APH Accountants COVID-19 Business Support Update 22/03/20
Covid-19 Business Support Update
I hope you are all safe and well through these tough and worrying times. I thought I would send this to try and answer some of the questions you may have and ease some of those worries.
Hopefully you find it easy reading but if not just give me a shout.
Whilst the government has set out a number of packages to help businesses and employees across the country there is still a lack of support for those that are self-employed. Where possible I urge everyone to help out the self-employed where we can
Below is some useful information for all business types on what you can do and how it affects your business, plus some useful tips based on the latest information released. Watch this space though as it’s changing all the time.
We will endeavour to help and support all clients in whatever way we can and encourage you all to stay practically positive about your business.
In the meantime I suggest you grab a cup of coffee or tea and have a read through the newsletter below. Any questions please feel free to call us and we will do our level best to help.
We our continuing to run our business as normal and all staff are home based, so feel free to get in touch in the normal way or visit our website www.aphaccountants.co.uk for how to call or email our staff directly.
Please all stay safe and stand strong during these turbulent times.
Self Employed Clients
Many Self-Employed clients are unable to work due to current Covid-19, if you find yourself in this position we recommend that you make a claim or apply for the following:
- Universal Credit – Don’t forget this has been raised by a £1,000 along with tax credits and the Chancellor announced that the self-employed will get full Universal Credit at a rate equivalent to Statutory Sick Pay (SSP), as well as a further £1bn to cover 30% of house rental costs-https://www.gov.uk/universal-credit
- New Style Employment Allowance – https://www.gov.uk/guidance/new-style-employment-and-support-allowance
- Council Tax Support (Hardship Fund) – Check with your local authority –Find your local authority
- 3 Month Mortgage Holiday – Check with your lender
- Rent Relief – Speak with your Landlord – many are being helpful during this crisis. Let them know ASAP if you cannot make payment. The Chancellor also announced a further £1bn to cover 30% of house rental costs. On 18th March 2020, the government announced emergency legislation to suspend new evictions from social or private rented accommodation while this national emergency is taking place.
- Loans & Credit Card Payments – Check with your lender to see if they can offer flexibility with your payments. The Financial Conduct Authority (FCA) are calling on lender’s to be more flexible. For instance Barclays are offering some clients capital repayment holidays on existing loans over £25k.
- Insurance – Check your policy to see if you are covered for Income protection or continuity insurance. Sadly a number of policies exclude pandemic but check the fine print you never know!
All Clients (Self Employed, Partnerships, Limited Companies etc)
- Income Tax – No payment on account is needed by 31st July 2020
so defer it until 31st Jan 2021 if necessary.
- You can just take advantage of this without informing HMRC. No interest or penalties will be charged in the deferral period.
- If you owe tax from previous period’s please contact HMRC “Time to Pay” on 0800 015 9559 which is a dedicated Coronavirus helpline.
- If at the end of your accounting period you have experienced trading losses we will be looking at ways to offset this/reclaim against any tax paid in a previous period.
- VAT – All VAT registered businesses are eligible to defer any VAT payments between the 20th March and until the 30th June. You will have until 5th April 2021 to make any deferred VAT payments. If your business is normally in a reclaim position this will continue as normal
- PAYE – Whilst the government has increased the Employers allowance for the new tax year they have made no announcement with regards to a deferral of PAYE – That said if you have a PAYE liability (Including CIS) then we suggest you speak with the Payment Support Service on 0300 200 3835 or the dedicated Coronavirus helpline on 0800 015 9559
- Corporation Tax (Ltd Co’s only) – Again if you currently owe Corporation Tax speak with the Payment Support Service on 0300 200 3835 or the dedicated Coronavirus helpline on 0800 015 9559. For any Limited Companies who experience trading losses for their financial year we will be looking at ways to reclaim any corporation tax paid in previous periods.
- Small Business Grant Funding – If you occupy premises and are in receipt of small business rate relief or rural relief then you should be eligible for the £10,000 cash grant. Your local authority will be in touch with you to organise this.
- Business Rates Holiday for Retail, Hospitality and Leisure Business – 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
- 12-month business rates – the local authority will adjust your bill automatically if you are eligible
- Cash Grants for Retail, Hospitality & Leisure – As above for the types of properties that will benefit
- For businesses in these sectors with a rateable value of between £15,001 and £51,000, they will receive a grant of £25,000.
- For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000.
- Coronavirus Business Interruption Loan Scheme – A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch early next week to support primarily small and medium-sized 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 12 months of that finance interest free, as government will cover the first 12 months of interest payments.
- You are eligible for the scheme if: your business is UK based, with turnover of no more than £45 million per year and your business meets the other British Business Bank eligibility criteria.
- Further details on how to apply will be notified in the coming days.
- Accredited Providers – https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/accredited-lenders/
- Businesses with Employees “Job Retention Scheme” – Before laying off staff or making them redundant the Government is asking employers to consider the help and support that is available.
- To receive this support they are asking employers to designate affected employees as “furloughed workers”. In English this translates to employees who are asked to take a leave of absence without pay.
- Notify your employees of this change – changing the status of employees remains subject to existing employment law therefore check with your HR provider.
- 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) and we will advise all clients when we know more
- 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. Existing systems are not set up to facilitate payments to employers.
- It is then up to you as the employer whether you top up the remaining 20% (or a proportion of it) or not. This is only detailed in the guidance for employees, not the employer guidance. If you are withholding the 20%, it is even more important to have a record of the agreement
- Currently there is no information available as to how this affects Limited Company Directors. On the basis that Directors are also considered employees we are assuming they are eligible for the time being. However, we will let you know more when we have more clarity on this.
- Statutory Sick Pay (SSP) Refund – Available to all Employees – this refund will apply to SSP paid for 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.
- Research & Development Relief – HMRC are encouraging businesses to claim R&D relief during this period.
- Does your business create, modify or adapt a process, product, material or service? If so, you may be eligible for R&D Tax Credits.
- You can use R&D Tax relief to either reduce your corporation tax payments or convert to Tax Rebate.
- Cashflow – The Covid-19 pandemic is highlighting the importance of cashflow to every business.
- Now is the time to get your cashflow in order so you plan your finances accordingly
- If you need assistance with your cashflow let us know as we have a basic template to get you started
- A good cashflow will help you plan your finances and see where and when you need help and support for any loan and grant applications.
- Scam Alert – Sadly during these times there are people who are only too willing to scam you still. It has come to our attention that there are several scams about. Be careful of:
- Insurance Scams
- Pension Scams
- Investment Opportunity Scams
- HMRC Scams
- Paypal Scams (Just had one!)
- Banking Scams
Generally my advice is that if something seems too good to be true then it normally is! If need be check with us first!
- Don’t Cancel – Postpone! – The longer term effect of what we’re going through right now will be on the economy, and if that suffers, we all suffer.
- The economy is not controlled by the government or by policies or by large corporations, the economy is controlled by small and medium sized businesses staying open, keeping employing people and keeping money moving.
- Our responsibility in that is to support those businesses and one way we can all do that is to not cancel things, just postpone things.
- If you have a meal booked for Mother’s Day and you can’t go, don’t cancel it, just postpone it.
- If you’ve paid a deposit for something that’s now moved, if you can, leave the deposit where it is and do the thing later.
- If your kids are in clubs or you have a gym membership, if you can afford to, leave it running, or at the very worst, ask for a payment break, but don’t cancel your membership.
- We need all these things to keep going otherwise it will be like a domino effect that will impact all of us and take us years to pull out of
- Let’s just hold our breaths, hold our belief that this will pass and hold onto the businesses we all need.
Don’t cancel. Postpone. – Please share this message.