COVID-19 is bringing us lots of changes including great financial uncertainty. Do you have a mortgage? You may be able to take a payment holiday where you can have up to 3 months off. Contact your lender to see if they can help. This is normally easier to do online.
If you are a renter, talk to your landlord and see if you can agree a similar arrangement and likewise with any other bills that you are going to struggle to pay.
COVID-19 Coronavirus Job Retention Scheme and Furloughed Workers
If you cannot cover staff costs due to COVID-19, you may be able to access support to continue paying part of their wages, to avoid redundancies.
If you intend to access the Coronavirus Job Retention Scheme, your employees could become classified as furloughed worker. This would mean that they are kept on your payroll, rather than being laid off.
To qualify for this scheme, the employees should not undertake work for you while they are furloughed. This will allow you to claim a grant of up to 80% of their wages for all employment costs, up to a cap of £2,500 per month.
The employee will remain employed while furloughed and you could choose to fund the difference between this payment and their salary.
If your employees’ salary is reduced as a result of these changes, they may be eligible for support through the welfare system, including Universal Credit.
The Coronavirus Job Retention Scheme will run for at least 3 months from 1 March 2020, but will extend if necessary.
COVID-19 Corona Business Interruption Loan Scheme (CBIS)
To be eligible for support the small business must:
- Be UK based, with turnover of no more than £45 million per annum
- Operate within an eligible industrial sector (a small number of industrial sectors are not eligible for support or subject to limitations)
- Be able to confirm that they have not received de minimis State aid beyond €200,000 equivalent over the current and previous two fiscal years
- Be unable to meet a lender’s normal lending requirements for a fully commercial loan or other facility, but would be considered viable in the longer-term
NB Full eligibility criteria will be published when the scheme goes live w/c 23 March 2020
Finance terms are from three months up to ten years for term loans and asset finance and up to three years for revolving facilities and invoice finance.
To apply for an CBILS-backed facility, businesses may wish to consider approaching one or more participating lenders to discuss their borrowing needs.
Advice can be found at the British Business Bank (www-british-business-bank.co.uk)
To ease the financial burden for businesses VAT deferral will apply from 20 March 2020 until 30 June 2020. All UK businesses are eligible.
This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period although they will be required to submit their normal return online. 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. VAT refunds and reclaims will be paid by the government as normal.
COVID-19 Income Tax
For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021. If you are self-employed you are eligible.
This is an automatic offer with no applications required.
There will be no penalties or interest for late payment in the deferral period.
With regard to other tax liabilities HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.
COVID-19 Support for self-employed through the Self-employment Income Support Scheme
The Self-employment Income Support Scheme (SEISS) will support self-employed individuals (including members of partnerships) who have lost income due to coronavirus (COVID-19).
This scheme will allow you 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. This may be extended if needed.
You cannot apply for this scheme yet.
HMRC will contact you if you are eligible for the scheme and invite you to apply online.
Individuals do not need to contact HMRC now and doing so will only delay the urgent work being undertaken to introduce the scheme.