COVID-19 Business Impact Update – Part 2
Further to our earlier update (COVID-19 Business Impact Update) we were eagerly awaiting, as with many other businesses and individuals, the announcement from Chancellor Rishi Sunak. The team at Plus Accounting will do whatever is possible to continue to support our clients with information and advice and I therefore set out below, some further guidance on a number of key matters
Help with taxes – The “time to pay” service which has been available for a number of years as a means by which income tax, corporation tax, Vat and PAYE/NICs due by businesses in financial distress can be deferred on application to HMRC, is being extended specifically to cope with expected claims from businesses which are suffering because of the conditions surrounding the COVID-19 virus. These claims are dealt with on a case by case basis, and HMRC normally wish to see reports of the current financial position of the business and forecasts showing the difficulties that will be caused. Clearly we are in early days for virus-related claims, so it is difficult to judge at the moment how lenient HMRC will be in allowing extended credit, but given the large volume of claims that are expected it may well be that they will be accepted with the minimum evidence of hardship.
The time to pay provisions can be brought into play at any time now by calling the Coronavirus helpline as follows:
HMRC Coronavirus Helpline
Telephone: 0800 015 9559
Monday to Friday, 8am to 8pm
Saturday, 8am to 4pm
Business rates – Businesses in the retail, hospitality and leisure sectors will pay no business rates for 2020/21 – before last night this was going to apply only to properties with rateable values less than £51,000.
Cash grants – Those businesses in the retail, hospitality and leisure sectors with properties with a rateable value below £51,000 will be eligible for an additional cash grant of up to £25,000. In addition, all businesses which previously qualified (before the Budget provisions) for 100% business rates relief will qualify for a grant of £10,000 – this was originally proposed to be £3,000 in the Budget.
Government-backed loans – businesses will be able to apply for a Government-backed bank loan of up to £5million under what is known as the Business Interruption Loan Scheme, under which the Government will cover the first 6 months of interest payments. This was originally announced as part of the Budget measures with a cap of £1.2m, but an increase to £5m was announced last night. The scheme covers loans and overdrafts and can help a potential borrower overcome a credit rejection because of the attached government guarantee. All of the major banks will be offering this scheme, but the business must be able to demonstrate sound borrowing criteria, (generally a forecast showing a requirement for cash which can be repaid to the bank within the agreed period). It must be emphasised that the funds have to be repaid to the bank unless the business fails in which case the loan will be repaid by the Government. Full details of the requirements for qualification under the scheme have not yet been published, but they are expected by the end of next week.
Support for staffing costs – the Budget contained provisions to increase the availability of Statutory Sick Pay for employees, which can now be paid from the first day of absence, not the fourth, where people have the virus or have to self-isolate, or care for such people. The amount of this pay is £94.25 per week and is payable to staff with minimum weekly pay of £118 per week. Previously SSP has been a cost to the employer, but now it will be met by the Government for the first two weeks of absence. The mechanism for this funding has not yet been announced. Employers will have to be careful about recording absence days for sickness, self-isolation, working from home and holiday, as the type of absence will determine whether SSP is due. For instance a person who is self-isolating because of family symptoms may be able to work from home. In addition, the Chancellor also said yesterday that he would be announcing further support measures for staff costs in the next few days.
This article has been produced by Peter Hedgethorne – we will aim to update the content as and when new announcements and developments are made.If you would like to discuss your matter in more detail with our team, please contact us on 01273 701200.
Any views or opinions represented in this blog are personal, belong solely to the blog owner and do not represent those of Plus Accounting. All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. (Date originally published; 18 March 2020)