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17th March 2020

Coronavirus advice for businesses

Covid-19 Statement and useful advice

Updated: 1 April 2020

Coronavirus advice for businesses
An illustration of the Covid-19 Coronavirus, created at the Centers for Disease Control and Prevention (CDC).

Coronavirus Financial Help & Rights

Helpful information on sick pay, employment rights, information for the self-employed, tax payments & more

Useful information and updates from Martin Lewis’ ‘MoneySavingExpert’ page here.

The Government Coronavirus Measures

The government has issued a number of measures that aim to help businesses through these difficult times. We have listed these measures below and added some practical explanations.

Coronavirus Job Retention Scheme

HMRC will reimburse 80% of employee’s wage cost, up to a maximum of £2,500 per month.  We also need to wait until HMRC set up the system for reimbursement as their current systems are not set up for such reimbursements. We estimate that we will have an update by 6th April 2020 as that is the start of the new tax year.

Deferring VAT payments

For VAT, the deferral will apply from 20th March 2020 until 30th June 2020. This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during the deferral period. 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.

Customers who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay. Please do so in sufficient time so that HMRC do not attempt to automatically collect on receipt of your VAT return.

Deferring Income Tax payments

For Income Tax Self-Assessment, payments due on the 31 July 2020 may be deferred until 31 January 2021. However, to be eligible for this deferral you must have been self-employed during the 2018/19 tax year. This is an automatic offer with no applications required. No penalties or interest for late payment will be charged if you defer payment until January 2021.

Statutory Sick Pay relief package for SMEs

The government will pay 2 weeks’ worth of SSP per eligible employee for employers with less than 250 staff. The employer should maintain records of staff absences and payments of SSP. This system is not set-up yet and we will know more once the repayment mechanism is introduced. As per the first point, we estimate that we will know more about this by 6th April 2020.

12-month business rates holiday for all retail, hospitality and leisure businesses in England

This is automatic if your business is eligible. You will know if you qualify once the local authority in which you are based, sends you a Council Tax bill, sometime in April. If you believe that your business falls within the above sectors but the council has not applied the “holiday”, please let us know.

The Retail and Hospitality Grant Scheme

If your business qualifies, your local authority will write to you. We estimate this to be some time towards the end of April/beginning of May. There are 2 levels of grants as follows:

  • For businesses in these sectors with a rateable value of under £15,000, the business will receive a grant of £10,000.
  • For businesses in these sectors with a rateable value of between £15,001 and £51,000, the business will receive a grant of £25,000.

Support for businesses that pay little or no business rates

Your local authority will write to you if your business qualifies. We estimate this to be towards the end of April and the scheme entails a small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief.

Coronavirus Business Interruption Loan Scheme

This scheme commences from Monday, 23rd March 2020 and an eligible business will be able to raise a loan from their bank at 0% interest for the first 12 months. You should contact your bank directly to discuss funding. Prior to the conversation, please think about the following:

  • How has Corona 19 affected your business?
  • How much money has your business lost and will lose? You should have a list of cancellations/postponements of contracts if you sell B2B. If you sell B2C, you will need daily sales for last 3 months.
  • How have you started to reduce the business’ costs?
  • How much money do you wish to raise?

Self-employment Income Support Scheme

On Thursday 26 March the government announced their intention to provide further support for the self-employed in the form of a taxable cash grant.

The scheme allows individuals to claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 per month for the 3 months from March to May 2020. This may be extended if needed.

The taxable cash grant will be in the form of a single lump sum to cover the three months from March to May 2020. It will be paid in June 2020 to those that are eligible directly into their bank account.

More from our partners at Croner Taxwise here.

Coronavirus advice for businesses and employers from the UK Government is available on the gov.uk website here.

We also recommend reading this link from the British Business Bank which gives more information on the Business Interruption Loan Scheme.

Owner-managed companies

Due to the coronavirus, many owner-managed companies or sole director limited companies have been affected. Further guidance in relation to the Coronavirus Job Retention Scheme has been issued by HMRC, which has now confirmed that those directors are eligible to be furloughed as long as they are on the payroll for that company.

HMRC is aware that limited company directors will have statutory duties and obligations to fulfil such as filling out their accounts, but they are allowed to undertake these duties whilst being furloughed. These duties would not count as doing work in the instance of being furloughed, as one of the main conditions of the furloughed scheme is that the employee is not allowed to work for the company/employer.

If you believe you are entitled to Job Retention Scheme and your business has been impacted by the coronavirus, please contact us to discuss being furloughed.

Some other useful points to note of the scheme are as follows –

  • Currently the business is liable for the 80% of the furlough pay, and this will be reimbursed to the business once HMRC has created the reporting system/portal. They are hopeful that this will be in place by the end of April 2020.
  • The employer can choose to top up their employee’s wages with the additional 20%, but they do not have an obligation to do so.
  • All pay including that received whilst furloughed is subject to the standard rate of income tax, NIC and pension contributions, if applicable.
  • If an employee is on sick leave and receiving SSP, they can be furloughed once their sick leave has ended.
  • A furloughed employee can be furloughed through one employment but still work through another employment if they want. Each job is classed as separate and the cap applies to each employer individually.

To see further guidance and criteria relating to the Coronavirus Job Retention Scheme please visit the government website.

In addition, The Institute of Chartered Accountants in England and Wales have summed up the key points of the scheme.

Financial Difficulty

HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of COVID-19 and have outstanding tax liabilities.

Employment & Self-Employment Coronavirus Help

A comprehensive page of information and support here.

HR support for businesses

As businesses in the UK are facing unprecedented challenges in the current environment many of our clients are turning to us for our support.

Dealing with employees is undoubtedly one of the key challenges that we all have to deal with, and our partners at Croner Taxwise can help.

All Finton Doyle clients have access to HR telephone support as part of our service. If you need HR support you can call 0844 892 2807 and speak to one of the Croner Taxwise team.

Furlough for Employees

The Government announced on 20th March that any employer in the country – small or large, charitable or non-profit – will be eligible for the Coronavirus Job Retention Scheme if they “Furlough” their employees.

There is no need to wait until the Government issues further guidance on this scheme and you can Furlough your employees now.

All you are required to do is inform your employees that their employment status has been updated to Furlough.

You should then follow this up with written correspondence via email attaching a letter, or by letter informing them of this change, which the HMRC may request and which will enable you to claim the grant.

We have been made aware of this draft letter for you to use which will allow you to Furlough your employees now.

Carrying over paid holiday

The government has introduced a temporary new law to deal with Coronavirus disruption.

Employees and workers can carry over up to 4 weeks’ paid holiday over a 2-year period if they cannot take holiday due to Coronavirus.

View further details and Acas guidance.

Lay-offs and short-time working

If an employer does not have enough work for their employees, they may need to consider:

  • lay-offs (sending employees home temporarily)
  • short-time working (reducing employees’ working hours)

These options may help avoid redundancies. But this should be a last resort for employers. View Acas guidance.

Stay in Touch

We understand the importance of your business as it is yours and your family’s livelihood and we will work extended hours to help and guide you but please understand that our mobiles and e-mails will be extremely busy during this time so if we are unable to pick up the phone when you call, it is because we are helping somebody else with their business, so please bear with us and we will call back as soon as we can.

Get in touch with us at Finton Doyle today if you need to discuss your business or personal finances.

We’ll keep this blog updated with news as and when we get it.

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