Offering you general business guidance and short-term action planning during these uncertain times.
The spread of the Coronavirus (COVID-19) continues to dominate the news, with major implications for businesses across Sussex, the UK, and the World.
The current economic conditions mean businesses are having to trade under extremely challenging and unprecedented conditions.
We would urge businesses foreseeing a requirement for additional support or finance to act promptly, even as a precautionary measure.
Our approach to managing the impact
Our priority is the health of our staff and clients, and we are taking actions to help keep our workplace healthy, while maintaining our high levels of customer service.Read our full statement
Coping with Covid Podcast
The Retirement Gym Podcast has released a special 2-part series entitled ‘Coping with Covid’.
In Part 1, Roy Thompson, Partner and Head of Wealth Management, is joined by Tax Partner Dan Hobbs. Dan talks through some of the major measures announced for businesses to help them with cash flow difficulties.
In Part 2, Roy is joined by Kelvin Riches, a Chartered Financial Planner at MHA Carpenter Box Wealth Management. Kelvin speaks about what individuals can do to help with their personal finances during the Coronavirus crisis.
Coronavirus Updates Webinar
On 31 March 2020, Dan Hobbs (Tax Partner) and Charlie Eve (Business Services Partner) held a webinar covering the latest Government measures and how to better understand what they mean for you and your business.Watch the webinar
Government support for businesses summary
The Chancellor has introduced nearly £440bn worth of measures to support small and medium sized businesses during the COVID-19 outbreak.
Coronavirus Job Retention Scheme (CJRS)
Under the CJRS, all UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis to avoid redundancies.
Any employer in the country (small or large, including charitable or non-profit) will be eligible for the scheme.
- Employers will be able to contact HMRC for a grant, via a new online portal, to cover most of the wages of their workforce who remain on payroll but are temporarily not working during the Coronavirus outbreak. Employers will need to identify ‘furloughed worker’s’ and notify any affected employees of the change in status.
- UK workers of any employer who is placed on the CJRS can keep their job, with the government paying up to 80% of a ‘furloughed worker’s’ wage costs, up to a total of £2,500 per worker each month.
- This will be backdated to 1st March and will be initially open for 3 months, to be extended if necessary.
- It can apply to anyone who was on the payroll at 28 February 2020, even if they have subsequently been made redundant, as long as they are reinstated on the payroll.
Self-Employed Income Support Scheme (SEISS)
Self-employed individuals will be able to apply for a grant of up to 80% of average monthly trading profits for a 3-month period. This will be calculated by looking at average trading profits over the last 3 tax years (2016/17 to 2018/19) or shorter period where applicable. Like the Coronavirus Job Retention Scheme (CJRS), this is subject to a maximum claim of £2,500 per month.
How to qualify
In order to qualify for SEISS the individual must have satisfied all of the following:
- Income tax return for 2018/19 must have been submitted by 23 April 2020 – there is therefore a short window to submit late returns
- Must be self-employed or a member of a partnership
- Must have traded in the 2019/20 tax year
- Must be intending to trade in the 2020/21 tax year
- Must be trading at the time the grant application is made, or would be trading if it weren’t for COVID-19
- Trading profits from self-employment must be at least 50% of total income
- Trading profits from self-employment must be less than £50,000 in the 2018/19 tax year OR less than £50,000 on average over the 3 tax years 2016/17 – 2018/19
- Must have lost trading profits due to COVID-19
If the conditions above are met, a grant can be applied for beginning 1 June.
This scheme does not apply to company owners or directors who pay themselves dividends and a salary. It is suggested that company directors may be able to benefit from the Coronavirus Job Retention Scheme but this is to be confirmed.Find out more about self-employed income support
Coronavirus Business Interruption Loan Scheme (CBILS)
A temporary loan scheme will be delivered by the British Business Bank to lender providers in order to support businesses to access lending and overdrafts, the main support is as outlined:
- Loans of up to £5m are available to SMEs
- Support can be in the form of term loans, Invoice or Asset Finance or overdrafts
- Security is 80% backed by the Government and will not be charged to lenders or businesses
- First twelve months of interest rate and lender-levied charges covered
To be eligible for lending the business must:
- Be UK based with a turnover of less than £45m
- Operate within an eligible sector and generate more than 50% of turnover from trading activity
- Have a sound borrowing proposal but insufficient security to meet a lender’s normal requirements
Updates to CBILS as of 6 April 2020:
- No personal guarantees in any form for facilities under £250k
- Personal guarantees for facilities above £250k (capped). Personal guarantees may still be required (lender’s discretion) but recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied.
- A Principal Private Residence (PPR) cannot be taken as security to support a personal guarantee or as security for a CBIL backed facility.
- Insufficient security no longer a condition to access the scheme. CBILS can now support lending to smaller businesses even where a lender considers there to be sufficient security, making more smaller businesses eligible to receive the business interruption payment.
During the recent Budget, the Chancellor announced help for businesses struggling because of the Coronavirus.
HMRC has set up a dedicated COVID-19 helpline to help those in need. To ensure ongoing support, HMRC have made a further 2,000 experienced call handlers available to support firms when needed.
The number for HMRC’s dedicated helpline is 0800 0159 559.
Make sure you have the following information to hand for that call:
- VAT or UTR number
- The amount of the debt on file (so you must have submitted and not paid the VAT return)
- The number of staff employed and what the payroll costs are for the next 6 months to a year
- What overdraft facility is available
- What the directors/partners/sole prop are doing personally to support the debt (eg, business loans and funding)
- Cash flow projections and plans of how to support business continuity
Statutory Sick Pay Relief Package
In response to the coronavirus outbreak, new Regulations known as The Statutory Sick Pay (General) (Coronavirus Amendment) Regulations 2000 came into force on 13 March 2020. These will remain in force for a period of 8 months.
The government will bring forward legislation to allow small and medium-sized businesses (SMEs) and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:
- This refund will cover up to two weeks’ SSP per eligible employee who has been off work because of COVID-19.
- Employers with fewer than 250 employees will be eligible. The size of an employer will be determined by the number of people they employed as of 28 February 2020.
- Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19.
- Employers should maintain records of staff absences, but employees will not need to provide a GP fit note.
- The eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to self-isolators comes into force.
- The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible. Existing systems are not designed to facilitate employer refunds for SSP.
Business Rates Holiday
The Government has proposed a 12-month Business Rates holiday for the retail, hospitality and leisure business in England for the 2020 and 2021 tax years. Any business receiving this holiday will be re-billed by their local authority as soon as possible.
Emergency Business Grant
A grant of up to £25,000 will be provided to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value between £15,000 and £51,000.
Small Business Grant
Businesses that pay little or no business rates will receive a one-off grant of £10,000 to help with their ongoing business costs. To receive this, businesses have to be eligible for SBRR or Rural Rate Relief.
For both grants listed above, councils are writing to all qualifying businesses so they can apply for grant funding online. Businesses who believe they qualify are being encouraged to check their local council websites for details on applications and to review Frequently Asked Questions (FAQs) on qualification criteria:
HMRC Time to Pay
The Government is highlighting it’s Time to Pay Scheme whereby all businesses with outstanding tax liabilities may be eligible to receive support in extending their payment terms.
A Time To Pay arrangement is an instalment plan agreed with HMRC that allows businesses to temporarily bridge financial difficulties in paying their tax on time.
Time to pay arrangements allow businesses to spread the payment of outstanding tax liabilities over a period of normally 3-6 months and exceptionally may allow up to 12+ months.Find out more about Time to Pay
All VAT payments due between 20 March and 30 June 2020 will be automatically deferred until 31 March 2021 – details of how to pay will follow at a later date. Business can choose to pay VAT normally if they wish.
The scheme does not cover sales of digital services in the EU (VAT MOSS).
This deferral will apply to all businesses and there is no need to contact HMRC. However, any business that pays VAT by Direct Debit must cancel it, otherwise HMRC will may VAT due as normal.
For the avoidance of doubt, VAT returns should still be submitted on time as usual. For any business that is unable to file on time, a default surcharge may apply, though there may be grounds to appeal assuming it is COVID-19 related.Find out more about the VAT Deferral Update
July payments on account for self-employed individuals have been cancelled. The payment will instead be due on 31 January 2021 with the balancing payment for the 2019/20 tax year. No action is required to defer, simply don’t pay and no interest or penalties will apply.
These measures apply to everyone within self-assessment however the deferral is optional. HMRC are encouraging people to pay if they can, but everyone is entitled to defer without drawbacks.
Extension to MTD ‘digital links’ deadline
Due to the impact Covid-19 is having on businesses, HMRC have granted an extension for those businesses participating in Making Tax Digital for VAT, meaning that those required to have ‘digital links’ within their record-keeping, now have until 1 April 2021. Businesses now have until their first VAT return period starting on or after 1 April 2021 to implement digital links.
Latest information for businesses
Latest information on funding
Latest information for individuals
Latest information for sectors
Our team are ready to assist any of our clients who may need our help.
If you are worried about your business or your finances, please get in touch on 01903 234094 to speak to one of our professionals, or get in contact with your usual MHA Carpenter Box contact.
Get in touch
If you want to set up a meeting to discuss your circumstances further, please fill in the form and a member of our team will be in touch shortly.