Covid-19: Measures for business - Update

Coronavirus Job Retention Scheme

The £2,500 is the maximum pay that will be covered so the 80% compensation will be £2,000 per month per employee maximum. Employers can pay as much as they want over this but will only get £2,000 back.

The compensation will be based on 80% of what employees received in their February payslips.

Employees have to be formally notified that they are being ‘furloughed’, so it cannot be claimed for employees who are actually working, even if this is from home.

It will only apply to payrolled employees, so all sub-contractors and self-employed are not covered.

The payments will still be paid through the payroll so PAYE and NIC will still apply.

The exact mechanics are still being worked on – it is expected to involve a submission to HMRC of workers furloughed through a new online portal.

Deferral of VAT & Income Tax payments

VAT payments deferred for the next 3 months – this applies automatically so VAT payments due between 20 March and 30 June 2020 will be delayed until the end of the 2020 to 2021 tax year to pay any liabilities that arise.

VAT refunds will be processed as normal.

Income tax self-assessment payments on account which were due on 31 July 2020 will be deferred until 31 January 2021. This will be an automatic deferral.

1. Time to pay scheme – for other taxes, where there are outstanding liabilities – you may be eligible to receive support through the HMRC Time to Pay service – these are on a case by case basis – you will need to phone HMRC on 0800 0159 559.

2. SSP for small & medium sized employers

For absence due to COVID-19, SSP will be refunded for up to 2 weeks – employees will be eligible for SSP from day 1 – employees don’t need a GP fit note but employers should maintain records of absences. If an employer requires evidence of absence the employee can get a note from NHS111 online.

The way the government will reimburse this has yet to be finalised.

Business rates holiday

For retail, hospitality and leisure businesses; also for nursery businesses – this will be applied on your next council tax bill from April 2020.

Cash grants of up to £25k available for businesses in the retail, hospitality and leisure sectors:

• If the rateable value under £15k – grant £10k
• If the rateable value £15k-51k – grant £25k.
• Your local authority will contact you if you are eligible.

Small business grant scheme – if you already receive small business rate relief, rural rate relief of tapered relief you will be eligible for £10k grant- your local authority will contact you if you are eligible.

Coronavirus Business Interruption Loan Scheme (CBILS) –

The Coronavirus Business Interruption Loan Scheme (CBILS) is available from Monday 23rd March and is aimed at providing SMEs access to loans, overdrafts, invoice finance of up to £5million for up to 6 years. The government will pay the first 12 months of interest – so lower initial repayments.

There are already 40 accredited providers including Barclays, Clydesdale, HSBC, Lloyds, Metro, NatWest, RBS, Santander and TSB and we understand that other banks are continuing to support their clients and that the list of accredited lenders is being updated regularly.

Each bank will have their own internal procedures so applications will still be subject to the normal checks, and businesses need to have accurate and up to date financial information available to support their application.

Demand is expected to be high so we would suggest that you make contact with your local bank contact to see what alternative short-term measures can be put in place to ease any immediate cash flow concerns, such as a repayment holiday from current loan arrangements to ease your cash flow.

The criteria to qualify for the scheme is as follows:-
• UK based, with turnover less than £41m
• Operate within an eligible industrial sector ( www.british-business-bank.co.uk/wp-content/uploads/2020/03/Ineligible-an... for list of exclusions)
• Must not have received de-minimis State aid beyond €200,000 over the current and previous two fiscal years – this includes government grants, loans, tax breaks (R&D tax credits / enhanced capital allowances), SEIS / EIS.