Advice updated Friday 27 March 2020.
For businesses there is an unprecedented amount of uncertainty over what the following days and months may bring as a result of COVID-19. Below are some of the measures that are in place to assist businesses and individuals during this time. We will be keeping this guidance updated as and when there are developments.
Coronavirus Job Retention Scheme
Please see link here for full details of the Coronavirus Job Retention Scheme
Self-employment Income Support Scheme
The Self-employment Income Support Scheme was announced in the Chancellor’s speech on Thursday 26 March. This scheme is available to the self-employed, including members of a partnership, if income has been lost due to coronavirus.
The scheme provides a taxable grant of up to 80% of trading profits to a maximum of £2,500 per month. In order to be eligible, self-employed trading profits must be less than £50,000 and more than half of total income. Trading profits will be calculated using an average of the previous 3 tax years’ profits.
The scheme will run for at least 3 months but may be extended if necessary and the scheme is expected to be up and running by June. You cannot apply for this scheme yet.
HMRC will contact eligible individuals, using 2018-19 tax returns, along with an invitation to apply online for the scheme. Once an application has been submitted HMRC will contact individuals to tell them how much they will receive. If a self-employed individual has not submitted their 2018-19 tax return then they have until 23 April 2020 to do so.
Business Interruption Loan Scheme
The Government has announced Government backed loans to a value of £330bn for businesses. Loans are available for SME’s of up to £5m with and may be subject to “interest free” terms in the first 12 months. The scheme was launched on 23 March 2020.
Important points to note are:
- It is advisable to first approach your own bank for a loan preferably via their website.
- You will need to put a business proposal to your lender which shows that your business would be viable were it not for COVID-19. Dodd & Co is here to help with compiling your borrowing proposal.
- The decision on the loan ultimately rests with the bank and not the Government.
- If the lender feels they can offer finance on “normal” terms without using the scheme then they will do so.
- Businesses are still 100% liable for the repayment of these loans. The Government support is to the lender, not directly to the borrower.
Dodds are here to help with compiling your borrowing proposal.
Payroll
We understand that many of you will have payroll and employment queries at the current time, and while we can’t provide employment law advice, we can point you in the direction of some useful guidance. ACAS are reviewing and revising their guidance as and when necessary and the link below is a good place to start with any employment queries you may have that specifically relate to Coronavirus:
https://www.acas.org.uk/coronavirus
ACAS helpline: 0300 123 1100
Specific legal advice should be taken if you are considering changing any employees’ hours of work or terms and conditions of employment. You should contact your usual HR adviser or the ACAS helpline number above.
Statutory Sick Pay
An employee’s rights to Statutory Sick Pay (SSP) depends on the employment status and earnings. However, if they are eligible and receive medical advice to self-isolate or become ill, they will be entitled to SSP from the first day of their absence from work. You may also have contractual sick pay in place as part of your terms and conditions of employment.
The Government will refund employers with fewer than 250 employees up to two weeks of SSP for each affected employee. The Government has admitted that their current systems are not yet designed to facilitate such refunds, but that they will be working with employers ‘over the coming months’ to set up a repayment mechanism.
VAT and Tax Deferral
All businesses are eligible to defer their VAT payments that would have been due between 20 March 2020 to 30 June 2020. Businesses will have until the 5 April 2021 to make these payments. This deferral is automatic, meaning businesses do not need to take any action, although if there is a Direct Debit in place for payment then it would be advisable to cancel this if you wish to defer your payment. Any businesses that are due to receive VAT refunds will receive these as normal. VAT returns should be filed on time where possible, although if this isn’t possible then ideally HMRC should be informed of the reasons via the Coronavirus helpline 0800 0159 559. Dodd & Co clients will have their VAT returns submitted on time as usual provided that they are able to get the information to us on time. If this is not the case then please let us know and we will speak to HMRC on your behalf.
Any Self-Assessment payments on account that are due to be paid on the 31 July 2020 are deferred until 31 January 2021. Again, this is an automatic deferral and no application is required.
Business Rates Relief for Businesses with Property in England
All businesses operating in the leisure, hospitality and retail sectors will receive a business rates holiday for 12 months, irrespective of the rateable value of business properties.
Businesses do not need to apply for business rates holidays as they are based on their receipt of business rates reliefs and rateable values.
Businesses can check the rateable value of their properties using the following link: https://www.gov.uk/correct-your-business-rates
Small Business Grant Funding for Businesses with Property in England
A small business grant is available for those businesses in England that qualify for Small Business Rate Relief. This is a one-off grant worth £10,000 to help meet ongoing business costs.
For businesses that operate in the leisure, hospitality and retail sectors and that have a rateable value of over £15,000 but less than £51,000 a cash grant is available of up to £25,000 per property.
The grants will be administered by the Local Authorities.
Local Authorities expect to receive Government guidance for the grant funding in early April, at which point it is expected that the Local Authorities will contact qualifying businesses.
Measures for Businesses with Property in Scotland
The following measures will be put in place by the Scottish Government as of April 2020:
- 100% rates relief for retail, hospitality and tourism
- Grants of £10,000 for small businesses in receipt of Small Business Bonus Scheme or Rural Relief
- Grants of £25,000 for hospitality, leisure and retail properties with a rateable value of between £18,000 – £51,000
Scottish businesses need to apply for these grants via their local authority.
HMRC’s Time to Pay Arrangements
HMRC have expanded their existing Time to Pay arrangements. These expanded arrangements aim to assist businesses that have been affected by COVID-19 to defer their tax payments (including PAYE and VAT) and agree payment by instalments. HMRC have set up a helpline to specifically to deal with this: 0800 0159 559.
Finance
Most banks have committed to offering loan repayment holidays aswell as temporary emergency loans and overdrafts. If you have existing bank lending or find your business in need of finance, then please contact your bank as soon as possible.
Insurance
Insurance policies should be checked for cover and if necessary insurance brokers should be contacted. The Government has announced that if leisure/hospitality/retail businesses have insurance which covers pandemics then they will be able to claim due to the measures recently introduced by the Government to prevent people meeting in pubs, clubs, theatres and other hospitality, leisure and retail venues. If you require assistance with any such claims then please get in touch with your usual Dodd & Co contact.
Companies House
Dodd & Co will continue to meet your company accounts filing deadlines where year end information is provided to us on time. However, if exceptional circumstances caused by COVID-19 mean that companies are unable to get their records to us on time then they can apply for a 3 month filing deadline extension. Guidance on how to apply for this extension is included below:
https://www.gov.uk/guidance/apply-for-more-time-to-file-your-companys-accounts
Whilst this is a great facility for businesses that genuinely need it, there is still the requirement for corporation tax to be paid 9 months and 1 day after the year end and accounts are required in order to calculate any payment due. Directors Loan Accounts will also need to be repaid within 9 months of the year end to avoid any tax charge arising. There is also a possibility that a company’s credit rating could be impacted by the extension. Please speak to your Dodd & Co adviser if you anticipate that you may require a filing extension.
The Charity Commission and Office of the Scottish Charity Regulator are also accepting requests for deadline extensions.
Universal Credit and Working Tax Credit
The standard allowance for Universal Credit has been increased by £1,000 for 12 months, as has the basic element for Working Tax Credits.
The minimum income floor for Universal Credit has been suspended meaning self-employed workers will now have access to a rate equivalent to Statutory Sick Pay.
Mortgages
In a move to assist individuals and employees, individuals with mortgages can speak to their lenders to arrange a 3 month mortgage holiday. This includes Buy To Let mortgages.
IR35 Reform Delayed
The implementation of IR35 Off-Payroll tax reforms have been delayed for a year, with the new legislation now due to be reintroduced in April 2021.
Dentists – NHS England Update
NHS England has today (25 March 2020) issued a further publication regarding COVID-19 which is linked to here.
A summary of some of the key points are here.
As always, rest assured that Dodd & Co will be working tirelessly to keep you up to date with developments, and whether you need business advice or even just a chat remember that we are here to assist you and your business.
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