Summary of Government advice:

The message from the Prime Minister is clear – stay alert – control the virus – save lives.

Boris Johnson initially ordered the compulsory closure of all non-essential shops, bars, cafes, pubs, restaurants and public venues which will no doubt have implications for the UK economy down the line.

In a further announcement to the United Kingdom on 10th May – Prime Minister Boris Johnson has now advised workers in the construction and manufacturing sectors in England to return to work on 13 May 2020 as part of a series of small measures which will see lockdown eased.

The Department for Business, Energy and Industrial Strategy has issued new guidance to help workers and employers return to work safely.

An extensive package of support for businesses facing the prospect of having to reduce staff numbers has been pledged with £330 billion-worth of state-backed loans to support businesses feeling the effects of the epidemic. To put that unprecedented figure into context, it represents around 15% of the value of the entire UK economy.

This page summarises what we know so far. We will keep this page updated with the latest information wherever possible.

Coronavirus outbreak FAQs: what you can and can’t do >>

Guidance: Working safely during coronavirus (COVID-19) >>

Find coronavirus financial support for your business >>


Getting Back to Business

The government, in consultation with industry, has produced guidance to help ensure workplaces are as safe as possible.

These 8 guides cover a range of different types of work. Many businesses operate more than one type of workplace, such as an office, factory and fleet of vehicles. You may need to use more than one of these guides as you think through what you need to do to keep people safe.

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Coronavirus Job Retention Scheme

  • The Government are encouraging Employers to keep their employees on the payroll by placing them into a “Furloughed” status rather than making them Redundant or Laying them Off
  • “Furloughed” will mean that an employee will not be able to work for the business at all during the period of time this is in place
  • HMRC will reimburse via a Grant 80% of “Furloughed Workers” total wages costs (including Employers NIC and Pension costs), up to a cap of £2,500 per month as a result of Coronavirus (up to and including July 2020)
  • The Government has recently extended the scheme for an additional 4 moonths to run to the end of October 2020
  • Information is submitted to HMRC through a new online portal
  • All UK Employers eligible.
  • Extended to include Public-sector contractors

 

Furloughing of Directors and Company Officers

  • Individuals who are not specifically employees but paid under PAYE can be furloughed when they meet the qualifying conditions.
  • Such individuals will include Company Directors, Company Secretary, Salaried members of Limited Liability Partnerships, Agency Workers (using umbrella companies)
  • The legal process will need to be followed to furlough the individual. For example, to furlough a director,  the process must be undertaken by the Board of Directors and recorded.
  • Once furloughed, the individual will be unable to undertake any work, such as generating revenue or providing services to or on behalf of the company.
  • They will still be able to fulfil their statutory duties.

 

Extension of the coronavirus business interruption loan scheme (CBIL)

  • Maximum turnover for eligible businesses was previously set at £41 million per year; it has now been increased to £45m.
  • Scheme further extended to cover larger firms who can now receive loans of up to £25m (turnover of between £45m and £500m)
  • The interest-free period has been increased from six months to twelve.
  • The scheme is being managed by the British Business Bank but businesses will access them via one of 40 accredited lending providers, including most major banks.
  • The maximum value of a facility provided under the scheme will be £5 million – higher than the £1.2m announced initially.
  • Loans will be available from Monday 23 March 2020.
  • Government will underwrite 80% of loans to speed up access to emergency funds.
  • What next? Discuss business plans with existing lending providers.

 

Deferral of tax and VAT payments currently due

  • VAT payments from UK-based VAT registered businesses due between 20 March and 30 June 2020 won’t need to be paid to the usual deadlines, with payment deferred until the end of the tax year. Please be aware that you must still complete and file your VAT return by the usual deadline. It is also strongly advised that you cancel any direct debit currently in place to pay your VAT, to avoid the liability being taken in error. You will then need to reset up the direct debit arrangement in the future, once something approaching normality re-emerges.
  • Self Assessment July 2020 payments on account deferred for all taxpayers not just Self Employed
  • What next? Both deferral schemes apply automatically with no application required.
  • Read in more detail: Self assessment tax deferral extended to all taxpayers
  • Read in more detail: Cashflow assistance announced with no VAT payment until after 30 June 2020

 

Help for the self-employed

  • The minimum income floor for access to universal credit has been suspended for self-employed people affected by the economic impact of coronavirus.
  • If you trade in your own name as a Sole Trader or along with others in a Partnership or Limited Liability Partnership you will not be eligible for Statutory Sick Pay because you take drawings from the business rather than a wage under Pay As You Earn. You would therefore be required to make a claim for Universal Credit or Contributory Employment and Support Allowance (ESA). The amount received under this scheme is £73.10 if you are over 25 and £57.90 if you are under 25. ESA is paid every 2 weeks.

 

Companies House Filing Extension

  • Businesses will be given an additional 3 months to file accounts with Companies House to help companies avoid penalties as they deal with the impact of COVID-19.
  • While companies will still have to apply for the 3-month extension to be granted, those citing issues around COVID-19 will be automatically and immediately granted an extension.
  • Applications can be made through a fast-tracked online system which will take just 15 minutes to complete.
  • Read in more detail: Applying for more time to file your company’s accounts
  • Read in more detail: Three month extension for firms to file accounts

 

Extension of business rate discount

  • All hospitality, leisure and retail venues in England, regardless of rateable value, can now claim a 100% discount on business rates for 12 months from 1 April 2020 to 31 March 2021.
  • Unoccupied properties that become vacant in the next 12 months will be charged 100% full rates from three months after they become empty.
  • What next? The discount will be applied automatically to the next council tax bill, due in April 2020.

 

Cash grants for very small businesses

  • Hospitality, leisure and retail businesses operating from units with rateable values between £15,000 and £51,000 will receive a grant of £25,000.
  • Businesses in these sectors with a rateable value of less than £15,000 will receive a grant of £10,000.
  • Those with a rateable value of more than £15,000 will receive £25,000.
  • Your local authority will contact you if you are eligible for this grant.
  • What next? Await notification from local authorities.

 

Grants for businesses receiving SBRR or RRR

  • Businesses in England eligible for small business rate relief (SBRR) or rural rate relief (RRR) will receive a one-off cash grant of £10,000.
  • What next? This will be processed automatically by local authorities.

 

Statutory sick pay reclaim scheme for SMEs

  • Small-and medium-sized businesses and employers will be able to reclaim statutory sick pay (SSP) paid for sickness absence due to COVID-19.
  • The refund will cover up to two weeks’ SSP for each member of staff off work because of COVID-19.
  • It applies to all UK businesses that employed fewer than 250 employees as of 28 February 2020.
  • What next? Legislation needs to pass before details of how to apply can be published.

 

Time to Pay

  • HM Revenue & Customs already operate a Time to Pay service to assist businesses suffering from financial difficulties to continue trading whilst paying outstanding VAT, PAYE, corporation tax or income tax over a period. Applications are subject to a number of checks and these can be arduous in terms of providing financial forecasts for larger requests.
  • The Time to Pay Scheme will be extended to include those businesses that are suffering financial hardship as a result of COVID-19 and a further 2,000 call handlers have been provided to discuss individual cases. The new helpline has its own number which is 0800 0159 559.

 

Interest rates

  • On 19 March 2020 the Bank of England cut interest rates to a historic low of 0.1%, having previously reduced them to 0.25% on the day of the Spring Budget.
  • Read in more detail: Interest rates slashed to a 325-year low

 

A personal message from Managing Partner Nick Forsyth – “When you’re ready, we’re ready to help”.

(information correct at time of recording 20 March 2020).

 

Further information

HMRC has changed the dedicated phone number for the coronavirus helpline targeted at businesses and the self employed to 0800 024 1222 to increase load capacity.


 

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Lambert Chapman Chartered Accountants

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