COVID-19- Guide for small businesses and employees

COVID-19 affects all of us, but we know that as a business owner you are likely to find the coming months more difficult and have some very specific questions about the support and advice available to you.

Lanop Accountants can advise and help get you the grants, and business relief you need. 

 

What’s This guide includes:

1- Coronavirus Job Retention Scheme:

Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. All UK businesses are eligible and can access this scheme:
Businesses will need to:

  • Designate effected employees as ‘furloughed workers,’ and notify these employees of this change – changing the status of employees remains subject to existing employment law and, depending on their employment contracts, may be subject to negotiations.
  • Submit information to HMRC about the employees that have been furloughed and
    their earnings through a new online portal (HMRC will set out further details on the
    information required)

Under Job retention Scheme, HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not yet set up to facilitate payments to employers.

2- Deferring VAT and PAYE Tax payments

VAT

    •  The next quarter of VAT payments will be deferred, meaning businesses will not
      need to make VAT payments until the end of June 2020. Businesses will then have
      until the end of the 2020-21 tax year to settle any liabilities that have accumulated
      during the deferral period.
    • The deferral applies automatically, and businesses do not need to apply for it. VAT
      refunds and reclaims will be paid by the government as normal.
    • All VAT registered UK businesses are eligible for VAT Payment Deferral.

PAYE

  • Businesses can defer PAYE between 1 and 3 months (they will need a valid reason –
    for example if the business has temporarily shut)
  • Expectation is that the deferral will apply up to and including April 2020 payroll
  • If the business can’t pay its PAYE liability at this point a formal payment plan can be
    set up between 3 – 9 months

3- Statutory Sick Pay relief package for SMEs

The Government has confirmed that employees will not need to provide a fit note in order
to receive STATUTORY SICK PAY (SSP) when self-isolating due to coronavirus. Small-and
medium-sized businesses and employers can reclaim Statutory Sick Pay (SSP) paid for
sickness absence due to COVID-19.

Eligibility criteria will be as follows:

  • Refund will cover up to 2 weeks’ SSP per eligible employee who has been off work
    because of COVID-19.
  • Employers 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. 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.
  • Government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible. 
  • A rebate scheme is being developed. Further details will be provided in due course once the legislation has been passed.

4- 12 months business rates holiday.

Business rates holiday for retail, hospitality and leisure businesses will be available for
businesses in England for tax year 2020/21.

Eligibility

You are eligible for the business rates holiday if:

  • your business is based in England
  •  your business is in the retail, hospitality and/or leisure sector

Properties that will benefit from the relief will be occupied premises that are wholly or mainly being used:

  • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues.
  • for assembly and leisure.
  • as hotels, guest & boarding premises and self-catering accommodation.

You do not need to do anything to get this relief, this will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill to exclude the business rate charge. They will do this as soon as possible.

5- Small business grant funding of £10,000 for all business.

The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

Your business will be eligible if:

  • your business is based in England
  • you are a small business and already receive SBBR and/or RRR
  • you are a business that occupies property

If you are not aware of SBRR and RRR please follow the link

https://www.gov.uk/apply-for-business-rate-relief/small-business-rate-relief

Again, you do not need to do anything. Your local authority will write to you if you are eligible for this grant. The Guidance for local authorities can be found at the link below.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment

6- Grant funding of £25,000 and £10,000 for retail, hospitality and leisure businesses.

  • The Retail and Hospitality Grant Scheme provides businesses in the retail,
    hospitality and leisure sectors with a cash grant of up to £25,000 per property.
  • For businesses in these sectors with a rateable value of under £15,000, they will
    receive a grant of £10,000.
  • For businesses in these sectors with a rateable value of between £15,001 and
    £51,000, they will receive a grant of £25,000.

Your business will be eligible for the grant if:

  • your business is based in England
  • your business is in the retail, hospitality and/or leisure sector

Properties that will benefit from the relief will be occupied premises that are wholly or
mainly being used:

  • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
  • for assembly and leisure
  • as hotels, guest and boarding premises and self-catering accommodation

Cash grants will be administered by local authorities and should be delivered
automatically, without businesses needing to claim. From early April Local authorities will
start approaching businesses as per latest updates

7- Coronavirus Business Interruption Loan Scheme (CBILS)

  • Coronavirus Business Interruption Loan Scheme delivered by the British Business
    Bank.
  • The government will provide lenders with a guarantee of 80% on each loan (subject
    to a per-lender cap on claims) to give lenders further confidence in continuing to
    provide finance to SMEs.
  • The government will not charge businesses or banks for this guarantee, and the
    Scheme will support loans of up to £5 million in value.

Eligibility Criteria for (CBILS):

  • Be UK based, with turnover of no more than £45 million per annum
  • Be able to confirm that they have not received de minimis State aid beyond 200,000 equivalent over the current and previous two fiscal years
  • Be unable to meet a lender’s normal lending requirements for a fully commercial loan or other facility, but would be considered viable in the longer-term

How to access the scheme:

  • The full rules of the Scheme and the list of accredited lenders is available on
    the British Business Bank website. All the major banks will offer the Scheme once it
    has launched. There are 40 accredited providers in all.
  • You should talk to your bank or finance provider as soon as possible and discuss
    your business plan with them. This will help your finance provider to act quickly
    once the Scheme has launched. If you have an existing loan with monthly
    repayments, you may want to ask for a repayment holiday to help with cash flow.
  • The scheme will be available from early week commencing 23 March 2020.

Complete range of financial products that are expected to fall within the CBIL scheme:

  • Term facilities
  • Overdrafts
  • Invoice finance facilities
  • Asset finance facilities

8- New Lending facility from Bank of England:

  • Under the new Covid-19 Corporate Financing Facility, the Bank of England will buy
    short term debt from larger companies.
  • This will support your company if it has been affected by a short-term funding
    squeeze, and allow you to finance your short-term liabilities.
  • It will also support corporate finance markets overall and ease the supply of credit
    to all firms.

Eligibility Criteria:

  • All UK businesses are eligible.
  • The scheme will be available early in week beginning 23 March 2020.
  • We will provide information on how to access the scheme here shortly.
  • More information is available from the Bank of England official website.

9- HMRC-Time to Pay Scheme:

  • 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.

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 COVID19, please call HMRC’s dedicated helpline: 0800 0159 559.

10- Relief on income tax:

  • 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 you are eligible to defer your income tax payment.
  • This is an automatic offer with no applications required.
  • No penalties or interest for late payment will be charged in the deferral period.
  • 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.

Self-employed people can now access full universal credit at a rate equivalent to
statutory sick pay.

11- Insurance:

  • Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim as long as all other terms and conditions are met.
  • Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.

12-Three- Month Mortgage holiday

Government is going to pass emergency legislation to protect private and social renters.
There are currently 4.6 million privately renting households in the UK. Legislation will
ensure that landlords cannot evict tenants who struggle to pay rent for three months.
Where landlords have “buy to let” mortgages, banks should be able to offer them the same
deal as homeowners.

  • Mortgage borrowers can apply for a three- month payment holiday from their lender. Both residential and buy-to-let mortgages are eligible for the holiday.
  • Borrowers still owe the amounts that they don’t pay as a result of the payment holiday. Interest will continue to be charged on the amount they owe.
  • Tenants can apply for a three-month payment holiday from their landlord. No one can be evicted from their home or have their home repossessed over the next three months.

13- Late filing of company accounts:

  • If, immediately before the filing deadline, it becomes apparent that accounts will not be filed on time due to your company being affected by Coronavirus (COVID19), you may make an application to companies house to extend the period allowed for filing.
  • If you do not apply for an extension and your accounts have been filed late, an automatic penalty will be imposed. The registrar has very limited discretion not to collect a penalty.
  • Each appeal is treated on a case-by-case basis, and Companies house already have policies in place to deal with appeals based upon unforeseen poor health. Appeals based upon COVID-19 will be considered under these policies.

Testimonials

Testimonial 1

I never liked the idea of outsourcing my work and that is mostly down to bad experience in past. My health was declining, and I wasn’t spending enough time with my family. I wanted to retire and was weighing the idea of selling my fees, but Lanop Outsourcing have extended my working life. I can still go play with my grandson, enjoy my weekly golf and still service all my old and new clients.

Mr Jorge
from RS Accountants in Leatherhead

Testimonial 2

I never liked the idea of outsourcing my work and that is mostly down to bad experience in past. My health was declining, and I wasn’t spending enough time with my family. I wanted to retire and was weighing the idea of selling my fees, but Lanop Outsourcing have extended my working life. I can still go play with my grandson, enjoy my weekly golf and still service all my old and new clients.

Mr Riccardo
from RS Accountants in Leatherhead

Testimonial 3

I never liked the idea of outsourcing my work and that is mostly down to bad experience in past. My health was declining, and I wasn’t spending enough time with my family. I wanted to retire and was weighing the idea of selling my fees, but Lanop Outsourcing have extended my working life. I can still go play with my grandson, enjoy my weekly golf and still service all my old and new clients.

Miss Sephire
from RS Accountants in Leatherhead

What’s This guide includes?

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London SW15 5QL, UK