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.
As the virus is now being controlled and ‘social distancing’ has become the new normal – the Prime Minister has revealed his plans to get the UK back to business with 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.
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.
- Read in more detail: Working safely during coronavirus (COVID-19)
- Read in more detail: A practical checklist to help SMEs prepare for returning to work post lockdown
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
- A new “Flexible Furlough” scheme will be put in place from July 2020 which will allow employees to return to work on a part-time basis
- No new employees can be added to the scheme after 10 June 2020
- 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)
- August 2020 – this reduces to 80% of total wages costs (excluding Employers NIC and Pension costs), up to a cap of £2,500 per month).
- September 2020 – this reduces to 70% of total wages costs (excluding Employers NIC and Pension costs), up to a cap of £2,187.50 per month).
- October 2020 – this reduces to 60% of total wages costs (excluding Employers NIC and Pension costs), up to a cap of £1,875 per month).
- Information is submitted to HMRC through a new online portal
- All UK Employers eligible.
- Extended to include Public-sector contractors
- Read in more detail: Summary of the Job Retention Bonus (JRB) Scheme
- Read in more detail: Furlough Frequently Asked Questions – Everything SMEs need to know from 1 July 2020
- Read in more detail: Flexible Furlough Scheme
- Read in more detail: Important Dates and Changes to the CJRS (June – Oct 2020)
- Read in more detail: Furlough scheme covers 8.4m workers
- Read in more detail: Relief as furlough scheme extends to October
- Read in more detail: CJRS – Online Portal Goes Live
- Read in more detail: Claim for your employee’s wages through the Coronavirus Job Retention Scheme
- Read in more detail: Protecting the workforce with a new Coronavirus Job Retention Scheme
- Read in more detail: Public-sector contractors in furlough boost
- Useful document: Furloughing and Coronavirus Job Retention Scheme Frequently Asked Questions
- Useful document: Signposting for employees to help them manage their own finances during the COVID-19 pandemic
- Useful document: Flowchart for payroll processing
Whistleblowers have reported nearly 2,000 cases of furlough fraud to HMRC. If you believe a business has acted dishonestly, HMRC have launched a new fraud hotline (0800 788 887) and an online whistleblower service based on a structured email form.
The coronavirus business support measures open up possibilities for dishonesty and abuse, and this is particularly the case with CJRS grants, which should be used by employers to pay the costs of keeping employees on furlough.
HMRC have made it clear it will be auditing employers and will clawback payments made where the application is found to be fraudulent or based on dishonest and/or inaccurate information. Examples of abuse HMRC will target include:
- Employers not paying the amounts received to the employees
- Asking employee to work while on furlough
- Making backdated claims to cover periods which include periods the employee was actually working.
As professional advisers, we will always maintain our professional standards and we are obligated to report any cases where we believe a client has acted dishonestly or inappropriately.
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.
Self Employment Income Support Scheme (SEISS)
- If you are self-employed (either as an individual or in a partnership), you could claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month, for 3 months covering March to May 2020. This was extended and amended by the Chancellor on 20 May (see below)
- You may be eligible for this scheme if: You’ve lost profits due to coronavirus, you’ve submitted your Self Assessment tax return for 2018 to 2019 tax year, you traded in 2019 to 2020 tax year, you are trading when you apply,or would be except for coronavirus, you intend to continue trading in 2020 to 2021 tax year, your trading profits have been no more than £50,000 for either 2018 to 2019 tax year or as an average of last 3 financial years, your trading profits have been more than half of your total income for either 2018 to 2019 tax year, or as an average of last 3 financial years
- Trading profits do not include dividends paid from your own company to yourself.
- On 29 May the Chancellor announced some changes to the SEISS.
- SEISS has been extended for a further 3-months (1 June to 31 August).
- The grant rate has been reduced to 70% of income or a maximum of £6,750.
- Please note that SEISS is only available to the self-employed. Limited company directors are not considered self-employed.
- If you are not eligible for Self-Employment Income Support Scheme, you may be eligible for Universal Credit or Employment and Support Allowance.
- What Next? Make a claim >>
- Read in more detail: Self Employment Income Support Scheme
Coronavirus Business Interruption Loan Scheme (CBILS)
- If you are a small to medium-sized business (SME) you may be able to apply for a temporary loan, overdraft, invoice finance and asset finance of up to £5 million, for up to 6 years.
- You may be eligible for this scheme if you meet all of the following criteria: your business is UK-based, with a turnover of no more than £45 million per year, you have a borrowing proposal which would be considered viable by the lender, if not for the current pandemic, you can self-certify that coronavirus (COVID-19) has adversely impacted your business.
- Self-employed people are also eligible for Coronavirus Business Interruption Loan Scheme.
- You may also be eligible for Business Interruption Payment to cover the first 12 months of interest payments and any lender fees. The government will give lenders 80% guarantee on each loan (subject to pre-lender cap on claims).
- What next? Check if you are eligible >>
- Read in more detail: New microloans revealed for small firms
- Read in more detail: Preparing your CBIL Application
- Read in more detail: Government to offer 100% guarentee on SME loans
- Read in more detail: Groups back increased support for crisis-hit firms
Coronavirus Large Business Interruption Loan Scheme (CLBILS)
- The Coronavirus Large Business Interruption Loan Scheme (CLBILS) provides a government guarantee of 80% on each loan, to give banks further confidence in financing businesses impacted by coronavirus.
- It allows banks to make loans of up to £25 million to businesses with an annual turnover of £45 million to £250 million
- It allows banks to make loans of up to £50 million to businesses with an annual turnover of over £250 million
- You can apply for this loan if your business: is UK based, has an annual turnover of at least £45 million, meets the other British Business Bank eligibility requirements
- The scheme is delivered through commercial lenders, supported by the Government-backed British Business Bank. Facilities backed by a guarantee under CLBILS are offered at commercial rates of interest.
- What next? Discuss business plans with existing lending providers.
- Read in more detail: Preparing your CBIL Application
- Read in more detail: Chancellor expands Loan Scheme for large firms
Coronavirus Bounce Back Loan
- If your small to medium-sized business (SME) is affected by coronavirus, you may be able to borrow between £2,000 and £50,000 through a Bounce Back Loan scheme.
- You may be eligible for this scheme if your business has been negatively affected by coronavirus, was not an ‘undertaking in difficulty’ on 31 December 2019.
- The government will guarantee 100% of the loan and for the first 12 months you will not have to pay any fees or interest, or make repayments.
- This includes self-employed people.
- What Next? Check if you are eligible >>
- If you’re a UK VAT registered business and have a VAT payment due between 20 March 2020 and 30 June 2020, you have the option to defer payment until 31 March 2021.
- What this means is that you can defer the payment of your VAT payment due between 20 March and 20 June 2020.
- You MUST however submit your VAT return as usual.
- If you defer the payment, you must pay the VAT due to HMRC by no later than 31 March 2021.
- This is particularly helpful to businesses needing a cash boost now and can be used to aid your cashflow in the short term.
- If you normally pay VAT by direct debit and you decide to defer the payment, remember to cancel the direct debit payment with your bank.
- What next? Taxpayers that wanted to defer VAT payments, but failed to cancel their Direct Debits in time can claim a refund – the quickest way is to submit a Direct Debit Indemnity (DDI) Claim to your bank. HMRC confirms that there is no time limit in making this request.
- What next? Check if you are eligible >>
- Read in more detail: Cashflow assistance announced with no VAT payment until after 30 June 2020
Deferring Self Assessment Payments on Account
- If you are due to pay a Self Assessment payment on account by 31 July 2020, you can defer payment up until January 2021. You will not be charged any interest or penalties during the deferral period.
- You do not need to be self-employed to be eligible for the deferment.
- If you normally pay by Direct Debit you should contact your bank to cancel your Direct Debit as soon as you can. You do not need to contact HMRC before doing this.
- The deferment is optional. If you are still able to pay your second payment on 31 July, you should do so.
- What next? This is an automatic offer. You do not need to apply for the deferral or tell HMRC.
- What next? Check if you are eligible >>
- Read in more detail: Self assessment tax deferral extended to all taxpayers
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.
- Self-employed people whose work has been affected by coronavirus have been boosted by an extension to the coronavirus income support scheme. Workers will be able to make a second and final claim in August 2020 for up to £6,750 through the self-employed income support scheme.
- Read in more detail: Chancellor extends support for the self-employed
- Read in more detail: Who is on the side of the ordinary Company Director?
- Read in more detail: Help awarded to the Self Employed with a Self Assessment Deferment of the July payment
- Read in more detail: Government urged to plug gaps in self-employed scheme
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
Business Rates Holiday for Retail, Hospitality and Leisure
- Businesses in the retail, hospitality and leisure sectors in England will not have to pay business rates for the 2020 to 2021 tax year.
- You’re eligible if your property is a shop, restaurant, café, bar or pub, cinema or live music venue, assembly or leisure property – for example, a sports club, a gym or a spa, hospitality property – for example, a hotel, a guest house or self-catering accommodation.
- What Next? You do not need to do anything. If you are eligible, your local council will apply the discount automatically.
Support for Nursery Businesses that pay Business Rates
- Nurseries in England do not have to pay business rates for the 2020 to 2021 tax year. Your council will do this automatically.
- You’re eligible if your business is on Ofsted’s Early Years Register and provides care and education for children up to 5 years old (early years foundation stage).
- Local authority-run nurseries are not eligible.
- What Next? Check if you are eligible >>
Small Business Grant Funding
- You may be eligible for a one-off grant of £10,000 if you are a small business that already pays little or no business rates because of small business relief (SBBR), rural rate relief (RRR), tapered relief.
- You are eligible if your business is based in England, in receipt of small business rate relief or rural rate relief as of 11 March 2020, you are a business that occupies a property
- These grants were paid out to eligible businesses in late March / early April.
- What Next? Contact your local council if you think you are eligible for a grant but have not yet received it.
Coronavirus Statutory sick pay reclaim scheme for SMEs (CSSP)
- Small-and medium-sized businesses and employers will be able to reclaim statutory sick pay (SSP) paid specifically 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.
- Employers must maintain records of staff absences and payments for SSP. Employees will not have to provide a GP fit note.
- What next? Make a claim
- Read in more detail: Coronavirus Statutory Sick Pay CSSP Scheme
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.
- 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).
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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