UPDATED 15:45, Thursday 2nd April
Details on availability and important contact details are highlighted in red.
BUSINESS RATES RELIEF AND RELATED GOVERNMENT SUPPORT
From April 1st businesses will start benefiting from £22 billion in the form of business rates relief. And grants of up to £25,000 which are being paid into the bank accounts of the smallest high street firms.
Funds have been provided to councils in England for grants to small businesses. These local authorities have received more than £12 billion and businesses are starting to receive these grants.
New HMRC coronavirus business helpline number
0800 024 1222
COVID-19: Directors on PAYE can furlough
Company directors that receive salaries through PAYE can be furloughed and apply for a grant of 80% of their salary during the coronavirus pandemic, the ICAEW understands.
After examining HMRC guidance ICAEW believes that individuals who are directors of their own family companies and who are themselves paid via PAYE should be eligible for the coronavirus job retention scheme, although the same rules will apply as to other businesses and their employees.
Under the scheme, businesses are able to apply for government grants for employees’ salaries up to the lower of 80% of an employee’s regular wage and £2,500 per month for three months from 1 March. The scheme could run for longer if the restrictions in movements to halt the COVID-19 pandemic remain in place.
We are awaiting full details of how the scheme will operate from HMRC, including for directors paid via PAYE but not receiving a consistent, regular monthly salary. We understand the intention of the scheme is to include those on irregular earnings, but full details on how the amount of the grant will be calculated for these individuals have yet to be released.
As with other businesses, such directors would need to have been on the payroll on 28 February 2020 and they cannot work while they are on furlough leave. We do not yet know the extent to which minor directorial duties would be disregarded, or whether the requirement that a furloughed employee should do ‘no work’ would prohibit this.
Support for the self employed
Self-employed workers can apply for a grant worth 80% of their average monthly profits to help them cope with the financial impact of coronavirus.
The money – up to a maximum of £2,500 a month – will be paid in a single lump sum, but will not begin to arrive until the start of June at the earliest.
80% of the average of your last 3 years self assessments. Maximum of £2500. This is expected as it is fair and inline with the employed.
It has not stated if that includes director-only companies. We will seek further clarity on this.
This does not include newly self-employed, so we await information on how HMRC is going to treat the new self employed in this tax year 19-20.
Ban on evictions for commercial tenants who miss rent payments
Commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction, the government has announced.
Many landlords and tenants are already having conversations and reaching voluntary arrangements about rental payments due shortly but the government recognises businesses struggling with their cashflow due to coronavirus remain worried about eviction.
These measures, included in the emergency Coronavirus Bill currently going through Parliament, will mean no business will be forced out of their premises if they miss a payment in the next 3 months.
More information can be found here
Support for business with new wage subsidy
The government will pay the wages of employees unable to work due to the coronavirus pandemic, aimed at protecting people’s jobs. It will pay 80% of salary for staff who are kept on by their employer, covering wages of up to £2,500 a month.
It is understood subsidy will apply to firms who have already had to lay off workers, as long as they are brought back into the workforce and instead granted a leave of absence.
Support for businesses paying tax
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.
Other measures to support firms and workers include:
> VAT payments by companies are deferred until the end of June – you must cancel your direct debit to take advantage of this
> Self employed self-assessment income tax payments for July 2020 can be deferred for six months
If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.
Support for businesses through the Coronavirus Business Interruption Loan Scheme
A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch next week to support primarily SMEs 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 £5M in value.
Businesses can access the first 12 months of that finance interest free.
Further details, including on the lenders providing access to this scheme will be announced in the coming days, and the scheme will be available from early week commencing 23 March 2020.
The government stated in the most recent budget, that it will pay the SSP for staff needing to be isolated or testing positive for the virus. This will help mitigate the costs which is normally paid by employers. Any other sickness will be unpaid.
Individuals who cannot work due to coronavirus and are eligible for SSP will receive payment from day one, rather than from the fourth day of their illness.
Legislation will ensure this measure applies retrospectively from 13th March 2020.
Employers are urged to use their discretion about what evidence, if any, they ask for if employees need to provide evidence that they must stay at home due to coronavirus.
This information is available at NHS 111 Online instead of having to acquire a doctor’s note.
One suggestion will be to encourage the staff to use any holiday allowance outstanding, if they have already had their use of the 14 days sickness. This would also help them financially.
Costs and expenditure
Now is the time to be reviewing all expenditures and ensure you minimise on running costs. This will help your cashflow. Look at any contracts for the likes of phones and software and see if these can be reduced or eliminated.
Within the March budget, reductions were made to business rates. Contact your local council to see if you are eligible.
Review any capital spends that you had budgeted for, can these be delayed until after the crisis? Reduce all unnecessary spending.
It is deeply unfortunate, but you may have to review staff numbers.
Overdrafts and loans
If you do not have an overdraft facility, now might be a good time to get this arranged with your bank. It will help your business operate for longer and could provide funds to cover a 3-month period.
The government have announced it will provide loans to business during this period, so you should find that any funding will be more accessible.
Banks and mortgage lenders have stated you could have a 3-month payment holiday. If you require this, arrange it with your bank to support cashflow.
Legislation to allow SMEs and employers to reclaim Statutory Sick Pay (SSP) paid to cover COVID-19 sickness absence.
The eligibility criteria for the scheme will be as follows:
> 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 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
Support for businesses that pay business rates
> Introduction of a business rates retail holiday for retail, hospitality and leisure businesses in England 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.
> A £25,000 grant will be provided to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value between £15,000 and £51,000.
Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority. Guidance for local authorities on the business rates holiday will be published by 20 March
Support for businesses that pay little or no business rates
The government will provide additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR). 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.
Funding for the scheme will be provided to local authorities by government in early April. Guidance for local authorities on the scheme will be provided shortly.
Support for larger firms through the COVID-19 Corporate Financing Facility
To support larger firms, the Bank of England has announced a new lending facility to provide a quick and cost-effective way to raise working capital via the purchase of short-term debt.
This will support companies which are fundamentally strong, but have been affected by a short-term funding squeeze, enabling them to continue financing their short-term liabilities.
It will also support corporate finance markets overall and ease the supply of credit to all firms.
Further details, including on how to access this funding will follow in the coming days, and the scheme will be available from the week commencing 23 March.
Businesses that have cover for both pandemics and government-ordered closure should be covered.
The government and insurance industry confirmed on 17th March 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim.
Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers.
Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.
Lay-offs, short time working and redundancy & remote workforce management and communication
Through our business associate network, advice can be obtained on people and HR-related matters relating to your people and process, as well as effectively managing and communicating to your workforce.
If you’d like an introduction to one of our associate specialists please call Mike or Colette on 0161 927 2727.