Businesses of all sizes and across all sectors are being affected by the coronavirus crisis and with Boris Johnson now in hospital and us all being told to still stay at home, we have no idea how long this situation will last.
Over the last few weeks, as local accountants, we’ve had numerous calls asking us about the various schemes the government has put in place to support businesses through these unprecedented times.
We take a look at some of our clients most common questions.
If you are unable to cover staff wages due to COVID-19, but want to keep your staff on, then the government will pay grants covering up to 80% of the salary of your employees up to a total of £2,500 per employee per month.
Your employees will then become furloughed workers, which means they are kept on the payroll, rather than being laid off. However, they can’t do any work during the time they are furloughed.
As their employer, you can choose to make up the shortfall between the government payment and their salary, but you don’t have to. If you don’t, your employees are essentially taking a pay cut, so it might be worth them seeing if they’re eligible for Universal Credit.
The online service to claim for the Coronavirus Job Retention Scheme is expected to be available by the end of April 2020.
For more furlough advice and to see whether you are eligible, take a look at the government website.
The government recognises that coronavirus is going to have a long-term impact on businesses, so have announced the VAT deferral scheme. This means no businesses will pay VAT between March 20, 2020 and June 30, 2020.
In addition, if you are self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
And if your business is struggling to pay any tax it owes because of coronavirus, call HMRC’s new dedicated COVID-19 helpline on 0800 024 1222. You will be able to ask for extra time to pay and set up a Time to Pay Arrangement , which enables you to pay set monthly repayments over a set time frame.
The Coronavirus Business Interruption Loan Scheme (CBILS) provides financial support to SMEs across the UK that are losing revenue, and seeing their cash flow disrupted, as a result of the COVID-19 outbreak. This facility has now been extended to allow businesses to borrow up to £5 million with no interest payments due for the first 12 months. Take a look at which lenders are taking part in the scheme.
To support small business through the coronavirus outbreak, the government is providing additional funding for local authorities to support small businesses. They will be able to provide a one-off grant of £10,000 to eligible businesses to help pay towards their ongoing business costs.
Eligibility is based around rate relief, so if you already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief, then you will qualify. Your local authority will contact you rather than you having to apply yourself.
The Self-Employed Income Support Scheme will pay self-employed people, including freelancers and sole traders, who have been adversely affected by the coronavirus, a taxable grant worth 80% of their average income over the last three years, up to £2,500 per month, for at least three months.
The scheme is available to business owners with an income of £50,000 or less, who make most of their income from self-employment, and will be based upon the previous three years’ tax returns to confirm income.
If you are eligible for the scheme HMRC will contact you directly and invite you to apply online.
The government has put in a raft of other measures to help small businesses cope with the coronavirus
The current situation is both unpredictable and fast moving and it can be difficult to know what support your business can and should access. As local accountants, just remember, we’re here to help you get through the next few weeks and months by offering sound business advice and guidance. In addition, if you want any help with business planning for when we come out of this situation, please get in touch.
We help ambitous small business owners grow their personal wealth and achieve their ideal work/life balance.
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Palmers Business Support was founded to help ambitous small business owners grow their personal wealth and achieve their ideal work/life balance. With accountancy as the central pillar of our offering, we take the view that timely accounts and efficient compliance is the bare minimum our cients should expect.