Emergency Measures
A summary of the key measures available to small businesses as a result of the Covid-19 pandemic
Statutory Sick Pay
Statutory Sick Pay (SSP) to be paid from the first day of absence, not the fourth, where people have the virus or have to self-isolate, or care for such people. Full funding of the cost of two weeks’ SSP for small and medium-sized employers whose workers have claimed SSP as a result of coronavirus.
Eligibility criteria:
- this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
- 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, but employees will not need to provide a GP fit note
- eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to those staying at home comes into force
Note that the government will work with employers over the coming months to set up the repayment mechanism.
If you would like to claim this please inform our payroll team on payroll@barnesandscott.com.
Time to Pay
If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 024 1222 (open 8am to 4pm).
These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
Businesses that pay rates
A business rates retail holiday will be introduced for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year. Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible. A £25,000 grant will be provided to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value between £15,000 and £51,000.
This means that every single shop, pub, theatre, music venue, restaurant, etc. will pay no business rates whatsoever for 12 months and, if they have a rateable value of less than £51,000, they can now get a cash grant as well.
Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority.
Businesses that pay little or no 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 (SBBR). This will provide a one-off grant of £10,000 to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs. Funding for the scheme will be provided to local authorities by government in early April.
If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority – you do not need to apply.
Support for businesses through the Coronavirus Business Interruption Loan Scheme
A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will be launched to support businesses in accessing bank lending and overdrafts. 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. Businesses can access the first 6 months of that finance interest free, as government will cover the first 6 months of interest payments.
This scheme is now open, further details here: https://support.barnesandscott.com/article/159-cbils
Working from home
If your employees are incurring additional costs as a result of working from home they can make an expense claim to the business (via the expense reports function in Receipt Bank). This might be, for example, a proportion of their home broadband costs and home running costs, special equipment required to work from home (such as a desk/chair) and any other directly attributable costs for working from home.
The expense claims will be a tax-deductible cost for the business and will not be taxable on the employee, provided the costs can be directly attributed to working from home.
If you need a hand with setting up expense claims for your employees please contact the team on team@barnesandscott.com.
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.
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.
Income Tax Payments
Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
Income Tax Self-Assessment payments due on the 31 July 2020 will be deferred until the 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.
VAT payments
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.
Other measures to note
- For individuals in difficulty due to coronavirus, mortgage lenders will offer at least a three-month mortgage holiday. Details are yet to be released on how to access this but it is important to ensure that this does not affect your credit rating if you use this facility, as that could impact you later.
- 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.
- The government is postponing the reforms to the off-payroll working rules, IR35, from 6 April 2020 to 6 April 2021 - this is yet to be announced officially!