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.
We understand that now is the time when we, as your financial advisers, can prove ourselves!
The Measures:
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 re-imbursement 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 and Income Tax payments
This is an automatic scheme and no UK business is required to pay VAT until 30th June 2020. Payments on Account for Self-Assessments that are due on 31st July 2020 are deferred to 31st January 2021. The government has not mentioned the PAYE and CIS tax but we are certain that these can also be deferred if we are to ask HMRC.
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 when we speak.
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. Please bear in mind that we liaise with banks and raise finance for businesses on daily basis so this is why we recommend you speak to one of us beforehand. 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 you wish to raise?
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.