Information and links - Government help during Coronavirus emergency
VAT
Any business will be able to defer any VAT payments due from 20 March 2020 to 30 June 2020
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.
Income Tax
Currently, the government is stating that the self-employed who have their first Payment on Account due on the 31 July 2020 will be deferred until the 31 January 2021.
We do not know where that leaves others within the Self Assessment system. Many of you will be directors and not technically self-employed. You may still have a Payment on Account due on 31 July. More specific advice on this is contained in an additional news item available on this site.
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.
Coronavirus Business Interruption Loan Scheme (CBILS)
It is clear that this is not just a large pile of cash which will be given to anyone who asks for some.
For businesses with turnover of up to £45m. Expected to be available in week commencing 23 March 2020
It is a lending scheme through the British Business Bank from £1,000 up to £5m per company with government meeting interest costs for the first 12 months. Finance terms are from three months up to 10 years for term loans and asset finance and up to three years for revolving facilities and invoice finance.
The scheme gives the lender a government-backed guarantee against 80% of the outstanding facility balance. The borrower always remains 100% liable for the debt.
The first 12 months of these loans will be interest free, as the Government will cover the interest payments.
To qualify, Small Businesses must have a sound borrowing proposal, but insufficient security to meet the lender’s requirements.
If the accredited lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so. Where the small business has a sound borrowing proposal but insufficient security, the lender will consider the business for support via the scheme.
The BOE is giving a guarantee to the lender, not the borrower. As we see it, the application process for loans should therefore be the same as for a normal high street loan.
In the first instance it will be necessary to apply to one of the lenders involved in the scheme. They are listed here:
More details of the scheme can be found here.
Grants for retail, hospitality and leisure businesses
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 will be published shortly.
The optimum route will be to contact one of the Economic Development Officers at your local town or city council. They should be best placed to advise on local arrangements.
Rates relief
Latest announcements allow for a 100% business rates discount for all retail, leisure and hospitality venues with no limit to Rateable Values.
All property occupiers in the retail, leisure and hospitality sectors including shops, cinemas, restaurants, music venues, museums, art galleries, theatres, caravan parks, gyms, small hotels, B&Bs, guest houses, sports clubs, night clubs and club houses and nurseries will receive 100% rates relief between 1 April 2020 and 31 March 2021.
Those eligible do not need to take any action. This will be applied by the local council.
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.
You do not need to do anything. Your local authority will write to you if you are eligible for this grant.
Time to Pay arrangements “TTP”
TTP allows a business to defer current (as opposed to prospective) tax debts (principally corporation / income tax, payroll taxes and VAT – but theoretically any other tax or duty) by converting settlement to instalments over a 3-12 months period.
As part of the process, directors are expected to provide written confirmation that the instalment will be made on time.
Any business is theoretically eligible to apply. It is, however, critical to ensure supporting facts (and documentation) are available to evidence cashflow concerns. HMRC have made it clear that they see themselves in this instance as lender of last resort (and not of first resort). Therefore the taxpayer must demonstrate that all other sources of finance have been pursued and exhausted.
HMRC’s helpline is 0800 0159 559. The process can take less than an hour in a simple situation where the amount to be deferred is less than £750K.
Businesses are strongly advised to be prepared for the conversation with HMRC and have the key information to hand:
o Description of the business;
o Annual total liability to tax;
o Amounts requesting to be deferred;
o Proposed period of deferral;
o Reasons for requesting deferral (directly linked to COVID-19);
o Details of discussions with other stakeholders / lenders;
o Details of other actions taken to mitigate cash outflows;
o A short-term cashflow forecast;
More information can be found here:
https://www.gov.uk/difficulties-paying-hmrc
Statutory Sick Pay “SSP”
For Small or medium sized businesses SSP is payable to qualifying employees and is now payable from day 1 for those who self isolate or are unwell because of COVID-19 (the first 3 days are normally unpaid). The current rate of SSP is £94.25 per week.
HM Treasury has announced that small and medium sized employers (those with fewer than 250 employees) may recover this cost where SSP has been paid as a result of COVID-19 from 13 March for a maximum of two weeks’ sickness per employee.
SSP paid from 13 March as a consequence of COVID-19 for up to two weeks. There is no existing mechanism for the recovery of SSP by employers (unlike other statutory payments such as Statutory Maternity Pay). The government has committed to working with employers to work out a mechanism for this recovery.