COVID 19 Considerations - What support is there for me?
Updated: Apr 2
During this surreal time, we find ourselves in, the majority of us, if not all, will be impacted by the effects of COVID-19. While we adapt to working from home and online video meetings, the government have made a number of announcements to help businesses continue doing what they do best.
Below, we have summarised the various help and support that has been made available. If you have any questions or would like to discuss any of these schemes in more detail, please do not hesitate to contact us. The information in this article has been summarised from publicly available information. The landscape is fast changing, and professional advice should be sought to understand the specifics of your circumstances.
Coronavirus Job Retention Scheme
To prevent people being made redundant as a result of this pandemic, the government has pledged to provide support to businesses to help continue paying their employees’ salaries. The scheme is available to all UK employers with a PAYE scheme.
The scheme is applicable to employees who have been ‘Furloughed’ (asked to stop working but kept on the payroll). HMRC will reimburse up to 80% of their wages to a maximum of £2,500 per month. The employer can choose to top up the remaining 20%.
Those who have their own personal service companies will also be able to access the Coronavirus Job Retention Scheme by putting themselves on furlough. They will only be eligible to claim the equivalent to their PAYE income, the dividend element will not qualify for the scheme.
An employee who is on furlough cannot take on work for or on behalf of the business and normal tax implications will apply.
The scheme is currently only available for 3 months, but this may be extended if needed and can be used to cover employees who were made redundant since 28 February 2020 provided they are rehired.
More details on the scheme can be found at https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
Statutory Sick Pay (SSP) Recovery
A scheme designed for the smaller and medium sized businesses, allowing them to reclaim any SSP paid for sick leave as a result of COVID 19.
The refund will cover up to 2 weeks SSP per eligible employee who has been off work as a result of COVID-19 and the claim can be made from the first day of sick rather than waiting until day 4. It will also be available to those employees who are off to care for someone in self-isolation.
This scheme is only available to businesses with less than 250 employees on record at 28 February 2020 and the employer should keep a record of staff absences and SSP payments. If evidence of sickness is required, the employee is able to get a note from the NHS from here. Those at home to look after someone in isolation can get their note from here.
Business Rates Holiday
For the 2020-21 tax year, a business rates holiday has been introduced for business based in the UK and in the retail, hospitality and/or leisure sector. It will apply to occupied properties that are wholly and mainly being used within one of these categories.
There is no action to be taken by yourself, the local authorities will reissue your bill to reflect this support as soon as possible.
The Retail and Hospitality Grant Scheme
Businesses within the retail, hospitality and leisure sectors may be eligible for a cash grant of up to £25,000 per property if the property has a rateable value between £15,000 and £51,000. A cash grant of £10,000 is available for businesses with a property with a rateable value up to £15,000.
Again, you do not need to take any action, your local authorities will write to you if you are eligible for this grant.
Support for Nursery businesses
For nursery businesses that are paying business rates, a business rates holiday will be available for the 2020-21 tax year.
Businesses that will qualify will be based in England and the properties will be occupied by providers on Ofsted’s Early Years Register or wholly or mainly used for the provision of the Early Years Foundation Stage.
Local authorities will reissue your bill to reflect this support – there is no action needed by you.
Small Business Grant Scheme
This is funding provided to the local authorities to support small business that pay little or no business rates due to reliefs available to them. The scheme will provide a one-off grant of £10,000 to eligible business to help meet ongoing costs.
The local authorities will be in touch with you if you are eligible for this.
Coronavirus Business Interruption Loan Scheme
This scheme is set up to support SME’s access finance of up to £5m for up to 6 years.
The government will cover the first 12 months of interest payments and lender fees so there should be no upfront costs for small businesses and the initial repayments should be lower.
Lenders will be provided with a guarantee of 80% on each loan to give them confidence to provide the finance and the scheme is available through commercial lenders.
The scheme is available to UK businesses with turnover below £45 million per year and meets the British Business Bank eligibility criteria outlines here.
The scheme is now live, and applications can be made through your bank. A list of providers can be found at https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/current-accredited-lenders-and-partners/.
You will need a business plan to discuss with them and may be asked to demonstrate how Coronavirus has impacted your business.
It would also be a good idea to approach your bank to request a payment holiday if you currently have finance arrangements in place.
Tax Payment Support
The HMRC time to pay service is available for all businesses and self-employed people with upcoming tax liabilities. This is offered on a case by case basis and is dependent on the individual liabilities and circumstances.
There is a dedicated helpline set up for tax payments that have been or may be missed as a result of COVID-19. the number to call is 0800 0159 559. It is advisable to contact HMRC prior to the liability being due.
Please contact us if you would like our assistance with dealing with HMRC.
Deferment of VAT Payments
UK VAT Registered businesses with a VAT Payment due between 20 March 2020 and 30 June 2020 have the option to defer the payment until a later date.
The VAT Return will still need to be submitted on time and if the payment is deferred it must be settled by 31 March 2021. There is no need to notify HMRC of the deferment but if you pay by direct debit, you will need to contact your bank to cancel the direct debit.
Payments arising after the deferral period will be due as normal.
If, as a result of COVID-19, your company accounts will be late, provided the filing deadline has not yet passed, you will be able to apply for an automatic and immediate filing extension of up to 3 months.
An application must be made prior to the filing deadline otherwise the late filing penalties will apply.
Please note, there have not been any announcements on the deferment of corporation tax payments as yet so these will continue to be due as normal.
Most business insurance policies are unlikely to cover pandemics of diseases however, we advise checking your insurance policy details as if your policy covers government ordered closure you may be able to make a claim.
You will need to check the terms and conditions of your Insurance policy as these can vary from company to company. It may be worth contacting the provider to check.
There is protection available for commercial tenants who cannot pay their rent as a result of COVID-19. This is introduced to protect businesses from automatically forfeiting their leases if they miss a payment.
The protection is available for payments to 30 June 2020 but may be extended if needed.
This is not a rental holiday and the rent is still payable by the business.
For low earners or those out of work, there are a range of benefits available through the welfare system including Universal Credit.
The standard allowance for Universal Credit has been increased by £20 per week in addition to the normal uprating. Support for rental costs will also be available through Universal Credits.
An application for Universal Credit can be made online at https://www.gov.uk/universal-credit/how-to-claim
This will also be applicable to those who have been furloughed.
Self-Employment Income Support
This is a scheme introduced to support self-employed individuals or partners of a business. To qualify, you must:
· have submitted an income tax return for 2018-19 or should do this by 23 April 2020.
· traded in the 2018-19 tax year
· be trading at application or would have been subject to COVID-19
· intend to continue trading in 2020-21
· have lost profits due to COVID-19
The self-employed trading profits in 2018-19 must be less than £50,000 and should represent more than 50% of your taxable income or your average trading profits for the three years to 5 April 2019 should be less than £50,000.
If your self-employed business commenced after 2016, only the years for which a tax return was completed will be assessed.
If you qualify for the scheme, you will be eligible for a taxable grant equivalent to 80% of the average profits up to a maximum of £2,500 per month for three months.
It will be paid as a lump sum to your bank account.
The scheme is not available until June 2020 and HMRC will be contacting those eligible for the scheme to invite you to apply online.
Employment Support Allowance
If you are self-employed and have to be off work to self-isolate or because you are sick, you will be able to claim Employment Support Allowance from day one. The weekly payment is £73.10 or for those under 25 the amount is £57.90 but these amounts have been raised to £94.25 per week - the same as an employee on SSP.
You will need to apply for the ESA and can do this by clicking here.
Deferment of July 2020 Tax Payment on Account
All self-assessment tax payments on account due for July 2020 have been deferred to January 2021 to assist with cashflow. Please note this is an optional deferment.
It is an automatic deferment and there will be no penalties or interest for late payment if the full balance is settled by 31 January 2021.
Many lenders have agreed to help those who are struggling to meet their mortgage payments with a three-month period of grace. This is not a compulsory scheme, so you will need to contact your provider to request/agree this.
The amount of the mortgage is not cancelled, it is still due but is spread over the remainder of your term.
Interest will still be charged on these payments – it is simply added to the total repayment.
This mortgage holiday will also be extended out to landlords whose tenants are unable to meet their rental payments as a result of the virus. Emergency legislation was also passed to prevent landlords from being able to evict their tenants for a period of three months.
If you would like to discuss any of these schemes in more detail, please do not hesitate to contact us:
Trishna Hirani Jessica Martin
Tax Adviser Associate Tax Adviser
FLM is an Appointed Representative of and represents only St. James's Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group's wealth management products and services, more details of which are set out on the Group's website The title 'Partner Practice' is the marketing term used to describe St. James's Place representatives. FLM Wealth Management is a trading name of Financial Lifestyle Management Ltd.