Coronavirus support announced by the Government
23rd March 2020
[Last updated: April 3, 2020]
On Friday 20 March, during the daily coronavirus briefing, Chancellor Rishi Sunak outlined further measures to support the incomes of millions of workers, as well as announcing the shutdown of entertainment and hospitality premises, such as pubs, clubs, and restaurants.
The Treasury stated on March 23, that further measures will be announced to ensure large and medium-sized businesses could access financing.
On March 26, the Chancellor outlined a relief package for the self-employed.
The following measures have been announced to support businesses and individuals.
- The Coronavirus Job Retention Scheme will be set up to support in paying wages. Employers will be able contact HMRC for a grant to cover most of the wages of employees who are on their payroll but unable to work because of the coronavirus outbreak. Any employer, regardless of size, is eligible. Charitable and not for profit status businesses are also included. This is to be backdated to 1st March 2020 and initially covers three months but will be extended if necessary. It is designed for employers that find it necessary to lay employees off and the furloughed worker may not work for the organisation during the period of furlough. At the moment, it seems that these grants will be available by the end of April. A new system is being built to issue this grant to businesses. It is advised that if you need short term cash flow support before this scheme is available, that you look into the CBILS. For more information on the CJRS, visit our blog here
- Statutory Sick relief package for SMEs where a refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19.
- 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England.
- Small business Grant funding of £10,000 for all businesses in receipt of small business rate relief or rural rate relief. The Retail, Hospitality and Leisure Grant Fund of £25,000 is also available for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000. The applications are now open on many local council websites, including Coventry City Council and Warwick District Council
- Coronavirus Business Interruption Loan Scheme, which offers loans of up to £5 million for SMEs through the British Business Bank, has now been launched. Full details can be found here.
- Self-employment Income Support Scheme where those eligible will get a taxable grant equivalent to 80% of the average profits from the applicable tax years. Further information on this scheme can be found on our blog here
We have created a funding flowchart to help understand what financial support is available to you. Click here to download the flowchart.
- HMRC have scaled up their Time to Pay offer to firms and individuals who are in financial distress as a result of Covid-19 and have outstanding tax liabilities. Contact HMRC to discuss your individual circumstances.
- Income Tax payments due in July 2020 under the Self-Assessment system will be deferred until 31 January 2021. This is automatic and those who do not pay in July 2020 will not receive a penalty or interest.
- Any business caught under the off-payroll working rules (IR35) will not be subject to the new rules until April 2021.
- An increase in Universal Credit and Tax Credit of £20 a week for one year from April 6th. The ‘minimum income floor’ for the Self Employed claiming Universal Credit is temporarily suspended.
- If you are a UK VAT registered business and have a VAT payment due between 20 March 2020 and 30 June 2020, you have the option to defer the payment until 31 March 2021 or pay the VAT due as normal.
- Whilst this deferral opportunity covers VAT payments on account, it does not cover overseas businesses registered for VAT in the UK. Additionally, it will not cover payments of MOSS VAT liabilities as these will still be due to be paid to HMRC.
- VAT registered persons do not need to apply as it’s automatic but it is essential to continue to file VAT returns on time in accordance with normal filing deadlines.
- If you normally pay your VAT liability by direct debit, you must cancel this in advance of your next VAT payment date otherwise HMRC will still collect the payment. This can be actioned by logging onto your Business Tax Account gateway. Remember to reinstate the direct debit following the scheduled payment date to ensure that future VAT returns are paid on time.
- HMRC has confirmed that it will not charge any interest or apply any penalties for any VAT amounts deferred under the scheme.
- Businesses that have cover for both pandemics and government-ordered closure should be covered under their policy. The Government and Insurance industry confirmed on 17 March 2020 that advice to avoid certain establishments is sufficient to make a claim.
- The initial 3 month holiday for mortgage repayments for those in financial need has been extended to buy to let mortgages.
Full and up to date details of all the government support announcements can be found at GOV.UK
Chancellor Rishi Sunak said:
“We continue to do everything possible to protect the public from coronavirus. We have been working round the clock so that we can today confirm an unprecedented package of support to protect people’s jobs and wages. And we’re strengthening our safety net at the same time.
I said we would help individuals, businesses and the most vulnerable through this outbreak and I meant it. We will do whatever it takes in the weeks and months ahead”.
If you would like advice on how to navigate the coronavirus crisis or need further support, please contact us on firstname.lastname@example.org or call 01926 422292.