Coronavirus Job Retention Scheme
What is it?
Government grants will cover 80% of the salary of retained workers, up to a total of £2,500 a month. The scheme, open to any employer in the country, will cover the cost of wages backdated to March 1st and will be open before the end of April for at least 3 months. The employer can choose to fund the differences between the grant and an employee’s salary but does not have to.
Eligibility: You must have:
- created and started a PAYE payroll scheme on or before 28 February 2020. The employee(s) must be on your PAYE payroll before or on before 28 February 2020
- enrolled for PAYE online – this can take up to 10 days
- a UK bank account
Government guidance on employees you can claim for can be found here
What do I need to do to access it?
You will need to:
- Designate affected employees as furloughed workers (when staff members are required to take an unpaid leave of absence) and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation. Workers should not undertake work while they are ‘furloughed’.
- Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required).
To claim, you will need:
- your ePAYE reference number
- the number of employees being furloughed
- the claim period (start and end date)
- amount claimed (per the minimum length of furloughing of 3 weeks)
- your bank account number and sort code
- your contact name
- your phone number
HMRC are currently working to set up a system for reimbursement.
Who do I need to speak to?
HMRC.
This scheme is currently expected to open by the end of April.
Find more information in our Coronavirus Job Retention Scheme FAQs developed with our colleagues at Quest.
Business rates holiday for retail, hospitality and leisure businesses
What is it?
The UK government is temporarily increasing the Business Rates discount to all businesses in the retail, hospitality and leisure sectors in England to 100% for 2020-21, irrespective of rateable value. Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.
There may be some variations among the devolved nations.In Northern Ireland there will be a three-month rates holiday for all business ratepayers, excluding public sector and utilities. The effect of this is that no rates will be charged for Q2 2020 and will be shown as a 25% discount on the annual rate bill. Business rate bills will also not be issued until June 2020. In Wales, retail, leisure and hospitality businesses with a rateable value of £51,000 or less will receive a 100% business rates discount.
Eligibility: You are eligible for the business rates holiday if your business is in the retail, hospitality and/or leisure sector. Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly 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. For more information on eligibility please refer to the Expanded Retail Discount 2020/21: Coronavirus Response – Local Authority Guidance.
What do I need to do to access it?
There is no action for you. This will apply to your next bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge.
Who do I need to speak to?
Speak to your local authority. Find your local authority.
Coronavirus Business Interruption Loan Scheme (CBILS)
What is it?
This scheme delivered by the British Business Bank, will enable small and medium sized businesses to apply for a loan, up to £5m, with the government providing a guarantee of 80% on each loan and with no interest due for the first twelve months. CBILS supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance facilities. The scheme will be delivered through commercial lenders, backed by the British Business Bank. CBILS is now open for applications.
NEW: Updated scheme features: 2 April 2020:
- Access to CBILS has been increased: those smaller businesses who would have previously met the requirements for a commercial facility but would not have been originally eligible for CBILS can now apply.
- No personal guarantees for facilities under £250k: Personal guarantees of any form cannot be taken under the scheme for any facilities below £250k.
- Personal guarantees for facilities above £250k: Personal guarantees may still be required, at a lender’s discretion, but recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied.
These changes should be retrospectively applied by lenders for any CBILS facilities offered since its launch on 23 March 2020.
Eligibility: A link to British Business Bank’s eligibility checklist can be found here. The borrower remains fully liable for the debt.
What do I need to do to access it?
A guide how to apply can be found here.
An FAQ on CBILS can be found here.
Who do I need to speak to?
You should speak to your business banking provider or one of the accredited lenders. With high demand for CBILS facilities, finance providers recommend that you approach a lender via their website. Phone lines are likely to be busy and branches may not be able to handle enquiries in person.
Covid-19 Corporate Financing Facility (CCFF)
What is it?
The Bank of England will provide funding – aimed at large businesses – by purchasing commercial paper of up to one-year maturity. The facility will offer financing on terms comparable to those prevailing in markets in the period before the impact of Covid-19. The facility will look through temporary impacts on firms’ balance sheets and cash flows by basing eligibility on firms’ credit ratings prior to the Covid-19 shock. The scheme will operate for at least 12 months.
Eligibility: The scheme is open to firms that can demonstrate that they were in sound financial health prior to the impact of Coronavirus. Companies who wish to use the scheme do not need to have issued commercial paper before. Here is further information for firms looking to participate in the scheme.
If your firm does not have an existing credit rating from the major credit ratings agencies, the Bank of England recommend that you speak to your bank in the first instance.
If that bank’s advice is that the firm was viewed internally as equivalent to investment grade as at 1 March 2020, then contacting the Bank of England at: [email protected] to discuss your potential eligibility. The central bank will then make an assessment of whether you can be deemed as equivalent to having a public investment grade rating.
When can I access the scheme?
The scheme is open for applications.
Who do I need to speak to?
Speak to your bank. It is important to note that not all banks issue commercial paper. If your bank does not issue commercial paper, UK Finance has provided a list of those banks that are able to assist.
Deferral of VAT for 3 months
What is it?
VAT payments will be deferred for 3 months (until 30 June 2020). Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. It does not cover VAT MOSS payments.
For the self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021. Self-employed will also get full Universal Credit at a rate equivalent to statutory sick pay.
Eligibility: All UK businesses are eligible.
What do I need to do to access it?
This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period.
VAT returns should be filed as usual. In order to ensure payments are not taken automatically, direct debits should be cancelled. VAT refunds and reclaims will be paid by the government as normal.
Who do I need to speak to?
This is an automatic offer with no applications required.
Grants to small businesses in England eligible for Small Business Rate Relief
What is it?
The government will provide additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR). This will provide a one-off grant of £10,000 (increased from the £3,000 announced at budget) to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs.
Eligibility: You are eligible if your business is eligible for SBRR (rateable value of less that £15,000) or rural rate relief.
What do I need to do to access it?
You will be contacted by your local authority and do not need to apply.
Who do I need to speak to?
You will be contacted by your local authority and do not need to apply. Click here to see the individual approaches by each local authority.
Grants for retail, hospitality and leisure small businesses
What is it?
A £25,000 grant will be provided to retail, hospitality and leisure businesses operating from smaller premise.
Eligibility: Retail, hospitality and leisure businesses operating from smaller premises, with a rateable value over £15,000 and below £51,000 are eligible. There may be some variations among the devolved nations. In Scotland, hospitality, leisure and retail properties with a rateable value between £18,000 and £51,000 are eligible. In Wales, hospitality, leisure and retail properties with a rateable value between £12,001 and £51,000 are eligible.
What do I need to do to access it?
Any enquiries on eligibility for, or provision of, the grants in England should be directed to the relevant local authority (likely to be the billing authority for rates).
Who do I need to speak to?
Speak to your local authority. Find your local authority.
Self-employment Income Support Scheme
What is it?
The Self-employment Income Support Scheme (SEISS) will support self-employed individuals (including members of partnerships) whose income has been negatively impacted by COVID-19. The scheme will provide a grant to self-employed individuals or partnerships, worth 80% of their profits up to a cap of £2,500 per month. HMRC will use the average profits from tax returns in 2016-17, 2017-18 and 2018-19 to calculate the size of the grant. The scheme will be open to those where the majority of their income comes from self-employment and who have profits of less than £50,000. The scheme will be open for an initial three months with people able to make their first claim by the beginning of June.
Eligibility: To be eligible for the scheme you must meet all the criteria below:
- Be self-employed or a member of partnership;
- Have lost trading/partnership trading profits due to COVID-19;
- File a tax return for 2018-19 as self-employed or a member of a trading partnership. Those who have not yet filed for 2018-19 will have an additional 4 weeks from this announcement to do so;
- Have traded in 2019-20; be currently trading at the point of application (or would be except for COVID 19) and intend to continue to trade in the tax year 2020 to 2021
- Have trading profits of less than £50,000 and more than half of your total income come from self-employment. This can be with reference to at least one of the following conditions:
- Your trading profits and total income in 2018/19
- Your average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19.
What happens to individuals whose 2018/19 profits are very different to what they would have expected to make this year?
The government will only act on the most recently available data. This is from the 2018/19 tax year. To try to provide the most accurate possible estimate of self-employed income, we can look at average profits over 16/17, 17/18 and 18/19.
Is this grant subject to tax?
Yes – individuals will pay Income Tax and National Insurance on any payments received through this scheme as they are replacement for income in line with normal practice for benefits or grants that replace income. The grant is recognised as income for the purposes of Universal Credit and Tax Credits and may impact the amount claimants are entitled to.
What should self-employed people do while they wait to be paid?
In the interim, self-employed individuals may be eligible for universal credit. The government has provided over £6.5bn of additional support through the welfare system for those affected by Covid-19.
Why does this scheme not cover small businesses who are incorporated?
Self-employed individuals who are owner-managers and pay themselves a salary through PAYE will be eligible for support through the Coronavirus Job Retention Scheme. SMEs can also access support through the temporary Coronavirus Business Interruption Loan Scheme. This supports SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years.
This new Self-Employment Income Support Scheme is open to anyone who reports trading profits through Income Tax Self-Assessment. Self-employed individuals who work through a company do not report their trading profits in this way.
How do I access it?
Individuals should not contact HMRC now. HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational. HMRC will then pay the grant directly to eligible claimants’ bank account. For eligible individuals who have not submitted their returns for 2018-19, they will have 4 weeks’ notice from today to file their returns and therefore become eligible for this scheme.
When can I access it?
Grants are expected to start to be paid by the beginning of June 2020.
Statutory Sick Pay
What is it?
Small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. SSP is payable from day one of sickness absence.
Eligibility: The eligibility criteria for the scheme will be as follows:
- this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
- 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. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website
- 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
If you are not eligible for SSP - for example if you are self-employed you have COVID-19 or are advised to stay at home, you can now make a claim for Universal Credit or a new style Employment and Support Allowance. From 6 April 2020, the requirements of the Minimum Income Floor will be temporarily relaxed and will last for the duration of the outbreak. New claimants will not need to attend the jobcentre to demonstrate gainful self-employment.
What do I need to do to access it?
A rebate scheme is being developed. Further details will be provided in due course once the legalisation has passed.
Who do I need to speak to?
TBC, but likely to be the Department for Work and Pensions.
Time to Pay
What is it?
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.
Eligibility: You are eligible if your business pays tax to the UK government and has outstanding tax liabilities.
What do I need to do to access it?
If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559. If you’re worried about a future payment, HMRC advice to call them nearer the time.
Who do I need to speak to?
Call HMRC’s new helpline: 0800 024 1222. Open from 8am to 4pm Monday to Friday.
