The fog is beginning to clear. The flesh is being put on the bones. Businesses need it fast.
We encourage clients to call us about any worries. We have spoken to many businesses over the last few days and have built up a raft of knowledge to help many different sectors.
We are also strongly advising all clients to keep to their filing deadlines and submit books and records to the usual timescales, even if payments to HMRC are deferred.
This will help to keep things on track for your business and avoid future confusion and possible penalties. It may also be very important if seeking funding support in future.
This is an evolving situation so we encourage you to get the most up-to-date advice from the government website.
In the rest of the post, I will summarise the help available for small businesses. There is likely to be a grant or loan which you can use to help during the Coronavirus Crisis.
All small businesses (less than 250 employees) can get the following help:
- 2 weeks of statutory sick pay paid for employees off because of COVID-19
- If you are struggling to pay a tax bill which is due (or you think you will struggle with), then HMRC have set up a Coronavirus Help To Pay helpline, which will work with you to put in place a “time to pay” plan. If you think you will need to do this, please give us a call first, but the telephone number of the helpline is 0800 0159 559
- If your business has insurance cover for a pandemic and government-ordered closure, e.g. the government’s order to close pubs, theatres etc, the government and insurance industry have confirmed that there are now sufficient grounds to make a claim. But this is a case of check the small print of your insurance policy!
- The ‘Coronavirus Business Interruption Loan Scheme’ is now open. https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/for-businesses-and-advisors/The government will make also make a Business Interruption Payment to cover the first 12 months of interest payments, so smaller businesses will benefit from no upfront costs and lower initial repayments. If you think you will need to access this scheme, please give us a call so we can work through the paperwork with you.
The government will provide lenders with a guarantee of 80% on each loan. (see the above website for full details)
- Coronavirus Job Retention Scheme. All UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. You will need to designate affected employees as ‘furloughed workers’ and notify your employees of this change. And submit information to HMRC about the employees and their earnings through a new online portal. 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 the system for this.
- VAT – the government will support businesses by deferring VAT payments for 3 months. This will apply from 20 March 2020 until 30 June 2020.
- Income Tax – if you are self-employed, Income Tax payments due on 31 July 2020 under the Self-Assessment system may be deferred until 31 January 2021.
If your business is eligible for small business rate relief OR rural rate relief:
- your local authority will provide you with a one-off grant of £10,000. (So, doesn’t need to be paid back). Your local authority will be in touch to arrange the grant. More details will be available in early April.
If you are a retail, hospitality or leisure business:
- The government is giving you a payment holiday for your business rates for the 2020/2021 tax year. There is no action for you. This will apply to your next council tax bill in April 2020.
- If your business received the retail discount in 2019/2020 tax year, your local authority will rebill you 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. You are eligible if your business is based in England and your business is in the retail, hospitality and/or leisure sector. Your local authority will write to you if your are eligible for this grant.
As a firm we believe that many businesses may struggle to pay their April or May payroll. If this could be your business, please get in touch so we can help you find a plan to ensure the health of your business going forward.