In these uncertain times we wanted to reach out to all our clients to let you know we are here to offer support and guidance over the next few months.
We are still available for advice and we will continue to complete your accounts, VAT, payroll and tax returns in a timely manner.
We are fully operational working from both home and the office. So we are contactable in the office as we have skeleton staff. We are designated key workers as we provide payroll services and financial support to fellow key workers.
Supporting your business
In recent weeks the Chancellor has set out a package of measures to support public services, people and businesses through this period of disruption caused by COVID-19.
This includes a package of measures to support businesses including:
• A Coronavirus Job Retention Scheme
• Deferring VAT and Income Tax payments
• HMRC Time To Pay Scheme
• Statutory Sick Pay relief package for SMEs
• A Business Interruption Loan Scheme
• 12-month business rates holiday for all retail, hospitality and leisure businesses in England
• Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
• Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
We will be keeping all our clients up to date with these developments including how to apply as and when the details are finalised.
A Coronavirus Job Retention Scheme
HMRC will reimburse 80% of ‘furloughed’ workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.
Affected employees need to be classed as ‘furloughed workers,’ and you need to 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.
The scheme is for employees that you are considering making redundant/laying off as you can no longer cover their cost due to Covid-19. The employee should not undertake work for you while they are furloughed.
There are still a number of unknowns with this scheme including if the employer is obligated to fund the difference of 20% and how Employer Pension Contributions will be treated.
Deferring VAT and Income Tax payments
This scheme is automatic with no applications required.
VAT – During the period 20th March 2020 to 30th June 2020 businesses will not need to make a VAT payment. You will have until the 5th April 2021 to pay any liabilities that have accumulated during this deferral period.
Income Tax – Self-employed individuals will have the option to defer their 31st July 2020 tax payment. The 31st July 2020 tax payment will be payable by the 31st January 2021 (along with the standard 31st January 2021 tax payment). It is not known at this time whether this scheme can be used for other tax payers that are not self-employed e.g. directors of limited companies receiving dividend income.
HMRC Time To Pay Scheme
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. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559. Please talk to us if you want our help here.
Statutory Sick Pay relief package for SMEs
The Government will pass legislation shortly 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
• eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to those staying at home comes into force
We will keep you fully informed of any developments on when the repayment mechanism for employers will be finalised.
Business Interruption Loan Scheme
This is a loan scheme to support long-term viable businesses who may need to respond to cash-flow pressures caused by Covid-19 by seeking additional finance
A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch shortly to support businesses to access bank lending and overdrafts. 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. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value. Businesses can access the first 12 months of that finance interest free, as government will cover the first 12 months of interest payments.
As of the 23rd March 2020 the scheme is open for application. 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.
Business Rates – Wales (please contact us directly if you require guidance for Business Rates outside Wales):
There will be a business rates retail holiday for retail, hospitality and leisure businesses for the 2020 to 2021 tax year.
Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible – you do not need to apply . You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator.
A £25,000 grant will be provided to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value between £12,001 and £51,000.
Additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR) has been announced by the Government. This will provide a one-off grant of £10,000 to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs. If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority – you do not need to apply.
Further details will be communicated as and when they become available to us
Please do not hesitate to contact us if you wish to discuss any of the above points or how Covid-19 is affecting your business generally.