Last Update 13 May 2020
The advice and support measures flowing from HM Government are changing on a daily basis, we aim to bring you the most up to date information available, please be aware that a lot of the detail around the headline provisions have yet to be published and therefore we will bring this to you as soon as they are available.
You can read the latest advice and guidance from government for employers, businesses and employees on its coronavirus pages at:
Support for business
The following is available in terms of government support to businesses who will inevitably be hit economically by the spread of the virus:
Whilst many of the measures mentioned below are new, some already exist or have simply been extended.
Coronavirus Job Retention Scheme
Under the new Coronavirus Job Retention scheme, government grants will cover 80% of the salary of PAYE employees who would otherwise have been laid off during this crisis. The scheme, open to any employer in the country, will cover the cost of wages backdated to 1 March 2020 and is now open. It will continue until 30 June in its current form and will continue until 31 October in a similar format with more details being released about the amended scheme in due course. It can include workers who were in employment on 19 March (must have processed an RTI submission notifying HMRC of payment of that employee on or before 19 March 2020.)
To claim under the scheme employers will need to:
- designate affected employees as ‘furloughed workers’, and notify employees of this change. Changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation; and
- submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal. HMRC will set out further details on the information required.
- HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.
To make your claim using your government gateway PAYE services account follow the claim portal link
Full details of the scheme is now published in our dedicated Coronavirus Job Retention Scheme information guide
For the full guidance from HM Revenue and Customs visit the website
COVID-19 Self-employment Income Support Scheme
On the 26 March, Chancellor Rishi Sunak announced a scheme to help self-employed workers who have been hit by the COVID-19 crisis.
Similar to the Coronavirus Job Retention Scheme for employed persons the government will pay self-employed people (or partners in a partnership) a taxable grant based on an average of their earnings over the past three years (or an average of less years if you have traded for less). The grant will cover up to 80% of earnings up to a limit of £2,500 a month, will be for three months and paid as one lump sum into your bank account, the grant will be taxable.
The profits will be taken from the tax return as filed and is the excess of income (turnover) after deducting allowable costs (in line with normal tax rules). The earnings figure will be stated after deducting capital allowances which may adversely affect some claimants although this should be mitigated by using the three-year averaging where multiple years are available. It is now clear that prior year losses utilised in a tax year and the personal allowance will be ignored and not deducted.
Those eligible must have filed a tax return for the 2018/19 tax year and have trading profits under £50,000 for either 2018/19 or an average of less than £50,000 over the past three years. In addition more than half of your income must come from self-employment/partnership income for either 2018-19 or be the case as an average for the last three years.
You can check now whether you are eligible and this will also give you the date you can make a claim as well as giving you more instructions on how to make the claim. Your agent will not be able to make the claim for you and you will need to make the claim using your government gateway ID and password, if you haven’t already got one of these then access can be granted fairly simply by applying.
Directors of their own companies who are paid through PAYE are not covered by the scheme but may be able to get support using the Coronavirus Job Retention Scheme.
If you have more than one trade in the same tax year then the profits and losses for all these trades will be added together all to work out your eligible trading profit.
Full details of the scheme from HMRC
The next quarter of VAT payments will be deferred, meaning businesses will not need to make VAT payments until the end of June 2020. Businesses will then have until the end of the 2020-21 tax year to settle any liabilities that have accumulated during the deferral period.
The deferral applies automatically and businesses do not need to apply for it. However, if you have a Direct Debit in place, you will need to cancel the instruction in plenty of time before it is taken to avoid automatic deduction which will not be repaid. VAT refunds and reclaims will be paid by the government as normal.
Income Tax payments
Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
Income Tax Self-Assessment payments due on the 31 July 2020 will be deferred until the 31 January 2021. This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period.
Self-employed people can now access full universal credit at a rate equivalent to statutory sick pay.
The Government will now provide loan guarantees up to “an initial” £330 billion for all sizes of businesses:
- For large firms, the Bank of England is launching a Covid Corporate Financing Facility (CCFF), which “will provide funding to businesses by purchasing commercial paper of up to one-year maturity, issued by firms making a material contribution to the UK economy”.
- For small and medium sized businesses, the loan limit on the Coronavirus Business Interruption Loan Scheme [CBILs] (originally announced in the Budget at £1.2 million) is now £5 million, with no interest due for the first twelve months.
- Bounce back loans, many small businesses have found accessing loans through CBILs difficult due to lengthy underwriting and strict lending criteria. Businesses will now be able to borrow between £2,000 and £50,000 and access the cash within days, loans will be interest free for the first 12 months, capped at 2.5 %pa after the first year, and businesses can apply online through a short and simple form. The application process is very simple with a lot of self-certification in place of traditional underwriting techniques. The scheme is live and businesses are likely to need to apply to their own trading bank as their will be very few lenders taking on new business.
This is similar to the Enterprise Finance Guarantee (EFG) scheme and, like EFG, is delivered by the British Business Bank. Further details will be made available on their website as they are published.
Time to pay (TTP) arrangements
HMRC has reintroduced TTP, having very quietly phased it out for many businesses over the last 3 years. Businesses and the self-employed who are struggling financially and have tax liabilities to meet can call the HMRC dedicated helpline to discuss a TTP arrangement on 08000 159 559.
Business rates holiday
There will be a one-year business rates holiday for the retail, hospitality and leisure sector. This is automatically in place and being administered by the local authority who you pay rates to.
Businesses that are entitled to Small Business Rates Relief (rateable value of less than £15,000) or Rural Rates Relief are now set to receive a grant of £10,000, administered by the local authority to whom they apply for the relief, without the need to make an application for the grant.
The Chancellor also announced a £25,000 grant for retail, hospitality leisure businesses operating from premises with a rateable value for tax purposes of between £15,000 and £51,000.
The Government envisaged that these grants would not be applied for and would be automatic, unfortunately the administration of this fell over with the local authorities not holding banking details for the majority of businesses. Therefore, most local authorities have opted to set up an online portal for businesses to provide the details. Local authorities will be writing to all eligible businesses (if they have not done so already) to inform them they are eligible and ask them to enter their details in the portal but you do not need to wait for that letter, you just need your latest rates bill and your bank details to be able to answer the very simply online form.
Links to the local online portals are as follows:
Sedgemoor District Council | Somerset West & Taunton | Mendip District Council | North Somerset Council | Bristol City Council |Bath & North East Somerset Council | East Devon District Council | Exeter City Council
Naturally, this isn’t an exhaustive list of local authorities and therefore if your business premises are based somewhere outside of these then you will need to contact your local authority via their website or using the enquiries telephone number.
Statutory sick pay
The Chancellor has announced that statutory sick pay will be extended to cover from day one of someone being off sick (and this includes self-isolating due to family members exhibiting signs or childcare requirements caused by children having to self-isolate) due to coronavirus for a period of two weeks without the need for GP sick note. This will be recovered by businesses through their PAYE and National Insurance monthly returns.
If you're a director of a limited company with less than 250 employees, you can pay yourself two weeks of SSP if you need to self-isolate subject to meeting the minimum payroll requirement for SSP.
The government will refund £94 per week, maximum £188, to your company.
It will also refund SSP for staff of businesses with less than 250 employees for up to two weeks.
Businesses that have cover for both pandemics and government-ordered closure should be covered. The government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres, etc., is sufficient to make a claim as long as all other terms and conditions are met. Insurance policies differ significantly, so businesses should check the terms and conditions of their specific policy and contact their providers.
Off-payroll working in the private sector (IR35)
Also on 17 March, the Chief Secretary to the Treasury, Steve Barker, said in a statement to the House of Commons that the start date for the new IR35 tax rules would be deferred to 6 April 2021.
For self-employed persons needing to claim additional support and those needing to claim top up benefits then the following link explains the provisions:
Department for Work and Pensions- Covid-19: Support for businesses and employees
You can contact the government’s Business Support Helpline for free advice on 0300 456 3565. For more details see: HM Treasury – Support for those affected by Covid-19
Measure for Individuals
Mortgage and rent holiday
Mortgage borrowers can apply for a three- month payment holiday from their lender. Both residential and buy-to-let mortgages are eligible for the holiday. It is important to remember that borrowers still owe the amounts that they don't pay as a result of the payment holiday. Interest will continue to be charged on the amount they owe.
Tenants can apply for a three-month payment holiday from their landlord. No one can be evicted from their home or have their home repossessed over the next three months.
Individuals ineligible for SSP
Self-employed and gig economy workers generally do not qualify for SSP. Instead they may be entitled to Contributory Employment and Support Allowance (ESA – a basic £73.10 a week for those 25 and over, rising to £74.35 in 2020/21).
Covid-19 sufferers and self-isolators will be able to claim the benefit from day one instead of day eight. The minimum income floor in Universal Credit (UC) has been temporarily removed to ensure that time off work because of sickness is reflected in benefits. Universal Credit helpline: 0800 328 5644 and for more information visit: HM Government - Support and guidance for employees, employers and businesses
The Chancellor announced in the Budget a £500 million Hardship Fund, which would be distributed to Local Authorities so that they could support the vulnerable.
Practical steps you can take now to support your business
- Communicate regularly with your employees to ensure that the latest government and Department for Public Health advice is taken on board
- Test your IT infrastructure and put in place video conferencing technology such as Zoom or Skype to allow ongoing communication
- Speak with your bank and or finance provider to get the support and flexibility you need in what is likely to be a challenging time
- Contact your suppliers to understand their contingency plans for working around the virus
- Zero hours contracts - Employer generally have no responsibility to offer work to casual staff and those on zero hours contracts. Unless such staff are essential to a continuing business activity this is an expense that is easily avoided
- Contracted hours staff - These are full and part-time employees who, generally, will have to be paid whether they work or not, unless you can require or persuade them to take unpaid leave and/or holiday
- If contracted hours staff are self-isolating due to coronavirus then the only obligation will be to pay them two weeks statutory sick pay, unless their contract provides otherwise. As mentioned above this can be recovered for up to 2 weeks without a GP sick note from NIC returns. To continue receiving sick pay after this period the employee will need a sick note from their GP
- Laying off staff - It is always an option to seek to lay off staff or place them on short time to reduce the cashflow burden, however, care should be taken with such measures and specialist employment advice taken first as employees can acquire a statutory right to redundancy if they are laid off or placed on short time. Redundancy obligations could increase the burden on cash flow rather than reduce it
- Voucher schemes - Selling gift and/or experience vouchers for the provision of goods and services in the future can provide a much needed injection of cash, however, this amounts to the taking of deposits so the business has to be certain of its ability to provide the services and honour the vouchers in the future otherwise this can create problems for the future if the business is unable or unwilling to honour such vouchers
- Services and supply contracts - If a business is closed during the coronavirus outbreak then management need to look closely at all of the service and supply arrangements and only pay for those which the business is bound into and which are necessary
- Arrangements with landlords - Rent is often the biggest expense for any business so, if you have concerns about being able to meet your rental obligations speak to your landlord before you fall into arrears. Most leases require any variations to be agreed in writing and signed by all parties so please ensure that any arrangements you agree with your landlord are properly formalised in accordance with the terms of your lease to ensure you are fully protected
- Any necessary supplies and services where the business is not bound into a contract should be reviewed and renegotiated to minimise the ongoing cost. Remember, your suppliers are in the same position as you and will wish to preserve their own cash inflows as much as possible
Other useful resources
FSB - Advice to Small Business on Covid-19
NHS Self Isolation Advice