If you are a small business owner or freelancer, you are probably worried about how your business is going to survive this period of disruption caused by Covid-19. Nobody knows how long the current coronavirus situation will last, and many businesses face losing both customers and money for the foreseeable future.
The UK government has already put various measures in place to help businesses. This information is changing day by day, but as of right now this is what has been introduced to help small businesses and the self-employed in the UK over the coming months…
Coronavirus Job Retention Scheme
UK employers will be able to access support to continue to pay part of their employees’ salary for those employees who would otherwise have been laid off during this crisis. HMRC will reimburse 80% of furloughed workers wages, up to £2,500 per month.
To access this help you will need to:
- designate any affected employees as ‘furloughed workers,’ and notify them of the change.
- submit information to HMRC about all employees that have been furloughed and their earnings.
HMRC are urgently setting up a new online portal for businesses to submit this information.
VAT and Income Tax payments
VAT registered businesses can defer VAT payments for 3 months until 30th June 2020. This is an automatic offer with no applications required.
If you are self-employed and usually submit tax returns via the Self-Assessment scheme, any Income Tax payments due in July 2020 can be deferred to January 2021. There will be no penalties or interest for late payments will be charged in the deferral period.
VAT and Income Tax payments will not be written off. Taxpayers will be given until the end of the 2020-2021 tax year to pay any liabilities that have accumulated during the deferral period.
Statutory Sick Pay relief package
Small and medium businesses and employers in the UK will be able to reclaim up to 2 weeks’ Statutory Sick Pay (SSP) per eligible employee who has been off work due to COVID-19.
The eligibility criteria for the scheme will be as follows:
- employers with fewer than 250 employees
- employers will be able to reclaim expenditure for any employee who has claimed SSP as a result of COVID-19
- employers should maintain records of staff absences and payments of SSP. Employees will not need to provide a GP note but if evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online
- the eligible period will commence the day after the regulations on the extension of SSP to those staying at home comes into force
The government will be working over the coming months to set up a repayment system
Business rates relief
The government are introducing a business rates holiday for retail, hospitality and leisure businesses in England for the 2020-2021 tax year. No businesses rates will need to be paid for 12 months.
Properties that will benefit from the relief are those being used as:
- shops, restaurants, cafes, drinking establishments, cinemas and live music venues
- for assembly and leisure
- hotels, guest & boarding premises and self-catering accommodation
There will also be a business rates holiday for nurseries in England for the 2020-2021 tax year.
These include premises occupied by providers on Ofsted’s Early Years Register and those which are wholly or mainly used for the provision of the Early Years Foundation Stage.
No action is required, rate reliefs will apply to your next council tax bill in April 2020.
Cash grants for businesses
Cash grants of up to £25,000 per property will be provided to businesses in England within the retail, hospitality, and leisure sectors such as shops, restaurants, pubs, cinemas, live music venues, leisure venues, hotels, and self-catering accommodation.
Businesses in these sectors with a rateable value of under £15,000 will receive a grant of £10,000, and businesses with a rateable value of between £15,000 and £51,000 will receive a grant of £25,000.
The government will also provide additional funding for local authorities to support small businesses in England that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will be provided as a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.
You do not need to do anything to apply for these grants, your local authority will write to you if you are eligible.
Coronavirus Business Interruption Loan Scheme
The Coronavirus Business Interruption Loan Scheme will support UK based SMEs with access to loans, overdrafts, and finance up to £5million for up to 6 years.
Businesses will not face any upfront costs, these will be covered by the government as well as the first 12 months of interest payments.
This scheme is being offered by all major banks and is now open for applications. To apply, speak to your bank as soon as possible.
Time To Pay service
Any business or self-employed person in financial distress may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.
Arrangements will be agreed on a case-by-case basis and are available to those paying tax to the UK government and with outstanding tax liabilities.
If you have missed a tax payment or you might miss your next payment due to COVID-19, you need call HMRC’s dedicated helpline on 0800 0159 559.
Self-Employed Income Support Scheme
The Chancellor has announced that the self-employed will receive 80% of their profits, up to £2,500 per month, for at least 3 months.
Those eligible will receive a cash grant worth 80% of their average monthly trading profit over the last three years.
The scheme will be open the self-employed with a trading profit of less than £50,000 in the 2018-19 tax year, or with an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19.
HMRC will use existing information to check potential eligibility and will invite applications once the scheme is operational.
If you have any questions with any of the information outlined above, please feel free to get in touch with us here at Magpie Accountancy.