The current situation in the UK is creating plenty of uncertainty in the business world, and many businesses are being asked to close, while continuing to support staff. With little to no productivity, and contracted fixed costs, there is a cashflow gap which is hard to fill. There is also an ongoing toll on the mental health of business owners and employees alike.
The government has outlined a range of measures to try to help businesses. As the situation is ever changing, the support and advice also changes, this article is up to date as of 23 March 2020, and based on official guidance only (below is a summarised and sometimes elaborated version of government guidance), available here.
OS Accounting offers our interpretation of the official guidance, below. Government advice should be followed, in light of the ever changing circumstances.
Gov.uk has released a support questionnaire to help businesses and individuals understand what help is available for them. You can get to the questionnaire here.
SSP and sick leave
Eligible employees must earn over £118 per week to be eligible for SSP – if they are below this amount then they should look to claim Universal Credit for support during this time.
- Sick pay has been brought forward to start from day 1, rather than waiting for 4 days as has previously been in place in relation to COVID-19. However, there must be a period of incapacity that exceeds 4 days in order for SPP to become payable;
- The government will refund 14 days worth of SSP for each employee, for COVID-19 reasons. The government guidance is 14 days of self-isolation, and employees should adhere to this;
- SSP refunds are only available to companies with up to 250 employees as of 28 February 2020;
- Employers need to maintain a record of SSP paid, and employee absence in respect of COVID-19, however a GP fit note will not be required. If an employer requires a sick note as part of their internal procedures, an isolation note (for those suffering from COVID-19) can be obtained from NHS 111 Online, and those who need a self-isolating note (for those with family members who have the virus) from the NHS website.
- The mechanism for obtaining a refund is not yet in place, but expected soon – keep in mind this will effect your cashflow until the refund mechanism is in place.
Coronavirus Job Retention Scheme
The government will cover 80% (up to a cap of £2,500 per employee per month) of an employees wage if they are unable to work due to coronavirus. The employee must be furloughed, meaning that they have been granted a temporary absence from work. Workers are not expected to during this furloughed period.
The reimbursement system is not yet live, there is no system in place to reimburse employers at present – so if cashflow is an issue you should look at the Coronavirus Business Interruption Loan Scheme in the interim.
In order to receive the reimbursement, you must:
- Write to your employee notifying them of their change in employment status to ‘furloughed worker’. This constitutes a change of employment status, and is still subject to employment law and may be subject to negotiation depending on your contracts of employment;
- Submit to HMRC the information of the furloughed employees and their earnings using the new HMRC portal (which has not yet been released);
- be registered for PAYE online services, and have an accessible postal address.
This is not available with the SPP reclaim – the employee is either sick, or furloughed – not both.
Self employed support, Micro Limited Companies and PSCs (Personal Service Companies)
Partnership partners, and self employed indivuduals
The Government are offering a support package, which will be paid as a lump sum in June, to those who have trading profits on their self assessment tax return. You can find out more details in our posting here.
Get your 2018-19 tax return in NOW
If you may be eligible for the self employed package, an invitation will be based on your 2018-19 tax return. HMRC have said they will include all returns received up to the 23rd April 2020. If we haven’t looked after your personal tax return for you, then you need to submit it now. If you need help, or would like us to do this for you, please contact us, or find out more details here.
Micro companies and PSCs
You may be able to furlough yourself, but this will need to be well thought out, and for most people will not result in a living income – more information is available here.
The government hasn’t offered any grant based support for this sector. The only current options – if you have had to close, or there is no work available – beyond the deferral options and the coronavirus loan scheme, are that you may be eligible for the means tested Universal Credits, or otherwise temporary employment – delivery companies are currently on a hiring spree, trying to meet demand:
Retail, Leisure and Hospitality sectors business rates
Businesses in this sector will not pay any rates for the 2020/21 tax year.
This is administrated by the local authority, who will be reissuing rates invoices over the coming months automatically. You are eligible if you are asked to pay business rates, and your business premises is wholly, or mainly being used:
- As a shop, restaurant, café, drinking establishment, cinema or live music venue;
- For assembly and leisure;
- As a hotel, or accommodation.
Further information is available in the expanded retail discount guidance
Retail, hospitality and leisure business grants
Businesses in this sector with a rateable value of lower than £15,000 will receive a grant of £10,000. Above this level, but below £50,000 rateable value will receive a grant of £25,000. These grants are issued per property.
The eligibility is the same as business rates relief above, and your local authority is administrating the scheme. They will write to you if you are eligible ,and should be contacted if you believe you are eligible but have not been contacted over the next 2 months.
Nurseries that pay business rates
Businesses in this sector will not pay any rates for the 2020/21 tax year.
This is administrated by the local authority, who will be reissuing rates invoices over the coming months automatically. You are eligible if you are asked to pay business rates, and your property is:
- occupied by providers on the Ofsted Early Year Register;
- wholly or mainly used for the provision of the Early Years Foundation Stage.
Further information is available in the nursery discount guidance.
All other businesses, who pay little or no business rates
If you receive Small Business Rate Relief, or Rural Rates Relief, and occupy a property, you will be eligible for a one off grant of £10,000. This is administrated by the local authority. They will write to you if you are eligible ,and should be contacted if you believe you are eligible but have not been contacted over the next 2 months.
Extra financing availability
Coronavirus Business Interruption Loan Scheme
Loans, of which 80% is secured by the government have been introduced. These are interest free for the first 12 months, as the government will be cover the first 12 months of interest payments.
This will be operated by the British business bank, and is provided through accredited lenders – likely, your bank. If you need this, then you need to approach your bank to receive it.
Please be aware this is borrowing and will need to be repaid – it is not a grant. The scheme is available from Monday (23rd March) through accredited lenders – who are available here. The scheme is open to businesses below £45million turnover, and who meet the BIB eligibility criteria.
Coronavirus Business Bounce Back Loan
On the 27 April 2020, the chancellor announced the business bounce back loan, for small and medium companies. These loans, between £2,000 and £50,000, are 100% guaranteed by the government, with no repayments, interest or fees for the first 12 months.
Larger Firm Corporate Financing
The Bank of England will purchase the short term debt of larger firms, and is available from 23 March 2020. More information is available from the Bank of England.
Payments of Tax
Time to Pay Service
The Time to Pay service’s staff numbers have been increased in order to help the self employed and businesses with paying their tax liabilities. This is in the form of an agreed payment plan, agreed based on liabilities and circumstances. To speak to the HMRC Time to Pay staff, call 0800 0159 559, if you are worried that you will miss a tax payment.
Deferring of VAT and Income Tax Payments
VAT payments are deferred until 30 June 2020. You can still pay on your usual schedule, but if you do not make a payment for liabilities due after 20 March 2020, then you may defer this payment until the end of the 2020/21 tax year – by which time HMRC expect all VAT payments to up up to date.. You do not need to make any application or claim. Please keep in mind that a VAT return will still need filing in the normal timescales, it is only the payment that can be deferred. HMRC will be issuing any refunds as usual.
Income tax payments due on July 2020 are deferred until January 2021. These will still be due, however, so if you do chose to defer then you need to be aware that you will have only paid 50% of your payments on account (included in your January 2020 payment – if you needed to) by 31 January 2021, so you may be in for a higher than average cash payment – and need to take into account that your January payment will include your 2020/21 50% payment on account as well.
Mental health support
With a lot of uncertainty around the subject of infection rates, and an onslaught by the media as well as rumours and a general time of bad news, everyone is worried – it’s a normal response, to abnormal times. Anxiety may be for Jobs, family and close vulnerable people, as well as a whole host of other reasons.
Anxiety UK have released guidance on navigating the mental health effects connected to these worries, as well as self isolation. You can find the article here.
There is an abundance of news, which can be all consuming. It is good to keep apprised of an ever changing situation, however limiting exposure to the news to once or twice a day can have a positive impact. Rumours and social media, though keeping us in touch with current events, also don’t give much information of the source of articles and advice. Try to be mindful as to whether the guidance you are reading is official, or a vocalisation of someone else’s anxiety.
Exercise scepticism towards unofficial information – there is a lot of it, not all is welcome, some is not useful – even though more information gives a perception of control.
Netflix, Amazon Video, and streaming on demand can offer relief from on going news bulletins, and there are some great shows to watch.
Its important to stay active, there are online Yoga videos, and home exercise routines that you can do – usually available for free on YouTube. Some yoga instructors are doing video streamed sessions – Tough Mudder are doing a home work out series.
There are plenty of mindfulness apps available for your smartphone. Headspace, is used by millions of people worldwide and is a way of helping keep everything in perspective. It’s also a nice switch off to help relax.