Government support: Covid-19
As you know, due to the Coronavirus pandemic the chancellor has announced a number of measures to assist individuals and businesses through these difficult times. We have outlined below some of the measures which may apply to you and your business should you require assistance.
Employers
Coronavirus Job Retention Scheme (CJRS)
This applies to all UK employers with a PAYE scheme. The scheme offers support to enable employers to continue paying part of their employees salary that are on a leave of absence also referred to as ‘furloughed’.
When an employee is furloughed they cannot undertake any work for, or on behalf of the business. This includes providing services or generating income. As a director of your company, you can also designate yourself as ‘furloughed’. HMRC confirm that directors can continue to carry out statutory obligations and legal duties on behalf of their companies without this affecting their ‘furloughed’ status. This means you can continue to maintain company records, to allow for statutory filings to be made for example VAT and accounts filing.
The scheme is expected to be available by the end of April 2020 and claims can be backdated to 01 March 2020. All claims will be made via a portal. When making a claim some details will be required including the claim period and amount (a minimum of three weeks).
Once the portal is available, employers will be able to claim 80% of furloughed employees usual wages up to a maximum of £2,500 per month, provided they were on payroll on 28 February 2020. In addition, employers will also be able to claim the associated National Insurance contributions. We will provide more information about the process for your limited company when further details are available.
Please see CJRS for HMRC’s current guidance.
All businesses
VAT deferral
This allows businesses that have VAT payments that will fall due between 20 March 2020 and 30 June 2020, to be deferred. Any liabilities that would have been due during the deferral period will be deferred until he end of 2020/21 tax year (05 April 2021). No application is required for this scheme but please note, if you pay by direct debit, you will need to ensure your direct debit is cancelled. HMRC have confirmed that any VAT refunds will be paid as usual. For more information please see VAT deferral.
Time to pay
This allows any businesses including self employed individuals in financial distress with outstanding tax to receive support with their tax liabilities. This can include deferral of payment or agreeing an affordable payment plan. For more information please see Time to pay
Small and medium businesses
Statutory Sick Pay Rebate (SSP)
This scheme allows any businesses to reclaim SSP paid to employees for absence due to Coronavirus. The refund will be two weeks SSP per eligible employee who has been unable to work due to Coronavirus. Current payroll systems are not able to facilitate claims for repayment and further details will follow in due course. For more information please see SSP.
Coronavirus Business Interruption Loan
This is open to businesses with annual sales of up to £45m. Loans under this scheme will be interest free for 12months and to qualify, the business must have a business plan and proposal for borrowing. Further guidance is available at Coronavirus Business Interruption Loan Scheme
Self Employed
Self employed income support scheme
This is a grant provided to self employed individuals or partnerships which have been negatively impacted by Coronavirus. This will allow claimants to receive 80% of their profits up to a maximum of £2,500 per month. The amount claimable will be based on the average profits from 2016/17, 2017/18 and 2018/19 self assessment tax returns. The scheme will initially be available for three months, with the first claims to be made at the beginning of June 2020. For more information please see Income support.
Deferral of self assessment payment
This scheme allows any taxpayer to defer their payment on account that would have been due on 31 July 2020. The payment deadline has been extended to 31 January 2021. This scheme does not require an application. For more information please see Self assessment tax deferral.
Universal Credit
HMRC is currently working to deliver all of the above measures. In the interim the HMRC are including further support by providing more generous universal credit. To find out more please see Universal credit.
Full details of the government support for businesses is available at Covid-19 support
