Coronavirus update 23rd March 2020

With what is currently happening within the UK and the rest of the world we have spent some time looking at press releases from the Government and HMRC to try to summarise what is going on.

Firstly, we urge you all to adhere to the current Government policy on Social Distancing and Isolation policies.

Secondly, it is a worrying time for us all in business and whilst measures shown on the media outlets are welcome some say that they are not enough or too late. Everybody’s case is different, and this short document is here to try to help in helping you get through this serious matter.

For up to date information you should periodically visit www.gov.uk/coronavirus this is where you will find the most up to date information rather than relying on Social Media.

There are several ways in which the Government is helping as best they can. These are headlined below.

  • Coronavirus Business Interruption Loan
  • HMRC
  • Business Rates
  • Income and Corporation Tax
  • Staff who have been told to work from Home
  • Staff who have been laid off
  • If you rent residential or commercial Property
  • If you are a Residential or Commercial Landlord
  • Help for the Self Employed

Coronavirus Business Interruption Loan   (CBIL)

The government has committed to CBIL and has agreed terms with most banks and financial lenders. However, this is on a case by case basis and is for businesses with turnover less than £45m.

The criteria for lending money are also within the usual Banking lending criteria, which is on a Bank by Bank basis.

All Banks will offer the scheme which only launches this week. If you apply you will have to pass the usual credit rating mechanisms, which may mean Personal Guarantees or Charges on Property etc.

Also note that the Government are to guarantee 80% of the loan, historical types of finance like this usually mean that the balance of 20% needs some other form of security.

HMRC

Its fair to say that at the forefront of the assistance is HMRC. Their brief is to help all businesses as best they can.

Time to Pay agreements have been ramped up to assist any business or person with any arrears, any previous arrangements may need to be reviewed with HMRC as a matter of urgency.

New Time to Pay agreements are on a case by case basis.

VAT has been deferred from 20th March 2020 to after 30th June 2020. THIS IS AUTOMATIC but you should still submit any VAT returns in the usual manner, and by the appropriate deadline. You then have until March 2021 to catch up with any VAT arrears.

VAT refunds will be processed and re-paid in the usual manner.

PAYE/CIS payments are not actually referenced within any of the current documentation so we recommend contacting HMRC and discussing any Time to Pay arrangement with them, as disclosed above.

Small Business Rate Relief and Rural Rate Relief – SBRR and RRR

Business Rate Holiday – Retail, Hospitality and Leisure Industry ONLY

The Government has announced a Rates holiday to all in the above sector. Additionally, there are cash grants available of up to £25,000. It is dependent on your rateable value of you premises.

If you are not in the above sector, then there is a one -off grant of up to £10,000 irrelevant of whether you pay Business rates or not. You must though be liable for Rates, even if it is reduced to nil, by renting premises and being on the Rates Register.

THIS IS ONLY AVAILABLE IN ENGLAND – different rules for the rest of the Country.

No action is needed as each Local Authority is to write to each business and advise what is available.

Income Tax

For Self Employed Income Tax payments for the 2nd Payment on Account due July 2020 have been deferred until January 2021, note the balance will be due then as well for the 2019/20 tax year.

Staff who have been told to work from home

If you have asked staff to work from home then it is very much things as usual, other than there are no current forms of assistance other than those above. This may change as cashflow dries up for businesses, but it is very much carry on within the current rules and regulations.

Staff who have been laid off

If you have had to lay staff off, then to assist you the Government has issued the following guidance.

You are to treat these members of staff as ‘Furloughed Workers’, they are to be identified as such and via an HMRC portal (yet to be developed and advertised) you will upload information of these people and their earnings. HMRC will then reimburse 80% of the wage cost of up to £2500 per month. What isn’t clear now is whether that is per employee or per business. I’d suggest that it is meant to be per employee but we will know more when the HMRC portal is operational.

If you rent Residential or Commercial Property

If you are a ‘renter’ then the Government has issued guidance where you cannot be forced out, or evicted, for at least 3 months. This is welcome help as many businesses operate from rented accommodation. It also applies if you rent a home. The Court system is currently locked down, a such any existing or new cases are unlikely to be heard.

Moving forward Landlords have been asked, not yet told too, assist tenants in agreeing an acceptable repayment plan to catch up with any arrears.

If you are a Landlord of Residential or Commercial Property

Firstly, you should discuss with all tenants the possibility of any rents not being paid. An agreeable solution needs to be documented accordingly a you may need this later.

Secondly, just like the UK housing market, any mortgage lenders have been advised that they should offer a 3-month Mortgage Repayment window to you. That should ease the cash flow burden if any of your properties are mortgaged.

Help for the Self Employed

Currently we are waiting for a further release of measures for the self employed as these seem to be forgotten about within the Coronavirus matter. However, at the very least you can claim Jobseekers Allowance, which isn’t much. I suspect that Prime Minister and Chancellor will shortly issue a statement that helps the Self Employed people.

I would urge you all to stay safe, keep looking at the www.gov.uk website and apply as and when you are able to the appropriate government department.

We cannot do it for you, but we can help with queries on who to get in touch with.

Phil Dawson and Clare West.

Dawson & Co