07/04/2020
I hope you are staying safe and well at this turbulent time.
I thought I would copy an email sent out to all my customers to ensure that you are aware of all the schemes that are available from the government which may apply to you. As the guidelines are regularly changing, I will attach links to information so that you are always looking at the latest information.
These are all the schemes available so you will need to select which are applicable to you.
An important principle to note is that these measures are designed to support Corona-related problems only not existing business issues.
Small Business Grant Funding
This is a grant that does not need to be repaid of £10,000 if you occupy a property which has a Business Rateable Value of £15,000 or less. Please look at the figure on your Business Rates Bill which would have been issued in early March to see if it applies to you. Whilst the guidance says that you do not need to apply, the Buckinghamshire Council website indicates otherwise. Please look at the website for your particular Council to determine the procedure https://www.buckinghamshire.gov.uk/coronavirus/coronavirus-business-support-hub/faqs-businesses-suppliers-and-charities/business-rates-questions/
HMRC VAT
https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19
If you have a VAT payment due between 20 March 2020 and 30 June 2020, you have the option to:
• defer the payment until a later date
• pay the VAT due as normal
HMRC will not charge interest or penalties on any amount deferred BUT you will still need to submit your VAT returns to HMRC on time. If you are in a reclaim situation, your refund will be processed as normal during this time. Therefore if this is likely to be the case, I would urge you to file the return as soon as possible. You do not need to tell HMRC that you are deferring your payment and you will have pay the VAT due on or before 31 March 2021.
**VERY IMPORTANT** - if you have a direct debit set up to collect the VAT payment, you will need to cancel it. Otherwise they will collect the payment as normal.
HMRC Time to Pay
https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses -for-businesses-paying-tax-time-to-pay-service
If you think you will not be able to make a PAYE or corporation tax payment by the due date you need to call the helpline 0800 024 1222. You may have to hold for several hours to speak to someone but I am assured that once have got through to someone they are very helpful. This relates only to the payment part of the process, you will still need to file your corporation tax return and payroll RTI filings by the normal due date.
Coronavirus Job Retention Scheme
https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
Under the Job Retention Scheme (CJRS), an employer is able to designate an employee or employees that it wishes to “furlough”. The Government will reimburse 80% of the employee’s wage costs (gross pay plus employers NI plus minimum autoenrollment pension) up to a cap of £2,500 for the gross pay element. Furlough means to lay-off. It is intended that a furloughed employee will return to work at some point so if you wish to permanently dispense with an employee’s services, redundancy may be a better option. It is also important to note that you will still need to pay your furloughed employees and claim reimbursement from the Government, so there will be an initial cashflow cost. The Government has indicated that the first payments will be made in late April. This Government initiative doesn’t supersede employment law so if you wish to use the scheme, you will still need to satisfy yourself that you are entitled to ask your employees to be furloughed. Most employee contracts include a “lay off” clause, but this needs to be reviewed. Please make sure you have issued a letter to all furloughed staff, I have a template furlough letter so please ask if you would like it.
Please note that if you are self-employed, you will not be an employee and cannot be furloughed, but come under the Self-Employed Income Support Scheme (see later). However even if you are self-employed you may have staff that you employ through payroll.
Coronavirus Job Retention Scheme as applied to small one director limited companies
If you are a director of a limited company, you can still be furloughed and it has now been indicated that so long as you are not providing services which generate fees you can claim the 80%. So payroll duties, filing accounts etc are permissible whilst you are furloughed.
Coronavirus Business Interruption Loan Scheme –loans include term loans, overdrafts, invoice finance and asset finance. Government will provide lenders with a guarantee of 80% of the lending and will pay the lender the interest for the first 12 months and the lending fees so you will still need to pay the capital unless you arrange otherwise with the provider. The maximum loan term is 6 years. It is important to note that if the lender can offer finance on normal commercial terms without using CBILS, it will do so. It appears that, in other words, if you can offer enough security, you will also not benefit from fee-free and interest-free lending. The bank must be satisfied that your requirement for the loan is only because of the virus not to support existing business issues. Your bank will need to see past trading history as well as cashflow forecasts and needs to be confident that you will be able to repay the loan in the long term.
In the first instance I would recommend visiting your own bank’s website to determine if you are eligible and what information they require as each bank has slightly different eligibility criteria.
A key point that many have missed is that loans via CBILS are limited to a maximum of 25% of 2019 turnover or twice the annual wage bill - whichever is greater, some banks also have a minimum loan amount, Lloyds for example is £25,000.
Please let me know if you need any help in producing the pack of information for your bank or determining how much you may need.
Self-employment Income Support Scheme
https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme
The Self-employment Income Support Scheme (SEISS) will support self-employed individuals who have lost income due to coronavirus (COVID-19). This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed. The scheme is still very unclear, but my understanding of the current guidelines are that you will need to have:
• filed a self-assessment return in 2018/9
• traded in the tax year 2019-20
• are trading when you apply, or would be except for COVID-19
• intend to continue to trade in the tax year 2020-21
• have lost trading/partnership trading profits due to COVID-19
• have self-employment profits of under £50k and your self-employment profits are over 50% of your total income
The scheme is not open for applications yet, I will advise you when further information becomes available.
What to do if you can't wait for the Self-employed Income Support Scheme to pay out or you are not eligible for the SEISS
https://www.gov.uk/universal-credit/what-youll-get
If you need money to live on before the payout at the end of June 2020, you can apply for Universal Credits. You can receive a monthly payment of least £251 for a single person under 25 up to £498 in total for a couple where at least one of you is over 25. You can receive extra money for up to two children only.You may also be eligible for help with housing costs. Universal credit applications can take up to five weeks to process, but you can claim for an advance payment and you will usually get a decision on the same day. This advance is a loan, without interest and you will then pay it back over 12-months.
Self-assessment payment deferral
If you’re due to pay a self-assessment payment on account by 31 July 2020 but the impact of the coronavirus causes you difficulty in making payment by that date, then you may defer payment until January 2021. You do not need to be self-employed to be eligible for the deferment, this applies to any taxpayer. The deferment is optional. If you are still able to pay your second payment on account on 31 July you should do so. You do not need to apply for this scheme and no penalties or interest for late payment will be charged if you defer payment until 31 January 2021.
Helping Yourself
Whilst these are the government funded schemes, there are many things you can do to help your business cope with corona. Some suggestions would be:
• Review your outgoings carefully and ensure they are all necessary
• Review the direct debits and standing orders on your account, so that you know they are essential and there are no nasty surprises
• Rent – speak to your landlord and see if you can pay reduced or not rent for a period
• Hire purchase – if you have equipment under HP contracts, some of the providers are giving 3 months payment holidays
• Leasing/contract hire – if you are not using the equipment, can you negotiate a rent holiday and extend the end of contract by that period?
• Prepare a cashflow of likely monies in and out
• Review your insurance cover, do you have business interruption insurance and does it cover the corona event?
• Think of things you could sell online. Delivery companies are still operating. Do you have lots of stock that could realise you some money?
• Do you have a skill that you could make a video of and sell to your customers?
• Develop customer loyalty and ask if there is any way you could help them remotely.
• Make a plan as to how your business will start trading again
• Think outside the box
• Remember you cannot generate income for the business you are furloughed by, but if you are furloughed you can still be employed by another business on a temporary basis to bump up your income.
• STAY SAFE
I hope this is informative. Please do get in touch if you need any help.
Best wishes and look after yourself
Tig
Information about business rates relief grants
