Last updated 1 July 2020.
The Government have announced an unprecedented package of support for business during these difficult and uncertain times, including an initial £330 billion of guarantees which is equivalent to 15% of GDP.
Measures are being introduced on a daily basis and as more detail emerges we will continue to update this page as a central hub to support our clients through the issues they face.
SMALL BUSINESS
- The Coronavirus Job Retention Scheme was announced on 20 March to allow all businesses to access support to continue paying part of their employees’ salary for those employees that they otherwise would have laid off. Changes to the scheme were announced in June to allow employees to be brought back on a flexible part time basis. More details of the revised scheme can be found here.
- Statutory Sick Pay (SSP) is not usually recoverable by employers but up to two weeks of SSP per employee may now be recovered if an employee is ill or required to self-isolate because of COVID-19. This is available to employers with fewer than 250 employees as at 28 February 2020. Existing systems are not designed to facilitate this repayment but will be set up as soon as possible.
- If your business is eligible for small business rate relief or rural rate relief you are entitled to a one-off grant of £10,000.
- If your business is in the retail, hospitality or leisure sector you may also be entitled to a grant. If the rateable value of your property is less than £15,000 you will be entitled to a grant of £10,000 regardless of whether you are entitled to small business rate relief or rural rate relief. If the rateable value of your property is between £15,001 and £51,000 you will be entitled to a cash grant of £25,000. These grants will be administered by your Local Authority and they will contact you if you are entitled. More information on the grants available in Plymouth can be found here.
- Many Councils still have unclaimed funds from this scheme and are distributing as grants to those who were not initially eligible. Contact your Local Authority if this might apply to you.
- 100% relief on your Business Rates bill for 1 year from 1 April 2020 will be available for the following businesses.
- If you are currently receiving the retail discount for your Business Rates bill
- If you are in the retail, leisure or hospitality sectors and the rateable value of your property exceeds £51,000.
- Nurseries
Your Local Authority will contact you if you are eligible.
Guidance of what falls into each category can be found here.
- Businesses may be eligible for lending under the new temporary Coronavirus Business Interruption Loan Scheme, which includes overdraft, invoice finance and term loans. The Government will provide lenders with a partial guarantee of 80% on each loan to give lenders further confidence in continuing to provide finance to SMEs. The scheme will support loans of up to £5 million in value, the first 12 months of these loans will be interest-free and there will not usually be an arrangement fee. For more information please see our dedicated article here which has been updated to include the most recent changes to the scheme.
- Support is available for payments due to HMRC. All VAT payments due between 20 March and 30 June 2020 have been deferred. This will impact on VAT quarters ended 28 February, 31 March and 30 April, as well as monthly and annual returns. No application is necessary and businesses will be given until 31 March 2021 to catch up on these payments. In addition, if your business is unable to pay tax liabilities then HMRC have relaxed their requirements for Time to Pay arrangements. Note that all returns must still be filed.
Our Advice: We would advise you to cancel all direct debits payable to HMRC and contact them on the dedicated COVID-19 support line on 0800 024 1222. The arrangements are agreed on a case by case basis, but some of our clients have been able to spread tax liabilities over 12 months or defer all payments to HMRC for 3 months, including corporation tax, PAYE and CIS tax. |
- The usual planning process to enable restaurants and pubs that serve food to operate a hot food takeaway has been replaced by a temporary Permitted Development Right to allow change of use from A3 or A4 to A5. You will be able to notify your Local Authority that you are now operating as a takeaway without prior approval.
- The planned changes to the off-payroll working rules (known as IR35) have been delayed for a year until 6 April 2021.
- If the only barrier to your business making an insurance claim was a lack of clarity on whether the Government was advising people to stay away from businesses, rather than ordering businesses to shutdown, then it has been clarified and current advice would now be sufficient. However, this only applies if you have insurance that covers pandemic related losses.
- Companies House have announced that they will grant a 3 month extension to the filing deadline of company accounts. If it is apparent immediately before the filing deadline that the accounts will not be filed on time due to companies being affected by COVID-19, then directors may make an application to extend the filing deadline. Companies must ensure that they apply prior to the filing deadline.
- The deadline for having digital links between bookkeeping systems under the Making Tax Digital for VAT scheme has been delayed until 1 April 2021.
- A new loan fund for smaller business launched on 4 May, the Bounce Back Loan Scheme. This is a loan 100% backed by the Government and is intended to be far easier to access than the CBILS loans. The maximum loan will be £50,000 but capped at 25% of the businesses turnover. The interest rate will be capped at 2.5% with the Government paying the interest for the first 12 months and no repayments due in the first 12 months. There is a maximum loan term of 6 years. In order to be eligible, the business must have been adversely affected by coronavirus and not been "an undertaking in difficulty" at 31 December 2019. Applications should be made through your main bank initially. The launch of this scheme means that CBILS loans will now be for over £50,000 only.
- Another new scheme available is the Future Fund, which is more restrictive on who is eligible. This scheme would see the Government providing a convertible loan to the business of £125,000 to £5m, subject to at least match funding from private investors. This is intended for those businesses who are not able to access CBILS and who have raised at least £250,000 in equity investment from third party investors in the last 5 years.
- VAT on personal protective equipment (PPE) has temporarily been removed from 1 May to 31 July 2020. During that period the zero rate of VAT will apply.
SELF-EMPLOYED AND FREELANCERS
- Self employed individuals are not entitled to Statutory Sick Pay in the same way as employees and instead must apply for Universal Credit (UC). For those already claiming UC the requirements of the Minimum Income Floor will be relaxed with effect from 13 March. It was announced on 20 March that self-employed individuals would now be able to access full UC at a rate equivalent to SSP of £94.25 per week.
- All Self Assessment payments on account that are due for payment by 31 July 2020 have been deferred to 31 January 2021. This is an automatic deferral with no application necessary.
- The planned changes to the off-payroll working rules (known as IR35) have been delayed for a year until 6 April 2021.
- Support was announced on 26 March for those who are self-employed. A cash grant of 80% of profits, up to £2,500 per month, will be available for at least 3 months. This is a taxable grant and will be based on average monthly profits on your 2016/17, 2017/18 and 2018/19 tax return. It will only be available to those whose self employment income makes up over half of their total income and only if the average annual profits are less than £50,000. It is not available to those who commenced self employment after 6 April 2019. The first stage of making this claim is to enter your details here to see if you are eligible. You will need your National Insurance number and Unique Tax Reference at this stage. If you are eligible you will need a Government Gateway log in to make a claim. Support under the first tranche of this scheme will need to be claimed by 13 July 2020.
- An extension to the Self-Employed Income Support Scheme has been announced, payable in August 2020 for the preceding three months. This will be based on 70% of average profits, capped at £2,190 per month and all other eligibility criteria will be the same as the first grant. Further information can be found here.
- Those who do not qualify under the scheme or those who will face hardship prior to June are encouraged to apply for Universal Credit.
- Note that the scheme for the self employed does not cover dividend income.
EMPLOYEES
- Statutory Sick Pay (SSP) of £94.25 per week is available to all employees who are unwell and also to employees who are self-isolating because of COVID-19. Usually SSP is paid from day 4 of sickness, but if the sickness is due to COVID-19 then it is available from day 1.
- A sick note is not required and those self-isolating can obtain an “isolation note” from NHS 111 online.
- Those employees not entitled to SSP as their earnings are below the Lower Earnings Limit of £118 per must apply for Universal Credit.
INDIVIDUALS
- Mortgage and rental holidays will be available to those experiencing financial difficulties due to COVID-19, including on Buy To Let mortgages for landlords where tenants are experiencing financial difficulties. This has been agreed with lenders and repayment holidays of up to 3 months will be available to customers who are up to date with payments and not already in arrears. You are encouraged to contact your lender or landlord at the earliest opportunity to see if you are eligible.
- Eligible renters will be able to access the Local Housing Allowance which will be increased to cover 30% of market rents.
- Emergency legislation will be introduced so landlords are not able to start proceedings to evict tenants for at least 3 months.
- If you have personal loans or credit cards that you are having difficulty repaying due to COVID-19 you are encouraged to contact your lender. The FCA are asking lenders to be more flexible and to record any payment holidays in a way that will not impact on your credit score.
- Council Tax relief will be available from Local Authorities.
- There will be a £1,000 per year increase in both the Universal Credit standard allowance and the Working Tax Credit basic element for the next 12 months.
CHARITIES
- £750 million has been pledged to in emergency support funding for frontline charities and those working with the most vulnerable during the crisis.
We’re here to support you throughout any difficulties.
What we can help with:
- Assisting you to access and apply for loans or other sources of finance, such as invoice financing
- Developing strategies to remain resilient during the current difficulties
- Cash management plans as cash is always king in challenging times
- Planning for the future, including forecasting cashflows and budgeting, to ensure that you are well positioned when the crisis ends
Other useful resources
