Most businesses are prepared for a ‘rainy day’ but few business owners could have foreseen the unfolding events and fall out of recent weeks.
The usual rules of running a business, employing staff and securing and delivering to existing and new clients are suspended by the daily updates from government on social distancing, furloughing staff, business cash grants and much more.
Government Update 5 November 2020
Coronavirus Job Retention Scheme (CJRS)
The Coronavirus Job Retention Scheme (CJRS) was due to end on 1 November and be replaced by the Wage Subsidy Scheme. However, Rishi Sunak somewhat surprisingly announced an extension to the more generous CJRS until 31 March 2021.
Self-Employment Income Support Scheme (SEISS)
The Self-Employment Income Support Scheme (SEISS) was increased, with the third grant covering November to January calculated at 80% of average trading profits, up to a maximum of £7,500.
For full details of the original scheme, click here.
Government Update 24 September 2020
- Bounce Back Loans were extended from six years to 10, cutting monthly repayments by nearly half.
- Coronavirus Business Interruption Loan Scheme lenders will also be able to extend the length of loans from the current maximum of six years to 10 years.
- The chancellor also extended the deadline for the government’s coronavirus loan schemes to the end of November.
- Businesses struggling can choose to make interest only payments for six months and those “in real trouble” can apply to suspend repayments altogether for six months.
- The 15% emergency VAT cut for the tourism and hospitality industries will be extended from January to 31 March 2021.
- Business who deferred their VAT bills will be able to pay back their taxes in 11 smaller interest-free instalments.
- Self-assessment taxpayers are able to defer tax payments to January 2022.
The majority of businesses, small, medium or large, whether self-employed sole traders and partners or limited companies, have had to make new working practice decisions to safeguard employees who can maintain their roles and furloughing others to provide longer term employment security. Each change encompasses a wide range of legal and best practice parameters:
Advice for employers and employees
ACAS have a guide covering:
- Staying at home and social distancing
- Vulnerable people and those at high risk
- Self-isolation and sick pay
- If the workplace needs to close temporarily
- Using holiday
- If an employee needs time off work to look after someone
- If someone has coronavirus symptoms at work
- Good practice steps for employers
- More coronavirus advice
Download the ACAS guide by clicking here.
Mental Health at Work
The website, Mental Health at Work has a range of coronavirus toolkits for each business type and has documents, guides, tips, videos, courses, podcasts, templates and information from key organisations across the UK. The information is curated by Mind, and funded by The Royal Foundation. For more information click here.
PAYE, VAT, Corporation Tax, personal Income Tax and Capital Gains Tax … each is due for payment at a defined frequency and date. Many businesses are suffering major disruptions to their cashflow and facing difficult decisions about prioritising who gets paid to secure their businesses future. These challenges have been recognised by government and a raft of special measures instigated to give flexibility to payments due:
Support for businesses paying tax: Time to Pay service
Self-Assessment customers can now apply online to spread the cost of their tax bill into monthly payments without the need to call HMRC.
The online self-serve ‘Time to Pay’ service, has been increased to £30,000 to help ease any potential financial burden due to the coronavirus pandemic.
The online self-serve ‘Time to Pay’ service through GOV.UK sets up a direct debit to pay any owed tax monthly, up to a 12-month period.
If you wish to set up your own self-serve ‘Time to Pay’, you must meet the following requirements:
- no outstanding tax returns
- no other tax debts
- no other HMRC payments set up
- your Self-Assessment tax bill is between £32 and £30,000
- it is no more than 60 days since the tax was due for payment.
If you do not meet these requirements, a call to HMRC is still required.
If you set up a ‘Time to Pay’ arrangement, you will have to pay interest on the tax paid late. Interest will be applied to any outstanding balance from 1 February 2021.
How to access the scheme
If you have missed a tax payment or you might miss your next payment due to COVID-19, you can call HMRC’s dedicated helpline: 0800 0159 559.
There is a new HMRC dedicated helpline for the self-employed and SME’s: 0800 024 122
Corporation and Personal Income Tax
The deadlines for paying your tax bill are usually:
31 January: for any tax you owe for the previous tax year (known as a balancing payment) and your first payment on account for the coming year.
31 July: for your second payment on account. You can now delay making your second payment on account. If you choose to do so, you have until 31 January 2021 to pay it. For more information click here.
The UK government has extended the cut VAT from 20% to 5% on any eat-in or hot takeaway food and drinks from restaurants, cafes and pubs, excluding alcohol until 31 March 2021. This VAT reduction also applies to all holiday accommodation in hotels, B&Bs, campsites and caravan sites, as well as attractions like cinemas, theme parks and zoos.
Additional Financial Support
Additional capital sources may be available to your business through packages of special measures, grants and government banked borrowing facilities, via online portals listed below.
Bounce Back Loan
This scheme is the latest step in a package of support measures launched by Chancellor Rishi Sunak.
- businesses will be able to borrow between £2,000 and £50,000
- loans will be 100% government backed for lenders, and businesses can apply online through a short form
- The interest is fixed at 2.5% pa and effectively interest free for the first 12 months.
To apply, see further information about the Bounce Back Loan scheme.
HarperLees would urge you to also review your Business Life Cover and Ill Health arrangements. These loans are repayable and the death or long-term illness of a business owner could bring hardship on the survivors or family. We will be delighted to assist with the review.
Business Support Grant Funding
Support for small businesses, and businesses in the retail, hospitality and leisure sectors. This support takes the form of two grant funding schemes: the Small Business Grant Fund and the Retail, Hospitality and Leisure Grant Fund, both delivered by Local Authorities. If you are eligible, your Local Authority will be in touch with you to arrange payment. It’s a simple process to apply online, and payment should go direct to your business account in about a week. For more information click here.
Business Rate Relief
To check if your retail, hospitality or leisure business is eligible for business rates relief click here.
Coronavirus Job Retention Bonus
This is a one-off payment of £1,000 to employers that have used the Coronavirus Job Retention Scheme (CJRS) for each furloughed employee who remains continuously employed until 31 January 2021. The bonus will provide additional support to retain employees.
To be eligible, employees will need to:
- earn at least £520 per month (above the Lower Earnings Limit) on average for November, December and January.
- have been furloughed by you at any point and legitimately claimed for under the Coronavirus Job Retention Scheme.
- have been continuously employed by you up until at least 31 January 2021.
Employers will be able to claim the bonus from February 2021 once accurate RTI data to 31 January has been received. More information about this scheme will be available by 31 July and full guidance will be published in the Autumn.
Statutory Sick Pay (SSP) Rebate Scheme
To find out if you can reclaim employees’ coronavirus-related Statutory Sick Pay click here.
Coronavirus Business Interruption Loan Scheme (CBILOS)
This scheme helps small and medium-sized businesses to access finance of up to £5 million. To view information from The British Business Bank which is 100% government owned, but independently managed to help British businesses, click here. To view government guidance, click here.
For specific guidance on working safely, please refer to the range of sector specific guides issued by HM Government on 10 May 2020.
The government has put together a business support finder to help you identify the COVID-19 financial support schemes your business may be able to access. This helpful tool is very easy to use and can be found here.