Government Help During the Coronavirus Pandemic
The government has issued a number of measures that aim to help businesses through these difficult times. We have listed these measures below and added some practical explanations.
We understand that now is the time when we, as your financial advisers, can provide critical support – please make use of that support and note we continue to offer that support even though we have had to close the office. Remember we are suffering similar issues to you and can use that experience for your benefit.
Coronavirus Job Retention Scheme
HMRC will reimburse 80% of employee’s wage cost, up to a maximum of £2,500 per month. This relates only to employees that you retain but would otherwise have laid off. We need to wait until HMRC set up the system for re-imbursement as their current systems are not set up yet. We expect an update by 6th April 2020 as that is the start of the new tax year. However, claims can be back dated to the beginning of March 2020.
Deferring VAT and Income Tax payments
This is an automatic scheme and no UK business is required to pay VAT during the period from 20th March until 30th June 2020. Returns will still need to be completed but any liability during that period can be deferred until the end of tax year 2020/21. If you wish to defer your VAT payment, you should cancel your Direct Debit mandate.
Payments on Account for Self-Assessments that are due on 31st July 2020 are deferred to 31st January 2021, but only if you are self-employed. The government has not mentioned the PAYE and CIS tax, but we are certain that these can also be deferred if we ask HMRC. Please note, these are deferrals not cancellations.
Statutory Sick Pay relief package for SMEs
The government will pay 2 weeks’ worth of SSP per eligible employee for employers with less than 250 staff. The employer should maintain records of staff absences and payments of SSP. This system is not set-up yet and we will know more once the repayment mechanism is introduced. As per the first point, we estimate that we will know more about this by 6th April 2020.
12-month business rates holiday for all retail, hospitality and leisure businesses in England
This is automatic if your business is eligible. You will know if you qualify once the local authority in which you are based sends you a Council Tax bill. These are being issued now. If you believe that your business falls within the above sectors but the council has not applied the “holiday”, please let us know when we speak.
The Retail and Hospitality Grant Scheme
If your business qualifies, your local authority will write to you. We estimate this to be some time towards the end of April/beginning of May. There are 2 levels of grants as follows:
For businesses in these sectors with a rateable value of under £15,000, the business will receive a grant of £10,000.
For businesses in these sectors with a rateable value of between £15,001 and £51,000, the business will receive a grant of £25,000.
Support for businesses that pay little or no business rates
Your local authority will write to you if your business qualifies. We estimate this to be towards the end of April and the scheme entails a small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
Coronavirus Business Interruption Loan Scheme
This scheme commenced on Monday, 23rd March 2020 and an eligible business will be able to raise a loan from their bank at 0% interest for the first 12 months. You should contact your bank directly to discuss funding. Please bear in mind that we liaise with banks and raise finance for businesses on daily basis, so therefore we recommend you speak to one of us beforehand. Prior to the conversation, please think about the following:
- How has COVID-19 affected your business?
- How much money has your business lost and will lose? You should have a list of cancellations/postponements of contracts if you sell Business to Business. If you sell Business to Consumer you will need daily sales for last 3 months.
- How have you started to reduce the business’ costs?
- How much money you wish to raise?
We understand the importance of your business as it is yours and your family’s livelihood and we will work extended hours to help and guide you but please understand that our mobiles and e-mails will be extremely busy during this time so if we are unable to pick up the phone when you call, it is because we are helping somebody else with their business, so please bear with us and we will call back as soon as we can.
Protection from eviction for commercial tenants
Commercial tenants who cannot pay their rent because of COVID-19 will be protected from eviction.
These measures will mean no business will automatically forfeit their lease and be forced out of their premises if they miss a payment up until 30 June.
There is the option for the government to extend this period if needed.
This is not a rental holiday. All commercial tenants will still be liable for the rent. Commercial tenants are protected from eviction if they are unable to pay rent.
Updates and F A Q’s
You will appreciate that this is a constantly changing situation and please visit here for the latest news.
Please contact us on 01453 822818 or by email if you have further queries or would like to discuss any of the issues.