Amid the current Covid-19 (Coronavirus) pandemic the UK economy is facing many tough months ahead. We are looking for guidance and support from our Government to help us all financially survive these times, and understandably small business owners are worried about the uncertainty that lies ahead. Each day at between 4pm and 6pm the Prime Minister, Boris Johnson, has been addressing the nation to announce new measures that have been put in place to help those most affected by the current downturn in economic climate, and here at Accounting Connections we are doing all we can to keep you updated with the latest information as it is announced. Here is what we already know…
Small Business Rates Relief Grant
If you have a business premises that is registered for business rates, and you are in receipt of small business rates relief for those premises, then you are entitled to a one-off Government grant of £10,000. A grant is essentially a handout from the Government that does not require the recipient to pay the money back, so this is great news for all those eligible small business owners.
In the original Budget announcement on 11 March 2020 the Chancellor, Rishi Sunak, announced that businesses in this position would get a grant of £3,000 but this was later increased by the Prime Minister, Boris Johnson, to £10,000 on 17 March 2020 in his daily address to the nation.
The mechanics of how to claim the grant have still not been released, but the assumption here is that central Government will provide local authorities with the necessary funds to distribute to the eligible businesses.
On 20 March 2020 the Chancellor confirmed that the grants should be paid out by the end of April 2020, so that is a positive piece of news for those eligible business owners.
Statutory Sick Pay (SSP) Reclaims
The current rules surrounding statutory sick pay are as follows:
- If an employee is off sick from work, the first three days of their sickness leave is unpaid and are known as “waiting days”
- From day 4 onwards the employee is entitled to statutory sick pay at a rate of £94.25 per week (increasing to £95.85 per week from 6 April 2020)
- Employers need to self-fund this statutory payment
In light of the Covid-19 pandemic where employees are expected to take more time off work, emergency legislation has been brought into play which says:
- Employees will be entitled to SSP from day 1 of their sickness (i.e. the waiting days have been removed)
- Employers can reclaim the cost of this SSP from the Government for the first 2 weeks of sickness, but only where the reason for absence is Covid-19 (Coronavirus) related
Coronavirus Job Retention Scheme
On 20 March 2020 the Chancellor announced that HMRC are developing a new scheme entitled the “Coronavirus Job Retention Scheme” that will allow employers to reclaim 80% of their employee costs for furloughed workers. To read more detail about this scheme please click https://www.aconnect.co.uk/2020/03/coronavirus-job-retention-scheme/
Business Interruption Loan Scheme
The Government have set up a Coronavirus Business Interruption Loan Scheme which is to be delivered by the British Business Bank. This means that all business owners who are in need of funds to pay rent, pay staff, and generally keep afloat throughout this time of uncertainty will be able to borrow the money at very attractive terms, with the Government providing guarantees to lenders of 80% on each loan.
Please bear in mind though that this option is a loan and not a grant. Therefore the money will need to be repaid at some point in the future.
On 20 March 2020 the Chancellor announced that these loans will be interest free for 12 months, and not 6 months as originally announced.
Problems Paying Tax Liabilities
HMRC have now set up a dedicated helpline to help those self-employed individuals who are struggling to pay their tax liabilities. If you are having trouble paying your tax liabilities then the best advice I can give you is to be proactive. Call HMRC on the new helpline (08000 241222) and be honest with them. The absolute worst thing you can do is bury your head in the sand here. If you contact them early enough to alert them of your difficulty to pay then there are many more options open to you including interest freezes and time to pay agreements.
On 20 March 2020 the Chancellor announced the following deferment on tax liability payments:
- VAT payments to be deferred until 31 March 2021
- Self assessment payments on account due to be paid on 31st July 2020 will now be deferred until 31st January 2021
In light of the Covid-19 (Coronavirus) pandemic HMRC have taken the decision to push back the planned changes to the IR35 legislation to April 2021. Our outline of the changes can be seen at https://www.aconnect.co.uk/2020/03/ir35-changes-in-april-2020/
Small Business Community
It is extremely important in this time of uncertainty for us all that we do everything we can to support each other in the small business community. Be kind, be sensible, be honest. If there is anything we can to do help your business then please don’t hesitate to contact us on 01634 540340 or [email protected]
Please do keep an eye out on our social media channels for more updates regarding the Government aid available for small businesses during this time.