STRENGTHENING BUSINESS CONTINUITY
Protect you Business continuity: Summary of financial, tax and accounting measures:
Business Rates Relief
The Government has announced a number of business rate measures to assist businesses experiencing disruption to their cashflow as a result of the COVID-19 outbreak. The main focus of these is on small and medium enterprises (SMEs) in the retail, leisure and hospitality sectors occupying smaller property.
The business rates retail discount for properties with a rateable value below £51000.A 12-month business rates holiday for all retail, hospitality and leisure businesses in England (including shops, pubs, restaurants)
The cash grants that will become available include:
– up £10,000 to the smallest businesses
– up to £25,000 for retail, hospitality and leisure businesses with a rateable value less than £51,000
Deferring payment of taxes
HMRC is willing to allow businesses to defer tax payments. What is key is communicating with HMRC prior to the tax due date. Early action on this is highly recommended.
Practicalities for Companies House accounts filing
Companies House has confirmed that Businesses may apply for a three-month extension period to file their accounts. This extension will not be granted automatically and companies seeking more time are expected to complete an online application before the filing deadline.
The Government announced that no VAT liabilities need be paid between 20 March and 30 June 2020. This is automatic, and no applications need to be made to HMRC. Organisations will have until the end of the 2021 “tax year” to pay off any accumulated liabilities.
HMRC guidance now states that where organisations are set up with direct debits to pay their VAT, they should cancel them, as otherwise the banking system will continue to take the direct debits automatically.
Job Retention Scheme
The Government has announced support of all UK businesses to help protect jobs during the COVID-19 crisis.
Under the Corona virus Job Retention Scheme, all UK employers will be able to access support to help pay part of the employees’ salary for those employees who would otherwise be laid off during the crisis period. The support package is intended to help protect jobs of employees who would otherwise have been laid off or made
HMRC will reimburse 80% of furloughed workers’ wage costs to employers, up to a maximum of £2,500 per month. Employers will be able to make a claim for the money once HMRC’s new system is available.
It’s up to employers whether they pay the remaining 20% of wages. They do not have to pay it.
Assistance for the Self Employed
The Government has announced an unprecedented package of assistance for business, employees and the economy.
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.
Various criteria apply and not all self-employed will qualify.
Business Interruption Loan Scheme (CBILS)
The British Business Bank together with 40+ lending providers are providing a range of financial options enabling an SME (turnover of less than £41m) to borrow up to £5m, with the first six months being interest-free under the Corona virus Business Interruption Loan Scheme (CBILS). Not all SMEs will be eligible. The scheme will be available from early week commencing 23 March 2020. Further details are here.
Temporary changes to Statutory Sick Pay (SSP)
SSP will temporarily be paid from the first day of sickness absence rather than the fourth day for people who have COVID-19 or have UK Government guidance: measures to support impacted businesses link to selfisolate.
SSP will be payable at a rate of £95.85 per week from 6 April 2020.
Those who are not eligible for SSP, for example, the self-employed or people earning below the lower earnings limit will be able to make a claim for Universal Tax Credit or Contributory Employment and Support Allowance.
Additional financial support for business owners and the self employed has come in the form of a three-month mortgage holiday for homeowners struggling to make repayments due to the effects of COVID-19.
The Government has confirmed that, having recently concluded a review of the planned reform to the offpayroll working rules and having made a number of changes to support its smooth implementation, it intends to push ahead with the changes coming into effect on 6 April 2020.