COVID-19

SUMMARY OF GOVERNMENT INITIATIVES

 

What follows is the extent of our current understanding of the various Government schemes announced to date to help businesses survive the COVID -19 outbreak. Please be aware that final details have yet to be announced so the following should be treated as opinion rather than fact.

Business Rates

Businesses in the Retail, Hospital and Leisure sectors (RHL) will pay no rates in 20/21

Businesses with a rateable value (RV) of less than £15,000 will be eligible for a £10,000 grant from the Small Business Grant Fund (SBGF). If you were already in receipt of the SBRR this will apply to you.

Business in the RHL sectors will be eligible for £10,000 with a RV of < £15,000 or £25,000 with an RV between £15K and £51K from the RHL Grant Fund .

The grants will be administered by Local Authorities who are in the process of setting up administrative systems.

VAT

Business’s do not have to pay the VAT due for the quarters ending March, April and May. This applies automatically and no action is required. No interest will be charged and the delayed payment has to be made by the 20/21 year end.  The actual VAT return is required to be submitted by the due date. (This potentially gives HMRC the ability to levy penalties which we will be resisting on your behalf.) HMRC have stated that refunds will be made as normal.

Companies on the Annual scheme can suspend payments for 3 months. You will need to cancel the DD and reinstate it afterwards.

Self Employed

HMRC will be contacting you in June to arrange payment of 3 months money amounting to 80% of average profits of the last 3 years up to a maximum of £2,500 a month.. This can be claimed whether you have any work or not and it will be treated as part of your taxable income for the year.

The 2nd Payment on Account due 31 July does not need to be made before 31 January 2021.

PAYE

No relief/ delay has been announced and PAYE payments are still expected to be made as normal. All we can say is that you should assess whether your business has adequate cashflow to make the payments and to meet its other commitments.

Corona Virus Job Retention Scheme

Businesses will receive a Government grant equal to 80% of the pay of any employee the business has furloughed as a result of the outbreak. They need to negotiate and obtain the agreement of the worker to this change of status and notify the employee in writing (a suitable draft is attached). The Employer is under no obligation to make up the worker’s pay.  The change of status can be back dated to 1st March. During this period of lock down the employer can designate periods of compulsory holiday (see letter). It may be appropriate to make up holiday pay. HMRC is setting up a portal for claims, expected late April, so it is unlikely that we will see any grant payments before May.  We will provide updates when details are available.

Update On The Corona Virus Job Retention Scheme – 2nd April 2020

Businesses need to continue to run Payrolls and to make their RTI returns.

If the business is not topping up the pay the gross payment to the employee will be 80% of the higher of the average wages paid in the previous year (or period of employment if shorter) and what was paid in the same period last year. NOTE: The amount of this pay should not include any bonuses, commission or overtime payments.

Employers will need to register on the HMRC portal, once it is open, to make their claims for the grant. The grant paid will comprise the 80% gross payment, Employers N.I. for this amount and the 3% Employers contribution to the pension of those workers who have opted in to the pension scheme.