COVID-19 Government Assistance

The UK government has released a large support package for UK based businesses during the COVID-19 crisis.  Here’s some information around each of the package elements.

Contents

• Coronavirus Job Retention Scheme
• Statutory Sick Pay Relief (SMEs)
• Deferring July Payment on Account – Self Assessment
• Deferring VAT Payments
• Business Rates Holiday
• Nursery Business Rates Support
• Small Business Grant Fund
• Self Employed Income Support
• Coronavirus Business Interruption Loan Scheme – SMEs
• Coronavirus Large Business Interruption Loan Scheme
• COVID-19 Corporate Financing Facility
• HMRC Time to Pay Scheme
• IR35

Coronavirus Job Retention Scheme

• Portal is became available 20 April to reclaim salaries paid for furloughed workers
• Employees must be on payroll on or before 28th February 2020
• Claims can be back dated to 1st March 2020
• Available for full time, part time, agency, flexible and zero hours contracts
• Employees to receive 80% of their usual wages, capped at £2,500 of salary per month
• For employee income tax, NI and pension contributions worked out on the furloughed rate
• For employer NI and pension contributions on the furloughed rate can be claimed back
• Furlough must be for a minimum of 3 weeks
• Employees on furlough can’t do any work for the company
• Not eligible if the employee is working reduced hours or pay; they can’t do any work for the business
• Commission, benefits in kind and bonuses shouldn’t be included in furloughed wages
• For employees on varied pay furloughed pay will be based on the same month the previous year, or an average of 2019/20 – whichever is higher
• Employees made redundant since 28th February can be rehired and put on the scheme
• Employees who are currently on sick leave or who are self isolating can be put on furlough once that finishes
• Doesn’t have to be all employees who work for the company, can be just for those who the company has no work for
• Employment law still applies
• If employer pays above 80%/top up salary then they are liable for the NI and pension contributions
• Pension contributions reimbursed are only up to mandatory level – 3%
• Furloughed pay can be lower than the National Minimum Wage
• Employees must be paid for any training they do – they can train while on furlough
• Employees can do volunteer work, but not for the business – no services or generation of revenue can be done for the business
• Normal rules apply for SMP – enhanced packages can be claimed through scheme if its contractual
• Scheme applies to March, April and May
• Grant received is included in the P&L and taxed
• HMRC will audit this to make sure no fraud has occurred
• Applies to Directors of Limited Companies, and agency workers (even if they’re operating through umbrella company)

Statutory Sick Pay Relief (SMEs)

• For businesses paying SSP due to COVID-19
• It will cover up to 2 weeks of SSP per eligible employee who has been off work
• For UK based business
• SME’s; businesses with less than 250 employees on 28th February are eligible
• Employers pay it, and can then reclaim it
• Available from day one of sickness
• Employers should maintain records of staff absences, but GP note won’t be necessary
• Isolation notes are available from 111 if evidence is required
• How this will be claimed back isn’t set up yet

Deferring July Payment on Account – Self Assessment

• Eligible if you’re due to pay second payment on account 31 July
• Pay by 31 January 2021
• Don’t have to be self employed, just have to have a bill due
• Optional
• No penalties or interest for deferring to 31 January 2021
• Can set up a budget payment plan with HMRC

Deferring VAT Payments

• VAT payments due 20 March to 30 June
• You can pay as usual
• Or defer – must pay by 31 March 2021
• VAT return must be submitted as usual
• Don’t need to tell HMRC if you’re deferring
• VAT payments due from 1st July to be paid as usual
• You must CANCEL YOUR DIRECT DEBIT!  This is HMRC’s advice.

Business Rates Holiday

• Hospitality, leisure and retail industries are eligible
• If your business is in England you will be eligible
• 2020/21 tax year rate free
• No action required – local authorities will reissue bill if you’ve already received one charging you

Nursery Business Rates Support

• Rates holiday for nurseries in England for 2020/21 tax year
• Relates to properties of those on Ofsted’s Early Years Register
• Or properties wholly or mainly used for the provision of the Early Years Foundation Stage (children up to 5 years old)
• No action required – local authorities will reissue bills if you’ve already been charged

Small Business Grant Fund

• Businesses in England in receipt of Small Business Rates Relief or Rural Rates Relief are eligible for £10k grant
• Retail, Hospitality and Leisure businesses in England with a rateable value up to £15k will receive a £10k grant
• Retail, Hospitality and Leisure businesses in England with a rateable value of £15k to £51k will receive a £25k grant
• Businesses over £51k rateable value aren’t eligible
• The grant will be taxable in the business’s accounts
• Local authorities contacting businesses
• Government say you don’t need to do anything to access scheme – local authorities will contact those eligible
• Some local authorities are requiring businesses to apply or complete forms to access the grants
• Guidance has been issued to local authorities on this, and they have started to contact those it relates to, and even pay out as of mid-April – give it some time, maybe check their website to see if there’s any information

Self Employed Income Support

• For Sole traders and partnerships
• Must have traded in 2019/20 and submitted self assessment for 2018/19
• Average trading profit for 2016/17, 2017/18 and 2018/19 must be less than £50k
• If started trading during that time only years with self assessments apply
• If haven’t submitted 2018/19 – why not!?  You had until 23 April to submit
• You must still be trading, or would be if it wasn’t for COVID-19
• You must intend to continue trading into 2020/21
• Have lost trading or partnership profits as a result of COVID-19
• You must confirm to HMRC that your business has been adversely affected by COVID-19
• You will receive 80% of averaged trading profits to a maximum of £2,500 for 3 months
• HMRC are identifying those eligible using submitted returns
• HMRC will invite you to apply if you are eligible – they aim to contact you by mid May 2020
• Don’t contact HMRC now – they can’t cope with it and it’ll delay the scheme
• HMRC will pay you a taxable grant in a lump sum directly into your bank
• Although it was initially stated that it was likely these payments would start from the beginning of June, it does not say this anymore
• Be careful of scammers asking you to click on links to get refunds!

Coronavirus Business Interruption Loan Scheme – SMEs

• Eligible if business is UK based
• Turnover less than £45m
• Business needs to meet the other British Business Bank eligibility criteria
• 40 accredited finance providers
• Must be for business use

Coronavirus Large Business Interruption Loan Scheme

• Eligible if business is UK based
• For businesses with turnover of £45m to £500m
• For businesses unable to secure regular commercial financing
• Loans of up to £25m available
• Government will provide lenders with 80% guarantee on loans for businesses

COVID-19 Corporate Financing Facility

• Bank of England to buy short term debt from larger companies
• Non-financial companies that meet the criteria set out on the Bank of England’s website
• Scheme is now available from Bank of England

HMRC Time to Pay Scheme

• For those in financial distress with outstanding tax liabilities
• Helpline number is: 0800 024 1222
• Looked at on a case by case basis

IR35

• Changes to legislation are pushed back to April 2021