Government support and guidance is continually being adjusted to reflect the seriousness of the health and economic impact. We will digest this information, cut through the noise and summarise the information for the self-employed and business owners.
Latest Updates – 12 May 2020
Coronavirus Self-Employment Income Support Scheme – The grant scheme for the self-employed will be open for applications from 13 May 2020. Self-employed individuals can apply for a grant from this date by logging into their Government Gateway account. Further details on the scheme are available on our website at Coronavirus Self-Employment Income Support Scheme.
Bounce Back Loans – Loans are available for small businesses between £2,000 and £50,000 which are 100% backed by the government. The process to apply for a Bounce Back Loan requires completion of a short online form which is straight forward. There are a limited number of banks offering the loans. Further details are available on our website at Bounce Back Loans.
HM Revenue & Customs (HMRC) have a specific page on their website dedicated to guidance for employees, employers and business at https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19.
There is also a specific page for the self-employed at https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme.
Update – 16 April 2020
Furlough worker rule update – you can now claim for employees that were employed on or before 19 March 2020. You are required to have made an RTI submission notifying HMRC of payment of that employee on or before 19 March 2020 to qualify.
Update – 8 April 2020
HMRC have announced the service to apply for the grant for furloughed workers will be launched on 20 April 2020.
Qualifying employers should get ready now to make their submissions. You will require the following details:
You’ll need to provide the following to make a claim:
- The bank account number and sort code you want the grant to be paid into.
- The name and phone number of the person in the business for HMRC to call with any questions.
- Your Self-Assessment Unique Tax Reference (UTR), Company UTR or Company Registration Number.
- The name, employee number and National Insurance number for each of the furloughed employees.
- The total amount being claimed for all employees and the total furlough period.
For Employers with less than 100 employees, details per employee will be required to be entered manually on the online portal.
Update – 26 March 2020
Self-Employed Income Support
A scheme to assist the self-employed and members of a partnership was announced on 26 March 2020.
How much will I get if I qualify?
If you qualify under the scheme you will be able 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.
Who can apply?
You can apply if you’re a self-employed individual or a member of a partnership and you:
- have submitted your Income Tax Self Assessment tax return for the tax year 2018/19.
- traded in the tax year 2019/20.
- are trading when you apply, or would be except for COVID-19.
- intend to continue to trade in the tax year 2020-21.
- have lost trading/partnership trading profits due to COVID-19.
- your trading provides are less than £50,000
- Your self-employed income is more than half of your total income. HMRC will consider an average for the trading profits for the last 3 year to 2018/2019.
If you have been trading less than 3 years HMRC will only use the years you filed a Self-Assessment Tax Return. HMRC will use the 2018/2019 Tax Return data to identify those eligible.
When will I receive the grant?
On receipt of your claim HMRC will confirm if you are eligible for the grant and contact you to confirm how much the grant will be and payment details. The Government aims for the grant to be payable by the end of June 2020.
How to apply
There is currently no facility to apply for the grant. HMRC will contact you if you are eligible and invite you to apply online. HMRC have iterated that you do not need to contact them as it will only delay the urgent work being undertaken to introduce the scheme.
Summary of other updates
Director support – it was confirmed Directors would potentially be able to claim under the Job Retention Scheme as employees. See Coronavirus Job Retention Scheme details below.
Deferral of Income Tax payments – it was confirmed the July 2020 payments on account have been deferred for all tax payers not just the self-employed until January 2021.
VAT – please ensure you cancel any VAT Direct Debit with your bank otherwise this will be collected by HMRC.
Update – 21 March 2020
Support for business
A number of packages have been announced to support business. These include:
- Coronavirus Job Retention Scheme – all employers will be able to access support to reimburse 80% of furloughed workers ( grant leave of absence to workers) wage costs up to £2,500 per month. Information will have to be submitted through a new online portal, further detail to follow. There are currently no existing systems to facilitate payments to employers, these are in development.
- Deferral of VAT payments – HMRC will defer all VAT payments from 20 March 2020 until 30 June 2020. Automatic offer with no applications required. Taxpayers will been given until 5 April 2021 to pay any liabilities that accumulate.
- Deferral of Income Tax payments for self-employed – Income Tax payments due in July 2020 will be deferred to January 2021. Automatic no application required. No penalties or interest for late payment will be charged in the deferral period. AMENDED THIS IS NOW FOR ALL TAX PAYERS NOT JUST THE SELF-EMPLOYED
- Time to Pay offer – HMRC have scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress and have outstanding liabilities.
- Statutory sick pay – 2 weeks are to be reimbursed by HMRC when a system for repayment has been developed.
- Business rates – Retail, hospitality and leisure businesses – Business rates holiday for businesses in England for the 2020 to 2021 tax year. No action required, the local authority will reissue your business rates bill automatically.
- Cash grants – Retail, hospitality and leisure – Cash grant of up to £25,000 per property. Businesses in this sector with a rateable value under £15,000 will receive £10,000. Businesses with a rateable value between £15,001 and £51,000 the grant will be £25,000. The local authority will write to you if you are eligible for this grant.
- Small Business grants – If a business receives small business rate relief (SBBR), or rural rate relief (RRR) a one-off grant will be available of £10,000. You must occupy a property to be available for this relief.
- Business Interruption Loan Scheme – To be delivered by the British Business bank, the scheme will launch week commencing 22 March 2020, to help small and medium sized businesses to access bank lending and overdrafts. The government will back 80% of each loan. There will be no charge for this guarantee and the loans can be up to £5m in value. Businesses can access the first 12 months interest free. List of accredited lenders is available at https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/accredited-lenders/. Banks will review your financial information for your business pre Coronavirus and review the viability and suitability for lending.
Action to consider to safeguard your business
You should consider the following action to safeguard your business and minimise the impact of Coronavirus on you and your business. Remember cash will be key during this period of uncertainty:
- Insurance – review your insurance documents to determine if you are covered.
- Discretionary expenditure – Put on hold any discretionary expenditure.
- Payment holidays – Ask for payment holidays from providers of loans, finance and your landlords for rent. Stop any pension commitments where possible.
- Time to pay – Utilise availability of the time to pay facility from HMRC if required for PAYE and Corporation Tax.
- Stock levels – consider if your stock levels are appropriate for your projected level of business. It will be a balancing act considering what items may become in short supply and ensuring you do not run out, against having too much cash tied up in stock.
- Staffing – review your workload and prepare for the worst. Consider availability to work at home, reduced hours, temporary layoff, permanent layoff. Consider the current and future impact on the business.
- Staff – Be in constant communication with your team. Ask them to consider mortgage payment holidays if they will have reduced hours or pay.
- Business Plan – review your business plan for the next 6 months, identify and consider any potential cash gap and review funding options from lenders.
Small and medium-sized employers will be able to reclaim Statutory Sick Pay (SSP) to cover absence due to Coronavirus. Eligibility criteria is as follows:
- The refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of Coronavirus. (£94.25 per week).
- 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.
- Eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force.
- The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.
The rebate scheme is being developed to cover the repayment of wages to employers. Note this is in development and will take time.
Update – 16 March 2020
Download our business update on Coronavirus and what action can be taken to reduce any potential impact.
Practicalities of the day to day running of your business
The following is based on Government guidance:
- Businesses and workplaces should encourage employees to work at home, wherever possible.
- If someone becomes unwell in the workplace with a new, continuous cough or a high temperature, they should be sent home and advised to follow the advice to stay at home.
- Employees should be reminded to wash their hands for 20 seconds more frequently and catch coughs and sneezes in tissues.
- Frequently clean and disinfect objects and surfaces that are touched regularly, using your standard cleaning products.
- Employees will need your support to adhere to the recommendation to stay at home to reduce the spread of coronavirus (COVID-19) to others.
- Those who follow advice to stay at home will be eligible for statutory sick pay (SSP) from the first day of their absence from work.
- Employers should use their discretion concerning the need for medical evidence for certification for employees who are unwell. This will allow GPs to focus on their patients.
- Employees from defined vulnerable groups should be strongly advised and supported to stay at home and work from there if possible.