Coronavirus Pandemic – What support is available?

The current coronavirus situation is not like anything we’ve experienced before.  It has resulted in restrictions on travel and public gatherings, as well as supply chain disruptions and market uncertainty. 

The pressure on businesses and individuals is raising concerns and therefore we have created this guide to help you see what support is available.


Government Support

UPDATED 27th MARCH (Red headings & Yellow blocks show the changes)

Self-employment Income Support Scheme

For sole traders and people in a partnership, HMRC will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed.

Coronavirus Job Retention Scheme

HMRC will reimburse 80% of furloughed (basically another word for redundant) workers wage costs, up to a cap of £2,500 per person per month. This scheme covers workers on the payroll as at 29th February and kicks in from 1st March.

Details of the scheme have been published by the Government. We’ve created a Furloughed Leave page to answer your Frequently Asked Questions.

Does it include directors? We don’t know, at this stage.

VAT and Income Tax Payment Deferral

VAT – The government announced that VAT will not need to be paid until at least 30th June and then any unpaid VAT must be paid by 5th April 2021. This is an automatic offer with no applications required.

If you have a direct debit in place for VAT then you will need to cancel this with your bank to avoid the payment being taken automatically.

Income Tax – The self assessment payments on account, due by the self-employed on 31st July, have been deferred until 31st January 2021.

Both taxes will still be payable so these are deferrals rather than write offs!

HMRC Time to Pay

HMRC have set up a dedicated phone helpline to support businesses and self-employed people concerned about not being able to pay their tax, due to the coronavirus pandemic.

The number to call is:

0800 0159 559

Opening hours are Monday to Friday 8am to 8pm, and Saturday 8am to 4pm.

If you are having cash flow problems and need to delay your tax payment then call HMRC asap.  They will agree an instalment arrangement and will suspend debt collection proceedings and will cancel penalties and interest. 

Communication is key, as soon as you realise you may not be able to make the tax payment you should call HMRC.  Our feedback so far has been that the helpline staff are friendly and understanding.

Please be aware that the Helpline has reached capacity a few times in the past week. As you will imagine HMRC are under huge pressure and many of the details are not fully avaliable as yet so please be patient if you need to call.

Coronavirus Business Interruption Loan Scheme

In the Budget 2020 the Chancellor announced that a Coronavirus Business Interruption Loan Scheme (CBILS) would be created.  This provides attractive finance options to businesses including:

  • Loans
  • Overdrafts
  • Invoice finance facilities
  • Asset finance facilities

The money borrowed will need to be paid back with terms from 3 months to 10 years.

The interest free period on loans under this scheme has been extended from 6 to 12 months.

Once agreed, specific scheme details will be made available here – https://www.british-business-bank.co.uk/ourpartners/supporting-business-loans-enterprise-finance-guarantee/

Business Rate Relief

Business properties with a rateable value below £51,000 will receive a 100% discount on their business rates.  Your local authority will rebill you as soon as possible. 

Further guidance on this will be published on 20th March 2020.

Small Business Grants

Small Businesses who pay little or no business rates will be eligible to a one-off grant to help you meet your ongoing business costs.  Funding for the scheme will be provided to local authorities in early April.

The value of this grant has been increased from £3,000 to £10,000.

Businesses in the retail, hospitality and leisure sectors could receive £10,000 or £25,000 depending on whether their ratable value is under or over £15k pa.

How to access the grant? You don’t need to do anything, your local authority will write to you in the coming weeks.

Companies House

If you have limited company accounts due to be filed, but you need more time due to the coronavirus, then Companies House will grant a two-month filing extension.  This will avoid the automatic late filing penalties.

IMPORTANT – you need to apply for the extension. A4C can make the application on your behalf so let us know asap if you would like this extension.

IR35 Reform Postponed

It may be too late for some, but last night the government announced that the changes planned to off-payroll working rules have been postponed until 1st April 2021. 

If you are a contractor who was affected by these changes then your agency or end client will be communicating with you this week.

Support for Employers

The government has published guidance, which outlines what you need to know as an employer. 

You can find full details here – https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/guidance-for-employers-and-businesses-on-coronavirus-covid-19

Key elements for you as an employer are:

  • Where possible, you and your team should work from home.
  • Any staff who are poorly or need to self-isolate will be entitled to Statutory Sick Pay (SSP) from day one and for up to 14 days. 
  • SSP is calculated through your payroll so email Tom with details of any absences and he will provide the calculations and supporting payslips (payroll@a4cgroup.co.uk).
  • SPP is normally a cost to the business but in the Budget 2020 the government announced that SSP paid due to coronavirus would be reimbursed to employers.  Details on this process to follow.
  • Employers should maintain records of staff absences, but the requirement for a doctor’s sick note has been relaxed, to ease the pressure on GP surgeries.

Universal Credits

Anyone not eligible to receive the self-employment income support scheme grant, furloughed pay or statutory sick pay are able to claim Universal Credit and / or Employment Support Allowance.

You can get help and advice from your Jobcentre Plus work coach or the Citizens Advice – https://www.citizensadvice.org.uk/ .

Mortgage Relief

Mortgage lenders have agreed to offer a 3-month mortgage relief holiday.  The payments will still be due, but our understanding is that they will be added to the end of your mortgage term (effectively extending your repayment period by 3 months).

Call you mortgage company to arrange your payment holiday.

Insurance

Most businesses have insurance and some policies include business interruption cover.  Therefore, it’s vital that you check with your insurance provider to see if you have any opportunity to claim. 

Many policies are limited to business damage through flood or fire, but do check your policy just in case!


What else can you do?

Check your costs

Identify which are essential and which are nice to have.  You may not want to cancel that Neflix subscription (understandable) but perhaps the purchase of golf clubs on the horizon can wait a few months?

Support your local businesses

Like you, there are thousands of independent businesses in the UK who are worried about surviving this.  We can all do our part to help them buy shopping local, whether it be an independent clothing store or a take-away from your favourite restaurant. 

Let’s support each other to get through this together.

Use your downtime wisely

  • Update your marketing plan
  • Complete your stock-take (perfect timing for most clients with a year-end of 31/3/20)
  • Review systems and procedures
  • Sign up for that software trial you’ve been meaning to test
  • Re-connect with friends, colleagues, suppliers, neighbours (albeit via FaceTime!)

A4C Support

We are in financially testing times right now but the staff and systems in place at A4C mean that we can continue to support you, just as we always have done.  As a team we are all working remotely but our robust IT systems mean that normal daily tasks can be completed without disruption.

Our focus over the coming months will be to deliver all deadline driven work as usual.  This involves Payroll, CIS, VAT Returns and Limited Company Accounts filing.

Any clients who wish to have a strategy review, in light of Covid-19 and the cash flow impact on their business, are welcome to book a call with Esther.

Please email esther@a4cgroup.co.uk to arrange a slot next week.

We are facing a storm, but we are facing it together.  A4C will continue to stand by your side and give you the support you need as we look forward to a time when things return to normal!

We wish you and your family good health and good fortune in the weeks & months ahead.