I want to try and keep the information as clear and as simple as I possibly can for everyone, so I won’t be writing out everything again, I will just be writing out the highlights.
There were some pretty big announcements made last night, but we are still hoping the government will go even further in helping all businesses, no matter the size, right across the UK
1) Coronavirus Job Retention Scheme:
All UK employers will be able to access support to continue to pay part of their employees’ salaries for those who would otherwise have been laid off during this situation.
In order to claim the money, you will need to designate affected employees as “furloughed workers” and notify your employees of the change in their employment status (this remains subject to existing employment law, and depending on the contract, may be subject to negotiation) and submit the information to HMRC about those employees status and their earnings through a new online portal (the information required will be set out at a later date). HMRC will then reimburse the employer 80% of the employee’s salary, up to £2,500/month. This is being backdated to all employees who have been laid off since March 1st. The government has said this is currently for 3 months, but will be continuing to review this scheme and put it in place for longer if necessary. The existing payroll systems are not set up to facilitate this scheme but HMRC are working at getting a new system set up urgently.
2) Deferment of VAT and Income Tax Payments
VAT registered businesses will be able to defer their VAT payments for 3 months. The deferral will apply from 20 March 2020 to 30 June 2020. You don’t need to apply for this to happen – it will be done automatically, you just do not make a payment during this time period and you will be given until the end of the 2020 to 2021 tax year to pay any liabilities accumulated during the deferment period. All VAT refunds and reclaims will be paid by HMRC as normal.
All income tax self-assessment payments due on 31/07/2020 will be deferred until 31/01/2021. You do not need to apply for this to happen as it will be automatically granted. There won’t be any penalties or interest for late payments charged during the deferral period.
3) Cash grants for retail, hospitality and leisure businesses:
This scheme provides all businesses in retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property. For any business in this sector that has a rateable value of under £15,000, they will receive a grant of £10,000. Any business in this sector that has a rateable value of between £15,001 and £51,000, they will receive the full grant of £25,000.
In order to obtain this grant, your business must be based in England and be in the retail, hospitality and/or leisure sector. Your business must be a shop, restaurant, cafe, drinking establishment, cinema, live music venue, for assembly and leisure, or a hotel, guest and boarding premise and self-catering accommodation.
Your local authority will write to you automatically if you are eligible. The guidance for this scheme will be provided to the local authorities shortly.
4) Coronavirus Business Interruption Loan Scheme:
The government has increased the turnover for a business to no more than £45 million per annum and they have increased the time limit for the finance interest free payments from 6 months to 12 months.
5) Support for businesses paying tax:
This scheme is now also open to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.
6) Support for the self-employed:
It has been announced that the government is increasing the standard allowance in Universal Credit and the basic element of Working Tax Credit by £20.00/week for 1 year from April 6, 2020. Universal credit will increase from £317.82/month to £409.89/month for a single claiming aged 25 or over.
The government is also increasing the Local Housing Allowance rate and it will apply to all private renters who already get Universal Credit housing element or are new to getting it, as well as to those who already get Housing Benefit.
For the self-employed who claim Universal Credit, you will not have to go to the jobcentre to prove you have gainful self-employment if you have to stay at home due to coronavirus, or are ill as a result of it.
The information and policies are continually being updated by the government, so I urge you to keep on top of the information by visiting the relevant website for your area.
Northern Ireland: https://www.nibusinessinfo.co.uk/
I will be trying to keep myself as informed as possible and will share relevant information on my fb business page: https://www.facebook.com/ihelmenterprises/