Table of Contents
COVID-19: Support for Businesses
The government announced various measures aimed at supporting businesses during these testing and uncertain times:
- For up to date information on support for businesses click this link from gov.uk
- For up to date information from the ICAEW click here
Given the constant changing landscape of COVID-19 and the support packages available we recommend you review the latest information published by the government linked above for up to date information.
Key highlights from current packages announced identified as useful for Treetops clients:
- A Coronavirus Job Retention Scheme:
- On the 26 March 2020 the government released details on the Coronavirus Job Retention Scheme in its original form, details of which can be found here.
- On the 29 May 2020 the government released details on changes to the Coronavirus Job Retention Scheme allowing Flexi-Furlough and a change in grant amounts, details of which can be found here.
- On 31 October 2020 as a result of Lockdown 2 the government released details about the extension of the Coronavirus Job Retention scheme, details of which can be found here.
- A Self-employment Income Support Scheme
- Job Support Scheme
- Coronavirus Bounce back Loan
- Job Retention bonus
- The Coronavirus Business Interruption Loan Scheme
- Coronavirus Future Fund
- Business rates relief
- Kickstart Scheme grant: 29 or less job placements
- Statutory Sick Pay Rebate Scheme
- VAT payment deferrals
- Self-assessment payment deferrals
- The HMRC Time To Pay Scheme
If you would like to discuss anything included within the advice then please get in touch.
Previous packages available now archived on Government website:
- 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 £15,001 and £51,000
- Deferring VAT and Income Tax payments (original scheme)
1. Small business grant funding of £10,000
In order to support small businesses through the coronavirus pandemic, the government has increased its one-off cash grant to £10,000, this is part of the £330b package of support for businesses.
Which businesses are eligible?
Eligibility for the grant is based around rate relief.
Criteria:
- You are a small business that already qualifies for Small Business Rate Relief (SBBR) or Rural Rate Relief, and
- Occupies a property, and
- Is based in England
The coronavirus grant only applies to small business in England. Business rates in Scotland, Wales and Northern Ireland are set by their devolved administrations.
This means that many small businesses will be excluded – basically you need to have a business premises in England, but the tradable value of those premises needs to be below £15,000.
Approximately 700,000 small businesses are expected to be eligible.
Can’t remember if you get one of these types of rate relief? Check your latest rates bill – the relief is shown on there.
When is it available?
The Department for Business, Energy & Industrial Strategy will be working with local authorities to outline the scheme and encourage local authorities to prepare.
However, once up-and-running, your local authority will contact you rather than having to apply yourself. Grant money will not be available until early April, as stated on the government website.
Guidance was issued to the local authorities on 24 March 2020 and can be found here, they will write to business shortly with details of how to claim the grant.
You can find your local authority here, we recommend you regularly check their website for updates.
2. Grant funding of £25,000 for retail, hospitality and leisure businesses
The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.
Businesses in these sectors with a property that has a rateable value of £15,000 and under will receive a grant of £10,000.
Businesses in these sectors with a property that has a rateable value of between £15,000 and £51,000 will receive a grant of £25,000.
Which business are eligible?
You are eligible for the grant if:
- your business is based in England, and
- 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 and boarding premises and self-catering accommodation
Not sure if your business comes under one of these categories? There’s a full list of how the Government define them in this guidance document, pages 5 to 8.
How do businesses access the scheme?
You do not need to do anything. Your local authority will write to you if you are eligible for this grant. Guidance for local authorities on the scheme was issued on 24 March 2020 and can be found here. Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.
You can find your local authority here, we recommend you regularly check their website for updates.
Can you get both the small business grant and the retail, hospitality and leisure businesses grant?
If your business is eligible for the Small Business Grant Scheme and the Retail and Hospitality Grant Scheme, it seems you’ll get both grants. However, this isn’t confirmed yet by the Government.
Your local council are currently organising how to distribute the money and they’ll contact all eligible businesses.
Given that the COVID-19 situation is continually evolving and updates are daily, we recommend that you check the links shown below the table of contents for the most up to date and accurate information.
3. Deferring VAT and Income Tax payments
To support businesses during the pandemic HMRC announced that they would be deferring VAT payments and income tax payments to help with cashflow.
VAT Deferral
If you’re a UK VAT registered business and have a VAT payment due between 20 March 2020 and 30 June 2020, you have the option to:
- defer the payment until a later date; or
- pay the VAT due as normal
It is important to note that this does not cover VAT MOSS payments.
What VAT payments can I actually defer?
You can only defer:
- quarterly and monthly VAT returns’ payments for the periods ending in February, March and April
- payments on account due between 20 March 2020 and 30 June 2020
- annual accounting advance payments due between 20 March 2020 and 30 June 2020
How long do businesses have to pay the VAT payments they have deferred?
If you choose to defer your VAT payment as a result of coronavirus (COVID-19), you must pay the VAT due on or before 31 March 2021.
Do I need to tell HMRC that I am deferring VAT payments?
No, there is no need to tell HMRC that you are deferring payments.
If you normally pay by Direct Debit you should contact your bank to cancel your Direct Debit as soon as you can, or you can cancel online if you’re registered for online banking.
Will businesses deferring VAT be charged interest or penalties?
HMRC will not charge interest or penalties on any amount deferred as a result of the Chancellor’s announcement.
How does deferring VAT payments affect payments on account?
If you defer a payment on account between 20 March 2020 and 30 June 2020 but the balancing payment is outside of these dates, the amount you must pay is the balancing payment less any deferred payments.
Deferring payments will not create a repayment.
What happens after the VAT deferral period?
VAT payments due following the end of the deferral period will have to be paid as normal.
Do UK VAT registered business still need to submit VAT returns on time?
Yes, you still need to submit your VAT returns as usual and on time to avoid late filing penalties.
My business is due a refund, will HMRC still pay this?
Yes, HMRC will continue to process VAT reclaims and refunds as normal and most repayments are paid within 5 working days.
Repayments will not be offset against any deferred VAT, but they will be offset against existing debts.
You can apply online to move to monthly returns to improve your cashflow if you’re in a repayment position.
Income tax payments
If you’re due to pay a self-assessment payment on account by 31 July 2020 but the impact of the coronavirus causes you difficulty in making payment by that date, then you may defer payment until January 2021.
Who is eligible for income tax payment deferrals?
You are eligible if you are due to pay your second self-assessment payment on account on 31 July. You do not need to be self-employed to be eligible for the deferment.
The deferment is optional. If you are still able to pay your second payment on account on 31 July you should do so.
Do I need to tell HMRC that I am deferring payment of my income tax?
No, this is an automatic offer with no requirement to notify HMRC.
Will I be charged interest or penalties for deferring payment?
No penalties or interest for late payment will be charged if you defer payment until 31 January 2021.
News on IR35
The changes to IR35 and the implementation of off-payroll working rules has been delayed for one year, this was announced on 17th March 2020 in the house of commons. If this impacts upon your business you may need to check with the decision-maker at your clients to see what action, if any, they are taking following this announcement.
If you would like to discuss your IR35 position then please get in touch.
