Help from Government
The Chancellor Rishi Sunak has announced support to Businesses during these unprecedented times. This includes a package of measures to support businesses. The measures are:
A Coronavirus Job Retention Scheme
HMRC will reimburse 80% of employee wage costs, up to a cap of £2,500 per month per head. It applies to those jobs that would otherwise have been lost due to this Covid-19 crisis.
Update announced in May. The scheme has now been extended to end of October whith Employers beginning to contribute from August. The other change is you can have staff working part -time under Furlough.
We wait for further clarification.
Deferring VAT Payments
For VAT, the deferral will apply from 20 March 2020 until 30 June 2020 so basically covers the February, March & April VAT Returns.
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 /2021(31 March 2021) to pay any liabilities that have accumulated during the deferral period.
VAT refunds and reclaims will be paid by the government as normal.
Self – Employed
For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021. If you are self-employed then you are automatically eligible and do not have to take any further action.
No penalties or interest for late payment will be charged in the deferral period.
There is also the introduction of SEISS. The portal opened on 13th May. HMRC will contact the self-employed and where business is negatively impacted by COVID-19, there will be an opportunity to apply for a grant which equates to 80% of the average trading profits for last three years. Basically a monthly sum is calculated and a lump sum payment will be made for three months directly to your bank account.
Other measures in place
- Support for Sick Pay
- Business Rate Holiday
- Cash Grants provided by the local authority. The letters should have arrived from the local Council to those in the Retail, Hospitality & Leisure Industry or those qualifying for the Small Business Rate Relief. The application is done directly on the Council's website.
- A new Discretionary Grant was introduced in May to accomodate certain small businesses previously outside the scope. Local authorities will choose to whom the payments will apply depending on the local needs. We wait for further details.
- Business Interruption Loan Scheme - This can be via your bank or other 3rd party lender. We have access to a panel of lenders via an online portal so contact us for help.
- Bounce Back Loans - You can apply for this directly to your bank and the range of loans will be from £2k to £50K but restricted to 25% of annual turnover.
- HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities. Special number set up: 0800 0159 559.
- Payment holidays for mortgage payers for three months
Please call us and speak to your normal relationship director/manager if you would like to discuss any of the above or any other matter. If you are not a client and would like help please email us at email@example.com
We are here to help you through these tough times.