The Chancellor has set out a package of ‘temporary, timely and targeted’ measures to support public services, individuals and businesses throughout this period of disruption and uncertainty caused by the outbreak and ongoing spread of Coronavirus.
Here, we summarise what we know about the package of support that is available to businesses:
1. Support for employers bearing the cost of Statutory Sick Pay (SSP)
Small and medium-sized businesses and employers can reclaim SSP paid for sickness absence due to Coronavirus. The Government will work with employers in the coming months to ensure the repayment mechanism is available as soon as possible.
Refunds will cover up to two weeks’ SSP, per eligible employee, who has been absent because of COVID-19, but only employers with fewer than 250 employees will be able to claim. The Government determines an employer’s eligibility based on the number of people employed at 28 February 2020.
Employers should keep records of staff absences and payments of SSP. Employees are not required to provide a GP fit note, unlike usual SSP claims.
The eligible period for the scheme will begin the day after the regulations on the extension of SSP to those staying at home comes into force.
If you have any questions or concerns about SSP calculations, our professional payroll bureau can assist. If you are considering amending pay rates, or hours of work, to cope with changing demands, you should seek the advice of a HR professional.
2. Business rates holiday
A business rates holiday will be available for retail, hospitality and leisure businesses in England for the 2020/21 tax year. At Budget, the policy was limited to those with rateable values below £51,000. However, the measure has now been opened up to all after the Chancellor was criticised for excluding larger retailers. Businesses that received the retail discount in 2019/20 will be rebilled by their local authority as soon as possible.
A £25,000 grant is available to retail, hospitality and leisure businesses operating from smaller premises. These premises must have a rateable value between £15,000 and £51,000. No applications are required. Your local authority will write to you if you are eligible.
Nursery businesses that pay business rates will now also qualify for a business rates holiday for the 2020/21 tax year. Furthermore, the Government have now confirmed that some retail, leisure and hospitality premises forced to close as a result of the outbreak and that were previously excluded from the ‘holiday’ will now be eligible; this includes letting agents, estate agents and bingo halls.
Your local authority will rebill you accordingly. If businesses have made payments in the meantime, these will be refunded. The government is working with local authorities to ensure new bills are issued as soon as possible.
If you are uncertain about your eligibility for the reliefs, or about the provision of these measures, seek advice from the relevant local authority.
3. Support for businesses paying little or no business rates
The government will provide additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR).
A one-off grant of £10,000 will be available to businesses currently eligible for SBRR or rural rate relief, to subsidise ongoing business costs. Originally set at £3,000 in the Chancellor’s Budget, the grant has since been increased.
If your business is eligible for SBRR or rural rate relief, your local authority will make contact with you. You do not need to apply for the grant. Local authorities will receive the funding early on in April. The Government will also issue further guidance to them shortly.
4. Coronavirus Business Interruption Loan Scheme
A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will help primarily small and medium-sized businesses to access bank lending and overdrafts. The scheme will support loans of up to £5 million in value (increased from £1.2m announced at Budget 2020).
Businesses can access the first 12 months of that finance interest free. During this period, the Government will cover interest payments. Further details are expected in the coming days, but the scheme should be available early this week.
All major banks will offer the Scheme once it is launched. Speak to your bank/finance provider, as soon as possible, to ensure you can act quickly.
5. Paying tax during the COVID-19 outbreak
Businesses and self-employed individuals experiencing financial distress, and with outstanding tax liabilities, may be able to receive support via HMRC’s Time To Pay service. HMRC approves these arrangements on a case-by-case basis.
If you are concerned about your current liabilities due to Coronavirus, please contact your usual adviser, or call HMRC’s dedicated helpline on 0800 0159 559.
6. Companies House filing extension
All companies must send their accounts, reports and confirmation statements to Companies House every year. 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 (COVID-19), you may make an application to extend the period allowed for filing. This application must be made before the deadline has passed.
If you do not apply for an extension and your accounts have been filed late, an automatic penalty will be imposed.
7. VAT & Income Tax payments deferred
Value Added Tax (VAT) liabilities arising during the period from 20 March 2020 until 30 June 2020 will automatically be deferred. Taxpayers will have until the end of the 2020/21 tax year to pay any liabilities that have accumulated during the deferral period.
However, VAT refunds and reclaims will be paid by the government as normal. All UK businesses are eligible for this support.
Furthermore, Income Tax payments due in July 2020, under the Self-Assessment rules, will be automatically deferred to 31 January 2021. This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period. All self-employed individuals are eligible for this support.
Timely completion of tax returns and accounts will give you the best chance of being able to plan effectively. We encourage you to keep accurate records and, where appropriate, provide all tax and accounts information to your usual adviser, as soon as possible.
8. COVID-19 Corporate Financing Facility
Under the new COVID-19 Corporate Financing Facility, the Bank of England will buy short-term debt from larger companies. This will support companies affected by a short-term funding squeeze. Details about how to access the scheme will be issued shortly.
How can George Hay help?
We know that the coming weeks and months are going to be challenging for many businesses and individuals. We know that many of you will have concerns about your finances. Our aim is to be here for you throughout.
Now more than ever, it is critical that business owners keep their financial records in good order. Having clear, realistic cash flow forecasts for the next 3-6 months can help you to make difficult decisions, quickly.
When contacting your bank, stakeholders or HMRC for support, knowing your financial circumstances will stand you in good stead to negotiate funding or claim entitlements.
We have adapted some of our working practices in response to the outbreak. However, we are still contactable by phone and by email. We actively encourage you to call on us for advice during this period of uncertainty.
Blog last updated (26/03/2020). Please keep an eye on our blog, for the very latest news as we endeavour to cover the key issues affecting you and your business at this time. More information and advice is available on the Gov.uk website.