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COVID-19

The Coronavirus (COVID-19) outbreak has impacted every aspect of life in the UK since early 2020 and has prompted government to impose various restrictions in an attempt to control the rate of infection. The effects on the UK economy have been disruptive and far-reaching. In an attempt to support individuals and businesses that are adversely affected, the The Chancellor has set out a package of temporary, timely and targeted measures to support public services, people and businesses through this period of disruption caused by COVID-19.

 

Click Here for a downloadable summary   

2nd Lockdown Update: 02 November 2020

Statutory Sick Pay

Small and Medium-sized businesses and employers are allowed to reclaim SSP if:

  • eligible employee has been off work because of COVID-19

  • the refund will cover up to 2 weeks’ SSP per employee

  • employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as at 28th February 2020

  • employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19

  • employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note.

  • Employees can get an online fit note from www.111.nhs.uk.

 

 

Coronavirus Job Retention Scheme

The Coronavirus Job Retention Scheme is open to all UK employers to access support to continue paying part of their employees’ salary for those employees that would otherwise have been made redundant during this pandemic. The overall objective of the policy is to keep employees safe at home while enabling employers to retain staff who will be needed to rebuild their businesses in the future.

 

Qualifying businesses, who placed employees on furlough, can claim 80% of furloughed workers wage costs, up to a maximum of £2,500 per month per employee from HMRC.  Employers can ‘top-up’ the additional 20% if they wish. 

 

The scheme is set-up to allow back-dated claims to 1 March 2020: claims for the period 01st March 2020 to 30th June 2020, must be made by 31st July.  The scheme has been extended to 31st October and will allow employees to be brought back to work in a flexible manner but businesses will have to share some of the costs from 01 st August. 

Employers can claim for furloughed employees that were employed and on their PAYE payroll and notified to HMRC on or before 19 March 2020.

 

Employees with more than one job can be furloughed from each job.  Furloughed employees must not carry out any duties for their employer whilst on furlough leave; although they can work for unconnected entities, do voluntary work or undertake some training. 

 

Employees can be brought in and out of furlough by their employers but to be eligible for CJRS grant each minimum furlough period must be at least 3 weeks in length for periods prior to 30th June.

 

HMRC guidance does not exclude company directors (including those who are sole directors) from being furloughed, but companies must minute their decision and the directors “should not do work of a kind that they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company”.  However, if they are required to attend to companies’ statutory duties (e.g. filing accounts) “… they may do so provided they do no more than would reasonably be judged necessary…..”

Self-Employed Income Support Scheme

This scheme will allow self-employed individuals to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for 3 months (01st March to 31st May 2020).  A second grant is available from August, again for 3 months but his time with a maximum of 70% or £2,187.50 per month.  N o further extentions are expected.

 To be eligible, the following conditions have to be met:

  • Applicants must be self-employed or a member of a trading partnership,

  • Have lost trading profits due to COVID-19,

  • Have filed a tax return for 2018-19. Late filers have had up to 23rd April 2020 to do so,

  • Have traded in 2019-20; be currently trading at the point of application (or would be except for COVID-19) and intend to continue to trade in the tax year 2020-21,

  • Have trading profits of less than £50,000 and more than half of total income from self-employment. This can be with reference to at least one of the following conditions:

    • Your trading profits and total income in 2018-19,

    • Your average trading profits and total income across the three years between 2016-17, 2017-18 and 2018-19.

 

HMRC will contact those who are eligible, by using existing data from tax returns.  The three-month grant will be paid directly to a nominated bank account in a single lump sum. The first SEISS grants have been paid out from mid-May onward and last date to claim is 13th July.  To qualify for the second grant, you will have to declare that your business was still adversely affected on 14th July 2020.

VAT

All UK businesses are eligible for a deferral of VAT payments due between 20th March to 30th June 2020. HMRC will automatically allow this deferral of payments (i.e. no need to make a claim for it). What you need to do is:

  • Cancel your Direct Debit!

  • Keep submitting your VAT returns by the usual due dates.

Businesses will be given until 31st March 2021 to pay any accumulated liabilities during this deferral period.

 

Self Assessment Payment on account

Income Tax, payments on account due by all tax payers, on 31st July 2020 can be deferred until 31st January 2021. This is another automatic deferral from HMRC without a penalty or added interest for late payments.

 

Time to pay scheme (TTP)

HMRC are allowing payments to be spread over a long period of time. This includes VAT, PAYE, CIS, Corporation Tax and Income Tax. All businesses across all sectors of the economy are covered, whether operating as companies, LLP, partnerships or sole traders.  TTP does not just apply to retail and leisure businesses.  Such TTP plans must be agreed with HMRC to avoid penalties or surcharges (interest may still be applied). 

 

If you run a business or are self-employed and are concerned about paying your tax due to Corona virus, you can call HMRC’s helpline for help and advice on 0800 024 1222.

 

Business rates support

 

  • The Business Rates retail discount in England will be increased to 100% in 2020-21 and expanded to the leisure and hospitality sectors.

  • The rates discount for qualifying pubs will be increased to £5,000:

  • Businesses that received the retail discount in 2019-20 will received revised bills by their local authorities.

  • Those businesses eligible for the newly expanded retail discount and/or the new pubs discount may need to apply to their local authority to receive the discount.

  • Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority.

 

Cash grants for small and ‘retail, hospitality and leisure’ (RHL)  businesses

 

  • Any business with a rateable value of under £15,000 and in receipt of small business rate relief (SBBR) or rural rate life (RRF) will receive a grant of £10,000.

  • The business rates in Scotland, Wales and Northern Ireland are set by the devolved administrations. Please contact your local authority for more information on any regional variations.

  • For businesses in the RHL sectors with a rateable value of between £15,001 and £51,000, they will receive a cash grant of £25,000.

  • These grant are not repayable but are subject to income or corporation tax in their businesses.

 

Properties that will benefit from the relief will be occupied premises that are wholly or mainly being used:

  • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues;

  • for assembly and leisure;

  • as hotels, guest and boarding premises and self-catering accommodation.

 

Your local authority will write to you if you are eligible for this grant. Regional variations may apply.

 

Bounce Back Schemes

In response to the growing levels of frustrations about the lack of access to CBILS funding (see below), the chancellor announced on 27th April, a new “Bounce-back” loan scheme aimed more specifically at the smaller businesses, with the following features:

  • Businesses will be able to borrow between £2,000 and higher of 25% of their 2019 turnover or £50,000 and access the cash within days.

  • Loans will be interest-free and repayment-free for the first 12 months and businesses will be able to apply online through a short and simple form.

  • Maximum rate of interest charges in years 2-6 will be capped at 2.5% p.a.

  • Borrowers will certify that they have a viable business, lifting obligations on lenders to carry out their own checks; loans are 100% underwritten by the government.

  • Loan terms are up to six years

  • All firms trading as of March 1 will be able to get cash

  • Banks will no longer require forward financials or business plans

  • Small businesses can only apply for a Bounce Back Loan if your business was not an “undertaking in difficulty” as of 31st December 2019.

  • You can’t apply if you’ve already had a Corona virus business interruption loan (CBIL) but you can port your existing loan of up to £50,000 across

  • The scheme opened on Mayday 4th May but currently only offered by few mainly high street banks, but additional institutions are being accredited all the time.

 

Coronavirus Business Interruption Loan Scheme (CBILS)

The government launched a temporary Coronavirus Business Interruption Loan Scheme (CBILS), delivered by the British Business Bank, to primarily support small and medium-sized businesses to access continuity funds.

 

The government will provide lenders with a guarantee of 80% on each loan to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value.

Businesses can access the first 12 months of that finance interest free, which will be paid by the government.

You are eligible for the scheme if: your business is UK based, with turnover of no more than £45 million per year and your business meets the other British Business Bank eligibility criteria.

 

Lenders are banned from requesting personal guarantees on loans under £250,000. For loans over £250,000 personal guarantees will be limited to 20% of any amount outstanding on the CBILS lending after any other amounts have been recovered from business assets.

Support for larger firms

Under the COVID-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies. This will support the company if it has been affected by a short-term funding squeeze and allow it to finance its short-term liabilities. It will also support corporate finance markets overall and ease the supply of credit to all firms. All UK businesses are eligible.

 

The Coronavirus Large Business Interruption Loan Scheme enables banks to make loans of up to £25m for firms with turnover of more than £45m and up to £50m loans for firms with turnover in excess of £250m. This will allow all viable firms with an annual turnover of more than £45m access to the 80% government guarantee.

Government Support Measures

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