Covid 19 – Government Support

help with covid 19

VAT Deferral main points

  • HMRC Defers Valued Added Tax (VAT) payments for 3 months.
  • All VAT-registered UK businesses are eligible.
  • The deferral will only apply for the period from 20 March 2020 until 30 June 2020. This will mean the deferral of one quarter’s VAT due on either the 7 April, 7 May or 7 June.
  • Repayment will have to be made by the end of the 2020/2021 tax year.
  • This is an automatic offer with no applications required.
  • Customers who normally pay by direct debit should cancel their direct debit otherwise HMRC will automatically claim it.   Make sure you reinstate the direct debit for subsequent periods.
  • VAT refunds will continue to be paid.

Corporation Tax – Seeking time to pay

  • Limited information available currently.  HMRC will publish further information as it becomes available from Government.
  • You can call HMRC’s helpline for help and advice on 0800 0159 559.  Do not be surprised for long delays.
  • Considerations when applying and negotiating time to pay with HMRC.
  • Your returns will need to be up to date.  You’ll have more chance if they are.
  • You may need to provide evidence in the form of budgets and cash flow.
  • HMRC will need an agreed repayment schedules in place.
  • In the current climate HMRC may be more sympathetic than usual but you should expect some robust questioning.
  • HMRC may be more amenable to certain sectors e.g. hospitality etc….
  • They may waive interest payments for late payment.
  • If time to pay is granted by HMRC it will be on a case by case basis.

Applying for more time to file your company’s accounts

  • You can apply to extend your accounts deadline if you cannot send your accounts because of an event that’s outside of your control.   So, if Covid-19 has impacted your ability to file your return you can apply for more time.
  • Apply through this website.  It will take 15 minutes https://beta.companieshouse.gov.uk/extensions
  • If you do not apply for an extension and your accounts are filed late, an automatic penalty will be imposed. The registrar has very limited discretion not to collect a penalty.

Covid-19 Six-month deferral on self-assessment payments

  • Payments due on the 31 July 2020 will not be payable until the 31 January 2021.
  • All self-employed persons are eligible.
  • This is an automatic offer with no applications required. No penalties or interest for late payment will be charged during the deferral period.

COVID-19: Grants for retail, hospitality and leisure businesses UK businesses

  • Package of measures announced on 17 March 2020.
  • Cash grants up to £25,000.
  • You do not need to do anything.  Your local authority will write to you if you are eligible for this grant.  Direct all enquiries on eligibility to your local authority.
  • Businesses in these sectors with a property that has a rateable value of £15,000 and under will receive a grant of £10,000.
  • Businesses in these sectors with a property that has a rateable value of between £15,000 and £51,000 will receive a grant of £25,000.
  • A holiday from business rates for the 2020-2021 tax year. This applies to all businesses in these sectors
  • Eligibility if your business is based in England and your business is in the retail, hospitality and/or leisure sector

Covid-19 Support for businesses that pay little or no business rates

  • The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.
  • You are eligible if your business is based in England and your business occupies a commercial property.
  • If you work from home, you do not qualify for this scheme.
  • You do not need to do anything.  Your local authority will write to you if you are eligible for this grant.  Direct all enquiries on eligibility to your local authority.

Coronavirus Business Interruption Loan Scheme

  • The scheme is for businesses that have a turnover of £45 Million and meet certain banking eligibility criteria.
  • For eligible businesses the government will cover the first 12 months of interest payments.

Statutory Sick Pay (SSP) for SMEs with employees

  • Small-and medium-sized businesses and employers will be able to reclaim Statutory Sick Pay (SSP) paid for due to COVID-19.
  • Refund will cover up to a maximum of 2 weeks SSP for eligible employees who have been off work due to the Covid-19 virus.
  • To be eligible for the scheme Employers must have less than 250 employees and must maintain and evidence absence records.
  • Waiting on more government information on how to apply and how the repayment mechanism will work.

Key measures to note for the self-employed

  • Definition of self-employed – A person is self-employed if they run their business for themselves and take responsibility for its success or failure.  Self-employed workers aren’t paid through PAYE and they don’t have the employment rights and responsibilities of employees.
  • A self-employed person directly affected by COVID-19 or in self-isolation will now receive universal credit of £95.25 per week.  That is the same amount as an employee on statutory sick pay.
  • However, those with savings of at least £16,000 are not eligible for any support via Universal Credit. You must wait until you have exhausted the savings before you become eligible.
  • Employment and Support Allowance (ESA) is available to the self-employed but to qualify you must have paid sufficient NI contributions in the last two to three years. This benefit will be payable from the first day of sickness rather than the eighth day.  Benefits are for those under the age of 25 £57.90 per month and those aged over 25 £73.10 per month.
  • If it is your first time applying for ESA, you need to send a completed ESA 1 form, along with an NHS 111 fit note as proof that you are not fit for work. You will receive the first payment within three weeks.
  • A delay to proposed IR35 tax reforms – measures aimed at clamping down on tax avoidance by targeting contractors who provide the same services as employees (but which has affected freelancers more widely) – will now be delayed by one year, to April 2021.
  • Self-employed are still not entitled to:
  • Statutory Sick Pay (SSP)
  • Not eligible for the Coronavirus Job Retention Scheme, which sees the government reimbursing 80% of (leave of absence) workers’ wages costs up to a maximum of £2,500/month.

Covid-19 Job retention scheme for furloughed (temporary leave of absence) employees

  • The overall objective is for the government to support businesses whose employees are on temporary leave of absence due to Covid-19.   This will help businesses retain staff with critical knowledge who otherwise may have been laid off.  Thus, allowing businesses to more easily start up again after Covid-19 passes.
  • Here is a list of conditions:
  • Staff must not work for the employer during the period of absence.
  • Start date 1st of March for 3 months and to be reviewed thereafter.  Note staff must have been on the payroll at 29th February 2020.
  • All UK businesses are eligible.  
  • It is a grant-based scheme.
  • The grant is paid to the employer.  The employer will then pay the employee through payroll in the normal way so tax and NI will still be payable.
  • The scheme is being administered by HMRC and details on the accessibility of the scheme will be announced later.  Our understanding is that it will be administered through an online portal and we hope it will be an easy process for employers.