How the Coronavirus affects your business
Due to the ongoing concerns with businesses regarding the coronavirus we have tried to summarise the key points that have been discussed by the Government in regards to COVID 19 and how this may affect your business:
Job Retention Scheme
Initially you will need to consider which of your staff members are affected and review their contracts. The employment law still remains in place and any changes to their contract is subject to negotiation and must be agreed by both parties.
If you believe any staff are unable to work and you would have to consider to have been furloughed then HMRC are creating a new portal to submit these employees details and subsequently, receive 80% of the workers wage costs up to £2,500 per employee per month.
As of yet HMRC have not designed this software but anticipate this to be completed as soon as possible.
If you are struggling in the interim period then please see below for further options that you could be eligible for.
Business interruption loan
A business interruption loan is to be implemented from 23 March which is currently looking at small and medium businesses.
The lending facility will be available through bank lending and overdrafts, and the Government will be providing an 80% guarantee to give lenders further confidence to provide support.
The Government will not charge businesses nor banks for this guarantee, and the scheme will support loans of up to £5 million in value.
As well as this, businesses can access the first 12 months of this finance interest free, as the Government will cover the first 12 months of interest payments.
In order to be eligible you must have a UK based business with a turnover of no more than £45 million per year and your business must meet the other British Business Bank eligibility criteria.
For further information on this please follow this link https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/
Deferring VAT and income payments
Income tax payments that would have been due by July 2020 will now be deferred to 31 January 2021 with no interest or penalties. This is an automatic offer with no applications required and individuals can pay any self-assessment payments between now and 31 January 2021. Please note that there will still be your usual tax payment on 31 January 2021.
The VAT deferral applies between 20 March and 30 June 2020. Again, this is an automatic deferral and businesses will have until the end of 2020 to 2021 to make all the payments due with no interest.
SSP
The Government will bring forward 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 who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
- 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 onlineand those who live with someone that has symptoms can get a note from the NHS website
- eligible period for the scheme will commence the day after the regulations on the extension of SSP for those staying at home comes into force
- the Government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible
Business rates for retail, hospitality and leisure businesses
A business rates holiday will apply for the tax year 2020 to 2021 for the retail, hospitality and leisure businesses. This will apply to all who have any of these sectors as their main business activity and no rates will need to be paid for this tax year. No action will need to be taken for this and any businesses who have already received the rates bill will be issued with a credit note as soon as possible.
Cash grants for retail, hospitality and leisure businesses
The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.
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.
You are eligible for the grant if your business is based in England and 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
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.
Support for businesses that pay little or no rates
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.
Time to pay arrangements
As announced in the Budget HMRC have set up a dedicated team to help businesses that are struggling due to the coronavirus and depending on your circumstances they can assist as follows:
- agreeing an instalment arrangement
- suspending debt collection proceedings
- cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately
They can be contacted on 0800 0159 559, or if you would like us to try and make any payment arrangements on your behalf please let me know and we will do our best to helps you.
As always if you require a further explanation please feel free to contact us. Our staff are working from home where possible and will be on hand to deal with any of your questions or concerns.