The Chancellor Rishi Sunak has set out a number of measures to support the Economy in this time of crisis. He has introduced measures to support the people of the UK, public service and businesses through this time of unprecedented disruption. In this article we focus on the support provided to businesses in the UK. These are rapidly changing times, with things changing on a daily, and even hourly basis. These measures are temporary and may change so we advise you to keep abreast with the latest news.
The package of measures introduced by the Chancellor include: –
All UK employers with a PAYE Scheme can access support allowing them to continue paying part of their employees’ salary. This saves jobs which otherwise would have been made redundant. It applies to employees who have been requested to stop working, but still remain on the payroll. These people are known as ‘furloughed workers’. HMRC will pay 80% of their wages up to a maximum of £2,500 per month.
The scheme is backdated to 1st March and is open for 3 months, but it will be extended if the need applies. You can claim for your employee’s wages through the Coronavirus Job Retention Scheme.
Legislation will be brought forward to allow SME’s and employers to reclaim SSP paid for absence due to COVID-19. There is eligibility criteria such as the refund covering up to 2 weeks’ SSP per eligible employee due directly to COVID-19
There will be support for retail, hospitality and leisure businesses with a business rates holiday for the 2020/2021 tax year.
VAT payments will be deferred for 3 months. If you are VAT registered you have the option to defer payment for VAT due between the period of 20 Match 2020 and 30 June 2020. HMRC will not charge interest or penalties on any amount deferred. You can also pay the VAT due as normal.
More information on VAT is available on our pages, including more details on what to do in a VAT Investigation.
The Time to Pay Service is intended to help UK businesses and self-employed people who are experiencing financial distress, and have outstanding tax liabilities.
If you have missed a tax payment and you think you might miss your next payment due to COVID-19, you can call HMRC’s dedicated helpline on 0800 0159 559.
If your business is in need of short term cash flow support you may be eligible for an Interruption Loan. The scheme gives SMEs access to loans, invoice finance and asset finance and overdrafts to the value of £5 million for up to 6 years. The Government will cover the first 12 months of interest payments and fees
You will be eligible if:
There is small business grant funding of up to £10,000 for all businesses in receipt of small business rate relief of rural rate relief. This is applicable for businesses with a property with a rateable value of up to £15,000.
This is applicable to business with a property that has a rateable value of between £15,000 and £51,000. They may be eligible for a grant of £25,000.
Eligibility for each of the grants
Your local authority will contact you to let you know if you are eligible for Grant Funding.
The Bank of England have a revised lending facility to help support cash flow with larger firms. They will buy their short-term debt to support short-term liabilities and improve cash flow.
Furthermore the Bank of England will help corporate finance markets to aide the supply of credit. All Non-Financial firms are potentially eligible for this scheme. You can read more on the Bank of England website.
Self-Employment Income Support Scheme (SEISS)
The SEISS scheme is aimed at helping self-employed people (including partnerships) who have lost income due to COVID-19. It will allow individuals to claim back 80% of your trading profits up to £2,500 for 3 months, which may be extended.
You are eligible if you:
You can find more information on the Self-Employment Income Support Scheme on Gov.uk.
These are incredibly tough times for everyone in the UK and beyond. We are available at Kinsella Tax to offer advice on your Tax and VAT affairs. Call us on 0800 471 4546.