone with up to date self assessment tax returns, filed with HMRC, with at least 50% of their cumulative income in self employment sole trader or partnership will get support at 80% of the net profits declared. Up to a ceiling of £50k p.a to a maximum of £2,500 per month. A three month arrangement to start with. This will be automatic as HMRC have all the information they need and they will contact individuals. If your returns are late you have 4 weeks to get them in. Virtually all of our clients are up to date so that will help.
The bad news is:
- Dividends taken by director/ shareholders do not qualify as self employed earnings. The only route there is a claim as a director/ employee via your company payroll scheme at 80% of your monthly salary.
- Buy to let landlords are not technically self employed so that doesn't qualify either.
- Newly self employed people who have no historical self employment profit on tax returns for the years up to and including 2018/2019 will not be eligible.
- Anyone who qualifies will receive no payments until June at the earliest.
There is obviously concern about those people for whom this is not enough and pressure will be applied to HM Gov to perhaps widen the support. We will give further updates if anything changes.
