Towards the end of March, as the seriousness of this pandemic was just becoming clear, we reported on the measures that were being implemented by the government in order to support businesses and individuals and keep the country running. As we near the end of this month, we thought it would be useful to recap on the measures in place and give an update as to how they are being implemented.
Summary measures for business
• Job Retention Scheme
This scheme has allowed employers to “furlough” staff who would otherwise have been laid off, pay them 80% of their normal wage (up to £2,500) and ask HMRC to reimburse this cost to employers. The scheme has now been extended for a further month to the end of June and the portal for making these claims is now open, with the first payments having been received. The calculation of the amount to claim is not straight forward so if you would like assistance in claiming please speak to your usual contact at the firm.
• Self Employed Support Scheme
Under this scheme support will be available to individuals whose income is mainly derived from self-employment and who have lost trading profits as a result of coronavirus, as long as annual taxable earnings are below £50,000. Unlike the furlough scheme, the individual can continue in business and claim 80% of monthly profits, averaged over three years. The claim will be capped at £2,500 per month for three months.
HMRC will contact those eligible next month with a claim system becoming available from June. Again we can help individuals to make a claim once they have been contacted by HMRC.
• VAT and Income Tax Deferral
As previously reported, an automatic deferral is in place for VAT payments from 20 March to 30 June 2020 meaning these payments will not be due until March 2021. Similarly, income tax payments that would be due in July 2020 are automatically deferred until January 2021. There was initial confusion that this was only open to self-employed individuals however HMRC have now confirmed that it is open to all taxpayers.
No application for either deferral is required but direct debit mandates will need to be cancelled. Returns should still be filed on time but there will be no penalties or interest for late payment.
• Grant funding for small businesses
There are cash grants available for businesses receiving Small Business Rate Relief or Rural Rate Relief through the Small Business Grants Fund (SBGF) and Retail, Hospitality and Leisure Grant Fund (RHLGF). Grants will be paid automatically and businesses do not need to apply for them. More guidance can be found at https://www.gov.uk/government/publications/coronavirus-covid-19-business-support-grant-funding-guidance-for-businesses
• Retail, hospitality and leisure industry
Businesses in the retail, hospitality and leisure sectors in England will not have to pay business rates for the 2020 to 2021 tax year. Businesses will receive a bill showing no business rates charge for the 2020/2021 tax year. Those who had already received bills for the 2020/2021 tax year will be rebilled. There are also cash grants of £25,000 that will be will be given to businesses in these sectors meeting the thresholds. The reliefs will be administered by local authorities and grants paid automatically.
• Business Interruption Loan Scheme
Two government backed loan schemes, the Coronavirus Business Interruption Loan Scheme and the new Coronavirus Large Business Interruption Loan Scheme, are available to businesses which, were it not for the current pandemic, would be considered viable by the lender. In other words the lender must believe that the provision of finance will enable the business to trade out of any short-to-medium term difficulty. Both schemes are administered by the British Business Bank and made available to businesses via accredited lenders. If you would like help with putting together a borrowing proposal please speak to your usual contact at the firm.
As the situation is constantly changing, new measures or changes to the existing measures will likely be made in the near future and we will try to keep you updated as they happen.
Our office premises remain closed however our staff are working from home as much as possible and are contactable either by e-mail or by calling the normal office number.
Should you have any concerns regarding the new measures in place, cash flow or any other query relating to finances in the current situation, please speak to your usual contact at the firm.
To see our other news items please visit our Muras Baker Jones – Blog.