Update 3, 24 March 2020

The government are regularly announcing measures to support businesses in the UK through this period of uncertainty amidst the coronavirus outbreak. 

Here’s the latest information on those governmental measures…

For Businesses

Coronavirus Job Retention Scheme

This is support for UK employers so they can continue to pay their employees during this crisis.

All UK businesses are eligible:

• HMRC will reimburse 80% of salary for ‘furloughed workers’ wage costs
• This 80% is capped at £2,500

To access the scheme they need to:

• Designate affected employees as furloughed workers
• Notify employees of this change – changing the status of employees is still subject to existing employment law, so there might be some contractual obligations and even negotiation involved, depending on the contract
• Submit information to HMRC about the employees that have been furloughed, and their earnings
• There will be a new online portal for this, and HMRC will publish more information on what details are required once they’re available – the system is not yet set up

VAT Payments

Payments for VAT will defer for 3 months.  This applies to payments from 20 March 2020 to 30 June 2020.

• All UK businesses are eligible
• There’s no need to apply, this is an automatic offer
• Businesses don’t need to make VAT payments during this period
• The VAT payment will need to be made by 5^th April 2021
• Any VAT refunds or reclaims during this time will be made as normal

Income Tax Payments

This is for those who pay self assessment:

• If you’re self-employed you’re eligible
• Payments due on 31 July 2020 are deferred to 31 January 2021
• There’s no need to apply for this, if it applies to you, you can automatically take it
• There are no penalties or interest charges for this deferral period
• As per previous update, the Time to Pay helpline specifically for those experiencing financial difficulties as a result of current events is available – the number to call is 0800 0159 559

Business Rates Holiday

For those businesses in the hospitality, leisure and retail industries this is a holiday from business rates for the whole tax year of 2020/21 – which has already been announced on previous updates. 

• It’s been announced that this will apply to your April 2020 council tax bills
• Local authorities may have to reissue these, if they’ve previously been issued with rates on
• They’re doing this as soon as possible

Cash Grants

Again, for retail, hospitality and leisure industry businesses:

• Businesses with a rateable value of under £15,000 – cash grant of £10,000
• Businesses with a rateable value of £15,000 to £51,000 – cash grant of £25,000
• Eligible for businesses in England
• Local authorities will write to those eligible
• Enquiries should be directed to your local authority
• Local authorities aren’t quite set up for this scheme yet

Nursery Businesses

A business rates holiday is being introduced for nurseries in England for 2020/21 tax year:

• Eligible if the business is based in England
• No action is required to access the rates holiday – local authorities will issue/reissue April 2020’s bill with this applied to it

Coronavirus Business Interruption Scheme

A few small updates to this one:

• Loans are available up to £5m for up to 6 years
• The government will cover the first 12 months of interest payments
• Lender-levied fees will also be covered by the government
• This means no upfront costs and lower initial repayments
• Eligible businesses are based in the UK
• Turnover must be less than £45m per year
• Businesses need to meet the other British Business Bank eligibility criteria
• This scheme is now up and running
• All major banks are set up for this, so speak to your bank
• Or speak to one of the 40 accredited providers here

COVID-19 Corporate Financing Facility

This is for larger companies:

• Bank of England will buy short term debt from these companies
• All non-financial companies are eligible to meet the criteria set out by Bank of England
• This scheme will be available this week

Other Initiatives with No Updates

• Statutory sick pay repayments for businesses with employees ill with coronavirus
• Statutory sick pay being available from day 1 of illness
• £10,000 cash grants to businesses eligible for small business rate relief or rural rate relief
• Insurance; for those who’s insurance covers the current situation and are able to claim
• Mortgage payment holidays

There are other things the government are putting into place…

For Individuals and the Self Employed

Benefits Increase

For those on low incomes or who have been made redundant as a result of coronavirus, some benefits will increase:

• Universal Credit standard allowance and Working Tax Credit basic element will both increase by £1,000 for the next 12 months
• For people renting; housing benefit and the housing element of Universal Credit are to be increased also – Local Housing Allowance will cover at least 30% of the market rents
• There will be no sanctions on those on Universal Credit who can’t attend meetings with work coaches, where this is agreed prior to the meeting because they’re in self isolation

For the Self Employed, Contractors, Single Director Limited Companies and Gig Economy Workers

If you fall into this category, unfortunately there aren’t as many solutions available to you. 

If you don’t rent a space of any kind, don’t employ people, who aren’t in the retail, leisure, hospitality or nursery industries there are fewer things in place for you.

From the list above you can take advantage of:

• VAT payments deferrals, if you’re VAT registered
• Income Tax deferrals, if you were supposed to make a payment in July 2020
• Coronavirus Business Interruption Loan, this is something that will need to be paid back over a period of time

Outside of these initiatives, there are only two other things that potentially apply to you:

• Employment and Support Allowance, this might be able to be claimed if you are eligible

• Universal Credit, changes have been made to this to support self employed people:
  • This is now at a rate equivalent to statutory sick pay for employees, if you’re ill
  • It’s £94.25 per week for up to 28 weeks

If you’re self employed and struggling, there’s a chance you qualify for Universal Credit as a whole.  A few changes have been made to this benefit to help the self employed to claim more easily at the moment. 

Universal Credit replaces working tax credit and other benefits, but isn’t available in all areas yet. 

If you need to find out more about Universal Credit, visit the government’s website here.

In addition to the above, a parliamentary update has been released this morning, 24March 2020.  This bill provides that the ‘secretary of state must introduce a scheme of Statutory Self-Employment Pay’.

The scheme makes public funds available for individuals who are self employed or freelancers.  It provides payments of:

• 80% of net monthly earnings, averaged over the last three years, or
• £2,917
• Whichever is lower

This bill was passed yesterday in parliament, so there’s no more information about it yet. 

Watch this space for further updates on all of this…