Covid-19 Information Centre
PLEASE BE ADVISED THAT THE INFORMATION ON THIS PAGE IS LIKELY TO CHANGE AS THE GOVERNMENT UPDATES ITS POLICIES.
THIS SUMMARY WAS LAST UPDATED 20th May 2020 AT 09:36.
As Covid-19 develops, so too will the information made available regarding what support there is for both businesses and individuals. In order to keep our clients as up to date as possible, and make useful resources readily available, we will be regularly updating this page with important information and links.
HMRC's New dedicated helpline number is 0800 024 1222.
SUPPORT FOR BUSINESSES
Coronavirus Job Retention Scheme
In a bid to help retain jobs the Government has announced that businesses will be able to apply to HMRC to be reimbursed with 80% of certain employees wage costs, up to £2,500 per month. Funding can cover wages from 1 March 2020 for up to 4 months until the end of July. From the 1 August to the end of October the Government intends to adjust the scheme. The changes will enable more flexibility for employers who wish to bring their staff back part time, more details will be posted by the end of May.
To apply for the funding employers have to designate those employees who are unable to work as 'furloughed’. By doing this, furloughed employees remain employed but they cannot undertake any work for their employer. Changing the status of employees remains subject to existing employment law. Where it is intended that employees will become furloughed then employers should seek agreement of this with the employee in writing and keep a record of this. Claims for the grant should be started from the date that the employee finishes work and starts furlough, not when the decision is made, or the agreement is signed.
Salaried company directors are eligible to be furloughed and receive support through this scheme. Company directors owe duties to their company which are set out in the Companies Act 2006. Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, for instance, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company. This also applies to salaried individuals who are directors of their own personal service company (PSC).
If an employee has been made redundant since 19 March 2020 (formerly 28 February 2020) then the scheme may still cover that previous employee provided that they are subsequently taken back on and then immediately furloughed.
The grant available for each furloughed worker will be 80% of the employee’s gross pay (capped at a maximum of £2,500 per month) plus both the employer’s national insurance and the minimum employer pension contributions (required under auto enrolment) on this reduced wage. If the employer chooses to continue to pay 100% of the employee’s gross pay then the additional 20% of gross pay and additional employers national insurance and auto enrolment will not be recoverable from HMRC.
Employees can potentially be moved into and out of ‘furlough’ but in order for the employer to make the grant claim the employee must be furloughed for a minimum of at least 3 weeks.
The portal is now open and claims are being paid (roughly six working days from date of claim). For more details on the claiming process and to make a claim follow the link below:
For Income tax and Corporation tax purposes the grant will be taxable.
Employees that have been placed on furlough will continue to accrue statutory holiday entitlements. Read HMRC's guidance on calculating holiday entitlements:
For further detailed guidance we strongly recommend that you read the following:-
Job Retention Scheme for Employers.
Job Retention Scheme for Employees.
Self-employment Income Support Scheme
The Chancellor, Rishi Sunak, has announced that if you are a self-employed individual or a member of a trading partnership you may be able to receive a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months (March-May). The scheme will be open to those with a trading profit of either:
- less than £50,000 in the 2018-19 tax year and this trading profit is more than half of your total taxable income in that year; or
- an average trading profit in tax years 2016-17, 2017-18 and 2018-19 of less than £50,000 and these profits are more than half of your average total taxable income in the same period. If you only started trading between 2016 and 2019 then HMRC will only use those years for which you filed a tax return.
Additionally the following conditions must be satisfied:-
- you are trading when you apply, or would be except for COVID-19
- you intend to continue to trade in the tax year 2020-21
- you have lost trading/partnership trading profits due to COVID-19
- you have submitted a tax return for the tax year 2018-19.
If you are late filing and have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19 then HMRC will provide a 4 week extension and you will have until 23 April 2020 to file this.
HMRC will use existing information to check if you are eligible. You can also check if you are eligible by using HMRC’s Eligibility Checker: https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference
When checking if you are eligible you will only need your National Insurance (NI) number and Unique Tax Reference (UTR) number. Once you follow the link and enter your NI number and UTR, HMRC will confirm whether it believes you are eligible to make a claim and, if so, it will allocate a date and time between 13 May and 18 May 2020 from which you may make your claim. At this point a link will guide you to the Government Gateway login.
If you do not have a Government Gateway Account then you will need to follow the link and set one up. It is important that you follow the link provided on the page to avoid setting up a Gateway Account for the wrong service.
Please note that as Agents we will not be able to make the claim on your behalf. This is due to the way the system has been set up by HMRC. However, we will be able to offer advice on eligibility and provide further instructions of how you can make your claim, if requested.
Once you have made your claim a single lump sum will be paid to your bank account covering all 3 months from March to May, capped at £7,500.
For our detailed guidance on this scheme read the following page: https://www.scott-wilkinson.com/blog/self-employment-income-support-scheme-seiss/
Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are both operating a PAYE scheme and able to be furloughed.
Unfortunately this Self-employment Income Support Scheme is unavailable to those who were not registered for Self-employment before 5 April 2019 and so did not complete a tax return for the 2018-19 tax year.
Further guidance from HMRC detailing how they will calculate trading profits for the scheme:
Business Bounce Back Loan Scheme
The Business Bounce Back Loan for small and medium-sized businesses is a 100% Government backed loan for amounts between £2,000 and £50,000 and up to 25% of turnover. There won’t be any interest or fees to pay for the first 12 months and then after this a rate of 2.5% a year will be charged for the remaining period of the loan, although to avoid any fees you can repay early. No repayments will be due during the first 12 months and Loan terms will be available up to 6 years.
You can apply for a loan if your business:
- is based in the UK
- was established before 1 March 2020
- has been adversely affected by coronavirus
If your business was classed as a business in difficulty on 31 December 2019 you’ll need to confirm that you’re complying with additional state aid restrictions. Check the business in difficulty criteria and state aid regulations here: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/faqs-for-small-businesses/#f22
If you’re already claiming funding under the Coronavirus Business Interruption Loan Scheme (CBILS) then you will not be able to apply for the Business Bounce Back Loan scheme. However, if the loan you have received is £50,000 or under and you would like to transfer it to the Bounce Back Loan scheme then you will be able to arrange this with your lender.
This new scheme launched on 4 May 2020.
For further details follow the link to our blog on the subject:
There are 11 lenders participating in this scheme, you can find a lender here: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/for-businesses-and-advisors/
Coronavirus Business Interuption Loan Scheme (CBILS)
A new temporary Coronavirus Business Interruption Loan Scheme will be delivered through commercial lenders, and backed by the British Business Bank, to support primarily small and medium-sized businesses to access bank lending and overdrafts. This will be available to businesses based in the UK with a turnover of no more than £45 million per annum.
The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value and for up to 6 years. The Government will cover the first 12 months of interest payments and any lender-levied fees.
Read our blog for more detail about the CBILS: https://www.scott-wilkinson.com/blog/cbils-made-more-accessible-to-small-businesses/
To apply you should talk to your bank or one of the 40 accredited finance providers as soon as possible. All major banks are offering this scheme and if you currently have an existing loan with monthly repayments you can ask for a repayment holiday in order to help with cash flow.
Note Fishery, aquaculture and agricultural businesses may not qualify for the full interest and fee payment.
Statutory Sick Pay (SSP)
For businesses with fewer than 250 employees, the cost of providing 14 days of Statutory Sick Pay per employee will be refunded by the government in full. Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. Instead those who have COVID-19 or are advised to self-isolate, will be able to obtain an “isolation note” by visiting NHS 111 online and completing an online form, rather than visiting a doctor. This scheme is set to launch on 26 May 2020.
Business Rates Holiday
If you are a UK business and your business is in the retail, hospitality and/or leisure sector, which includes properties being used:
- as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
- for assembly and leisure
- as hotels, guest & boarding premises and self-catering accommodation
Then no business rates are payable for the 2020-2021 tax year. This will therefore apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill to exclude the business rate charge. They will do this as soon as possible. You do not need to take any action as the relief is automatic. This has also been extended to include estate agents, lettings agencies and bingo halls.
There are two types of grant available the Retail, Hospitality and Leisure Grant Fund (RHLGF) and the Small Business Grants Fund (SBGF). Both of these grants will be taxable.
For the RHLGF a grant up to £25,000 per property will be provided to retail, hospitality and leisure businesses operating from premises, with a rateable value between £15,000 and £51,000. For businesses in these sectors with a rateable value of
- under £15,000, they will receive a grant of £10,000.
- between £15,000 and £51,000, they will receive a grant of £25,000.
Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.
Lancaster City Council are now paying the Retail, hospitality and leisure businesses grant, to apply please follow this link: https://www.lancaster.gov.uk/forms/ShowForm.asp?fm_fid=262
The SBGF is available for other types of businesses that already pay little or no business rates because of small business rate relief (SBBR) or rural rate relief. A one-off grant of £10,000 will be provided to help meet their ongoing business costs. Funding for the scheme will be provided to local authorities by the government in early April. You should contact your local authority for further guidance.
Lancaster City Council has opened applications for businesses to apply for this grant and also receive an advance. See the link to our blog on how you can access this:
South Lakeland District Council:
Wyre Borough Council:
Craven District Council:
Time to Pay
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.
These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. If you have missed a tax payment or you might miss your next payment due to COVID-19, you should call HMRC’s dedicated helpline: 0800 0159 559.
Deferring VAT Payments
For businesses that are VAT registered you will now be able to defer any payments due between 20 March 2020 and 30 June 2020. This is an automatic offer and you do not have to agree this with HMRC. Those that do defer will be given until 31 March 2021 to pay any liabilities that have accumulated during this period. VAT refunds and rebates will be paid by the government as normal.
Although no payments will be due between these dates it is important to note that VAT returns are still to be submitted by the usual statutory deadline.
If you make your VAT payments via Direct Debit and you are unable to pay then you will need to cancel the direct debit with your bank. You should do so in sufficient time to make sure HMRC do not automatically take the payment.
Companies House filing extensions
As of the 25 March 2020 companies will be able to apply to companies house for a 3 month filing extension. This is a joint initiative between the Government and Companies House which hopes to enable businesses to prioritise managing the impact of the coronavirus. If it becomes apparent that accounts will not be filed on time due to your company being affected by Coronavirus (COVID-19), you may make an application to extend the period allowed for filing. Prior to this announcment applications would be reviewed on a case by case basis however now if you cite Covid-19 as your reason for extension this will automatically be approved. If you do not apply for an extension and your accounts have been filed late, an automatic penalty will be imposed. You can apply here:
SUPPORT FOR INDIVIDUALS
Universal Credit for self-employed
If you are self-employed and not claiming tax credits then you may able to claim Universal Credit, provided you meet certain criteria. These include:-
- you’re on a low income or out of work
- you’re 18 or over (there are some exceptions if you’re 16 to 17)
- you’re under State Pension age (or your partner is)
- you and your partner have £16,000 or less in savings between you
- you live in the UK
Under the Universal Credit rules the Minimum Income Floor (MIF) assumes that those who are self-employed work 35 hours per week and earn the minimum wage. However, from 6 April the requirements of the Minimum Income Floor will be relaxed for all claimants for the duration of the outbreak. In addition, the requirement to attend the JobCentre in person is suspended.
The Chancellor has said that he is increasing the Universal Credit standard allowance (and separately the basic element of Working Tax Credit) by £20 per week. This means that for a single Universal Credit claimant (aged 25 or over), the standard allowance will increase from £317.82 to £409.89 per month.
For further details about Universal credit and making a claim see:
Sick pay for self-employed workers
Self-employed workers do not have access to statutory sick pay (SSP), but the government has said that if you are ill, or you have been advised to self-isolate, you will be able to claim New Style Employment and Support Allowance (ESA). You may also still be able to claim Universal Credit.
To be eligible you need to have paid NI contributions in the last 2 to 3 years through an employment or a self-employment.
If you are eligible for new style ESA and have coronavirus or are advised to stay at home then the benefit will now be payable from day one of sickness rather than day eight.
The weekly payment for ESA is typically £73.10 or £57.90 for people under the age of 25.
For further details about new style ESA and making a claim see: https://www.gov.uk/guidance/new-style-employment-and-support-allowance
Statutory Sick Pay (SSP) for employees
Employees who have COVID-19 or are told to self-isolate will be eligible for statutory sick pay from their employer. The employee will not need to provide a GP fit note. Instead they will be able to obtain an “isolation note” by visiting NHS 111 online and completing an online form, rather than visiting a doctor.
Deferring Income Tax Payments
For Income Tax Self Assessment payments, the second payment on account due on 31 July 2020 will be deferred until 31 January 2021 for those that are self employed. This is an automatic offer with no applications required and no interest or late payment fees will be charged during the deferral period. HMRC have confirmed this also applies to those that are not self employed but make income tax POA such as landlords etc.
Mortgage and Rent Holiday
Mortgage borrowers can apply for a three month payment holiday from their lender. Both residential and buy-to-let mortgages are eligible for the holiday. It is important to remember that borrowers still owe the amounts that they don't pay as a result of the payment holiday. Interest will continue to be charged on the amount they owe. It is likely that the lender will then spread your outstanding payments and interest over the remaining term of your mortgage so you will see an increase in your monthly repayments when the 3 month holiday is over. Each lender will be different so the best thing to do if you wish to apply for this is contact your lender.
Tenants can apply for a three-month payment holiday from their landlord. No one can be evicted from their home or have their home repossessed over the next three months.
- HMRC have deferred the deadline for MTD 'digital links' until 1 April 2021, read more on our blog.
- HMRC have now updated their Coronavirus hotline number. The new number to call is 0800 024 1222 which will replace the original 0300 hotline number. This new hotline will be open 8am to 4pm Monday to Friday only.
- As of 1 April 2020 the spending limit for contactless card payments will be increased from £30 to £45 in a bid to reduce the use of paper money during the current pandemic.
- The Bank of England has cut interest rates again in an emergency move as it tries to support the UK economy in the face of the coronavirus pandemic. It is the second cut in interest rates in just over a week, bringing them down to 0.1% from 0.25%. Interest rates are now at their lowest level in history.
- The Bank said it would also increase its holdings of UK government and corporate bonds by £200bn effectively pumping more money into the economy.
Gov - Guidance for employers and businesses on Covid-19:
Gov - Covid-19 what you need to do:
Gov - Covid-19 Support for businesses:
Gov - Covid-19 Guidance for employees:
Rock and Road Training - Site Operating Procedure Covid-19:
Gov - Guidance on Non-essential businesses and premises:
Gov - Guidance for the Charity Sector: