COVID-19 - Government Support for Businesses

In the current situation, information and advice is changing constantly. To help keep you up to date and informed, we have summarised the key areas of Government support for businesses and will continue to update this as we find out more.

8 June 2020

Job Retention Scheme

All UK businesses are eligible, affected employees will be designated as “furloughed” and should be notified, this is subject to existing employment law and depending on the contract, may be subject to negotiation.

HMRC will reimburse 80% of wage costs up to £2,500 per month, will can be claimed back from HMRC via the new portal. For up to date information on the scheme please visit the link below:

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#support-for-businesses-through-the-coronavirus-job-retention-scheme

For specific information on how to make a claim, including what information you need and the latest information on the HMRC portal availability, please visit the link below:-

https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

With regards to Directors being furloughed, the advice on this has been updated as of 4 April 2020:

Office Holders

Office holders can be furloughed and receive support through this scheme. The furlough, and any ongoing payment during furlough, will need to be agreed between the office holder and the party who operates PAYE on the income they receive for holding their office. Where the office holder is a company director or member of a Limited Liability Partnership (LLP), the furlough arrangements should be adopted formally as a decision of the company or LLP.

Company Directors

As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme. Company directors owe duties to their company which are set out in the Companies Act 2006. Where a company (acting through its board of directors) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed. Where one or more individual directors’ furlough is so decided by the board, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned.

Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, for instance, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.

This also applies to salaried individuals who are directors of their own personal service company (PSC).

For specific bespoke advice call Croner taxwise on 0844 892 2807 quote TAX 01 scheme number 1.

Support for the Self Employed

This scheme, announced on 26 March, known as the Self-employment Income Support Scheme (SEISS), will support self-employed individuals, including members of partnerships, who have lost income due to coronavirus.

The 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 and may be extended if needed.

For full details of the scheme, please click here

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#support-for-self-employed-through-the-self-employment-income-support-scheme

The article below, written by our governing body, Institute of Chartered Accountants for England and Wales (ICAEW), gives a good explanation of their understanding of the scheme.

https://www.icaew.com/insights/viewpoints-on-the-news/2020/mar-2020/coronavirus-chancellor-unveils-self-employed-support-scheme?utm_campaign=Members%20-%20ICAEW&utm_medium=email&utm_source=1360250_ICAEWmonthly_News_27Mar2020&utm_content=round&dm_i=47WY,T5KQ,JWNPS,3IIUL,1

Deferring vat and income tax payments

VAT – all UK businesses are eligible; the deferral will apply from 20 March 2020 until 30 June 2020.

This is an automatic offer with no applications needed. You will be given until the end of the 2020/2021 tax year to pay any liabilities.

If you pay by direct debit you will need to cancel this with your bank, if you are unable to pay. Ensure enough notice is given.

You will still need to complete your VAT return.

Income Tax – if you are self-employed you are eligible. For self-assessment, payments due on 31 July 2020 may be deferred until 31 January 2021.

This is an automatic offer with no applications required.

Statutory sick pay relief

The headline news on this, is that the government will bring forward legislation to allow small and medium size businesses and employers to reclaim SSP for sickness absence due to COVID-19, through a refund.

Directors are also eligible for this as they are classed as employees

This refund will cover up to 2 weeks SSP per eligible employee who has been off work because of COVID-19

Due to the amount of detail around this scheme, in the first instance we recommend you visit the Government website:-

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

For specific bespoke advice call Croner Taxwise on 0844 892 2807 quote TAX 01 scheme number 1.

12 month business rate holiday for retail, hospitality, leisure and nurseries in england

There will be a business rates holiday in England for the tax year 2020/21, if you operate in these sectors.

There is no action required , this will apply to your next tax bill in April 2020.

For further information visit :-

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

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

There will be additional funding for local authorities to support small businesses that already pay little or no business rates because of SBRR* or RRR*.

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

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

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

For businesses in these sectors there is a cash grant of up to £25,000 per property.

Businesses with a property with a rateable value of £15,000 and under, will receive a grant of £10,000.

Business with a property value of £15,000 and £51,000 will receive a grant of £25,000.

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

Business interruption loan of up to £5 million

This scheme supports SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million for 6 years.

There will also be a Business Interruption Payment to cover the first 12 months of interest payments.

You need to speak to your bank or one of the other 40 accredited finance providers as soon as possible to discuss your business plan.

HMRC Time To Pay Scheme

All businesses and self-employed people in financial distress and with outstanding tax liabilities, may be eligible to receive support with their tax affairs.

These are looked at on a case by case basis

If you have missed a tax payment or you might miss your next payment due to COVI-19, please call the HMRC’s dedicated helpline 0800 0159 559

Commercial insurance

Most commercial insurance policies are unlikely to cover pandemics or unspecified notifiable diseases, such as COVID-19

However, if your policy covers government ordered closure and pandemics or government ordered closure and unspecified notifiable disease should be able to make a claim, subject to the terms and conditions of the policy.

For further information – contact your provider

Protection from eviction for commercial tenants

If you can’t pay your rent because of COVID-19, you will be protected from eviction.

This means, no business will automatically forfeit their lease and be forced out of their premises if they miss a payment up until 30 June.

This period may be extended

This is not a payment holiday and tenants will still be liable for the rent.

This will come into force when the Coronavirus Bill receives Royal Assent. No action is required.