24 March 2020 at 12:30

Dear Clients

Summary of key UK Government package of measures to support businesses

We are receiving a significant number of enquiries about the support available for small businesses, their employees and the self-employed.

We hope the following summary will provide you with a no-nonsense guide to the current support available.

The situation is evolving daily and so please do follow us on Instagram and Facebook media platforms as we will add to the below summary as detail is provided to us by government.

 

Coronavirus Job Retention Scheme

All UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. All UK businesses are eligible.

You will need to:

  • Designate affected employees as ‘furloughed workers,’ and notify your employees of this change -changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

At this stage the HMRC Furlough Portal does not exist. We do not have a timescale for go-live.

The following may be a useful template to allow you inform workers of their designation to furloughed status:

The template will need to be adapted accordingly. The employer does not have to pay the remaining 20% according to the government advice for employees. Workers cannot undertake work while they are furloughed. The scheme is currently available for 3 months from 1 March 2020 and will be reviewed towards the end of this period. Employees already laid off prior to the announcement of the scheme can be brought back as long as they were in employment at the end of February 2020. For those on zero hours contracts or fluctuating pay then the calculation may be based on the last 12 weeks worked.

Deferring VAT and Income Tax payments

VAT

  • The deferral will apply from 20 March 2020 until 30 June 2020.
  • All UK businesses are eligible.
  • This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 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.

Income Tax

  • For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.
  • If you are self-employed you are eligible. This is an automatic offer with no applications required.
  • No penalties or interest for late payment will be charged in the deferral period.
  • HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.

A Statutory Sick Pay relief package for SMEs

Applies to small-and medium-sized businesses and employers:

  • This refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
  • 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 of 28 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. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website
  • Eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force
  • The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.

A 12-month business rates holiday for all retail, hospitality and leisure businesses in England

The Government is introducing a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.

Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible. You do not need to take any action this will be done by your Local Authority.

You are eligible for the business rates holiday if:

  • your business is based in England
  • your business is in the retail, hospitality and/or leisure sector
  • Properties that will benefit from the relief will be occupied hereditaments 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

Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief

The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

You are eligible if:

  • your business is based in England
  • you are a small business and already receive SBBR and/or RRR
  • you are a business that occupies property

How to access the scheme:

You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000

The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property. For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000. For businesses in these sectors with a rateable value of between £15,001 and £51,000, they will receive a grant of £25,000.

You are eligible for the grant if:

  • your business is based in England
  • your business is in the retail, hospitality and/or leisure sector

Properties that will benefit from the relief will be occupied hereditaments 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

Accessing the scheme:

You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

The Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank

A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch this week to support primarily small and medium-sized businesses to access bank lending and overdrafts.

The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) 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, as government will cover the first 12 months of interest payments.

You are eligible for the scheme if:

  • your business is UK based, with turnover of no more than £45 million per year
  • your business meets the other British Business Bank eligibility criteria

Repayment terms of up to 6 years. At the discretion of the lender, the scheme may be used for unsecured lending for facilities of £250,000 and under. For facilities above £250,000, the lender must establish a lack or absence of security prior to businesses using CBILS. If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so. We are awaiting further details on this scheme.

 

Businesses should approach their own provider –typically via the lender’s website.

  • Telephone lines are likely to be busy and branches may have limited capacity to handle enquires due to social distancing
  • Consider the urgency of your need –it is possible that some businesses may be looking for regular longer-term finance rather than ‘emergency’ finance, and there may other businesses with a more urgent need to speak with a lender.
  • FAQ’S: https://www.british-business-bank.co.uk/wp-content/uploads/2020/03/British-Business-Bank-CBILS-FAQs-for-SMEs-FINAL.pdf
  • Loans –summary: KNOWYOURMONEYWebsite.
  • Application –“usual” 3 years accounts and accountants statement of “Support and Resilience” –AND personal Guarantees (in some circumstances)
  • Some banks have updated their web site some haven’t!

HMRC Time To Pay Scheme

All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time to Pay service.

These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. You are eligible if your business pays tax to the UK government and has outstanding tax liabilities.

If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559. If you’re worried about a future payment, please call them nearer the time.

What next?

We will provide further guidance in due course on actions that you may wish to take next. It is important that you start planning and we are here to help you through this period. We will be following up shortly with our Small Business Action Plan.

 

Keep well and stay safe

Blow Abbott Team