The Government has proposed a number of ways in which it seeks to assist businesses in relation to the ongoing COVID-19 pandemic, this includes:
Rishi Sunak has also highlighted that the Government understands the situation which many self-employed people are facing and has said that they are determined to find a way to support them. A further announcement is expected on this today.
Full details on these measures can be found at Government Business Support website, below we summarise some of the key points.
Coronavirus Job Retention Scheme (CJRS)
Under the CJRS, all UK employers will be able to access support to continue paying part of their employees’ salaries for those employees that would otherwise have been laid off during this crisis. Employers can contact HMRC for a grant to cover 80% of furloughed workers wage costs, up to a cap of £2,500 per month. Employers can join the scheme without needing to pay the remaining salary, although they may choose to do so on a voluntary basis.
Any employer in the UK, including charitable organisations and not for profit organisations, will be eligible to apply to the CJRS.
The CJRS will be backdated until 1st March 2020 and will be available for at least three months, but could be extended if necessary. The Government has also advised that further details will be provided as to how to apply for CJRS, but have stated that the first grants will be paid within a matter of weeks and by the end of April 2020.
As the reimbursement scheme is not yet active, employers may be struggling with cash flow and unable to pay. If employers need extra short term cash flow support, they have been advised that they may be eligible for a Coronavirus Business Interruption Loan.
Statutory Sick Pay Relief Packages
The Government has brought forward legislation to allow small and medium sized businesses and employers to reclaim statutory sick pay (SSP) paid for absence due to COVID-19. The refund will cover up to 2 weeks’ SSP per eligible employee. Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note.
Business Rates and Grants
The Government has introduced a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year. This will apply to the next council tax bill in April 2020.
In addition, the Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant. Businesses in these sectors with a property that has a rateable value of £15,000 and under will receive a grant of £10,000. Those that have a rateable value of between £15,000 and £51,000 will receive a grant of £25,000. Your local authority will write to you if you are eligible for this grant.
The Coronavirus Business Interruption Loan Scheme (CBILS)
CBILS is now available through participating lenders and allows small and medium sized businesses (SMEs) to borrow up to £5 million if they are experiencing lost or deferred revenues, leading to disruptions to their cashflow. The Government will provide lenders with a guarantee of 80% on each loan in order to give lenders further confidence to continue to provide finance to SMEs. The Government will cover interest payments for the first 12 months, but capital repayments will still have to be made.
To be eligible under the CBILS the applicant must be UK based in its business activities, with an annual turnover of no more that £45 million. Full eligibility criteria is expected from the Government shortly.
CBILS is available through the British Business Bank‘s 40+ accredited lenders. However, in the first instance, businesses should approach their own provider. We will see over the coming weeks how this will be implemented, it should also be noted that there are alternative options as the lending panel authorised to operate CBILS includes various challenger banks and asset-based lenders.
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.
If you are concerned about a missed payment, or if you won’t be able to make future payments due to COVID-19, please call HMRC’s dedicated helpline (0800 0159 559).
Companies House Filing Extension
It has been announced that from the 25 March 2020, businesses will be able to apply for a 3-month extension for filing their accounts to help companies avoid penalties as they deal with the impact of COVID-19. This joint initiative between the government and Companies House will mean businesses can prioritise managing the impact of Coronavirus.
VAT Deferral
Businesses planning to use the three-month VAT deferral need to cancel their direct debits immediately. The VAT deferral applies from 20 March 2020 until 30 June 2020. Taxpayers will be given until the end of the 2020-21 tax year to pay any liabilities that have accumulated during the deferral period. This is an automatic offer and no applications have to be made.
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