COVID19 Business Impact Introduction
We are living in unprecedented and very challenging times and it is hard to keep up with the pace of change which is now measured in hours and days rather than weeks and months. Despite that, 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 guidance on a number of key matters. As I write, I am aware that the Chancellor will be making an announcement this evening and we will therefore keep you updated as and when possible.
Deferment of Tax
Income tax, corporation tax, Vat and PAYE/NICs due by businesses in financial distress can be deferred on application to HMRC to delay their payment under the “Time to Pay” service. This scheme has been available for a number of years, and HMRC will be sympathetic to 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.
Statutory Sick Pay (SSP) update in response to COVID-19
Statutory Sick Pay for employees who are off work due to the virus can now be paid from the first day of absence for up to 2 weeks, and will be funded by the government. This is a change from the normal scheme which is not funded, and is only payable after three “waiting days”. No evidence of illness will be required and the funding will be available for those that are self-isolating with no symptoms. The mechanism for refunding has not yet been announced, but it will be essential for all eligible businesses (those with fewer than 250 employees) to have kept detailed records of sick days in order to support their claims.
Additional business rates relief for small businesses
As part of the recent budget, the government announced that they will be increasing business rates relief in England to 100% for properties which have a rateable value below £51,000 for the 2020/21 tax year. This relief will also be expanded to the leisure and hospitality sectors in response to the COVID-19.
Businesses eligible for the newly expanded relief will probably have to apply to their local authority to receive the discount.
Guidance is expected to be published on the 20 March.
The government announced that they will also support small businesses that pay little or no business rates.
A £3,000 cash grant will be provided to businesses to help meet their ongoing business costs.
Guidance on how to apply will be published in due course.
This article has been produced by Paul Feist, Peter Hedgethorne and Chris Morey at Plus Accounting – 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; 17 March 2020)