[Updated 26 June 2020]
If you have been following the news on Coronavirus/Covid 19, you’ll know that the government has introduced some measures to help businesses.
Coronavirus Job Retention scheme
HMRC will reimburse 80% of furloughed workers wages up to a cap of 80% or £2,500 per month.
Employers will need to designate affected employees as “furloughed” (and you must notify them that they are furloughed… you should also check their employment contract – employment law still applies to changing the status of an employee), and make an online claim to HMRC. See separate posts on the Coronavirus Job Retention Scheme as it applies to employers and employees
Extra time to pay taxes
If you need to delay paying your corporation tax, or need to arrange a “time to pay” agreement (payment plan) due to Covid 19, then you can call the HMRC Coronavirus helpline on: 0800 0159 559.
These are agreed on an individual basis. Call them if you have missed a payment or you think you will miss your next payment.
- All VAT payments from 20 March to the end of June are deferred (the VAT from the deferral period will have to be paid by the end of the 2020/21 tax year.)
VAT refunds and reclaims will be paid as usual.
All businesses are eligible; it is automatic and you don’t have to apply – you just opt not to pay, if that is what you choose to do.
- All personal income tax payments that would have been due on 31 July 2020 are deferred until 31 January 2021.
All self-employed people are eligible it is automatic and you don’t have to apply – you just opt not to pay, if that is what you choose to do.
No penalties and interest will apply to the late payment for the deferral period.
Employers who are paying sick pay
The statutory sick pay (SSP) for sickness due to Covid 19 will be cover up to 2 weeks SSP per eligible employee. Employers will be able to reclaim expenditure for any employee who has claimed SSP. You will need to keep records of their absences but employees will not need to provide a GP fit note. (Employees with Covid 19 symptons can obtain an isolation note from NHS 111 online)
UK based employers who had less than 250 employees on 28 February 2020 are eligible. Details of how to claim have not been released yet.
Business Rates Holiday
There is a business rates holiday for 2020/21 tax year for those in retail, hospitality and leisure in England.
If you are eligible, your council will write to you (they may have to reissue their April 2020 rates invoice)
Cash Grants
Cash grants for retail, hospitality and leisure businesses in England with a business property; those with a rateable value of under £15,000 will receive a grant of £10,000; those with a rateable value of £15,001 to £51,000 will receive a grant of £25,000.
If you pay little or no business rates, because of small business rate relief, rural rate relief or tapered relief and you occupy (business rateable) property, you will receive a grant of £10,000.
Your council will write to you if you are eligible.
Coronavirus Bounce Back Loan
Announced in April 2020, this scheme is intended to help small and medium businesses by providing loans from £2,000 to up to 25% of their turnover – subject to a maximum of £50,000. The government will guarantee 100% of the loan. The first 12 months are interest fee (as the government will cover the first 12 months of interest payments). After the first 12 months, the interest will be 2.5% per year.
Your business must be based in the UK, established before 1 March 2020 and be adversely impacted by the coronavirus.
If your business was considered “in difficulty” on 31 December 2019, you’ll need to comply with additional restrictions such as restrictions on the loan amount and what you can do with the loan.
If you had already received a loan up to £50,000 under CBILS (below) you can apply to transfer it to the Bounce Back Loan (you have until 4 November 2020 to arrange this)
Coronavirus Business Interruption Loan Scheme
The new temporary Coronavirus Business Interruption Loan Scheme will provide loans of up to £5million. The government will guarantee 80% of the loan. The first 12 months are interest fee (as the government will cover the first 12 months of interest payments)
You are eligible if your business is UK based, with a turnover of £45 million or under and you meet the British Business Bank eligibility criteria (once it is launched)
Universal Credit Minimum Income Floor
For self-employed people subject to Universal Credit, the minimum income floor requirement will be suspended from 13 March 2020 for the duration of the outbreak.
If you think you may need financial support, you may be entitled to support from the £500 million hardship fund (via your council) although it looks like the government anticipates that most of the hardship fund will be used for council tax relief.
Mortgage Payment Holiday
If you are having trouble meeting your mortgage payments due to Covid-19, you can ask for a payment holiday for 3 months (this includes landlords whose tenants are experiencing financial difficulties due to Covid 19). You do not have to be behind with your payments in order to ask for a payment holiday.
Note that the mortgage interest is not necessarily suspended or cancelled.
Landlords will not be able to begin evicting tenants for at least 3 months.
Disclaimer
Since things are changing on a daily, if not hourly, basis, some of the above may change, be superseded or clarified in the future.
Please double-check any of the above before acting on them.
Links to Government Guidance
- Guidance to businesses and employers
- Support for those affected by the coronavirus and covid-19
- HMRC Helpline for Businesses Affected by Coronavirus
- Business Interruption Loan Scheme
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