Covid-19 Government assistance – The government has put in place a package of measures to support businesses and individuals suffering from the impact of Covid-19. These are summarised below. If you have any questions about how these can be applied to you or your business please do not hesitate to contact us.
Table of Contents
1. Deferral of VAT and income tax payments
a. VAT. All VAT due in the period 20 March 2020 to 30 June 2020 is automatically deferred. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. No application necessary. All UK businesses are eligible.
b. Income tax. Payments for self-employed due on 31 July 2020 will be deferred until the 31 January 2021. No application necessary.
c. When? Immediate (or as due).
2. Corona Business Interruption Loan Scheme, available at many providers including all high street banks.
a. To support long-term viable SME businesses who may need to respond to cash-flow pressures by seeking additional finance (bank lending and overdrafts) to pay rent, their salaries, suppliers or purchase stock
b. Up to £5M. No interest due for first 6 months.Government now indicates that loans under £250k should not generally need to be personally guaranteed.
c. When? Available from 23 March.
3. Corona virus job retention scheme.
a. Scheme under which the government will reimburse a large part of the wages of workers, who would otherwise need to be laid off, to enable them to be retained on payroll.
b. Need to notify HMRC of these ‘furloughed’ workers up to a cap of £2,500 per month. Furloughed workers are not permitted to work while furloughed.
c. Available for all UK businesses. Can be used for employees who have already been laid off. Can be back-dated to 1 March. Available to directors of own companies if paid through PAYE.
d. When? Eligible employers will be able to access grants by the end of April. Notification is via HMRC portal which has yet to be set up.
4. Small business grant funding of £10,000 for all business in receipt of Small Business Rates Relief (SBRR) and Rural Rates Relief.
a. If your business is eligible for SBRR or Rural Business Rate Relief, you will be contacted by your local authority – you do not need to apply.
b. When? Funding for the scheme will be provided to local authorities by government in early April.
5. Pubs, clubs, theatres, hospitality
a. Insurance – Some businesses may have purchased supply chain or denial of access cover. The Chancellor confirmed that those who have insurance can claim based on the Prime Minister’s public health announcement for the public to avoid these premises.
6. Retail, hospitality, leisure and nursery businesses
a. No rates for 2020/21 tax year.
b. Cash grant of up to £25k per business if rateable value less than £51k.
c. Those businesses eligible for the newly expanded retail discount and/or the new pubs discount may need to apply to their local authority to receive the discount. Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority.
i. Businesses that received the retail discount in the 2019 to 2020 tax year will be re-billed by their local authority as soon as possible.
ii. Guidance for local authorities on the application of the expanded retail discount will be published by 20 March.
7. SSP (Statutory sick pay) relief package for SMEs
a. Legislation will be brought forward to allow small- and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19.
b. Eligibility criteria. Covid-19-related. Max 250 employees.
c. When? “The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible”
8. HMRC Time to Pay Scheme.
a. All businesses and self-employed people with outstanding tax liabilities and in financial distress.
b. When? Case-by-case basis.
9. (COVID-19) Self-employment Income Support Scheme
a. Grant for self-employed or members of partnerships who have lost income due to corona-virus.
b. 80% of trading profits up to a maximum of £2,500 per month for the next 3 months. (Profits must be less than £50k.)
c. HMRC will contact you (by the beginning of June) if you are eligible for the scheme and invite you to apply online. [If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020.]
10. Protection from eviction for commercial tenants
a. No business will automatically forfeit their lease and be forced out of their premises if they miss a payment up until 30 June.
b. This is not a rental holiday. All commercial tenants will still be liable for the rent. Commercial tenants are protected from eviction if they are unable to pay rent.
c. Came into force on 25 March when corona-virus Bill received Royal Assent.
11.Possible regulatory forbearance.
1. Mortgage holiday – 3 months
a. For those in difficulty due to corona-virus, mortgage lenders will offer a three month mortgage holiday – so that people will not have to pay a penny towards their mortgage while they get back on their feet.
2. Sick pay
a. You can get £94.25 per week Statutory Sick Pay (SSP) if you’re too ill to work. If you are staying at home because of COVID-19 you can now claim SSP. This includes individuals who are caring for people in the same household and therefore have been advised to do a household quarantine.
3. Employment and Support Allowance
a. If you are not eligible for SSP – for example if you are self-employed or earning below the Lower Earnings Limit of £118 per week – and you have COVID-19 or are advised to stay at home, you can now more easily make a claim for Universal Credit or new style Employment and Support Allowance. If you are eligible for new style Employment and Support Allowance, it will now be payable from day 1 of sickness, rather than day 8, if you have COVID-19 or are advised to stay at home.
NOT LEGAL ADVICE.
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