Further Government measures to assist businesses impacted by COVID-19

Date: March 24, 2020

On Friday 20 March 2020, the Chancellor announced a further package of measures to assist businesses impacted by COVID-19. These were in addition to the measures announced in the Budget on 11 April 2020. A summary of the main measures announced to date are summarised as follows, along with coronavirus advice for employers:

Coronavirus Job Retention Scheme

For those businesses wishing to access the scheme, you will need to:

Designate affected employees as ‘furloughed workers’ (your current workers who you will retain but will not be working). Employees will need to be notified of this change and changing the status of employees remains subject to existing employment law. Depending on your employment contracts, this may be subject to negotiation
Information will then need to be submitted to HMRC about the employees that have been furloughed and their earnings through a new online portal (further details will be set out by HMRC in due course, including the information required)

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month gross, currently for a maximum of 4 months 9updated on 17 April 2020 for the initial 3 months). We understand the setting up of a system by HMRC for reimbursement is being actioned as a matter of urgency, as existing systems are not set up to facilitate this.

Deferring VAT and Income Tax payments

For VAT, this will apply from 20 March 2020 until 30 June 2020.

All UK businesses are eligible to defer VAT for this quarter. No applications are required as this is an automatic offer. Businesses will not be required to make a VAT payment during this period. Businesses will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the Government as usual.

Income Tax Self-Assessment, payments due on the 31 July 2020 will now be deferred until the 31 January 2021.

If you are self-employed you are eligible. Also an automatic offer, no applications are required. There will be no penalties or interest charged for late payment in the deferral period.

Support for businesses paying sick pay to employees

Covering up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19, this will be refunded to the employer. SSP in these circumstances can be paid form day one, rather than day 4
Eligibility is for employers with fewer than 250 employees, employed as of 28 February 2020
Expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19 can be reclaimed by an employer.

12 months business rates holiday

For retail, hospitality and leisure businesses in England, a 12-month business rates holiday will be introduced for the 2020/21 tax year. If a business received the retail discount in the 2019/20 tax year will receive revised bills by their local authority as soon as possible.

Properties benefiting from the relief will those that are wholly or mainly being used as follows, and are occupied as:

Shops, cafes, restaurants, drinking establishments, cinemas and live music venues
For assembly and leisure
As hotels, guesthouses & boarding premises as well as self-catering accommodation

This will apply to your next bill in April 2020. However, billing authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible.

For business in receipt of small business rate relief or rural rate relief, Grant funding of £10,000 is available

Small businesses that receive small business rate relief (SBBR), rural rate relief (RRR) or tapered relief, the Government is to provide additional Small Business Grant Scheme funding. This will provide a £10,000 grant, on a one of basis, to eligible businesses to help meet their ongoing business costs.

Retail Hospitality Scheme

Applicable to businesses in the retail, hospitality and leisure sectors, a cash grant of up to £25,000 per property will be made available. Businesses in these sectors with a rateable value of under £15,000 will receive a grant of £10,000. If your businesses premises have a rateable value of between £15,001 and £51,000 in this sector, you will receive a grant of £25,000.

You should not need to do anything. Your local authority should write to you if you are eligible for this grant.

Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant billing authority.

Business rates support for children’s nursery businesses

A business rates holiday is to be introduced for nurseries in England for the 202/21 tax year. Properties eligible for this relief will be:

Those occupied by providers on Ofsted’s Early Years Register
Those wholly or mainly used for the provision of the Early Years Foundation Stage

There is no action required. This should be applied to your next business rates bill in April 2020. Billing authorities may be required to reissue bills to exclude the business rate charge.

Supporting businesses that pay little or no business rates

Small Business Grant Scheme funding is being made available by the Government, this will enable local authorities to support small businesses that already pay little or no business rates because of rural rate relief (RRR), small business rate relief (SBBR) or tapered relief. A one-off grant of £10,000 to eligible businesses will be provided.

You should not need to do anything. You should receive correspondence from your billing authority if you are eligible for this grant.

Support for businesses through the Coronavirus Business Interruption Loan Scheme

A new Coronavirus Business Interruption Loan Scheme (CBILS), delivered by the British Business Bank, has been launched to primarily support small and medium-sized businesses to access bank lending and overdrafts.

Lenders will be provided with a guarantee of 80% on each loan form the Government (subject to a per-lender cap on claims) to provide lenders with further confidence in continuing to provide finance to SMEs. Loans of up to £5 million in value will be supported by the scheme.

The rules and list of accredited lenders is available on the British Business Bank website. The scheme will be offered by all major banks once it has launched. There are over 40 accredited providers.

You will need a business plan for your application which we can help you with, if required.

The Bank of England will have a similar scheme for larger firms. More information is available from the Bank of England

Time to Pay service

Businesses and the self-employed in financial distress, who are without outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time to Pay service.

These are agreed on a case-by-case basis, tailored to individual circumstances and liabilities. A dedicated HMRC helpline is available on 0800 0159 559. From our experience, you can expect long delays in getting through. Alexander & Co can help clients with applications, if required.

Last updated 23.03.2020

Coronavirus advice for employers – how can we help?

Alexander & Co can provide you with support to help you through this difficult time:

We can provide advice on funding, including government-backed schemes
We can assist with cash flow modelling and sensitivity analysis, to plan for the forthcoming months
We can negotiate with HMRC with Time to Pay, to delay tax payments.
If for any reason, the filing of company accounts need to be delayed, we can manage this on your behalf.
We can assist in providing help to with business continuity plans.
Alexander & Co is here to support its clients and to regularly provide up to date advice.
We have remote working facilities including cloud-based software packages and video conferencing facilities, to assist throughout this period.

For further information, you can contact our tax team by sending an email to info@alexander.co.uk or simply fill out the form below and we’ll be in touch shortly.