Updated 27/03/2020

Support for self employed

This evening the chancellor announced measures to support the self employed, the Self employment Income Support Scheme,  following the Job retention scheme support earlier. This will be as well as the deferment of self employed payment on account due in July 2020 (see below)

  • Self Employed Income Support Scheme (SEISS) will support self employed individuals who have lost income due to Covid-19
  • Scheme will allow a claim of 80% of the average trading profits up to a maximum of £2500 per moth for at least the next three months (May be extended)
  • To apply you must have submitted your Income Tax Self Assessment return for tax year 2018/19. You will also need to be trading in tax year 2019-20
  • Must be trading when you apply, or would be except for Covid-19
  • Have reduced or no trading profits due to Covid-19
  • Self employed trading profits must be less that £50,000 and more than half of total income should be derived from self employment.
  • Trading profits will be determined by having average trading profits in 2016-17, 2017-18 and 2018-19 of less than £50,0000 OR trading profits in 2018-19 of less than £540,000.
  • If you have not submitted a tax return yet for 2018-19 this must be done by 23rd April 2020 to qualify.
  • According to Rishi Sunak HMRC will use the average profits in either 1/2 or 3 years returns to calculate the profit and you will receive 80% of the figure to a maximum of £2500
  • This is expected to be paid in June
  • HMRC will contact all those who are eligible for the grant from their returns and invite you to apply online.

 

Support for businesses who are paying sick pay to employees:

 The Government will pass legislation shortly 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. There will not be a 3 day qualifying period.
  • employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note
  • eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to those staying at home comes into force
  • An employee should self certificate as normal for the first 7 days and for the second week should complete an isolation note which can be found HERE

We will keep you fully informed of any developments on when the repayment mechanism for employers will be finalised.

Support for businesses needing to lay off employees

The Coronavirus job retention scheme (CJRS) has been introduced by the government as a temporary scheme open to all employers for at least 3 months beginning from 1st March 2020. The scheme is expected to be running by the end of April with payments likely to be made in May.

A portal will be available on HMRC’s website to allow employers to claim for 80% of furloughed employees wages up to £2500 plus the Employers National Insurance and minimum automatic enrolment employer pension contributions on the wage.

Who can claim

Any UK organisation with employees can claim including

  • Businesses
  • Charities
  • Recruitment Agencies
  • Public Authorities

In order to qualify you must have created and started a PAYE payroll scheme on or before 28th February 2020 and have a UK bank account.

Employees you can claim for

Furloughed employees must have been on the payroll on 28th February 2020 and can be on any type of contract including

  • full time employees
  • part time employees
  • employees on agency contracts
  • employees on flexible or zero hours contracts

The scheme will also cover employees who were made redundant since 28th February 2020 who are rehired by their employer

  • To be eligible the employee cannot undertake work for or on behalf of the organsation . This includes providing services for or on behalf of the organisation. Tax and other deductions will apply.
  • The scheme is only for agency workers who are not working
  • Employers need to discuss with their staff and make any changes to the contract by agreement to cover the furloughing (unless in the unlikely situation that a clause already exists)
  • When making the decision to furlough staff equality and discrimination rules will apply
  • Employees hired after the 28th February 2020 cannot be claimed for.
  • Employees on unpaid leave cannot be furloughed unles the unpaid leave started after 28th February 2020
  • Employees on sick leave or self isolating should get Statutory Sick Pay but can be furloughed after this
  • Employees who are shielding in line with public health guidance can be placed on furlough
  • If the employee has more than one employer then they can be furloughed from each employment. Each employment is seperate and the cap applies to each employer individually.
  • A furloughed employ6ee can take part in volunteer work or training, as long as it does not provide services to or generate revenue for your operation
  • Note if workers are required by the organisation to complete online training whilst furloughed they must be paid at least NMW/NLW for the time spent training even if more than the 80% subsidised.

What can be claimed

  • There will be a grant covering the lower of 80% of the employees regular wage or £2500.
  • An employer can choose to top up the salary beyond this but is not obliged to
  • For full and part time empoyees the actual salary before tax should be used to calculate the 80%. Bonuses commissions etc should not be included.
  • If an employees pay varies you can claim the higher of the same months earnings from previous year or the average monthly earnings from 2019/20 tax year
  • If the employee has been employed for less than a year then work out average monthly earnings since they started
  • If employee only started in February 2020 then use a pro rata for their earnings so far
  • Once the amount of wages that can be claimed for have been calculated work out what the amount of Employer National Insurance contributions and minimum autoenrolment contributions you are entitled to claim

 

Full guidance can be found here

Support for businesses that pay business rates

 There will be a business rates retail 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 rebilled by their local authority as soon as possible.

A £25,000 grant will be provided to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value between £15,000 and £51,000.

Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority. Guidance for local authorities on the business rates holiday will be published by 20 March.

We will keep you informed of these developments as and when they happen.

Support for businesses that pay little or no business rates

 Additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR) has been announced by the Government. This will provide a one-off grant of £10,000 to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs.

If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority – you do not need to apply.

Funding for the scheme will be provided to local authorities by government in early April. Guidance for local authorities on the scheme will be provided shortly.

We will keep you up to date with the latest news.

Support for businesses that rent commercial premises

  • It was announced by the government on 25th March that anyone renting commercial premises and failing to pay cannot be evicted for 3 months
  • See Press Release for further details

Support for businesses through the Coronavirus Business Interruption Loan Scheme

A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch shortly to support businesses to access bank lending and overdrafts. The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value. Businesses can access the first 6 months of that finance interest free, as government will cover the first 6 months of interest payments.

The scheme is expected to be available sometime in the week commencing 23rd March

Further details, including lenders who will provide access to the scheme, will follow and we will support any clients needing assistance with obtaining this support.

 Support for businesses paying tax

  • 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.
  • VAT deferment- Businesses with vat payable between 20th March 2020 and 30th June 2020 can defer the payment until April 2021. There will be no requirement to apply for this.
  • You will still need to submit a VAT return as normal
  • HMRC currently recommend that if you wish to take advantage of the VAT deferment and you pay by Direct Debit you should cancel the DD when submitting your VAT return for the period.
  • For self employed businesses the ‘on account’ payment due to be taken in July 2020 will also be deferred.

Income Tax

  • For income tax Self Assesment payments due on 31st July 2020 these can be deferred until 31st January 2021.
  • Individuals will be eligible if they are due to pay the second payment on account in July 2020.
  • You do not have to be self employed to be eligible.
  • No late payment charges or interest will be chargedprovided paid by January 2021.
  • The deferment is optional but is an automatic offer.
  • If this is paid by direct debit ensure that this is cancelled in good time (at least 5 days before due) otherwise do not make the payment until you wish to (and before 31/01/2021)

If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559. Please talk to us if you want our help here.