Covid-19 Business Support Hub
With the majority of the UK now either working from home, working reduced hours, or not working at all as a result of Covid-19 (Coronavirus), it’s understandable for financial anxiety to develop.
Over the last three months, the government has introduced a series of measures designed to ease the financial fallout caused by the virus.
We’ve taken a look at what help is available for you, our clients, business owners, self-employed contractors, and Danbro Family members.
Some of the more immediate pledges made by the government in response to the Coronavirus outbreak were to Small and Medium-Sized Enterprises (SMEs). A plethora of packages have been made available to support businesses through this period of unfamiliarity. Here are some of the steps the government has taken to help.
VAT payments deferred for three months for ALL UK businesses. This action applies from March 20th 2020 to June 30th 2020. So, if you’re a UK VAT registered business with a VAT payment due between March 20th and the end of June, you can either pay as normal or defer ‘til a later date. HMRC will not charge penalties or interest on any amount deferred.
‘Bounce Back Loans’ from £2,000 to £50,000 are also available to UK businesses who’ve been negatively impacted by Coronavirus. Whilst this is a loan, NOT a grant, qualifying businesses will only start repaying their loans after 12 months, with all lenders charging a flat rate of 2.5%. The loans will last up to six years.
As per the Covid-19 Corporate Financing Facility, the Bank of England will buy short-term debt from larger businesses, supporting your company if it suffers a shrinking of short-term funding. To find out more about eligibility, etc., click here.
There’s a business rates holiday for companies in retail, leisure, hospitality and nurseries for the whole of the 2020/21 tax year. This includes businesses like shops, restaurants, pubs, cafes, cinemas, gyms and hotels.
If your business is insured against government-ordered closures, as we’ve seen with gyms and pubs, for example, you will be able to make a claim. There’s more information available on business interruption claims, courtesy of the Financial Ombudsman.
For SMEs that pay little or no business rates already, the Small Business Grant Scheme provides a one-time grant of £10,000 to authorised businesses. To check your eligibility, click here.
The most publicised package of support has been the government’s Coronavirus Job Retention Scheme, changes to which were recently announced by the Chancellor.
Qualifying organisations include UK businesses, charities, recruitment agencies and other public authorities. To register, “you must have created and started a PAYE payroll scheme on or before March 19th 2020 and have a UK bank account”. There’s more information on this scheme available in the ‘Employees & Furloughed Workers’ section of this page.
The Coronavirus Business Interruption Loan Scheme gives SMEs temporary access to certain overdrafts and bank lending. If your business is based in the UK and has a turnover of under £45 million, you’ll be eligible. The scheme, delivered by the British Business Bank, supports loans of up to £5 million. What’s more, the government will provide a guarantee of 80% on each loan and will pay the interest and fees for the first year.
For further guidance from HMRC on the measures that have been announced, click below:
To try and echo the assurances given to ‘employees’, the Chancellor also put in place a package of support for self-employed workers too:
The Self-Employed Income Support Scheme (SEISS), which covers the majority of a self-employed person’s average monthly trading profits, has been extended.
So, those eligible can now make a second (and final) claim in August. That grant will be worth 70% - rather than the previous 80% - of your average monthly trading profits. It’s paid out in one single instalment, covering three months’ worth of profits. This is capped at £6,570.
Your allowance will be taken from your average income over the last three financial years. For those self-employed people who do not have three years’ worth of profits, assessments will be made from the amount that you do have.
You must make the claim yourself. Furthermore, you must make a claim for your first SEISS grant by July 13th 2020. Application for the second grant will open in August.
If you’re registered for Self-Assessment and you’re struggling to make your second payment on account (due July 31st) as a result of Coronavirus, you have the option to defer.
If you’re able to pay, you may still make your payment by the end of July. But HMRC will not penalise you if you need to defer your payment, so long as it’s paid in full by the end of January 2021. Find out more, here.
For those self-employed workers in need of additional financial support, Universal Credit is available.
The application rules for Universal Credit have recently been relaxed, making the benefit more accessible. To check your eligibility for Universal Credit, or to make a claim today, click here.
HMRC's 'Time to Pay'
Another useful tool for both businesses and self-employed personnel in financial difficulty, is HMRC’s ‘Time To Pay’ arrangement. This is a payment plan for certain outstanding taxes. With Time To Pay, HMRC provide support for those who are unable to meet their tax payment deadlines. In this instance, as a result of COVID-19.
Time To Pay allows you to pay the tax you owe in monthly instalments. So, if you’ve received a payment demand, such as a tax bill, contact the HMRC office that sent you the letter. Their details should be on the correspondence you received.
To clarify, as this is a monthly payment plan, it IS NOT a grant.
Employees & Furloughed Workers
The financial support available for the nation’s employee workforce is unprecedented in its scale.
Firstly, if you have or are using a PAYE scheme and are unable to work as a result of sickness or self-isolation, you’re entitled to claim Statutory Sick Pay (SSP) to the value of £95.85 per week. As well as employees, this includes freelancers, contractors and consultants who use Limited Companies.
If your employer cannot cover the cost of your employment as a result of Coronavirus, the aforementioned Coronavirus Job Retention Scheme (CJRS) ensures that you’ll continue getting most of your wages.
Under the CJRS, if you’re ‘furloughed’ by your employer, HMRC will reimburse 80% of your regular wage costs (up to a maximum of £2,500 per month) until the end of July 2020.
In order to qualify for the scheme, a worker will need to be classed as ‘furloughed’. This can apply to: full-time, part-time and flexible employees, as well as agency contracted employees and those on zero-hour contracts.
The scheme will close to all new entrants on June 30th. Thereafter, employers will only be able to claim the CJRS for employees who have been furloughed for a minimum three week period prior to June 30th.
From July, employers can bring furloughed employees back into work part-time AND STILL claim 80% of their employees’ wages for the ‘regular hours’ they do not work.
As an employer, you can decide the hours and shift patterns of your staff. However, you are responsible for paying them for the hours they do work. Otherwise, employees can remain furloughed for the remainder of the scheme.
The scheme will continue in its original format (covering 80% of a furloughed workers’ pay) until the end of July. Then:
• From August, employers are required to pay pension contributions and Employer’s National Insurance Contributions (Er NICs).
• As well as pension contributions and Er NICs, as of September 1st, employers are also required to contribute 10% of their furloughed workers’ pay. The government will cover the remaining 70% of any hours an employee doesn’t work - up to a maximum of £2,187.50.
• The employer’s contribution will double to 20% at the beginning of October, on top of the usual pension and Er NI contributions. At this stage, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee has not worked.
• The scheme will close in November 2020.
For more information on the Coronavirus Job Retention Scheme, including how to access it as an employer and details about the furlough process, click below.
Limited Company Directors
Unfortunately for those of our clients who have Limited Companies, the SEISS DOES NOT apply to Limited Company Directors.
However, ‘those who pay themselves a salary through their own Limited Company WILL be covered for their salary by the Coronavirus Job Retention Scheme, IF they’re operating a PAYE scheme’.
So, if you receive a regular salary as a Director, your grant will be calculated at 80% of your salary as at 19th March 2020.
This, though, does not include any dividends you draw. Nor does it account for any bonuses or commissions.
There is also a distinction between Executive and Non-Executive Directors. Executive Directors are often permanent, senior members of staff and would therefore qualify for the scheme. On the other hand, Non-Executive Directors tend not to be permanent contracted employees, and so wouldn’t be eligible.
Furthermore, as an employer, you are eligible to claim for Employer’s National Insurance Contributions and minimum Employer’s Pension Contributions - 3% if opted in.
The financial fallout from Coronavirus - and the measures introduced to combat its spread - is something we’re all trying to come to terms with.
So, the team of experts at Danbro Financial Planning (DFP), have taken a look at some ‘dos’ and ‘don’ts’, to help you with things like pensions, investments, mortgages, and insurance policies. Read more on our blog.
Support from Danbro
Our employees are continuing to work as normal. Some have already returned to the office, while others work remotely from home.
Our dedicated team are working tirelessly to bring you the information that matters as quickly, clearly and concisely as we can. If you have any accounting-related concerns or queries, you can contact your Personal Accountant via their usual, individual email address.
Of course, it goes without saying that your health and wellbeing is of paramount importance to us. And, to that end, we sincerely hope you and your families are keeping safe and well in these unfamiliar times.
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