With every day comes new developments, guidelines and advice for businesses across the UK in response to the COVID-19 outbreak. As a local business, we are personally invested in our customers and the wider community and are committed to keeping our clients up-to-date about how the developments may affect you.
Managing Director at Portsmouth-based VW Taxation, Gary Ellis, shares his latest advice for individuals and businesses on the COVID-19 outbreak. We will continue to keep this page updated with developments as they occur.
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.
The employment status of affected workers will need to be temporarily changed and they will be classified as a ‘furloughed worker’.
HMRC will reimburse 80% of furloughed workers wages costs up to a maximum of £2,500 per month.
HMRC are currently working on a system to reimburse employers. We will keep you updated on this as the system is developed.
Coronavirus Business Interruption Loan
If your business needs short term cash flow support, you may be eligible for a business interruption loan. These are government-backed loans which will be available from all high street banks and lenders from Monday 23rd March.
These loans will be interest-free for 12 months.
Cash grants for small businesses
There are various grants available for businesses:
Businesses that pay little or no business rates will receive a one-off grant of £10,000. You will be eligible for this if your business is based in England, you are a small business and already receive Small Business Rate Relief (SBBR) and you are a business that occupies a property.
There are further grants available for businesses in the retail, hospitality and leisure sectors along with business rates holidays.
The grants will be available from local authorities. Your local authority will write to you if you are eligible for any of these grants in early April.
Income Tax Support
If you are due to pay an instalment towards your Self Assessment tax bill on 31st July 2020, this can now be deferred until 31st January 2021. This is an automatic offer, no application to HMRC is required. No penalties or interest for late payment will be charged in the deferral period.
CIS and Income Tax rebate claims will be processed as normal during this time and paid by HMRC as they normally are.
Value Added Tax (VAT) payments due to HMRC from 20th March 2020 to 30th June 2020 can be deferred. Businesses will not need to make a VAT payment during this period. Businesses will have until 5th April 2021 to pay any liabilities that have accumulated during the deferral period. This is an automatic offer, no application to HMRC is required. VAT refunds & reclaims will be paid by HMRC as normal.
Statutory Sick Pay
If you have employees, they should be covered by Statutory Sick Pay (SSP). There have been a number of immediate changes to SSP for coronavirus self-isolation:
- You can now claim SSP from the first day you are self-isolating and cannot work
- The government will cover SSP payments of all businesses with under 250 employees for up to 14 days per employee
- Employees who need to be off work to care for those within the same household who have been told to self-isolate will also be eligible for SSP
If you are self-employed you will not usually be covered by SSP. Instead, you should be able to claim either Employment and Support Allowance (ESA) or Universal Credit. The government are making the process of applying for both of these quicker & easier. The government are also temporarily relaxing the requirements of the minimum income floor in Universal Credit for those directly affected or self-isolating for the duration of the outbreak. Universal Credit will be payable at the same rate as SSP.
Mortgage holidays, help for renters & buy to let landlords
The government announced a three month mortgage payment holiday to help those in difficulty during this crisis. The repayments would still need to be made in the future and interest would still be payable.
Evictions from social & private rented accommodation, while this national emergency is taking place, will be suspended.
Landlords will also be protected as the three-month mortgage payment holiday includes Buy To Let mortgages.
HMRC – Time to Pay
A dedicated government helpline has been set up to help businesses and self-employed individuals with outstanding tax liabilities, to receive support with their tax bills.
Businesses will be able to agree a Time to Pay arrangement with HMRC. During the coronavirus outbreak, the usual 3.5% annual interest on late tax payments should be waived.
If you are concerned about being able to pay your tax, call HMRC’s dedicated helpline on 0800 0159 559.
If you would like to talk to one of our team now about any concern you may have regarding your taxes and finances in relation to the outbreak, please do not hesitate to contact the office on 02392 324587.
We will continue to update our website and Facebook page as developments unfold.
In the meantime, take the Governments advice and where possible stay home.