REC summarises all the support available to business:
What Covid-19 support is available to recruitment business leaders?
- VAT Deferral - You can defer VAT due between 20.03 and 30.06 – but you must clear the debt by April 2021 SSP Rebate
- Businesses with less than 250 employees* can claim a rebate for staff paid SSP for 2 weeks. * Definition of “employees” TBC Job Retention Scheme For laid off and furloughed workers
- Government will pay 80% of the wages (capped at a max of £2,500 per month) if a business decides to “furlough” any of their workers (company directors are not eligible). Business Interruption Loan Scheme By British Business Bank
- Interest free loans for the first six months, underwritten by government. Available if your business has a turnover under £45m per annum. Maximum loan value of £5m. Small Business Grant For businesses that receive small business rate relief
- Your local authority will write to you if you are eligible for this. The grant is to a value of £10,000. Corporate Financing Facility For larger businesses
- The Bank of England will buy short term debt to support the cashflow of those larger businesses that have been temporarily disadvantaged by the coronavirus outbreak Time to Pay scheme For those with outstanding tax liabilities
- For UK businesses that pay tax to HMRC, you may be able to come to an arrangement with HMRC. You can call HMRC on 0800 0159 559 Self-assessment delay For the self-employed
- Payments due at the end of July 2020 can now be deferred until 31 January 2021. You do not need to apply – this is just automatic
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Support for the self-employed
Self-employed workers facing financial difficulties as a result of coronavirus are set to be offered a package of support from the government, reports the BBC
Chancellor Rishi Sunak will unveil the measures later.
He set out plans for 80% wage subsidies for staff kept on by employers last week - and the PM has said he wants similar protection for freelancers.
However, Boris Johnson added he could not promise the UK would beat the virus "without any kind of hardship at all".
The total number of people in the UK to die with Covid-19, the disease caused by coronavirus, has reached 465.
Mr Sunak said last week that the government would cover wages of up to £2,500 a month for staff being kept on by their employer, as part of "unprecedented" measures to prevent workers being laid off.
The chancellor later said drawing up plans to help self-employed people had proved "incredibly complicated".
Dr Adam Marshall, director general of the British Chambers of Commerce, said: "For many people that have seen their businesses disappear in the blink of an eye, things like statutory sick pay or universal credit just isn't enough.
"It doesn't need to be perfect - we just need a system in place," he told the BBC's Today programme.
John Healey, a self-employed driving instructor from Lancashire, said: "We don't need a lot, we just need something.
"But by doing nothing, we just go to the wall, basically," he told the Today programme.
BBC Newsnight's political editor Nick Watt said all the indications from talking to ministers and Conservative MPs were that the chancellor would match the 80% salary support given to PAYE employees.
He said one minister said the reason why it had taken so long was because it was fiendishly complicated but "when this chancellor acts, he acts big".
BBC business editor Simon Jack said calculating a support wage for the self-employed was so difficult because their income could be lumpy, irregular and intermittent.
Government sources said they had struggled to find a way to avoid paying people who do not need help.
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20 March 2020: Here’s a quick summary of practical help notified by the Chancellor as outlined by the Institute of Chartered Accountants in England and Wales (ICAEW)
Coronavirus Job Retention Scheme
Under the new Coronavirus Job Retention scheme, government grants will cover 80% of the salary of PAYE employees who would otherwise have been laid off during this crisis. The scheme, open to any employer in the country, will cover the cost of wages backdated to 1 March 2020 and will be open before the end of April. It will continue for at least three months, and can include workers who were in employment on 28 February.
To claim under the scheme employers will need to:
- designate affected employees as ‘furloughed workers’, and notify employees of this change. Changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation; and
- submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal. HMRC will set out further details on the information required.
- HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.
While HMRC is working urgently to set up a system for reimbursement, we understand existing systems are not set up to facilitate payments to employers. Business that need short-term cash flow support, may benefit from the VAT deferral announced below and may also be eligible to apply for a Coronavirus Business Interruption Loan.
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.
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.
Self-employed people can now access full universal credit at a rate equivalent to statutory sick pay.
HMRC Time to Pay
HMRC’s Time to Pay scheme can enable firms and individuals in temporary financial distress as a result of Covid-19 to delay payment of outstanding tax liabilities. HMRC’s dedicated Covid-19 helpline provides practical help and advice on 0800 0159 559.
Business Rates holidays and cash grants
- No rates payable for the 2020-2021 tax year for any business in the retail, hospitality or leisure sectors.
- In those sectors, if your rateable value is between £15K and £51k, you'll also receive a cash grant of up to £25,000 per property.
- Any business which gets small business rates relief, including those in the retail, hospitality or leisure sectors, will receive a cash grant of £10,000 (increased from £3,000 announced in the 11 March Budget).
- The rates holiday and cash grants will be administered by local authorities and should be delivered automatically, without businesses needing to claim.
Coronavirus Business Interruption Loan Scheme
- These should be available from Monday 23 March and are delivered by lenders that partner with the British Business Bank, including all the major banks. The lender receives a guarantee of 80% of the loan amount from the government.
- They are available for UK-based businesses with turnover of no more than £45 million and can provide for a facility up to £5 million. The borrower remains liable for 100% of the debt.
- No interest will be charged for the first 12 months.
COVID-19 corporate financing facility
The Bank of England has set up a scheme to finance working capital by purchasing commercial paper from larger business ‘making a material contribution to the UK economy’. Businesses do not need to have previously issued commercial paper in order to participate. The scheme will operate for at least 12 months.
Mortgage and rent holiday
Mortgage borrowers can apply for a three- month payment holiday from their lender. Both residential and buy-to-let mortgages are eligible for the holiday. It is important to remember that borrowers still owe the amounts that they don't pay as a result of the payment holiday. Interest will continue to be charged on the amount they owe.
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.
Businesses that have cover for both pandemics and government-ordered closure should be covered. The government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres, etc., is sufficient to make a claim as long as all other terms and conditions are met. Insurance policies differ significantly, so businesses should check the terms and conditions of their specific policy and contact their providers.
Statutory Sick Pay (SSP)
- If you're a director of a limited company with less than 250 employees, you can pay yourself two weeks of SSP if you need to self-isolate subject to meeting the minimum payroll requirement for SSP.
- The government will refund £94 per week, maximum £188, to your company.
- It will also refund SSP for staff of businesses with less than 250 employees for up to two weeks.
Covid-19: UK practical business advice using existing tax rules
Paula Tomlinson, an ICAEW member, sets out some advice based on existing income tax and corporation tax rules.
- As we near the end of the tax year, get your income tax return in as soon as possible after 6 April 2020, for a potential refund of part of your January 2020 tax payment. Then know the exact amount due in July.
- If you make a sole trader or partnership tax loss to 5 April 2020, generate a tax refund by carrying the loss back to 2019.
- If you're a start-up sole trader or partnership, this loss can be carried back three years to generate a tax refund from your previous PAYE job or even from rental income.
- If you're a limited company and make a loss in your current year end, carry it back by a year to generate a tax refund.
- If you're working from home more than usual, claim more costs against your taxable income for your home office.
- The sooner you get tax returns sent in, the sooner you can benefit from the above.
- Getting your return in early doesn't bring forward any tax payment dates, but it does bring forward tax refunds.
- An increase in Time-to-pay arrangements from HMRC, where you phone HMRC to agree a delay in paying your tax. Have a realistic proposal ready that you expect to adhere to.
Off-payroll working (IR35) deferral
Freelancers and consultants worried about getting taxed as an employee from 6 April 2020 have a year's reprieve until 6 April 2021.
Talk to your ICAEW Chartered Accountant for more trusted business advice.
Chancellor prepares wage package rescue plan
The chancellor is set to announce an employment and wage subsidy package to try to protect millions of jobs reports the BBC.
Talks went on into the night with business groups and union leaders, who urged the government to help pay wages amid the coronavirus pandemic.
Many firms are warning of collapse, wiping out thousands of jobs, as life in the UK is largely put on hold.
It is the latest in a string of big fiscal attempts to ease the burden on businesses and their employees.
Prime Minister Boris Johnson signalled Chancellor Rishi Sunak would be saying more on Friday about the extended package the government is putting forward for workers.
The PM has urged struggling businesses to "stick by their employees, because we're all going to need them".
One proposal under discussion is for the UK to follow the lead of countries such as Denmark, where the government has promised to cover 75% of salaries at private companies for three months, if they promise not to let staff go.
UK interest rates slashed again in emergency move
The Bank of England has cut interest rates again in an emergency move as it tries to support the UK economy in the face of the coronavirus pandemic.
It is the second cut in interest rates in just over a week, bringing them down to 0.1% from 0.25%.
Interest rates are now at their lowest level in history.
The Bank said it would also increase its holdings of UK government bonds.
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