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Covid 19: Craig MacKinlay Business Update

March 23rd 2020

Coronavirus business update

The support measures available to businesses is evolving on a day to day basis. This is a summary of where things stand as of Monday 23rd March 2020.

(1) Business Premises

Smaller businesses of any type occupying any rateable premises up to £15k rateable value will receive £10k. This is being administered by local authorities and is planned to be automatic, with payments made by the end of April 2020. There should be no need to formally claim.

The retail, hospitality and leisure sectors will have a different support scheme with all properties having a rateable value between £15k and £51k qualifying for a grant of £25k. In the case of higher rateable values, whilst no grants will be available, there will be no Business rates to pay for the year starting from 1st April 2020.

Other businesses occupying properties with rateable values over £15k receive no additional relief or grants.

Planning rules have been relaxed so that pubs and restaurants can operate as hot food takeaways during the outbreak.

(2) Jobs and employees

(a) Coronavirus Job retention Scheme

Government grants to be received by employers will cover 80% of the salary of PAYE employees who would otherwise have been laid off up to a cap of £2,500 per month. The new term for this class of employees is ‘furloughed workers’. It is open to every employer and will cover the cost of wages backdated to 1st March 2020 based upon payroll information gathered through monthly RTI as at 29th February 2020. The scheme will open before the end of April 2020 but there are further details as to how it will be administered, but a new online portal will be set up which will require action by employers.

(b) Statutory Sick Pay

This will be paid from day 1 rather than day 4 and applies to those employees off work due to sickness or required to self-isolate. An online form on the NHS 111 website will create an ‘isolation note’ for these purposes. The government will cover SSP for two weeks at the rate of £94.25 per week per employee affected but only to companies with less than 250 employees. This will be claimed through normal payroll submissions.

(3) VAT and general tax payments

(a) VAT

The next quarter of VAT payments will be deferred, meaning that businesses will not need to make VAT payments until the end of June 2020. This is automatic and requires no claim to be made.

Currently, future VAT payments will need to be made as normal with any deferred VAT payable by January 2021.

(b) Time to Pay

Application can be made to defer other tax liabilities using the HMRC helpline on 0800 0159 559; use Option 1 in all cases and then Option 2 for PAYE and Option 3 for VAT. Obviously the HMRC helpline is very busy at present.

(4) Coronavirus Business Interruption Loan Scheme

These schemes are available from today. The lender receives a guarantee of 80% of the loan amount from the government. It is available to businesses with turnover of no more than £45million, and can provide a 12 month interest free loan of up to £5million. The borrower remains liable for 100% of the debt. Application is made via the High Street banks. It is not known if normal lending procedures, which can be complex and slow, will be relaxed. The banks are meant to offer normal loan facilities first.

(5) Self-employed

There has been no targeted support announced yet, but this is anticipated. Currently the only help has been the announcement that 31st July 2020 ‘on account’ tax payments will not need to be made on that date and will attract no penalties or interest when paid later. This is automatic. However, all tax deferred must be paid by 31st January 2021. Claims for Universal Credit (UC) or Employment and Support Allowance can be made from 13th March 2020. The income floor for UC claims has been removed, and the amount payable has been increased by £1,000 per year with immediate effect.

(6) Other filing requirements

Companies House currently require an online form to be completed to claim excuse for late filing and penalties. It is not currently known whether other late filing penalties across RTI, Auto-enrolment and other areas of government will be relaxed. I recommend that every effort is made to keep up to date with filing requirements at this time.

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