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How to access new financial measures introduced by the Government

The outbreak of Coronavirus is causing disruptions to businesses globally. This guide provides some initial advice on how to plan and respond to the crisis as a business and employer.

Stop Press – Update from 30 March 2020

Making Tax Digital

HMRC issued the following announcement on 30 March 2020: “We understand that the impact of COVID-19 is creating extremely difficult times for all, and we are committed to helping in every way possible all those businesses facing unprecedented challenges. Therefore, we are providing all Making Tax Digital (MTD) businesses with more time to put in place digital links between all parts of their functional compatible software. This means that all businesses now have until their first VAT return period starting on or after 1 April 2021 to put digital links in place.”

26 March 2020

Self-Employed Income Support Scheme

The Chancellor has announced that, like the Coronavirus Job Retention Scheme, Her Majesty’s Revenue & Customs (HMRC) will pay self-employed people a taxable grant worth 80% of average monthly profits over last three-years, up to a maximum £2,500 per month.

The Scheme will be open to anyone with averaged annual profits of up to £50,000 and the Chancellor stated this covers 95% of all self-employed.

For further information, please read our article here.

24 March 2020

Filings with Companies House

You can now apply for a three-month extension to file your accounts at Companies House during COVID-19. This must be done before original filing deadline.

Companies House and the Financial Reporting Council have confirmed that all companies with imminent filing deadlines – predominantly 30 June 2019 year-ends which are due for filing by 31 March 2020 – will be granted a three-month extension.

If you are in the situation that your annual accounts are not yet finalised and may not get completed by the filing deadline, you must still contact Companies House. However, they are automatically accepting Coronavirus as a reason and providing a three-month extension.

You will need to state:

  • the company number
  • an e-mail address
  • to state that you are extending due to Coronavirus.

You can do this by using the following link:
www.gov.uk/guidance/apply-for-more-time-to-file-your-companys-accounts

It is critical that the application is made before the deadline or it will be rejected.

If you have passed the filing deadline and are receiving notices concerning the overdue accounts, it is always recommended that you contact Companies House to explain the circumstances behind the delay. If Coronavirus is a factor, you should let them know this. You can email them at: enquiries@companieshouse.gov.uk

It is also now possible to appeal a late filing penalty as a result of exceptional circumstances caused by the Coronavirus. This is assessed on a case-by-case basis. For further details see https://www.gov.uk/government/publications/late-filing-penalties

Gender pay gap deadlines

Due to the Coronavirus outbreak, the Government have today taken the decision to suspend enforcement of the gender pay gap deadlines for this reporting year (2019/20). The decision means there will be no expectation on employers to report their data.

Previously announced measures

Coronavirus Job Retention Scheme

We explore the Coronavirus Job Retention Scheme in our dedicated article here.

For all employees who remain on the payroll with no work to do, the Government will pay 80% of their basic salary up to £2,500 per month. They will also give employers the ability to top-up the salary to 100%. All businesses are eligible for this scheme.

In order to access this scheme, businesses will need to:

  • designate affected employees as ‘furloughed workers,’ and notify your employees of this change. Changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal

The Government has pledged these measures will be in place for three-months and available by the end of April but will take affect from 1 March 2020. These arrangements will be reviewed every month so that if further extensions are required, this is possible.

HMRC are now working to set up a system for reimbursement as existing systems are not set up to facilitate payments to employers and will publish further guidance here as soon as it’s available: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

Coronavirus Business Interruption Loan Scheme

To support small and medium sized business, the Chancellor is extending the Business Interruption Loan Scheme. This will be administered through the British Business Bank and is due to launch in the week commencing 23 March.

The scheme provides the lender with a Government-backed guarantee against the outstanding facility balance.

The limit of funding has increased from the £1.2 million announced on the 11 March to £5 million for companies with a turnover of less than £45 million.

Finance terms are from three-months up to six-years for term loans and asset finance and up to three-years for revolving facilities and invoice finance.

The Government will cover the first 12-months of interest payments, so businesses will benefit from lower initial repayments. The business remains liable for repayments of the capital.

To be eligible for support via the Business Interruption Loan Scheme, the small business must:

  • be UK-based, with turnover of no more than £45 million per annum
  • operate within an eligible industrial sector (a small number of industrial sectors are not eligible for support or subject to limitations – see link)
  • be unable to meet a lender’s normal lending requirements for a fully commercial loan or other facility, but would be considered viable in the longer-term

The following link provides a few details with more information promised soon:
https://www.british-business-bank.co.uk/ourpartners/supporting-business-loans-enterprise-finance-guarantee/

Deferred VAT payments

Business VAT payments for the next quarter (until 30 June 2020) will be deferred until the end of the year.

Self-assessment

Tax payers will not have to make a tax payment on account in July and the payment will be deferred until January 2021.

Self-employed

The minimum income floor for Universal Credit has been removed and it has been increased by £1,000 per year, ensuring the self-employed will get this Universal Credit at the statutory sick pay level. He also announced a further £1bn to cover 30% of house rental costs for the self-employed.

We explore the situation for the self-employed further here.

Time to Pay HMRC

A dedicated helpline has been set-up to help businesses and self-employed individuals in financial distress and with outstanding tax liabilities to receive support with their tax affairs. Through this, businesses may be able to agree a bespoke ‘Time to Pay’ arrangement.

You can find out more about Time to Pay in our article here.

If you are concerned about being able to pay your tax due to Coronavirus, call HMRC’s dedicated helpline on 0800 024 1222. Alternatively, we are always happy to approach HMRC on your behalf.

Further measures announced by the Chancellor on 17 March 2020

Loans for large business with turnover over £45m

The Government has two schemes in place for large business to access additional funding. These are the Coronavirus Large Business Interruption Loan Scheme and the Co-Vid 19 Corporate Financing Facility. You can find out more here.

Cash grants for retail, hospitality and leisure sectors

The grant scheme provides businesses in these sectors with a cash grant of up to £25,000 per property. For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000.

For businesses in these sectors with a rateable value of between £15,001 and £51,000, they will receive a grant of £25,000.

Please use the following link to determine your business’ rateable value: https://www.gov.uk/correct-your-business-rates

Rates relief

All businesses in the retail, hospitality and leisure sector, irrespective of size, will have a 12-month holiday from 1 April and will pay no rates at all.

If businesses who qualify for this do not receive a letter from their local council, it is important they contact them directly to claim this relief.

You can find out more about business rates relief for the retail, hospitality and leisure sector here.

HMRC guidance on IR35

HM Revenue & Customs (HMRC) have confirmed that the proposed changes to IR35, which were due to take place with effect from 6 April 2020, have now been pushed back to 2021.

Overseas businesses engaging with UK contractors via their personal services companies will also be pleased to learn that no further action in respect of the IR35 changes are currently required. Note that the delay is only relevant to those companies that engage workers via their personal service companies and not those arrangements where companies are engaging workers directly.

The Government announced that the three-day waiting period for statutory sick pay will be removed, but legislation will be needed to implement this.

Sick pay

The Chancellor, Rishi Sunak, also announced in the Budget that for businesses with fewer than 250 employees the cost of providing 14 days of Statutory Sick Pay per employee would be funded by the Government in full. This will also apply to those who are in self isolation.

The Government has announced that the three-day waiting period for statutory sick pay will also be removed, but legislation will be needed to implement this. Further details on the implementation of these measures are awaited.

Would you like to know more?

If you would like to discuss any of the above guidance or have other queries about how you can make the right decisions for the future of your business and your income, please contact your usual Blick Rothenberg contact or one of the partners to the right.

You can also visit our Coronavirus – Practical Guidance for businesses today Hub for our latest updates and insights.