As Covid-19 continues to spread throughout the UK, the government is taking steps to support businesses and individuals.
Please find below details on some of the latest measures announced, which may be of significant benefit to you and your business.
Job Retention Scheme
Rishi Sunak, The Chancellor of the Exchequer, announced on Friday that the government wants to protect the jobs of all employees who are at risk of redundancy due to the impact of the Coronavirus. The scheme looks to retain employees so that they can go back to work once the economy recovers. These employees are referred to as “furloughed” and are put on a paid leave of absence rather than a permanent redundancy. These are the key details:
- Employers can claim up to 80% for each furloughed employee’s wage from the government capped at £2,500 (For annual salaries of £37,500 and above).
- Any number of employees can be furloughed and the government has announced there will be no limit to the funding.
- Employers can top-up the employees wage but are not required to – it is at their discretion.
- The money received from the government is a grant and not a loan, so is not repayable.
- This is open to all businesses of all sizes, including charitable and non-for-profit organisations.
- Any employee is defined as any worker enrolled in PAYE. The government has yet to release guidance on different types of employment, such as zero-hour workers.
What is a furloughed employee?
- As we currently understand it, furloughed employees are not allowed to do any work during their leave of absence, but we are hoping for more detailed guidance in the coming days.
- These are employees who would have lost their jobs due to the impact the coronavirus has had on their availability of work.
- A furloughed employee could be a staff member you have recently made redundant due to the coronavirus, you could bring them back to employment to protect their job.
What period does this cover?
- You can claim this grant from 1 March 2020.
- It is currently being rolled out for three months, but this may be extended.
How to claim
- HMRC are in the process of creating a new portal for this grant, they hope to have this ready before the end of April.
Businesses in the retail, leisure and hospitality sector are to be given 100 % Business Rate relief for the period 1 April 2020 – 31 March 2021. It is up to the relevant local authorities to deem exactly which businesses it believes fall into this category, however guidance suggests this is applicable to businesses such as pubs, clubs, cinemas, restaurants, museums, music venues, art galleries, theatres, small hotels, guest houses, B&Bs and sport clubs, as well as other sectors.
All VAT registered businesses do not need to pay their VAT bills falling between 20 March 2020 and 30 June 2020 until the end of the business’ tax year (no sooner than the 31st March 2021).
Statutory Sick Pay (SSP) reimbursements for Small and Medium businesses
If an employee is self-isolating due to suspected/confirmed coronavirus infection, an employer can now claim back the full SSP from the 1st day of the absence. SSP is now payable from day one and this overwrites the normal SSP rules of 3 days unpaid.
This reimbursement is only available where absence started on or after 13 March and is for a maximum of two weeks per employee.
Using Time to Pay arrangements
Businesses have always been able to apply for this scheme, whereby a payment schedule is agreed with HMRC to allow businesses to pay their current tax bills over a longer period, protecting their cash flow and allowing businesses to continue to trade.
This can be used for any tax but is primarily used for Corporation and income tax. The payment settlement terms are normally between 3 and 12 months.
Please note HMRC have confirmed they should be the lender of last resort and may ask for proof the business has tried to raise funds elsewhere.
There are multiple loans and grants being put in place for businesses. The amount of money available for each business depends on its size and industry. Here is a summary of facilities available:
- Businesses with low or no business rates could be eligible for a one-off grant of £10,000. If you are eligible for this grant your local authority should be in touch to provide you information on how to claim this money.
- Businesses in the retail, hospitality and leisure industry could be entitled to a grant of £25,000, providing the rateable value of their business premises is between £15,000 and £51,000.
- Small and medium size businesses could be entitled to support and guarantees from the government to reduce their credit risk on loans from banks and therefore ensure loans are provided. The government will also cover the interest payments for 12 months and therefore create an interest free period for the business.
More information on this can be found on the government website https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses in addition to HMRC’s dedicated telephone helpline on 0800 0159 559.
Measures to help the self-employed
The government is removing the minimum income floor for universal credit, which means the self-employed are fully entitled to a rate equivalent to statutory sick pay for employees, which is currently set at £94.25.
This does not appear to be as generous as the measures in place for employees, however we expect the government to announce further assistance this week.
Deferral of the July payment on account
The government have suspended the July payment on account and the full tax due for the tax year ended 5 April 2020 will now be due on 31 January 2021. This is a 6-month delay and could be a considerable cash injection for many self-employed individuals.
Universal & Working Tax Credit
Both allowances will be increased by £1,000 over the next 12 months.
To understand how these changes are likely to impact you personally, please do contact us. We would be delighted to provide more in-depth guidance and support. Call 01823 218550 or email firstname.lastname@example.org and we will respond to you as soon as possible.