COVID-19 Update 23rd March 2020
The Government have announced a raft of measures to support businesses through the Covid-19 pandemic.
We have summarised the key points below & further details can be found here:
We are still waiting for the detailed guidance on this scheme but so far, the Government have said the any employee who would otherwise be laid off due to lack of work caused by the pandemic can instead be designated as a “furloughed worker”. The Government will fund 80% of a furloughed workers salary up to a cap of £2,500 per month.
Whilst furloughed, an individual cannot do any work for their employer.
The Government are aiming to make the first payments under this scheme by the end of April.
VAT
No UK business will be required to make a VAT payment between 20 March 2020 & 30 June 2020. HMRC will continue to pay refunds as normal.
Taxpayers will be given until the end of the 2020/21 to pay any liabilities that have accumulated during the deferral period.
This will be automatic, there is no need to apply to HMRC.
VAT returns must still be submitted on time during the deferral period.
Self Assessment
If you are self-employed and have a payment on account becoming due on 31 July 2020, this can be deferred until 31 January 2021.
This will be automatic, there is no need to apply to HMRC.
Although the Government’s original guidance specifically referred to this as a deferment for the self-employed, the Gov.Uk website has since been updated and it would appear that this deferment will be automatically available to anyone who will struggle to pay their tax bill in July.
Business Interruption loan Scheme
UK based smaller businesses from all sectors, can apply for funding under the scheme. The lender will accept a proposal, where, were it not for the current pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable the business to trade out of any short-to-medium term difficulty.
Finance terms are up to six years for term loans and asset finance facilities and up the three years for overdrafts and invoice finance facilities.
The Government will cover the first 12 months of interest payments.
Full rules of the scheme & the list of lenders can be found here:
Grant funding
£10,000 grant for all businesses in receipt of small business rate relief ie whose properties have a rateable value of up to £15,000.
£25,000 grant for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000.
Again, local authorities should notify eligible businesses automatically. To find your local authority use the website https://www.gov.uk/find-local-council
Some local authorities are starting to release information on their websites. We recommend that you dig out your business rates account number in anticipation of it being needed.
Financial support from your Bank
Your Bank may provide you with the following support:
- Loan repayment holidays
- Interest rate reductions
- Temporary emergency loans
- Immediate access to deposit balances with no penalty
Contact your bank directly.
Business Rates Holiday for Retail, Hospitality & Leisure Businesses
There will be a business rates holiday for the 2020 to 2021 tax year for properties that are being wholly or mainly used as shops, restaurants, cafes, drinking establishments, cinemas, live music venues. Leisure, assemblies, hotels, guest houses & self-catering accommodation
This should be applied automatically via the April 2020 council tax bill. If the bill has already been issued it should be automatically adjusted.
Business Rates Holiday for Nurseries
Properties occupied by providers on Ofsted’s Early Years Register or used wholly or mainly for the provision of the Early Years Foundation Stage will be given a business rates holiday for the 2020 to 2021 tax year.
This should be applied automatically via the April 2020 council tax bill. If the bill has already been issued it should be automatically adjusted.
Support for Businesses Paying Tax
A dedicated Covid-19 Time to Pay service has been set up by HMRC on 0800 0159 559. This is aimed at providing support for businesses with outstanding tax liabilities.
Support for Larger Firms
The Bank of England are expected to publish full details this week of a new Covid-19 Corporate Financing Facility whereby they will buy the debt of larger companies. All of the currently published information on this can be found here:
Support for Employers Paying Sick Pay
Employers will be able to reclaim up to 2 weeks’ SSP per eligible employee who has been off work due to Covid-19. Our understanding is that this covers employees who are suffering with the virus & employees who are required to self-isolate. Sick pay for these individuals can be paid from day 1 rather than waiting until day 4. This scheme commenced on 13 March.
The usual conditions for paying sick pay continue to apply.
We don’t yet know what the mechanism will be for reclaiming these SSP payments from HMRC.
Support for Individuals
The Government have made it easier for individuals to make a claim for Universal Credit or new style Employment and Support Allowance.
The government has agreed with mortgage lenders that they will offer repayment holidays of 3 months to households in financial difficulty due to COVID-19. This will also apply to landlords whose tenants are experiencing financial difficulties because of the pandemic.
In additional to the announcements by central Government, we are aware that Derbyshire County Council have set up an emergency relief fund. More details of this can be found here: