The coronavirus (COVID-19) outbreak has brought an unprecedented array of challenges for businesses and their agents. Information is changing on an almost daily basis, making it difficult to keep up-to-date with business support measures and where to find the necessary guidance.
The first port of call for Covid-19 guidance for employees, employers and businesses is on the gov.uk website at https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19. In particular, this guidance will help employers and businesses in providing advice to their staff on:
- the Coronavirus Job Retention Scheme;
- the Self-employment Income Support Scheme;
- deferring VAT and Self-Assessment payments;
- statutory sick pay relief package for small and medium-sized enterprises (SMEs);
- a 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England;
- small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief;
- grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000;
- the Coronavirus Business Interruption Loan Scheme to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance;
- a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans; and
- the HMRC Time To Pay Scheme to help with tax.
The Government has launched a new website Coronavirus Financial Support, which has details of various government schemes available UK-wide, including the Coronavirus Business Interruption Loan Scheme, the Coronavirus Job Retention Scheme, the Self-employment Income Support Scheme, the Coronavirus Large Business Interruption Loan Scheme, Covid-19 Corporate Financing Facility, Statutory Sick Pay Rebate, Time to Pay tax from HMRC, and VAT and income tax self-assessment deferral.
Self-employment Income Support Scheme (SEISS)
In summary, SEISS takes the form of a cash grant for use by self-employed individuals or members of a partnership, which will be made in one lump sum, covering three months initially. It will provide a taxable grant, worth 80% of monthly trading profits averaged over the three years 2016 to 2019, or whichever of those years the business traded for, to a maximum of £2,500 per month. Those with ‘a trading profit of less than £50,000 in 2018/19 or an average trading profit of less than £50,000 from 2016/17, 2017/18 and 2018/19’ and half of whose income in these periods comes from self-employment, are eligible. They must however have filed a 2018/19 tax return showing income from self-employment, by 23 April 2020.
The first payments are expected at the start of June. HMRC will contact those it thinks are eligible on the basis of its own records, to invite applications as soon as the system is up and running.
Coronavirus Job Retention Scheme (JRS)
Broadly, the scheme is available to all UK employers with a PAYE scheme that started on or before 19 March 2020. It covers part of the salary of employees who would otherwise be laid off because of the crisis – known as ‘furloughing’.
To access the support, employers have to ‘furlough’ employees, which means asking them to stop working but retaining them on payroll. This is a formal process with employment law implications and needs to be followed through carefully. Only furloughed employees on the payroll on or before 19 March can be covered. HMRC will pay a grant worth 80% of an employee’s usual wages, up to £2,500 a month, and associated employer NICs and minimum automatic enrolment employer pension contributions on the subsidised wage. Note that furloughed employees cannot carry out work for their employer during furlough and there are also rules around volunteer work and training.
HMRC guidance Check if you can claim for your employees’ wages through the Coronavirus Job Retention Scheme provides an overview for employers, and Check if your employer can use the Coronavirus Job Retention Scheme gives information for employees.
As part of a number of measures to support the country during the coronavirus (COVID-19) pandemic, the Government t has announced that working tax credit (WTC) payments will be increased by £1,045 to £3,040 per year from 6 April 2020 until 5 April 2021. The amount a claimant or household will benefit from will depend on their circumstances, including their level of household income. But the increase could mean up to an extra £20 each week. Further information on the increase, and how to claim, can be found at https://www.gov.uk/government/news/increase-to-working-tax-credits-what-this-means.
Commercial tenants protected from rent arrears
The Government has confirmed that commercial tenants who cannot pay their rent because of coronavirus will be protected from eviction.
Many landlords and tenants are already reaching voluntary arrangements about rental payments, but the Government recognises that businesses are struggling with cashflow due to coronavirus and remain worried about eviction. Measures, included in the emergency Coronavirus Act 2020, mean that no business will be forced out of their premises if they miss a payment in the next three months.
As commercial tenants will still be liable for the rent after this period, the Government is also actively monitoring the impact on commercial landlords’ cash flow and continues to be in dialogue with them. Further information on this measure can be found at https://www.gov.uk/government/news/extra-protection-for-businesses-with-ban-on-evictions-for-commercial-tenants-who-miss-rent-payments
Beware of coronavirus scams
Unfortunately, HMRC have reported a significant increase in the number of bogus contact and phishing emails being received by individuals from scammers purporting to be HMRC. A recent scam email advises customers they can claim a ‘goodwill payment’ if they provide certain personal information. If received, such emails should not be opened and should be deleted straight away. Keep up-to-date with known HMRC scams at https://www.gov.uk/government/publications/phishing-and-bogus-emails-hm-revenue-and-customs-examples. There is also helpful guidance on fraud, tricks and scams available at https://www.gov.uk/government/publications/frauds-tricks-and-scams/fraud-tricks-and-scams