Support for Businesses
Coronavirus Job Retention Scheme
HMRC will set up a new online portal so that ALL UK employers, regardless of size, will be eligible for assistance where an employee has been designated as a ‘furloughed worker.’ HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. The current plan is that this will be in place for 3 months, at which point it will be reviewed. This will be backdated to 1 March 2020.
Employers must set out which of their employees are ‘furloughed workers’ and inform particular employees.
Furlough is the equivalent of lay off. So you can lay off staff, continue to pay them and recover 80% of that cost up to £30k per annum.
The current guidance states ‘You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to’
Changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation. Our HR support line can help (0844 892 2807).
Deferment of VAT payments
VAT payments can be deferred for up to 3 months. Again, all UK businesses will be eligible and the scheme will run between 20 March 2020 and 30 June 2020. There is no need to apply for this scheme. Businesses will be given until the end of 2020/2021 to settle outstanding VAT liabilities that have accumulated as a result of the 3-month deferral.
Time to Pay
Any business that pays tax to the UK government and has outstanding tax liabilities will be able to apply for their case to be reviewed by HMRC with a view to arranging a bespoke time to pay agreement. This applies to all businesses including the self-employed. HMRC has set up a dedicated helpline: 0800 0159 559.
Statutory Sick Pay
Employers will be able to reclaim up to 2 weeks of SSP payments per employee where those SSP payments related to Coronavirus. This applies to all UK employers with 250 employees or less as at 28 February 2020. The reclaim will not be via RTI, instead, HMRC will set up a new portal to facilitate this.
IR35 for the Private Sector
Changes to the IR35 off-payroll working rules in the private sector have been delayed by 12 months to April 2021.
HMRC will introduce a business rates holiday for retail, hospitality and leisure businesses in England for the 2020/2021 tax year. No action is required and this will apply to your next council tax bill in April 2020 meaning that there would be no rates payable for those businesses for 2020/2021.
The retail, hospitality and leisure sectors in England can also apply for a cash grant of up to £25,000 per property. For rateable values of under £15,000, they will receive £10,000. Between £15,001 and £51,000, they will receive a grant of £25,000. No action is required as local authorities will write to eligible businesses. Smaller businesses within the Small Business Rate Relief or Rural Rate Relief will of £10,000.
Business Interruption Loan Scheme – (Updated 23/03/2020 @ 12.32pm)
The British Business Bank will launch a scheme from the week commencing 23 March 2020 to support businesses with a turnover of no more than £45 million per year. The government will provide lenders with a guarantee of 80% on each loan. This applies for loans of up to £5m in value and for up to 6 years. No interest will be charged for the first 12 months.
The scheme is now open for applications as from Monday 23 March. To apply, you should talk to your bank or one of the 40 accredited finance providers (not the British Business Bank) as soon as possible, to discuss your business plan.
The major high street banks are on this list of 40 providers. Gov.uk states that more information can be found on their websites.
Corporate Financing Facility – (Updated 27/03/2020 @ 8.44am)
The Bank of England has announced plans to buy short term debt from larger companies that are ‘fundamentally strong’. We are currently waiting for a definition of ‘fundamentally strong’.
The Bank of England updated their site to set out the eligibility criteria: https://www.bankofengland.co.uk/news/2020/march/the-covid-corporate-financing-facilityand this was launched on Monday 23 March.
If a company’s accounts are unlikely to be filed on time owing to being affected by Coronavirus then an application can be made to extend the period allowed for filing. Here is a link. If an application is not made and there is a late filing then the normal penalty regime would apply, so it is important to make the application ahead of the deadline.
Protection for Commercial Tenants – (Updated 25/03/2020 @ 11.37am)
Any commercial tenant who misses a lease payment up until 30 June will not automatically be evicted. The government may extend this beyond 30 June as and when it becomes necessary. This is not a rental holiday and all rent payments must ultimately be met as part of the rent agreement. This will come in to force when the Coronavirus bill receives royal assent.
Support for individuals
Self-employment Income Support Scheme – (Updated 27/03/2020 @ 8.44am)
A taxable cash grant worth 80% of trading profits for the self-employed (including partnerships) up to a maximum of £2,500 is available for applicants upon invitation by HMRC to apply. Initially, the scheme will cover March to May 2020 and will be paid in the form of a single lump sum. The government is intending to pay this lump sum payment in June 2020. Eligibility conditions include a requirement that the self-employed individual has submitted a 2018/2019 tax return (by 23 April 2020) and traded in 19/20 as well. Further, they must intend to trade in 2020/2021 and they must have lost profits due to Covid-19. A separate more detailed update is available on our website.
Income Tax – (Updated 26/03/2020 @ 1.26pm)
The 2nd payment on account of tax that is due by 31 July 2020 will be deferred until 31 January 2021. All Taxpayers are eligible for this deferment. There is no need to apply for this offer to apply. No penalties or interest for late payment will apply during this deferral period.
Statutory Sick Pay
Individuals will be eligible for SSP for the first day of absence if the absence is Covid-19 related. The individual will need to visit https://111.nhs.uk/ in order to obtain an isolation note in line with advice issued from Friday 20 March. They will still be entitled to the normal maximum of 28 weeks in any 3-year period with the same employer, however, there is no need to wait for 3 working days before they would be eligible where Covid-19 applies.
The self-employed will be eligible to make a claim for Universal Credit or new style Employment and Support Allowance. Self-employed people will receive a rate equivalent to SSP.
Mortgage and rent holiday
Tenants, as well as mortgage borrowers, can apply for a 3 month payment holiday. Interest will continue to be charged on any amount that they owe. The government has announced that they intention is that no one can be evicted from their home over the next 3 months where this applies.
Statutory Residence Test (SRT) – (Updated 24/03/2020 @ 9.44am)
HMRC have updated their manuals to account for the impact of Covid-19. They have set out what they consider to be ‘exceptional days.’ See RDRM11005. Exceptional days are days that can be disregarded in trying to establish whether an individual is a resident in the UK.
If you have any further queries regarding the above or you wish to speak to one of our advisors regarding this please call the Croner Taxwise Tax, VAT and Payroll advice line fill out the form to request a callback.
FOR ANY CORONAVIRUS QUERIES, PLEASE CONTACT OUR HR, TAX OR PAYROLL TEAM HERE: http://bit.ly/TaxVATAdvice
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