COVID-19: UK business advice

Click on the links below to find out more about the help that Government has put in place to help your business through this pandemic:

COVID-19 UK business advice

Here is a quick summary of practical help announced by the government. You can read the latest guidance and advice issued by the government for businesses on its coronavirus pages.

 Read government’s Frequently asked questions that will be regularly updated according to the latest advice and guidance. 

These uncertain times have been addresses by the Government in a variety of ways. We would like to reassure our clients that we are here to offer guidance and support over the next few months.

Our services will continue without interruption to ensure our clients meet their filing deadlines.  

Please keep up to date with the latest Government support for businesses using the links below. These are changed on a daily basis as the situation develops: 

 Government action plan: https://www.gov.uk/government/publications/coronavirus-action-plan

 Budget 2020: tax-related documents: https://www.gov.uk/government/collections/budget-2020-tax-related-documents

 

Beware of fraud

 Under the current circumstances, fraudsters are taking advantage to a variety of scams and cybercrime. Since businesses now have limited numbers of staff and remote working, this has increased risk that staff may be tricked into one of these scams.  Please see the HMRC fraud and scams for details of potential fraud and scams.  

 Should you need further support by getting more time to pay taxes see the guide to the HMRC difficulties to pay.

 

Employers

 

  • Coronavirus Job Retention Scheme has been put in place to protect those employees who would otherwise have been laid off during this crisis.  UK employers can access the scheme for any employee who was on the payroll on 28th February 2020. The guidance states that employers can use a portal to claim for 80% of furloughed employees’ usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions. 
  • Employees hired after 28 February 2020 cannot be furloughed in accordance with this scheme. Further, in order to qualify for the payment, an employee must be furloughed for a minimum period of three weeks. The employer must adhere to the conditions of this scheme and their employees’ rights. See ‘Conditions and employee rights’ 
  • Employees must be paid the lower of 80% of their regular wage or £2,500 a month, and employers can choose to “top up” the pay of a furloughed employee to 100% of their contractual pay, but they are not obliged to under the scheme. See ‘Salary on which claim is based’ 
  • Sole-directors can also access the furlough scheme as it can apply to owner-managed limited companies. See ‘Company directors’ 
  • The HMRC update was released on 4 April and addressed:  

Guidance for employers – Claim for your employees’ wages through the Coronavirus Job Retention Scheme 

Guidance for employees – Check if your employer can use the Coronavirus Job Retention Scheme 

 

 

Access to the CJRS grant 

Any businesses, individuals, charities, recruitment agencies and public authorities will be able to make a claim as long as they have a UK payroll and a UK bank account. 

HMRC has stated that the online service through which claims will be made is expected to be available from 20th April 2020. 

To make the claim, employers will need the following information: 

  • employer PAYE reference number
  • the number of employees being furloughed
  • the claim period (start and end date)
  • amount claimed (per the minimum length of furloughing of 3 consecutive weeks)
  • the relevant bank account number and sort code
  • claimant’s contact name
  • a contact phone number

 HMRC will pay it by BACS to a UK bank account after checking the claim.

 

 HMRC will retain the right to audit retrospectively all aspects of the claim.

 

 The employer is required to pay the employee all the grant received for the employee’s gross pay. The employer cannot deduct charges or fees from the pay.

 

Salary on which claim is based

 The grant is based on the lower of 80% of the monthly salary and £2,500, plus the associated employers NIC and pension contributions. If employees are on a regular salary, the employer must use 80% of the employee’s gross salary on 28 February 2020. 

However, for those whose pay varies, and they have been employed for more than 12 months, use the highest of: 

  • Same month’s earnings from the previous year
  • Average monthly earnings for the tax year 2019/20.

For anyone employed for less than 12 months, the employer must claim for 80% of their average monthly earnings since they started work. 

For anyone who started employment in February 2020, the employer must pro rate their earnings to date and use that as a base for the claim. 

Discretionary bonuses (incl. tips), commission payments and non-cash payments are excluded from this grant. However, any regular payments that the employer is obliged to pay the employee can be claimed through the grant. This included fees and compulsory commission payments and past overtime. 

The reference salary is the amount after deducting any payments into the employees’ pension through salary sacrifice. Also non-monetary benefits to the employee including benefits in kind should be excluded. Under the terms of the Job Retention Scheme, HMRC has stated that any employer benefits should be paid to furloughed employees in addition to the wages paid through the scheme. 

Conditions and employee rights 

 The minimum period for which an employees must be furloughed is 3 consecutive weeks. Employees cannot work for the employer at all during this period. Once the employee starts working for their employer again, they must be taken off the furlough scheme. They can be put on furlough multiple times, with each instance being a minimum of 3 consecutive weeks.  

Before making an employee furlough, the employer must check the terms of the employment contract to ensure they are not in breach of any rights. They should seek legal advice if necessary. 

Employees will have the same rights at work, which include: 

  • Statutory Sick Pay
  • maternity and other parental rights
  • rights against unfair dismissal
  • redundancy payments – the grant cannot be used as a redundancy payment. 

 

Company directors 

 Many people have asked us if company directors receiving a salary can be made furlough where they are the owner/ manager of the close company. The answer is yes, this can be done. However, the HMRC guidance reminds companies that: 

‘company directors owe duties to their company which are set out in the Companies Act 2006. Where a company (acting through its board of directors) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed. Where one or more individual directors’ furlough is so decided by the board, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned.’ 

‘Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, for instance, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.’ 

Disclaimer

Whilst we endeavour to bring you the latest information to support you and your business in these challenging times, please be aware that employment law must be followed at all times and in the event of any doubt of the application of guidance please speak to an employment lawyer. 

All businesses

For all businesses, the government has introduced deferment of various taxes to ease the pressure: 

VAT

 VAT payments have been deferred for all payments due between 20 March and 30 June 2020. However, if businesses have a direct debit in place for HMRC to collect payment, this will need to be cancelled otherwise the payment will be collected. The business must then re-instate the direct debit for future payments. All deferred payments must be made by 31 March 2021. 

 For more information: Government guidance 

 Time to Pay 

 All self-employed people and businesses under financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time to Pay Service. HMRC has set up a dedicated helpline for those who need help is 0800 0159 559.

 For more information: Government guidance 

  

Regulations temporarily suspended to fast-track supplies of PPE to NHS staff and protect companies hit by COVID-19

 Changes to insolvency rules to help companies trade – announcement that changes will be made to enable UK companies undergoing a rescue or restructure to continue trading, helping them avoid insolvency. 

For more information: Government guidance 

 

 

Self employed

 

Self employment Grant Scheme

After much concern by the Self employed about being left out of the government support schemes, the Chancellor, Rishi Sunak, announced that the self-employed will now be aligned with the Job Retention Scheme for the employed. Anyone who had lost profits due to coronavirus, could be eligible for a taxable grant worth 80% of their average monthly profits over the past three years, up to £2,500 per month. The eligibility criteria would cover 95% of those who earn the majority of their income through self employment. Anyone earning over £50,000 would not be eligible for this grant.

 Self employed people do not need to apply for this. HMRC will be sending out forms to individuals and the earliest they expect to pay the grant to tax payers is June.

 The government has said it will use the average self employed income for the last three tax years 2016-2017, 2017-2018 and 2018-2019. However, if the individual does not have three years, only two or one year will be used depending on when they registered.

 Unfortunately for anyone who registered their self employment start date after 5 April 2019 will lose out as they do not fall under this scheme. The government has advised that they seek financial assistance through he state benefits system.

 For further details and eligibility criteria, please see the Government guidance. 

 

 Deferral of Self-Assessment payment 

 For 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. This is automatic and does not need to be applied for.  No penalties or interest for late payment will be charged in the deferral period.  

For more information: Government guidance.

 

Small and medium businesses

 

Small Business Grant Funding

The government will provide additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR). This will provide a one-off grant of £10,000 to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs.  Funding for the scheme will be provided to local authorities by government in early April.

You are eligible if:

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

Check your latest business rates demand to see if SBRR or RRR was applied.

You will be contacted by your local authority – you do not need to apply.  Any enquiries regarding eligibility should be directed to your local authority.

 

Coronavirus Business Interruption Loan Scheme

This temporary scheme can provide facilities of up to £5m for smaller businesses who are experiencing lost or deferred revenues causing disruption to cashflows.  Facilities can be loans, overdrafts, invoice or asset finance.  Key features are: 

  • Up to £5m facility, available on repayment terms up to 6 years on loans / 3 years on overdrafts and invoice finance
  • 80% Government backed guarantee
  • Interest and fees paid by the Government for 12 months
  • At the discretion of the lender, it may be used for unsecured lending up to £250,000

Note that the Government guarantee is to the lender and not the business; the borrower remains 100% liable for repayment of the facility.

 

You are eligible if:  

  • UK based business activity with turnover less than £45m
  • The business must have a borrowing proposal which if it were not for the current pandemic would be considered viable by the lender and which the provision of finance will allow the business to trade out of any short to medium term difficulty.
  • Decision making for eligibility is fully delegated to the lender.

You must access this through accredited lenders. A full list of accredited lenders can be found here.

For more information: Government guidance.

  

Statutory Sick Pay Rebate

This allows small and medium-sized businesses to reclaim up to 14 days of the cost of Statutory Sick Pay pay for staff absence due to coronavirus. 

Statutory sick pay will be available for anyone who has had to self-isolate due to the virus and the government will refund the cost of statutory sick pay for up to 14 days for small and medium-sized businesses. 

You are eligible for the scheme if your business is UK based and is a small or medium sized business with fewer than 250 employees as at 28 February 2020.

Although the rebate scheme is still being developed, the scheme can be used straight away as long as employers are maintaining a record of staff absences and payments of SSP. Employees will not need to provide a GP fit note but those with symptoms should obtain an isolation noted from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website. 

For more information: Government guidance.

Retail, Hospitality and Leisure businesses

 Business Rates Holiday for Retail, Hospitality and Leisure sectors in England for the 2020-21 tax year. 

Cash Grants

The Retail and Hospitality Grant Scheme provides Up to £25,000 per property Cash Grant for Retail, Hospitality and Leisure in England

These will be given to businesses in these sectors with rateable value between £15,000 and £51,000 (in England). Small businesses with a rateable value below £15,000 (in England) will receive a cash grant of £10,000.

The reliefs will be administered by local authorities. Cash grants will be paid automatically.

Properties that will benefit from the relief will be 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

Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority. 

For more information: Government guidance  

 

Business rates

Business rates will be cancelled for 2020-21 for businesses in retail, hospitality and leisure.

Eligibility is as per the cash grants criteria above.  Check your latest business rates demand to see if a Retail Discount was applied. You do not need to do anything. Your local authority will rebill you as soon as possible.

Nursery businesses

Business rates holiday will apply for nurseries in England for the 2020 to 2021 tax year. You do not need to do anything. Your local authority will rebill you as soon as possible.

Properties that will benefit from the relief will be:

  • occupied by providers on Ofsted’s Early Years Register
  • wholly or mainly used for the provision of the Early Years Foundation Stage

For more information: Government guidance