Coronavirus – 23 March
The following information is current as at 9:00 am on Monday 23 March.
The Government is continuing to provide daily updates and publications on their measures to deal with the disruptions caused by COVID-19. The Friday afternoon briefing announced significant financial measure to assist businesses, workers and the self-employed. Friday’s briefing contained financial measures for Wages, Business Interruption Loans, VAT, Self-Assessment, Universal Credit and Employment and Support Allowance.
For those thinking of deferring their VAT payment and currently pay be direct debit please pay particular attention to the VAT section.
Wages
The government announced a new Coronavirus Job Retention Scheme. Under the scheme all UK employers, small, medium and large, will be reimbursed 80% of eligible workers wage costs, up to a cap of £2,500 per month per employee. For an employee to be eligible businesses will need to:
• designate affected employees as ‘furloughed workers,’ and notify your employees of this change (this change is still subject to employment law);
• submit information to HMRC about the employees through a new online portal.
HMRC are working urgently to set up a system for reimbursement as existing systems are not set up to facilitate payments to employers. HMRC have set themselves a deadline of the end of April for this. If businesses needs short term cash flow support whilst waiting for reimbursement, they may be eligible for a Coronavirus Business Interruption Loan.
Business Interruption Loan
The previously announced Coronavirus Business Interruption Loan for SMEs will launch early last week. The government will provide security for 80% of any loan and loans are available for up to £5 million. These loans will be interest free for the first 12 months (previously this was 6 months).
Your business is 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.
The loans can be applied for from Monday 23 March and the full rules of the Scheme and the list of accredited lenders is available at https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/ . Businesses should contact their bank or lending provider to apply.
VAT
VAT payments due between 20 March 2020 and 30 June 2020 are being deferred for all businesses. This is automatic and businesses need not apply. Businesses have until 5 April 2021 to make any payments due in this period. VAT refunds and reclaims will continue to be paid to businesses by HMRC.
You should continue to charge VAT to your customers as normal. You should still keep your accounting records and VAT return filings up to date as normal.
For those businesses that pay their VAT via direct debit. H M Revenue and Customs are awaiting clarification but are currently advising businesses that pay by direct debit to cancel the direct debit to ensure payment is not taken. Updated guidance is expected on this in the coming days / weeks.
Self-Assessment
Any self-employed individual with a payment due on 31 July 2020 will have this deferred to 31 January 2021. This is automatic and individuals need not apply.
Universal Credit and Employment and Support Allowance
If you have COVID-19 or are advised to self-isolate and are self-employed or not eligible for Statutory Sick Pay, you can now more easily make a claim for Universal Credit or new style Employment and Support Allowance.
From 6 April the Minimum Income Floor for the self-employed to access Universal Credit has been suspended and new claimants need not attend the job centre.
From 6 April Local Housing Allowance paid through Universal Credit is being increased to the 30th percentile of market rents to assist those in rented accommodation.
Guidance for businesses can be found at https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
Guidance for employees can be found at https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-guidance-for-employees
We will continue to monitor the situation and keep you informed. If you have any concerns, please do not hesitate to contact us. Like you we are doing our best to deal with the situation and we must all pull together during the next few weeks.
