The UK government’s reaction to the coronavirus pandemic and its financial support for businesses has been ramping up daily. But Jon Miles, tax director of Bath-based chartered accountancy firm Richardson Swift, says that while the headlines may seem clear cut, the detail of how to claim any assistance is still to be released in many areas and there may be delays in accessing certain schemes, which businesses need to consider in their planning.
WHAT SUPPORT IS AVAILABLE? 
Financial help, which includes the Job Retention Scheme and Self-Employment Income Support Scheme, is currently available in the following areas:
Coronavirus Job Retention Scheme. HMRC will reimburse UK employers 80% of wage costs (up to a cap of £2,500 per month) for employees’ who would be laid off otherwise. The scheme is expected to be up and running by the end of April and will run for three months (subject to government review). While the Chancellor says there is no limit on what the scheme might cost, it may not be sufficient to avoid redundancies for some firms. Please see our detailed factsheet.
Self-Employment Income Support Scheme. Self-employed individuals (including members of partnerships), who have lost income due to the coronavirus pandemic, may qualify to claim a taxable grant from HMRC worth 80% of the relevant trading profits figure, up to a maximum of £2,500 per month for the next three months. HMRC will invite eligible self-employed individuals to apply based on those who have filed a 2018/19 filed tax return and who meet certain criteria. To find out if you qualify, please see our detailed factsheet.
Deferring VAT and Income Tax. No UK business will have to make a VAT payment between March 20, 2020, and June 30, 2020. This is more welcome news and appears to be an automatic option with no application required. For the self-employed, July 31, 2020, Self-Assessment Tax Payments will be deferred automatically and added to the payment due on January 31, 2021. For taxpayers who don’t qualify, there is still the option of making a claim to reduce payments based on a drop in income or considering HMRC Time to Pay arrangements. Please see our detailed factsheet.
Statutory Sick Pay (SSP). The government has agreed to pay for the first two weeks of SSP. Our institute, the ICAEW, understands that developing a mechanism to enable businesses to recover coronavirus related SSP is some time away. In the interim, if funding this will be difficult you should try to at least contact HMRC to let them know. Please click here for our detailed factsheet.
Business Interruption Loans. The government has announced that 80% guaranteed loans of up to £5m per business should be available through your bank from this week. While this is very welcome, we think there may be issues over eligibility and paperwork, resulting in many disappointed businesses so we suggest speaking to your bank or existing finance provider in the first instance, if you anticipate needing finance. Please click here for our detailed factsheet.
Business Rates Relief. There will be a business rates holiday (100% retail discount) for all businesses in the retail, hospitality and leisure sector. This is one area which seems to be on track and Bath & North East Somerset council has already published a simple claim form and we submitted our first one successfully last week. Businesses that have claimed business rate relief in the past are already in the system and no further action is needed as the adjustments will be made automatically. There are some grey areas for certain sectors and what qualifies as ‘retail’, so if you think you may qualify, but have never made a claim, we would advise you to contact your local authority. Please click here for our detailed factsheet.
Grants. The government has announced that additional funding grants (Retail and Hospitality Grant Scheme) of between £10,000 and £25,000 will be available to small businesses that basically trade from a property subject to business rates. If your business qualifies, you should not need to do anything and your local authority should write to you if you are eligible for this grant. Guidance for local authorities on the scheme is hoped to be provided shortly. Please click here for our detailed factsheet.
HMRC Time to Pay. The government have set up a helpline 0800 0159 159 for clients to negotiate more time to pay. We would expect HMRC to be flexible during the height of the crisis in terms of extending payment deadlines and cancelling late payment penalties and interest. Please see our detailed factsheet.
OTHER TIPS . . .
There are other things that all businesses should be doing:
Rent. Businesses should be discussing rental holidays, deferrals, or monthly payments with their landlords as a matter of urgency. 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.
Costs. All businesses should be reviewing their overheads to see if there are easy cost savings that can be achieved.
Existing Loans. Some banks would appear to be being accommodating in trying to help both businesses and buy-to-let Landlords have a repayment holiday if they are in difficulty. This will of course likely result in increased payment or an extension of the payment period.
Tenants. The Chancellor announced in his press conference on March 20 that the government were intending to help renters by increasing Housing Benefit to cover 30% of market rents. We have not seen much more detail currently.
HMRC. Clients who are due to pay large Corporation Tax or PAYE bills in the next few weeks should be reviewing their cashflow to establish the ability to pay these amounts now. If you think you will be unable to pay you should try call the HMRC Covid-19 Time to Pay number.
Insurance. All businesses should be reviewing their insurance policies to see if they have cover, especially in light of government enforced business closures and the national Covid-19 lockdown. Please see our factsheet for more details.
For businesses that feel that they need immediate insolvency advice, we have an arrangement in place with local experts who have offered to meet up with businesses free of charge. Please come back to us if you would like this service.
Facing challenging times together
We stand ready to help and will keep you abreast of changes as further details are released by the government.
For further information or advice on any of the issues raised, or for help with services like bookkeeping, cashflow management or payroll during the coronavirus pandemic, please call us on 01225 325580 or email info@richardsonswift.co.uk
