COVID-19 : Support from Government for business

We have summarised below for our clients and partners the key measures recently announced by the chancellor to assist business through the next few months. This article is intended only to sign post the assistance that may be available to you.

Full detail of all these measures can be found here.

The information in this post is correct as at 22 March 2020 . The VAT section was updated on 25 March 2020. The Job retention scheme summary and self employed support summary was updated on 27 March 2020.

 

Support for businesses through the Coronavirus Job Retention Scheme

A full summary of this support can be found on our page here

 

Coronavirus (COVID-19) Self-employment Income Support Scheme

Full details of the package can be found here. Summary of support package published by Chancellor is below:

  • direct cash grant of 80% of their profits, up to £2,500 per month for at least 3 months
  • using an online form, with the cash being paid directly into people’s bank account.
  • The scheme will be open to those with a trading profit of less than £50,000 in 2018-19 or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19.
  • To qualify, more than half of their income in these periods must come from self-employment.
  • To minimise fraud, only those who are already in self-employment and meet the above conditions will be eligible to apply. HMRC will identify eligible taxpayers and contact them directly with guidance on how to apply.
  • The income support scheme, which is being designed by HMRC from scratch, will cover the three months to May. Grants will be paid in a single lump sum instalment covering all 3 months, and will start to be paid at the beginning of June.
  • Individuals should not contact HMRC now. HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational.
  • Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.
  • this scheme also applies to members of partnerships
  • before grant payments are made, the self-employed will still be able to access other available government support for those affected by coronavirus including more generous universal credit and business continuity loans where they have a business bank account.

Unlike the support scheme for furloughed employees, self-employed individuals may continue to undertake business if this is practically possible.

If the individual started their business in the last three years, HMRC will undertake the averaging over the years where returns have actually been filed. The scheme is not open to individuals whose business commenced after 6 April 2019.

 

Support for businesses through deferring VAT and Income Tax payments

VAT

Valued Added Tax (VAT) payments will be deferred for 3 months The deferral will apply from 20 March 2020 until 30 June 2020.

All UK businesses are eligible for this support.

How to access the scheme

This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. 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. VAT refunds and reclaims will be paid by the government as normal.

If you normally pay by direct debit you should cancel the direct debit with the bank if you are unable to pay due to COVID-19. Please do so in sufficient time so that HMRC do not attempt to automatically collect payment on receipt of your VAT return.

VAT Returns should continue to be submitted on time.

Income Tax

If you are self-employed Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.

If you are self-employed you are eligible for this scheme.

How to access the scheme

This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period.

Support for businesses who are paying sick pay to employees

Small-and medium-sized businesses and employers will be able 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. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 onlineand those who live with someone that has symptoms can get a note from the NHS website
  • eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force
  • A repayment mechanism is not yet in place and this is yet to be announced

You are eligible for the scheme if:

  • your business is UK based
  • your business is a small or medium-sized and employs fewer than 250 employees as of 28 February 2020

How to access the scheme

A rebate scheme is being developed and full details will be announced once it is in place.

 

Business rates holiday for retail, hospitality and leisure businesses

A business rates holiday for retail, hospitality and leisure businesses is being introduced 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.

You are eligible for the business rates holiday if:

  • your business is based in England
  • your business is in the retail, hospitality and/or leisure sector

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

  • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
  • for assembly and leisure
  • as hotels, guest & boarding premises and self-catering accommodation

How to access the scheme

There is no action for you as local authorities will deal with.

 

Cash grants for retail, hospitality and leisure businesses

The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property. For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000. For businesses in these sectors with a rateable value of between £15,001 and £51,000, they will receive a grant of £25,000.

You are eligible for the grant if:

  • your business is based in England
  • your business is in the retail, hospitality and/or leisure sector

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

  • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
  • for assembly and leisure
  • as hotels, guest and boarding premises and self-catering accommodation

How to access the scheme

You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

 

Support for businesses that pay little or no business rates

The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

You are eligible if:

  • your business is based in England
  • you are a small business and already receive SBBR and/or RRR
  • you are a business that occupies property

How to access the scheme

You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

 

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 be launched to support primarily small and medium-sized businesses to access bank lending and overdrafts.

The government will provide lenders with a guarantee of 80% on each loan. 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.

You are eligible for the scheme if:

  • your business is UK based, with turnover of no more than £45 million per year
  • your business meets the other British Business Bank eligibility criteria

How to access the scheme

You should talk to your bank or finance provider as soon as possible and discuss your business plan with them. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.

 

Support for businesses paying tax: Time to Pay service

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.

How to access the schemeIf you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicate