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Coronavirus Support

At this difficult time we want to highlight potential actions where we can support you if your business is struggling because of the Coronavirus (Covid 19 pandemic). Note we have written this advice with our Business Companion clients in mind.. We have had to make many assumptions where details are still lacking but will update with further advice as new guidance is issued.

We are all  working as usual and are here to support you. Call or email us with any specific problems/ questions. The key actions are as follows:

  1. Defer your Taxes
  2. Coronavirus Job Retention Scheme
  3. Statutory Sick Pay (SSP) Rebate Scheme
  4. Self Employment Income Support
  5. Grants and Sources of Credit

1. Defer your Taxes

If you are already struggling with cashflow you may be able to delay payment of some taxes. Bear in mind that they will have to be paid at some point. HMRC are offering 'improved Time to Pay (TTP) arrangements'.

  • Self Assessment - Tax due or payments on account due on 31st July 2020. If you need to discuss TTP options with HMRC ring 0300 200 3820 (8am - 4pm weekdays, quieter first thing).
  • PAYE - consider delaying your PAYE payments. If necessary cancel Standing Orders or Direct Debits and discuss TTP options with HMRC (ring 0800 024 1222).
  • Consider delaying payment of Corporation Tax: If you are likely to make a loss in the current year we can write on your behalf to explain that a loss this year will offset any profits made hitherto. Therefore you will be applying for a rebate.
  • For those on VAT Annual Accounting - if your turnover is down and you need to reduce your interim payments let us know and we will write to HMRC to explain the situation. VAT returns need to be submitted as usual. If you have a VAT balance due between 20 March 2020 and 30 June 2020, you have the option to defer the payment until a later date
  • For those who have quarterly VAT returns, VAT payments due up to end of June can be deferred. Taxpayers 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 normal. VAT Returns need to be submitted as usual.

Note: HMRC helplines are likely to be completely jammed at the moment so you may not get through. Consider writing to HMRC instead - or we can help you with this.

Rent and Rates

  • For this year, there will be a business rate holiday in England for eligible businesses in the retail, leisure and hospitality sectors with a rateable value below £51,000.
  • There will be an increase in the business rate discount for pubs from £1,000 to £5,000.
  • Send us a copy of your Business rates bill so we can see your Rateable value.

If you rent your premises and are in difficulties negotiate terms with your landlord
Are you working from home now? If so do you need to retain your premises?

2. Coronavirus Job Retention Scheme (CJRS)

The Government will pay up to 80% of employees wages (up to £2,500 per month) from March to July.  This has now been extended to October with some changes. We can make the grant applications to HMRC on behalf of our clients for this scheme. Consider the following:

  • Within the Coronavirus Job Retention Scheme you  may designate some workers as 'furloughed'. They will still be employed but will not be working.
  • You have to seek agreement from employees to be furloughed, for instance by letter (we can give you a draft letter to use). We need to have copies of the furlough agreements before we submit furlough details to HMRC.
  • The 80% paid by Government will be based on previous wages. For salaried employees, the employee’s actual salary before tax, as of 19th March 2020 should be used to calculate the 80%. Use the HMRC Calculator
  • For employees whose pay varies, if they have been employed for a full twelve months prior to the claim, you can claim for the higher of either the same month’s earnings from the previous year or average monthly earnings from the 2019-20 tax year. Consider whether you can afford as an employer to pay the extra 20% of wages (or top up beyond £2,500) - it is not compulsory.
  • HMRC will pay the minimum automatic enrolment employer pension contributions on the subsidised wage (3% of qualifying earnings) until July.
  • Tell us when you send us the payroll information who has been furloughed for how many days in that month.
  • Furlough claims can be submitted for a period ending up to 14 days in the future from the current date. This will help employers' cashflow. The repayment of wages from the government takes up to 6 working days
  • The scheme will close to new entrants from 30 June.
  • From 1 July 2020 furloughed employees will be able to return to work for their employer part-time. 
  • From 1st August, employers must also pay all National Insurance and pension contributions.
  • From September Employers will also have to contribute 10% of normal pay, rising to 20% in October.
  • Although generally furloughed employees must not perform any work for the employing business, the government has clarified that a director can furlough and continue with their 'statutory duties'.

3. Statutory Sick Pay (SSP) Rebate Scheme

As explained in our Spring Budget Newsletter Statutory Sick pay (SSP) is now payable for those asked to self-isolate with or without symptoms because of Coronavirus, and the Government will refund the cost of the first 14 days of SSP to smaller businesses. The SSP rate is now £95.85 per week for up to 28 weeks and it is now payable from day one of sick leave.

SSP is a contributory benefit related to an employee’s National Insurance contributions. If you are an employer please check the wage and hours rates for your employees. In order to benefit from the new rebate of SSP your staff have to be earning at least £118pw for eight weeks.

We can make claims on your behalf through the Coronavirus Statutory Sick Pay (SSP) Rebate Scheme.

4. Self Employment Income Support

Freelancers and contractors can claim up to 80% of their profits from the state if they have been adversely affected by the coronavirus pandemic.

The Coronavirus Self-employment Income Support Scheme (SEISS) grant is worth 80% of their profits up to a cap of £2,500 per month. The first  lump-sum payment for March, April and May can be claimed from  the beginning of June. A further claim for June, July and August can be made in August.

To be eligible more than half of a claimant's income needs to come from self-employment with a trading profit of less than £50,000The scheme will be open to those with a trading profit of less than £50,000 in 2018-19, or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19.

Those who are recently self-employed, having set up since April 2019, will not receive any help under this scheme. This is because they will not have filed a tax return and therefore HM Revenue and Customs (HMRC) will not know of their self-employed status.

Unfortunately HMRC will not allow accountants to make the SEISS claims on your behalf, so you have to make the claims yourself.  However we can help you by confirming your eligibility and the figures for your claim.  

5. Grants and Sources of Credit

  • Local authority small business grant funding of £10,000. This is for all business in receipt of small business rate relief or rural rate relief. Your local authority will write to you if you are eligible for this grant. You may be able to speed this up by applying online with your rates bill and bank details. Check your local authority website.
  • Business grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000. Your local authority will write to you if you are eligible for this grant. Again this may be speeded up by sending them your details. Check your local autority website for how to apply.
  • Small firms will be able to apply for a 'Coronavirus Business Interruption Loan' of up to £1.2million. Any small business interested should approach one of the accredited lenders with their borrowing proposal. The main criterion is for your business to be unable to meet a lender’s normal lending requirements for a fully commercial loan or other facility, but would be considered viable in the longer-term. Go to the British Business Bank Website for more information.
  • The Bounce Back Loan Scheme will enable small businesses affected by the pandemic to borrow between £2,000 and £50,000 in an initiative described by the Chancellor as “an easy solution for those in need of smaller loans”. Businesses can apply for 25% of their turnover and the government will pay the interest for the first 12 months.  This loan will be available from 4th May and we are hoping to give those of our clients who may benefit, personalised guidance on how to exploit this scheme.

Next Step:

Please contact us if you need further advice.

Ask an MYOB accountant

Call us now on 01422 847500

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