GUIDANCE FOR OUR CLIENTS - CORONAVIRUS (COVID-19)
Coronavirus Job Retention Scheme
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. To qualify for this scheme, the employee should not undertake work for you while they are furloughed.How to access the scheme
- 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)
- The scheme is not yet ready and should be fully in place by end of April. HMRC are working urgently to set up a system for reimbursement. We’ll publish more details as these become available.
Furloughed workers
If the employer intends to access the Coronavirus Job Retention Scheme, they will discuss with the employee about becoming classified as a furloughed worker. This would mean that they are kept on the employer’s payroll, rather than being laid off.
To qualify for this scheme, employee should not undertake work for them while they are furloughed. This will allow the employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month.
Employee will remain employed while furloughed. The employer could choose to fund the differences between this payment and their salary, but does not have to.
The Government intend for the Coronavirus Job Retention Scheme to run for at least 3 months from 1 March 2020, but will extend if necessary.
Deferral of VAT payments
The deferral will apply from 20 March 2020 until 30 June 2020 and businesses will not need to make a VAT payment during this period. They will have until 5th April 2021 to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.This is an automatic offer with no applications required. Businesses will still need to file their VAT returns within the usual deadlines.
Income Tax
For 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.
Statutory Sick Pay (SSP) Relief
- employers with < 250 employees will be able to reclaim expenditure for up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
- employee can get £94.25 per week SSP, and is to be paid from day 1, rather than day 4 of absence
- 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
How to access the scheme
A rebate scheme is being developed. Further details will be provided in due course once the legalisation has passed.Self-employed not able to work
If you are not eligible for SSP – for example if you are self-employed or earning below the Lower Earnings Limit of £118 per week – and you have COVID-19 or are advised to self-isolate, you can now more easily make a claim for Universal Credit (UC) or new style Employment and Support Allowance. For more information on how to claim, please visit https://www.gov.uk/universal-credit and https://www.gov.uk/guidance/new-style-employment-and-support-allowance.The requirements of the Minimum Income Floor for Universal Credit will be temporarily relaxed. This change took effect on 13 March and will last for the duration of the outbreak, to ensure that self-employed UC claimants will receive support.
£10,000 Grant - Support for businesses that pay little or no business rates
You are eligible if:
- you are a business that occupies property and based in England
- you are a small business and already receive Small Business Rates Relief and /or Rural Rate Relief
You do not need to do anything. Your local authority will write to you if you are eligible for this grant. Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.
£25,000 Grant - For retail, hospitality and leisure businesses
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. Also a Business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.You are eligible for the grant if your business is based in England and in the retail, hospitality and/or leisure sector.
Eligibility
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
Time to Pay service
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.You must apply to obtain time to pay. Do not miss a payment unless approved in advance.
These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and 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.
Coronavirus Business Interruption Loan Scheme
The new Coronavirus Business Interruption Loan Scheme supports SMEs with access to working capital (including loans, overdrafts, invoice finance and asset finance) of up to £5 million in value and for up to 6 years.The government will pay to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will not face any upfront costs and will benefit from lower initial repayments.
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.
This scheme is being delivered through commercial lenders, backed by the British Business Bank.
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
How to access the scheme
The scheme is now open for applications. To apply, you should talk to your bank or one of the 40 accredited finance providers (not the British Business Bank) as soon as possible, to discuss your business plan. You can find out the latest on the best ways to contact them via their websites.
All major banks are offering this scheme. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.
The full rules of the scheme and the list of accredited lenders are available on the British Business Bank website.
Insurance
Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim as long as all other terms and conditions are met.
Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.
For further guidance please see the following links:
