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Chartered Accountants & Chartered Tax Advisers
Support for businesses during the Covid-19 Pandemic
Many of you have been asking about the measures introduced by the Chancellor last week. These provisions are changing all of the time – further announcements are expected for the self-employed later today.
More detail regarding the announcements can be found here:
Please bear with us – many of the proposals are still at the outline stage so we are unable to answer detailed questions until further information is released.
Here are a few headlines for you.
PAYING YOUR TAX
VAT payments for the quarters ended 29 February, 31 March and 30 April 2020 will not now need to be paid until the end of the 2020/21 tax year, so by 5/4/2021. NB VAT returns will presumably still need to be filed on time during this time.
You do not need to apply for this deferment, it is automatic.
Self Assessment second payments on account due 31 July 2020 HAVE BEEN CANCELLED. No one needs to make a payment towards their personal account on 31 July this year. This will mean that most of you will have a bigger bill in January 2021, as the balancing payment for the year, due by 31/1/2021, will now be bigger.
Other tax liabilities – time to pay arrangements available
If you are struggling to pay any other business tax liabilities at this time, eg corporation tax or PAYE, HMRC have set up a special helpline on 0800 0159 559, where you may be able to agree payment in instalments etc. Expect to be on hold for a long time, but reports from clients have been positive so far.
PAYING YOUR EMPLOYEES
All employers will be able to access support to continue paying part of your employees’ wages if you would otherwise have had to lay them off during the crisis. HMRC will reimburse 80% of an employee’s salary, up to a maximum of £2,500 per month per employee. You MUST check the legal position and will need to review your employees’ contracts, but you are not required to make up the shortfall as part of the scheme, although you can if you wish.
You will need to identify and notify those employees which are affected and submit information to HMRC about the employees and their earnings via a new on line portal. Further details to follow.
If they are continuing to work for you, then you cannot claim under this provision.
Sick Pay (SSP)
Small and medium sized employers will be able to reclaim SSP relating to sickness absence due to Covid-19 (not any other sickness) for up to 2 weeks absence, starting from day 1 of the absence. You should maintain a record of all of these absences, but your employee does not need to provide a GP fit note. SSP is currently £94.25 per week, so if you want (or are required by your contract) to pay your employee more than this, you will have to fund this difference yourself.
The facility to recover this SSP is not currently in place, but will be set up as soon as possible, so you will need to pay your staff for any absences this month and then claim a refund.
Business Rates Holiday for some
Any business in the retail, hospitality and leisure sector will receive a business rates holiday for 2020/21
Properties which qualify are those “occupied hereditaments that are wholly or mainly being used:
as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
for assembly and leisure
as hotels, guest & boarding premises and self-catering accommodation”
There is more detailed guidance here:
https://www.gov.uk/government/publications/business-rates-retail-discount-guidance
Cash Grants for Small Businesses
You can find the rateable value of your business premises on your latest rates bill.
Within the retail, hospitality and leisure sector, a cash grant will be made per property.
Where your business premises has a rateable value of under £15,000, you will receive a grant of £10,000.
Where the retail value of your premises is between £15,001 - £51,000, the grant will be £25,000.
For any other business which currently qualifies for small business rates relief, rural rates relief and tapered relief, (generally where the rateable value of your property is under £15,000) you will receive a one-off grant of £10,000
If you are eligible, your local authority should be writing to you shortly.
Corornavirus Business Interruption Loan Scheme
In the next few days, a loan scheme for loans of up to £5 million will be offered to help small and medium sized businesses. The Government will provide lenders with a guarantee 80% on each loan and will not charge for this facility. Full details of the scheme will be available here:
Insurance – you should also check your insurance to see if you have business interruption cover which may help you at this time if you are unable to trade.
On a personal level
If you are unable to work, and some or all of the above options are not available to you, some of you may be eligible to claim universal credit. More detail can be found here:
https://www.understandinguniversalcredit.gov.uk/coronavirus/
Lefevres Chartered Accountants
23 March 2020
01252 877936
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