In response to the pandemic of Covid-19 and the unprecedented difficulties impacting businesses, the Chancellor announced new measures to provide support during the Spring Budget 2020. The support package includes £330 billion in loans, £20 billion in other aid, a business rates holiday and grants for retailers and pubs. The different types of financial support are intended to only be in place temporarily and are so newly introduced that mechanisms have not yet been put in place to allow for businesses to access them. We will keep you updated with more details as soon as we can. The below sections outline the different types of support that the government have proposed.

Self-employment Income Support Scheme (NEW)

The newest scheme announced on 26 March 2020 aims at supporting a majority of the self-employed in the UK. The Chancellor has offered a similar package to Coronavirus Job Retention Scheme (below) whereby up to 80% of a self-employed person’s profits can be claimed, up to a maximum of £2,500 per month for an initial three months.

– Eligibility:

  • You are self-employed or a member of a partnership
  • You have been trading in the tax year 2019/20 and intend to continue doing so for the tax year 2020/21
  • Your trading profits must not exceed £50,000
  • Complete eligibility guidance criteria can be found here

–  Requirements:

  • You have submitted your self-assessment tax return for the tax year 2018/19
  • If you have not done so yet, you have until the 23 April 2020 to file

– How to access:
You are unable to apply for this grant until HMRC have contacted you to invite you to do so. They are currently assessing all those who are eligible through the 2018/19 personal tax returns and will be in touch directly if you are entitled to receive this grant. Payments are expected to start from early June.

Coronavirus Job Retention Scheme (UPDATED)

To protect as many people as possible who are at risk of being made redundant, the government are offering to support all UK employers with a PAYE scheme by offering to provide 80% of employees’ wages, up to £2,500 per month per employee. The Coronavirus Job Retention Scheme will cover the cost of wages backdated to March 1st and is initially open for 3 months, but will be extended if necessary.

– Eligibility:

  • All UK-wide employers with a PAYE scheme will be eligible including the public sector, Local Authorities and charities.

– Requirements:

  • You will need to identify and designate affected employees as ‘furloughed workers’
  • These employees need to be notified that their work status has been changed to ‘furloughed worker’, and this change must comply with existing employment law

– How to access:
HMRC are currently developing a portal in order to implement this new measure – It is not yet available but expected to be ready by the end of April. Once the portal is live, HMRC will give further details on the information that needs to be submitted.

Statutory Sick Pay relief for SMEs

Small and medium sized businesses will be able to claim back 2 weeks’ worth of Statutory Sick Pay (SSP) to each employee who has been off sick due to coronavirus.

– Eligibility:

  • Small and medium sized businesses are defined by those with fewer than 250 employees.
  • The business must be based in the UK.

– Requirements:

  • The employee must be eligible to receive SSP (i.e. have an employment contract, given correct notice, earn an average of at least £118 per week etc)
  • Employers are expected to keep records of sickness and payments of SSP, but the employees are not required to provide a GP note

– How to access:
A rebate scheme is currently being created and not yet available. Further details will be provided once legislation has passed.

Business Rates Holiday

Some of the most adversely affected businesses will receive a business rates holiday meaning they will not need to pay business rates for the 2020/21 tax year.

– Eligibility:

  • The business must be based in the UK.
  • The business is in the retail, hospitality and/or leisure sector. These include shops, restaurants, cafes, drinking establishments, cinemas and live music venues. It will apply to venues for assembly and leisure such as gyms. It will also include hotels, guest and boarding premises, and self-catering accommodation

– Requirements:

  • Originally this relief was only offered to eligible businesses with a rateable value of less than £51,000 but this has now been extended to cover businesses of any rateable value.

– How to access:
No action needs to be taken by the business owner as it will apply to the next council tax bill in April 2020.

Cash Grants

£25,000 in grants will be available for some small businesses.

– Eligibility:

  • The business is in the retail, hospitality and/or leisure sector.
  • The business is operating from a small premises, with rateable value between £15,000 and £51,000.

– How to access:
Enquiries and applications for grants should be directed to your relevant local authority. However, at this point in time due to the very recent introduction, you may find that your local authority has little information. The government have said that funding for the scheme will be passed to local authorities in April and so we advise that you contact them then.

£10,000 in grants will be offered to support the smallest business who pays little or no business rates.

– Eligibility:

  • Available to businesses that already pay little or no business rates because of small business rate relief (SBRR).
  • Will also apply to businesses who receive rural rate relief

– How to access:
If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority. You do not need to apply.

Interruption Loan Scheme

With the help of the government, the British Business Bank is launching a new but temporary Coronavirus Business Interruption Loan Scheme that will enable small and medium sized businesses to access bank lending and overdrafts. The government are providing lenders with a guarantee of 80% of each loan and will not charge businesses or banks for the guarantee. The scheme will support loans of up to £5 million in value and businesses can access the first 6 months of finance interest free which will be covered by the government.

– Eligibility:

  • The business must be based in the UK.
  • Turnover must be under £41 million per annum
  • The business meets other British Business Bank eligibility criteria.

– How to access:
First, check to see the rules of the scheme and the accredited lenders available which can be found here. Second, talk to one of the accredited providers as soon as possible to discuss your business plan and the best course of action for financing. If you have an existing loan, you may want to ask for a repayment holiday to ease cash flow pressures. Note that the scheme will be available from week commencing 23rd March 2020 so we would advise that you make an arrangement to speak to a provider soon.

Time to Pay Service

This is not a new initiative. All businesses and self-employed people who are struggling to settle their outstanding tax liabilities may request support through HMRC’s Time to Pay service. Arrangements are agreed on a case-by-case basis and tailored to individual circumstances and liabilities. HMRC now have a dedicated Coronavirus helpline. Details of Time to Pay and the coronavirus helpline can be found here.

Companies House allowing filing extensions

A maximum of a three-month extension is being granted for those who are unable to file their accounts, reports and confirmation statements on time due to coronavirus.

– Eligibility:

  • You must apply for the extension BEFORE your filing deadline

– Requirements:

  • An automatic two month extension will be granted to those who apply for an extension due to coronavirus; however, if more time is needed in excess of this then you need to make a further request which will be considered on a case-by-case basis.

– How to access:
Follow the instructions found here.

VAT Deferral

VAT payments have been postponed by 3 months. Taxpayers will be given until the end of the 2020-21 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.

– Eligibility:

  • You must be a VAT-registered UK business

– Requirement:

  • You are still required to file your VAT accounts by the usual deadlines.

– How to access:
This has been applied automatically and no action is required by you. The deferral applies from 20 March 2020 until 30 June 2020.

Income Tax Deferral for the Self-Employed

For those who are self-employed and are expected to make a tax payment by July 2020, this has now been deferred until January 2021.

– Eligibility

  • Anyone who has registered as self-employed

– How to access:
This will be implemented automatically.

 

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