We hope this post finds you well during these extremely trying times.
The Chancellor has set out a package of temporary, timely and targeted measures to support public services, people and businesses through this period of disruption caused by COVID-19. We have collated these for your information. Read on for the detail of these announcements, including our recommendations on the key areas you could address.
The package of measures to support businesses are as follows:
CORONAVIRUS JOB RETENTION SCHEME
Under the 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. HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month for each employee. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers and they expect this to be available in April 2020 – no fixed date has yet been announced.
In order to prepare for this, please follow the below instructions so that you are ready to submit this information to HMRC.
- 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).
As this system has not yet been deployed, businesses will have to continue to pay employees, furloughed or not, as normal and wait for further updates.
Please note that if employees continue to work, the job retention scheme will not apply.
Please note that the government have issued advice to state that those whom have purchased pandemic and government closure insurance policies, will be able to make a claim. However, please note that most businesses have not purchased insurance that
covers pandemic related losses. As such, any affected businesses should note the government’s full package of support, including the Coronavirus Business Interruption Loan Scheme and business rates holiday mentioned below.
THE CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME OFFERING LOANS OF UP TO £5 MILLION FOR SMES THROUGH THE BRITISH BUSINESS BANK
The government will provide lenders with a guarantee of 80% on each loan 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.
A STATUTORY SICK PAY RELIEF PACKAGE FOR SMES
New legislation to allow small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:
- 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 (including directors) who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
A 12-MONTH BUSINESS RATES HOLIDAY FOR ALL RETAIL, HOSPITALITY, LEISURE AND NURSERY BUSINESSES IN ENGLAND – This includes cash grants of £10K & £25K.
- No rates payable for the 2020-2021 tax year for any shops, nurseries, restaurants, cafes, drinking establishments, cinemas and live music venues or for assembly and leisure
Properties that will further benefit from a cash grant 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
if your rateable value is between £15,000 and £51,000, you’ll also receive a cash grant of up to £25,000 per property.
Any business which gets small business rates relief, including those in the retail, hospitality or leisure sectors, will receive a cash grant of £10,000
The rates holiday and cash grants will be administered by local authorities and should be delivered automatically, without businesses needing to claim.
The next quarter of VAT payments will be deferred, meaning businesses will not need to make VAT payments until the end of June 2020. Businesses will then have until the end of the 2020-2021 tax year to settle any liabilities that have accumulated during the deferral period.
The deferral applies automatically, and businesses do not need to apply for it. VAT refunds and reclaims will be paid by the government as normal.
INCOME TAX PAYMENTS
Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
Income Tax Self-Assessment payments due on the 31 July 2020 will be deferred until the 31 January 2021. 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 – see below.
THE HMRC TIME TO PAY SCHEME
HM Revenue & Customs (HMRC) has established a “time to pay” (TTP) service available for businesses and self-employed people in financial distress, to work with the taxpayers to deferred payments of tax (including corporation tax, value added tax (VAT) and pay-as-you-earn (PAYE)). TTP arrangements are agreed to on a case-by-case basis. Considering current circumstances, the TTP scheme has been scaled up and HMRC set up a dedicated COVID-19 helpline for advice and support on this.
If you think you or your business is eligible for support through Time to Pay, you can call the following helpline number to get practical help and advice: 0800 0159 559. For more information, please follow this link: https://www.gov.uk/government/news/tax-helpline-to-support-businesses-affected-by-coronavirus-covid-19
THE PLANNED IR35 CHANGES HAVE BEEN POSTPONED UNTIL APRIL 2021.
If you own a pub that serves food or a restaurant in England, you will be able to operate a hot food takeaway to serve people staying at home, without going through the usual planning process:
- The Ministry for Housing, Communities and Local Government (MHCLG) will shortly legislate to bring forward a temporary Permitted Development Right to allow for change of use from A3 (Restaurant) and A4 (Pub) to A5 (Hot Food Takeaway).
- The intention is that once the legislation has come into force a pub or restaurant will be able to notify their Local Authority that they are now operating as a takeaway without any prior approval.
Now more than ever, we wish you the best over the coming months. We are here every step of the way and are happy to assist in way which we can.