COVID-19 Government Funding Update
Please note that current guidance is changing all the time but the following is an up to date summary as at 23 March 2020 of current schemes in place to assist with business interruption resulting from the Coronavirus outbreak.
Coronavirus Job Retention Scheme
The Coronavirus job retention scheme covers any employees in any business, charity, or non-for-profit organisation. This scheme covers any employees who are now unable to work due to COVID-19 (but have been retained), this scheme covers up to 80% of your monthly salary of up to £2,500 per month.
You will be able to backdate and claim from 1 March 2020. The government has said that there will be no limit on funding for this scheme which will be open for an initial period of 3 months but will be extended if needed.
Income Tax and Deferred VAT Payments
The government will defer VAT payments for 3 months for businesses. Payment of VAT will be deferred until the end of the tax year. Please note that at this stage further guidance is awaited on exactly when these VAT payments will fall due for each VAT registered business.
For self-employed individuals the income tax due under self-assessment for July 2020 will be deferred until January 2021.
Statutory Sick Pay
The government has announced that SMEs (fewer than 250 employees) will be able to reclaim their Statutory Sick Pay (SSP) paid for employees that have been off work due to COVID-19 (or are self-isolating). This reimbursement will cover up to 2 weeks SSP for each eligible employee who has not attended work due to COVID-19. The current rate of SSP is £94.25.
It is vitality important you keep accurate records of SSP payments and staff absences. If evidence is needed by the employer you will be able to get an isolation note from NHS 111 online. Furthermore, if someone in your home has had the symptoms you should be able to get a note from the NHS website.
Rate Relief for Leisure, Hospitality and Retail Businesses
The government has introduced a business rates holiday for leisure, hospitality and retail businesses for the 2020/21 tax year. There is no limit to rateable values on this scheme and any businesses that have been temporarily closed as a result of COVID-19 will be treated as occupied for the purposes of this relief.
In addition, the government will support small businesses through the Small Business Grant Scheme for businesses that already pay either very small or no business rates. The government will provide a one-off grant of £10,000 to eligible small businesses across the country to help with on-going business costs.
Grants for Leisure, Hospitality and Retail Businesses
Again, this scheme is available for any business in the leisure, hospitality and retail sectors and you could receive a grant of up to £25,000 if you have a rateable value between £15,000 – £51,000. If your business has a rateable value of less than £15,000 you will be eligible for a grant of up to £10,000.
Coronavirus Business Interruption Loan Scheme
This new scheme was launched on 23 March and is aimed at supporting small and medium sized businesses with turnover up to £45 million. Lenders will receive an 80% backed guarantee from the government on each loan. This should provide confidence to lenders providing loans to SMEs. The scheme will support loans of up to £5 million in value. The government will also cover the interest payments for the first 12 months.
Time to Pay (TTP)
TTP has been available to businesses for over a decade, but HM Treasury has announced a stepping up of resource and a specific COVID-19 helpline that businesses can call. TTP allows a business to defer current (as opposed to prospective) tax debts (principally corporation / income tax, payroll taxes and VAT –but theoretically any other tax or duty) by converting settlement to instalments over a 3-12 month period. As part of the process, directors are expected to provide written confirmation that the instalment will be made on time.
Businesses with a Customer Compliance Manager should discuss this with them in the first instance. All others are encouraged to contact HMRC’s helpline on 0800 0159 559. The process can take less than an hour in a simple situation where the amount to be deferred is less than £750K. Agreement for deferral of larger sums will take longer.
Make sure you keep up to date with the COVID-19: support for businesses site here.