COVID-19 – Coronavirus - HMRC’s Business Support
Here is a quick summary of the measures set out by the Chancellor to date in the Government’s attempt at helping businesses and employees to survive financially in this current crisis. More informationa and guiidance is emerging daily so we will update the information below regularly.
We are here to support you and your business, never more so than now. To access HMRC's up to date guidance go to https://www.gov.uk/coronavirus/business-support
This page was updated 5.2.21.
1. Job Retention Scheme
• All UK businesses are eligible for the Scheme.
• All UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis.
• HMRC will reimburse 80% of the salaries of “furloughed” workers wage costs, up to a cap of £2,500 per month. £2,500 will be the gross amount and that tax and National Insurance will still be payable.
• The scheme will cover the cost of wages up until 31st March 2020 -the scheme will carry on until at least April 2021.
• Employers must set out which of their employees are “furloughed workers” and inform the particular employees.
• By changing the employee(s)’s status to “furloughed workers”, the employer is changing their employment status and remains subject to existing employment law, and depending on the employment contract, may be subject to negotiation.
• In simple terms, the employees are still on the payroll and in employment for the furloughed period
• They will resume their previous status after the “furloughed” period.
• If you need further advice on amending employment contracts and making agreements with staff, please contact your solicitor. Alternatively, we will be able to refer you to one of our trusted affiliates with expertise in employment law/human resources.
• HMRC launched an online portal for reimbursement on 20th April 2020 and businesses are receiving funds within 6 days of making a claim.
• If you have insufficient cash to pay your employees in the meantime, you may be eligible for a Corona Virus Business Interruption Loan – please refer to section 8.
• For directors of close companies, who typically take a monthly salary and draw dividends during the year 80% of the salary which goes through PAYE can be claimed.
• It is noted that if an employee is fully furloughed, they can’t do any work for the same employer. However the scheme now is fully flexible so the employer must pay full rate for any hours worked and can claim 80% for hours not worked .
2. Deferring VAT and Income Tax payments
• Deferral for the payment of VAT will apply from 20 March 2020 to 30 June 2020.
Your VAT payments due between 20 March and 30 June 2020 are deferred until 31 March 2021. To pay this VAT, you can:
• Pay in full on or before 31 March 2021. If you can pay in full before 31 March 2021, please do. You’ll find everything you need online, go to GOV.UK and search 'paying VAT'. Choose 'pay your VAT bill' and follow the instructions – please make sure you use the right reference.
•Opt in to a new scheme that allows you to pay in instalments, until January 2022. The new scheme will allow you to pay your deferred VAT in up to 11 regular monthly instalments, interest free, beginning in March 2021. The scheme is not available to use yet, but you can find more about how it works, and get ready to use it, by going to GOV.UK and searching 'deferred VAT'.
3. Statutory Sick Pay Relief Package for small and medium sized businesses (SMEs)
• Employers will be able to claim for statutory sick pay (SSP) paid for sickness absence due to COVID-19.
• Employees do not need a letter from the GP.
• Applies to all UK employers with fewer than 250 employees as at 28 February 2020;
• HMRC are working on their system (an online portal) for employers to enact this reclaim. It is not yet available.
• If you are a director of a limited company, you can pay yourself two weeks of SSP if you need to self-isolate subject to meeting the minimum payroll requirements for SSP.
• The government will refund £95.95 per week, maximum 2 weeks, to your company.
• SSP due to COVID-19 to be paid up to two weeks (14 days).
• If you are a director of a closed company, you can sign off yourself for two weeks self-isolation and can claim SSP at £95.85 a week.
• HMRC has developed a portal or agents can claim via their HMRC accounts.
4. There will be a 12 month business rates holiday for all businesses, in England, in the following industries; Retail, hospitality, leisure and nursery providers. This will commence 1 April 2020 and will cover the 2020-2021 tax year.
• Your business is based in England.
• Your business is in retail, hospitality and/or leisure sector, nursery provision
Properties that will benefit from the relief will be occupied properties 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 & boarding premises and self-catering accommodation
• Providers of Ofsted’s Early Years Register and mainly used for the provision of Early Years Foundation Stage
You do not need to do anything. The local authorities will apply relief to your next council tax bill if your business is eligible.
5. The Corona Virus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through British Business Bank
• If your business has a shortage of cash, you may want to look at the Coronavirus Business Interruption Loan Scheme for loans up to £million and for up to 6 years.
• The government will cover the first 12 months of interest payments and any lender-levied fees so smaller businesses will benefit from no upfront costs and lower initial payments.
• Whilst all borrowing should be carefully considered, this is an option if you have a short term cash flow issue whilst waiting to reimbursement for payments to furloughed employees under the Job Retention Scheme.
• To be eligible, your business needs to be UK based with turnover under £45 million and meet the other British Business Bank eligibility criteria. Link below:
• Please note that to be eligible for the loan, the business still need to satisfy the lender’s requirements. The lender will need to be satisfied that, were it not for COVID-19, the borrowing proposals would be considered viable by the lender, and they believe that by providing your company the finance will enable your business to trade out of any short-to-medium term difficulty.
• We can help with providing any financial information for your business as required by the lender(s).
• Most of the mainstream banks are in the lender list and you can consider going to your bank for an initial conversation about the possibility of a loan under the Corona Virus Interruption Scheme.
• This scheme was extended on 27th April with the announcement of ‘bounceback’ loans of up to £50k 100% backed by the government and from 9th November there is the option to take out any element of an available bounceback loan not previously applied for.
• These bounceback loans can be up to £50k or 25% of turnover, which ever is higher.
• Please get in touch if you need anything from us in support of your loan application.
6. The HMRC Time To Pay Scheme
All businesses and self-employed people in financial distress and with outstanding tax liabilities may be able to get support through HMRC’s Time To Pay service.
Please contact HMRC’s dedicated helpline on 0800 0159 559 HMRC will consider on case-by-case basis .
HMRC updated their guidance on the Self-employed income support grant on 4 May. The link to the guidance and the eligibility checker are here
There are now 4 grants in total (applications for the first 2 grants have closed) and the third grant will be available from 30th November for up to 80% of quarterly profits. Details of the 4th grant are yet to be confirmed.
We strongly suggest that you bookmark this as it is updated regularly and also has a further link which takes you to the claims system.
Please read the Guidance from HMRC as there is some very important information in there. There are a few particular points that have prompted us to get in touch, and to which we wanted to draw your attention now;
• The scheme will be open for the third online claim from 30th November/
• Funds will then be made available within 6 days of the date of the claim
• HMRC have confirmed that Accountants and tax agents will NOT be able to complete claims on behalf of individuals, and we understand that this may be of concern to some of our clients.
• The claims process has been designed to be relatively simple. The only information you will require to make the claim is your UTR and National Insurance number (both of which can be found on the front of your Tax Return) and bank details. We expect you will be asked to confirm that your income has been impacted by Coronavirus.
• You will need to have your own Government Gateway account set up in order to make a claim, which you won’t necessarily have if we complete Tax Returns for you.
• There is an eligibility tool within the updated guidance, and you should be able to check your eligibility for the grant and set up your Gateway Account at the same time.
For those of you who have set up an account recently, for example to claim Universal Credit, we think that you will be able to make the claim for your income support grant using the same account.
• We would also remind you that the grant will be counted as taxable income so you should record it in your trading income records in the usual way.
8. Other information
• Companies will be given an additional 3 months to file accounts with Companies House to help companies avoid penalties as they deal with the impact of COVID-19.
• Companies do not need to make an application to Companies House. This has been automatically applied. However, Corporation Tax is still payable by the original date.
• The previously announced Job Retention Bonus has been cancelled with the extension of the Furlough Scheme.
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