Here is a heads up on some of the measures available to help the nation through the next few months. This document is not exhaustive and so do have a thorough look through the government website and other guidance.
If there is anything else that you feel should be added please do let us know.
We all like free money so let’s start here.
Those hard-hit businesses in retail, hospitality and leisure occupying property with a rateable value between £15,001 and £51,000 should receive cash grants of £25,000.
Grants of £10,000 are being given to smaller businesses occupying commercial premises with a rateable value of less than £15,000 and those that qualify for Small Business Rate Relief (SBRR), Rural Rate Relief (RRR) or tapered relief.
You should be contacted automatically but if you have not heard as yet I would contact your Local Authority. On a personal note, we received £10,000 on 3rd April – quick work Brighton & Hove Council!
Business rates in England are temporarily being reduced to nil for 2020/2021 for all retail, leisure and hospitality businesses with a rateable value less than £51,000. Support should be automatic and nurseries (the ones for growing kids) should also benefit as well.
You still need to complete VAT returns but payments due between 20 March and 30 June may be deferred for three months and the facility is granted automatically. It is only a deferral not a gift, so don’t make a bigger problem further down the line if you can avoid it.
You can request a three-month delay to the deadline for filing your accounts and if eligible you won’t get the usual late payment penalty. HMRC has a fast-track application and if you state the effects of the virus being the reason for delay acceptance should be a formality.
HMRC should be understanding in these circumstances. You should contact the HMRC helpline on 0800 0159 559 for time to pay.
No surprise as to which sector of the business world has already attracted flak for their reaction to the Coronavirus – banks take a bow.
Under the scheme businesses can apply for finance to a range of banks (not just their own) to receive loans, overdrafts and other forms of financial support. Government is guaranteeing 80% of bank losses and covering the first 12 months of interest payments which theoretically should allow the banks to lend freely and cheaply. However, banks are banks and many people have experienced difficulties in applying, or are not being offered the terms envisaged. Never the less, this could be a useful facility for some SME businesses to pull through a difficult period or create a cash buffer and I would suggest that you explore all of the options available. The scheme is delivered via British Business Bank which provides a full list of lenders. Financial assistance to larger firms is being extended directly via the Bank Of England on an individual basis.
Who had heard of furloughing three weeks ago? I thought it was something to do with horseracing.
This is intended to protect the jobs of people who would otherwise have been made redundant due to the virus. The Coronavirus Job Retention Scheme will pay 80 per cent of an employee’s salary, capped at £2,500 a month. Employer NI and some pension payments are also covered. Support is backdated to 1 March and is initially for three months.
Very importantly, the employee cannot work for the employer during the furlough period so you should not get government money for staff who are still working in the business.
Your payroll adviser should be able to help you with the process and if the business needs cash to pay the salary in the short term you may be eligible for a Coronavirus Business Interruption Loan.
Small businesses will get a full refund on 14 days of Statutory Sick Pay per employee who is off sick with Covid-19. Employees do not need to get a GP sick note.
The usual labyrinthine planning regulations are being relaxed to allow restaurants and pubs to provide takeaway – a curry and beer at the desk should really give homeworking a new kick.
If you are struggling to pay rent due to the virus and miss a rent payment before 30 June you will not be evicted – this period may be extended. However, it is not a ‘rent holiday’ and you will still be liable for the amount owed. Tenants and landlords are being encouraged to communicate and try to reach an agreement.
There have been some business grants offered via local schemes for businesses seeking to adapt their processes to the pandemic – I know as we have applied. Talk to your accountant or another contact who is connected with local business finance sources.
The Self-Employed Income Support Scheme (SEIS) can pay up to 80 per cent of average profits over the last three years, subject to a cap of £2,500 a month. Self-employed partners may also qualify and cash should be with those eligible by June.
However, the support is not aimed at high earners, so those with earnings over £50,000 are excluded as are those whose earnings are not largely derived from self-employment.
HMRC should contact you directly if you’re eligible and the plan is that once a simple form has been completed, your bank account will be credited directly.
The self-employed usually pay an Income Tax instalment in July 2020. This will be deferred automatically until January 2021. It is important to note that the tax is deferred not waived so if you are able to pay the money it might still be worthwhile paying it at some point before January 2021.
Many contractors will have been delighted to learn that IR35 reform has been delayed for a year. However, it has not gone away.
Many self-employed people employ their partner and others via PAYE. Is it possible to furlough them – see above?
The self-employed who are ill or self-isolating can now claim Universal Credit with payments made in advance and without having to go to a Jobcentre. The income floor has also been relaxed making many more people eligible.
If you qualify you may be able to claim Employment and Support Allowance (ESA) of £73.10 a week, from day one of your sickness rather than the usual day eight. Young uns’ under 25 cannot apply.
Mortgage lenders should offer a three month payment holiday if you are in difficulty due to the virus. However, the amount owed will be added to your debt so it is not a freebie. Taking a break should not affect your credit score but you need to contact your lender. This applies to residential and buy-to-let borrowers alike.
Lenders have been asked to use flexibility to support their borrowers in these times and if you receive agreement to a break it should not affect your credit score – contact your lender.
Landlords cannot start eviction proceedings for at least three months and should work with a distressed tenant to agree upon an affordable repayment schedule.
Central government is providing local authorities with access to a new £500 million Hardship Fund to support economically vulnerable people and households.
Roxboro do not provide tax, legal or accounting advice. This material is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
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