The Coronavirus story is fast-moving. Here, we summarise the key initiatives that have been announced and provide links to the relevant sites where you can obtain the very latest information. If your specific query remains unanswered, please get in touch with your Harwood Hutton contact and we will do all we can to help.
CORONAVIRUS JOB RETENTION SCHEME
Through 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 the crisis. HMRC will reimburse 80% of designated furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are currently working on a system for notification and reimbursement. To qualify for the scheme, the employee must be designated as ‘furloughed’ and should not undertake work for the employer during this period. The employee will remain employed while furloughed. Employers can choose to fund the differences between this payment and their salary but it is not compulsory. The scheme will initially run for three months from 1 March 2020.
THE CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME
The Coronavirus Business Interruption Loan Scheme offers loans of up to £5 million through the British Business Bank. The scheme is being offered to support primarily SMEs to access bank lending and overdrafts. The Government will provide lenders with a guarantee of 80% on each loan and will cover the first 12 months of interest on behalf of the business. The full rules of the scheme and the list of accredited lenders is available on the British Business Bank website. All the major banks will offer the Scheme once it has launched.
Tom Gooder, our head of business development and former HSBC relationship manager reports: “I’m talking to the main High Street banks on a daily basis and am requesting updates as soon as they are available. This is a very fast-moving situation with many variables from the lenders’ perspective in terms of physically delivering the funds, so I am hopeful the process has been as streamline as possible for fast easy access and decision-making to support businesses.
“I am advised that the banks are expecting sound proposals from viable clients and that consideration has been given to all possible support available, as well as any support that the business owners/directors are providing and also what can be done to manage costs. Due to the expected volume of requests the banks are going to see, it is important clients get this right and it is positioned with the best chance of approval at the outset, as lengthy delays could occur. There are other finance providers in the market who can assist in my network and I would like to help in any way I can, so please do contact me if you need help.”
VAT PAYMENT DEFERRAL
All UK businesses are entitled to defer any VAT payments that would otherwise be falling due between 20 March and 30 June 2020, meaning you will not need to make a VAT payment during this period. This is an automatic offer with no applications required. Taxpayers will be given until 5 April 2021 to pay any liabilities that have accumulated during the deferral period. VAT refunds are not affected by this measure and liabilities falling outside of this window are due as normal. For specific VAT queries, contact our Head of VAT Michael Ashdown
INCOME TAX DEFERRAL
For Income Tax Self-Assessment, payments falling due on 31 July 2020 will be deferred until 31 January 2021.This is an automatic offer with no applications required and no penalties or interest for late payment will be charged in the deferral period. This will mean your payment on 31 January 2021 will be larger.
HMRC TIME TO PAY SCHEME
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, can speak to HMRC about time to pay. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. However, HMRC will clearly be more sympathetic at present. 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.
STATUTORY SICK PAY RELIEF PACKAGE FOR SMEs
Legislation will be brought forward to allow SMEs and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to Covid-19 and will cover up to two weeks’ SSP per eligible employee who has been off work because of Covid-19. A rebate scheme is being developed. Further details will be provided once the legislation has passed.
12-MONTH BUSINESS RATES HOLIDAY FOR RETAIL, HOSPITALITY AND LEISURE BUSINESSES
This is for all retail, hospitality and leisure businesses in England for the 2020/21 tax year. It will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. This will be done as soon as possible.
THE RETAIL, HOSPITALITY AND LEISURE GRANT SCHEME
This provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property. The amount of the grant will depend on the rateable value of the property and will be either £10,000 or £25,000. You do not need to do anything. Your local authority will write to you if you are eligible for this grant.
SMALL BUSINESS GRANT FUNDING
Grant funding of £10,000 will be available for all business in receipt of small business rate relief or rural rate relief. The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs. You do not need to do anything. Your local authority will write to you if you are eligible for this grant.
CORONAVIRUS CORPORATE FUNDING FACILITY
A new lending facility from the Bank of England will help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans. Under the new Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies to support companies affected by a short-term funding squeeze and allow you to finance your short-term liabilities. Information on how to access the scheme will be published shortly.
The exact processes and timings of some of the above are still not entirely clear and patience will be required for the moment. However, if you have any questions please do not hesitate to contact us. As further significant developments arise, we will let you know.
GENERAL INFORMATION ABOUT CORONAVIRUS
GENERAL GUIDANCE FOR EMPLOYEES, EMPLOYERS AND BUSINESSES
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