This post has been updated to 12:00 24/03/20
In this constantly changing and uncertain time, it is important to us that we keep our clients informed and up to date with the latest information and government support available.
We are working from home, and still available to answer your queries.
Main advice and support
Government advice is constantly being reviewed, updated and worked on. We have outlined the key points made so far below (further detail for each summary Point noted, is detailed below by Point ):
i) If an Employer has no work and is forced to ‘lay off workers’, but keep them on the books, then they are called ‘Furloughed Workers’ – this has to be explained and agreed with the Employee. The Employee cannot undertake any work for the Employer whilst in this ‘state’.
ii) If the Employer has no work for its employees, then they can apply for 80% of their wages to be paid by the Government – this will be via a new HMRC Portal when available. Employer then has to decide if they have enough funds to pay the 20% balance to the Employee or not. If not, then the employee can see if they can claim Universal Credit.
iii) ‘casual’/’zero-hour’ workers would have to claim through the welfare and see if they can claim Universal credits.
iv) If your employees are sick or have symptoms, you can pay SSP from Day 1 of self-isolation
v) VAT payments being deferred for the period of 20 March 2020 until 30 June 2020 – this will be deferred until later this year or early next.
vi) There is a Business Interruption Loan Scheme available – see detail below.
vii) The support for rates is different for Scotland & England and the Scottish Government is still working on the policy – see vii. Below for latest.
viii) Income Tax Deferment is only for the self-employed – they can delay their July payment on Account until Jan 2021.
ix) HMRC Time to Pay Scheme – for those Businesses and self-employed that cannot pay their taxes – can call HMRC on 0800 0159 559 and agree a future payment plan.
Further detail for above points ( taken from HMRC web-site):
i) Furloughed Workers
If your employer cannot cover staff costs due to COVID-19, they may be able to access support to continue paying part of your wage, to avoid redundancies.
If your employer intends to access the Coronavirus Job Retention Scheme, they will discuss with you becoming classified as a furloughed worker. This would mean that you are kept on your employer’s payroll, rather than being laid off.
To qualify for this scheme, you should not undertake work for them while you are furloughed. This will allow your employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month.
You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to.
If your salary is reduced as a result of these changes, you may be eligible for support through the welfare system, including Universal Credit.
We intend for the Coronavirus Job Retention Scheme to run for at least 3 months from 1 March 2020, but will extend if necessary.
ii) Job Retention Scheme
If your employer cannot cover staff costs due to COVID-19, they may be able to access support to continue paying part of your wage, to avoid redundancies.
If your employer intends to access the Coronavirus Job Retention Scheme, they will discuss with you becoming classified as a furloughed worker. This would mean that you are kept on your employer’s payroll, rather than being laid off.
To qualify for this scheme, you should not undertake work for them while you are furloughed. This will allow your employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month.
You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to.
If your salary is reduced as a result of these changes, you may be eligible for support through the welfare system, including Universal Credit.
The Coronavirus Job Retention Scheme is intended to run for at least 3 months from 1 March 2020, but will be extended if necessary.
iv) SSP – Support for employees that are ill or self-isolating:
We will bring forward legislation to allow small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:
- this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
- those with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020
- employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
- employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website
- eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force
- the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible
Eligibility
You are eligible for the scheme if:
- your business is UK based
- your business is a small or medium-sized and employs fewer than 250 employees as of 28 February 2020
v) VAT Deferment
The government will support businesses by deferring Valued Added Tax (VAT) payments for 3 months. If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
VAT
For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.
Eligibility
All UK businesses are eligible.
How to access the scheme
This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.
vi) Business Interruption Loan Scheme
The temporary Coronavirus Business Interruption Loan Scheme will support SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years.
The government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.
The government will provide lenders with a guarantee of 80% on each loan (subject to pre-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The scheme will be delivered through commercial lenders, backed by the government-owned British Business Bank.
There are 40 accredited lenders able to offer the scheme, including all the major banks.
Eligibility
You are eligible for the scheme if:
- your business is UK based, with turnover of no more than £45 million per year
- your business meets the other British Business Bank eligibility criteria
How to access the scheme
The scheme is now open for applications. All major banks are offering this scheme.
To apply, you should talk to your bank or one of the 40 accredited finance providers (not the British Business Bank) as soon as possible, to discuss your business plan. You can find out the latest on the best ways to contact them via their websites. Please note that branches may currently be shut down to enable social distancing.
The full rules of the scheme and the list of accredited lenders are available on the British Business Bank website.
If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.
vii) Scottish Government Rates proposal
The latest position from the Scottish Government on Rates has now been changed and can be found here.
The main points are as follows:-
Extra reliefs to help with COVID-19
All non-domestic properties in Scotland will get a 1.6% rates relief. This relief effectively reverses the change in poundage for 2020-21.
You do not need to apply for this relief and it will be applied to your bill by your local council.
Retail, hospitality and leisure businesses
Retail, hospitality and leisure businesses will get 100% rates relief. To get this relief, a property has to be occupied.
The Scottish Government are working with Scotland’s 32 Councils to ensure this relief is administered in the most effective way. You can check this page for updates, including information on any application process.
Grants
Retail, hospitality and leisure businesses with a rateable value between £18,000 and up to and including £51,000 will be able to apply for a one-off grant of £25,000.
A one-off grant of £10,000 will also be available to small businesses who get:
You can also get this grant if you applied for Nursery Relief or Disabled Relief but are eligible for the Small Business Bonus Scheme.
viii) Income Tax Deferment for the Self-Employed
For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.
Eligibility
If you are self-employed you are eligible.
How to access the scheme
This is an automatic offer with no applications required.
No penalties or interest for late payment will be charged in the deferral period.
ix) HMRC Time to Pay
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.
These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
Eligibility
You are eligible if your business:
- pays tax to the UK government
- has outstanding tax liabilities
How to access the scheme
If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559.
We have summarised the above from the 3 web-sites below.
The information being released by government is constantly changing. However, we will ensure that you are kept informed of the latest and most accurate information. If you have any questions about the government support available, please don’t hesitate to contact us.