The Government has announced a number of packages to help small businesses. The package will come as a great relief to businesses across the country as they continue to meet the demands of cash flow and supporting their employees, but we are waiting on how to utilise these in the coming days.
We’ve tried to list these in one place and broken them down into how they can help your business.
We have summarised the main changes below which include the following:
· Statuary Sick Pay (SSP)
· Job Retention Scheme
· VAT
· Income Tax
· Self-Employed
· Time to Pay
· Grants
· Government-backed loans
· Insurance Policies
· Scam emails
Statuary Sick Pay (SSP)
SSP will be paid for from day 1 rather than day 4 for employees off work because of Covid-19 only; other sick absence will be dealt with as usual. This will include employees, who may not necessarily be ill, but self-isolating due to their own possible symptoms (7 days) or those of a household member (14 days). This will be fully recoverable from HMRC by the employer for two weeks, however, as SSP has not been recoverable for a number of years the PAYE system does not allow this and we are told to pay the SSP and keep a track as to which employees and dates paid to enable a future claim. (Probably the April date as above).
Initially, this appears to include directors as well being paid more than £118pw, but we await confirmation of this in the detail.
Job Retention Scheme
This is an unprecedented scheme and generous by the obvious cost. It will pay employees 80% of their normal salary for three months (which may be extended if needed) from 1 March 2020. Again the employer is asked to notify HMRC of which staff are laid off (note they cannot work and this be claimed). The notification procedure is not yet in place, so again this is for the employer to pay now and reclaim later. (Probably the April date as above).
This will pay 80% up to a maximum of £2,500pcm; you can pay the full normal wage to staff, therefore a contribution 20% as an employer.
VAT
You do need to still file your VAT returns in the normal timescale. However VAT will not need to be paid and we are advised that this will be automatic and need not be applied for, from 20 March 2020. You can if you wish to pay this if you would like to remain up to date but I would anticipate you will need to put this in place with HMRC as they intend to automatically stop collecting VAT.
Any companies who receive or are due refunds will receive these as usual.
Any VAT not paid will need to be settled by 31 March 2021, and if so will be interest and penalty-free.
Income Tax
As with VAT, Income Tax will not be payable for the self-employed from 31 July 2020 (next payment due), this date is used as they expect taxpayers to have already settled the 31 January 2020 liability by now. This would appear to be aimed at self-employed income and if that is in legislation when written, will probably not include tax due because of company dividends/profits form rental properties both which will affect many of our clients.
Tax due 31 July 2020 (that qualifies) can now be held over until 31 January 2021 without interest or penalties.
Self-Employed
At present any self-employed workers (including partnerships) are not being dealt with by HMRC (other than the time to pay scheme) and it is the benefits agency you need to contact. The main form of assistance apparently is Universal Credit, which is not something we have any knowledge of and we will not be able to assist with as hold no authority on their behalf. If you need to supply accounts earnings to them we can held only to that point.
Time to Pay (TTP)
This covers all taxes however PAYE & VAT will not be collected and need not be applied for.
Any other taxes due can be delayed by entering a TTP arrangement with HMRC on 0800 0159 159, this is down to the individual or directors of the company to arrange directly, we are not allowed to do this on clients behalf as it is a finance agreement.
Grants
These appear to be based on businesses working from a business property and assessed by the local authority you come under. They are intended to be dealt with automatically and the figure mentioned is £10,000 per business, which is to cover fixed costs such as rent/rates etc. This will rule out homeworkers as business rates will not have previously been assessed or paid. If you have had 100% business rate relief over the past few years, and not needed to pay rates, this will not affect the entitlement. This will be dealt with by your local authority.
Government-backed loans
This has very little detail at the moment but these will be dealt with by your business bank manager and will be guaranteed by the government (to 80%) and most likely interest-free. You are instructed to speak with your bank in relation to this.
Insurance Policies
It is advised that 95% of business interruption policies do not cover pandemics, you need to look through your policy, again which needs to be addressed to the insurers.
Scam Emails
We are aware of scam emails being sent out claiming to be from HMRC and local authorities to claim many the above. Please be vigilant as to the authenticity of these. Do you educate your team? Learn More
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For the full information from the Chancellors announcement please visit the Government website. You can also find more information on how the Government can support your business during the COVID-19 outbreak.
Links below of business advice and information.
