COVID19 Government Support- What are the details?

Please see below a summary of the extensive the COVID19 Government has put in place to help you. We will be sending out regular bulletins such as this to keep you informed.

COVID-19:Support for Businesses –as of 30th March 2020

Over the past 10 days The Chancellor set out a package of temporary, timely and targeted measures to support public services, people and businesses through this period of disruption caused by COVID-19.

Much of the detail is still being worked on by the Government and HMRC. We therefore expect more information to be released over the coming days.  In the meantime we can update you as per the below.

Help for the Self Employed

There will be a new Self-employment Income Support Scheme to support self-employed people who have been adversely affected by COVID-19

This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed.
Who can apply

You can apply if you’re a self-employed individual or a member of a partnership and you:

Have submitted your Income Tax Self Assessment tax return for the tax year 2018-19

Traded in the tax year 2019-20

Are trading when you apply, or would be except for COVID-19

Intend to continue to trade in the tax year 2020-21

Have lost trading/partnership trading profits due to COVID-19

Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment. This is determined by at least one of the following conditions being true:

Having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income

Having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period

If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.

If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020.

HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way.

How much you’ll get

You’ll get a taxable grant which will be 80% of the average profits from the tax years (where applicable):

    2016 to 2017
    2017 to 2018
    2018 to 2019

To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.

It will be up to a maximum of £2,500 per month for 3 months.

We’ll pay the grant directly into your bank account, in one instalment.
How to apply

You cannot apply for this scheme yet.

HMRC will contact you if you are eligible for the scheme and invite you to apply online.


Individuals do not need to contact HMRC now and doing so will only delay the urgent work being undertaken to introduce the scheme.

You will access this scheme only through GOV.UK.

Warning

If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.

After you’ve applied

Once HMRC has received your claim and you are eligible for the grant, we will contact you to tell you how much you will get and the payment details.

If you claim tax credits you’ll need to include the grant in your claim as income..

A package of measures have been outlined to support businesses including:

A Coronavirus Job Retention Scheme

Deferring VAT and Income Tax payments

A Statutory Sick Pay relief package for SMEs

A 12-month business rates holiday for all retail, hospitality,leisure and nursery businesses in England

Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief

Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000

The Coronavirus Business Interruption Loan Scheme offering loans of up to  
 £5 million for SMEs through the British Business Bank

A new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
   
The HMRC Time To Pay Scheme

Coronavirus Job Retention Scheme

Eligibility

All UK businesses are eligible.
 
How to access the scheme

You 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 (HMRC will set out further details on the information required)

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.

HMRC are working urgently to set up a system for reimbursement. No systems have been set up yet to facilitate payments to employers nor the online portal to register employees as furloughed.

Please note that employers will need to seek advice from their HR department in relation to furloughed workers. Before designating an employee as a “furloughed worker” the employer needs to seek agreement from the employee as this will be viewed as an amendment to the terms and conditions of their employment contract

Deferring VAT and Income Tax payments

VAT – HMRC will support businesses by deferring Valued Added Tax (VAT) payments for 3 months.

For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.

If you are self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.

How to access the scheme

This is an automatic offer with no applications required.
Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.

Customers who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay.

Please do so in sufficient time so that HMRC do not attempt to automatically collect on receipt of your VAT return.

Income Tax
For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.

Eligibility

If you are self-employed you are eligible.

How to access the scheme

This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period.

Customers who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay.

Please do so in sufficient time so that HMRC do not attempt to automatically collect on receipt of your VAT return.

Support for businesses who are paying sick pay to employees

The Government will bring forward legislation to allow small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19.

The eligibility criteria for the scheme will be as follows:

This refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19

Employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020

Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19

Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website
   
Eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force

The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible

Eligibility

You are eligible for the scheme if:

Your business is UK based
Your business is a small or medium-sized and employs fewer than 250 employees as of 28 February 2020

How to access the scheme

A rebate scheme is being developed. Further details will be provided in due course once the legislation has passed.

Support for retail, hospitality and leisure businesses that pay business rates

Business rates holiday for retail, hospitality and leisure businesses.
The Government will introduce a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.

Businesses that received the retail discount in the 2019 to 2020 tax year will be re-billed by their local authority as soon as possible.

Eligibility
You are eligible for the business rates holiday if:

Your business is based in England
Your business is in the retail, hospitality and/or leisure sector

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

As shops, restaurants, cafes, drinking establishments, cinemas and live music venues

For assembly and leisure

As hotels, guest & boarding premises and self-catering accommodation

How to access the scheme

There is no action for you.

This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible.

You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator.

Further guidance for local authorities is available in the expanded retail discount guidance.
 
Cash grants for retail, hospitality and leisure businesses

The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.

Businesses in these sectors with a property that has a rateable value of £15,000 and under will receive a grant of £10,000.

Businesses in these sectors with a property that has a rateable value of between £15,000 and £51,000 will receive a grant of £25,000.
 
Eligibility

You are eligible for the grant if:

Your business is based in England
Your business is in the retail, hospitality and/or leisure sector

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

As shops, restaurants, cafes, drinking establishments, cinemas and live music venues

For assembly and leisure

As hotels, guest and boarding premises and self-catering accommodation

How to access the scheme

You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.

Support for nursery businesses that pay business rates

The Government will introduce a business rates holiday for nurseries in England for the 2020 to 2021 tax year.

Eligibility

You are eligible for the business rates holiday if:

Your business is based in England

Properties that will benefit from the relief will be hereditaments:

Occupied by providers on Ofsted’s Early Years Register wholly or mainly used for the provision of the Early Years Foundation Stage

How to access the scheme

There is no action for you. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill to exclude the business rate charge. They will do this as soon as possible.

Support for businesses that pay little or no business rates

The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief.

This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

Eligibility

You are eligible if:

Your business is based in England
You are a small business and already receive SBBR and/or RRR
You are a business that occupies property

How to access the scheme

You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.
 
Support for businesses through the Coronavirus Business Interruption Loan Scheme

The temporary Coronavirus Business Interruption Loan Scheme supports SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years.

The government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.

The government will provide lenders with a guarantee of 80% on each loan (subject to pre-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs.

The scheme will be delivered through commercial lenders, backed by the government-owned British Business Bank. Please note however that the borrower will be 100% liable to repay the loan.

There are 40 accredited lenders able to offer the scheme, including all the major banks.
 
Eligibility

You are eligible for the scheme if:

Your business is UK based, with turnover of no more than £45 million per year
   
Have a borrowing proposal which, were it not for the COVID-19 pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable your business to trade out of any short-to-medium term difficulty

How to access the scheme

The scheme is now open for applications. All major banks are offering this scheme.

To apply, you should talk to your bank as soon as possible, to discuss your business plan. You can find out the latest on the best ways to contact them via their websites.

Please note that branches may currently be shut down to enable social distancing.

The full rules of the scheme and the list of accredited lenders are available on the British Business Bank website.

If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.
 
Support for larger firms through the COVID-19 Corporate Financing Facility
 
Under the new Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies.

This will support your company if it has been affected by a short-term funding squeeze, and allow you to finance your short-term liabilities.

It will also support corporate finance markets overall and ease the supply of credit to all firms.
 
Eligibility

All non-financial companies that meet the criteria set out on the Bank of England’s website are eligible.
 
How to access the scheme

The scheme is now available for applications.
 
Support for businesses paying tax: Time to Pay service

All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.

These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
 
Eligibility

You are eligible if your business:

Pays tax to the UK government
Has outstanding tax liabilities

How to access the scheme

If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559.

If you’re worried about a future payment, please call us nearer the time.
 
Commercial insurance

Most commercial insurance policies are unlikely to cover pandemics or unspecified notifiable diseases, such as COVID-19.

However, those businesses which have an insurance policy that covers government ordered closure and pandemics or government ordered closure and unspecified notifiable disease should be able to make a claim (subject to the terms and conditions of their policy).

Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers.
 
Notifiable diseases

Notifiable diseases are certain infectious diseases that registered medical practitioners have a statutory duty to notify the ‘proper officer’ at their local council or local health protection team about when they come across a suspected case.

The government keeps an updated list of notifiable diseases. On 5 March 2020, the government added COVID-19 to its list of notifiable diseases.

Many insurers use diseases on this list as triggers for the activation or exclusion of insurance cover. For example, insurers’ policies that cover notifiable diseases will typically only cover a specific subset of notifiable diseases (such as Cholera or Anthrax) that the insurer will reference in the policy documentation.

These policies will exclude any notifiable disease not on the insurers list, as well as future/unknown diseases (such as COVID-19).

The price that the insurer charges for the policy is modelled against the risk posed by this set list of diseases.
 
Unspecified notifiable diseases

Some businesses will have purchased add-ons for their insurance that cover for ‘unspecified notifiable diseases’.

These policies effectively cover any disease listed as a notifiable disease, enabling the business to claim for losses for all notifiable diseases as well as from diseases that are unknown at the point the policy is written.

The effect of the government adding COVID-19 to its list of notifiable diseases is to ensure that businesses with unspecified notifiable disease cover are able to make a claim – subject to the terms and conditions in their policy. For example, someone infected with COVID-19 may need to have been on the premises.
 
Government ordered closure

The government asked a number of different businesses and venues to remain closed from 21 March onwards.

Insurers have agreed that this advice is sufficient for businesses covered for COVID-19 losses to make a claim (if the only barrier to them making a claim was a lack of clarity on whether the government had ordered businesses to close).

As such, intervention by the police or any other statutory body is no longer required to trigger cover in the current circumstances.

However, most businesses’ commercial insurance policies (including for denial of access) are unlikely to offer cover for COVID-19.

Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers.
 
Event coverage

Businesses with event cancellation policies that include unspecified notifiable disease extensions should be able to make a claim for the necessary and unavoidable cancellation, abandonment, curtailment, postponement and disruption of their event for reasons beyond the control of organisers and participants (subject to the other terms and exclusions of their policy).

Insurance for major events is often bespoke to the specific event, so businesses are encouraged to check the terms and conditions of their specific policy and contact their insurer or broker.

If you want to have more information on the above, please CLICK HERE to access HMRC website.

Please do not hesitate to contact us on 07786650089 or at info@miaccountants.com should you require more information or assistance.

We are here to help you through these challenging times

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