The government’s reaction to the coronavirus pandemic is fast-moving and changing on a daily basis. Jon Miles, tax director of Bath-based chartered accountancy firm Richardson Swift, says that while the headlines are relatively clear, the detail of what assistance businesses is still being worked out and to be released.
WHAT HELP IS AVAILABLE? 
The Chancellor announced a £330bn support package for businesses this week. The support is currently in the following areas:
Statutory Sick Pay (SSP). The government has agreed to pay for the first two weeks of SSP paid. In our view this seems wholly insufficient and we hope that there will be further announcements in the near future about expanding this scheme or even increasing the quantum of SSP. Click here for our factsheet
Loans. The government has announced that 80% guaranteed loans of up to £5m per business should be available through the business’s bank from next week. While this is very welcome, these are loans and will have to be repaid at some point. Click here for our factsheet
Business Rates Relief. For businesses in the retail, leisure and entertaining sector, the previous announced limit of rateable value of £51,000 has been removed, so it applies to all businesses in this sector. The exact mechanism for claiming is to be clarified but it seems that for business who were already getting relief it will be automatic whereas all other businesses in that sector will need to register with the local council. We will update you as soon as we have clarity, but it makes sense as a precaution for all businesses in that sector to immediate cancel their direct debit so that money cannot be taken in error in April. We are making active efforts to establish the qualifying criteria for businesses. We have had inquiries from several online retailers as to whether they qualify and although our initial view is probably not, we will advise as soon as we know. Click here for our factsheet
Grants. The government has announced that grants of between £10,000 and £25,000 will be available to businesses. We have yet to see the detail on how this will be administered and exactly which businesses will be eligible. It would appear that all grants will be administered by the local authority. We will update you as soon as we have more information. Click here for our factsheet
HMRC Time to Pay. A helpline – 0800 0159 159 – has been set up for clients to negotiate more time to pay. We would expect HMRC to be very flexible during the height of the crisis. Click here for our factsheet
OTHER TIPS
There are measures that all businesses should be doing now:
Rent. The next rent for most businesses is due on March 25. All businesses should be contacting their landlords to ask for a rent holiday, or at least a deferral. We do not know how long this crisis is going to last and businesses need to retain as much working capital as possible to be able to pay staff and suppliers.
HMRC. Clients who are due to pay large Corporation Tax, PAYE or VAT bills in the next three weeks should be reviewing their cashflow to establish whether it is the right thing for their business to pay these amounts now. Then either use HMRC Time to Pay or consider borrowing the money using the government-backed scheme above.
Costs. All businesses should be reviewing their overheads to see if there are easy cost savings that can be achieved.
Insurance. All businesses should be reviewing their insurance policies as the government has clarified some issues this week. Businesses with a notifiable disease cover may be able to make a claim now. We have had instances of inquiries being rebuffed up until now, so this is a welcome change. Businesses will need to clarify with their insurer if they will be covered if they either close or are directed by the government to do so. Click here for our factsheet
There are clearly some people, such as the self-employed, for whom there is minimal or no support so far.
We sincerely hope that this will change in the near future and that there will be further announcements from the government.
