Covid 19 Support for Clients
Amid the ongoing Coronavirus crisis, the government unveiled a series of measures to help businesses cope with almost inevitable disruption to business and trade.
At Crowther we are working hard to support both clients and the wider business community to manage and mitigate the effects of the current crisis.
In this connection we have summarised the main points of the Chancellor’s package:
As the situation unfolds and the government informs the nation of any changes, we will update this blog as often as possible in our ‘LIVE BLOG’ section below:
Further to the announcement made by the Government on Thursday 26th March 2020 please see the following which outlines the additional assistance for self-employed workers:
Claim a grant through the coronavirus (COVID-19) Self-employment Income Support Scheme
Use this scheme if you’re self-employed or a member of a partnership and have lost income due to coronavirus.
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.
Who can apply?
You can apply if you’re a self-employed individual or a member of a partnership and you:
- have submitted your Income Tax Self-Assessment tax return for the tax year 2018-19
- traded in the tax year 2019-20
- are trading when you apply, or would be except for COVID-19
- intend to continue to trade in the tax year 2020-21
- have lost trading/partnership trading profits due to COVID-19
Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment. This is determined by at least one of the following conditions being true:
- having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
- having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period
If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.
If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020.
HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way.
How much you’ll get
You’ll get a taxable grant which will be 80% of the average profits from the tax years (where applicable):
- 2016 to 2017
- 2017 to 2018
- 2018 to 2019
To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.
It will be up to a maximum of £2,500 per month for 3 months.
The grant will be paid directly into your bank account, in one instalment.
How to apply
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.
You will access this scheme only through GOV.UK. If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.
After you’ve applied
Once HMRC has received your claim and you are eligible for the grant, they will contact you to tell you how much you will get and the payment details.
If you claim tax credits you’ll need to include the grant in your claim as income.
The payments from this grant are not expected to be avilable until June 2020.
Other help you can get
The government is also providing the following additional help for the self-employed:
- Deferral of Self Assessment income tax payments due in July 2020 and VAT payments due from 20 March 2020 until 30 June 2020
- Grants for businesses that pay little or no business rates
- Increased amounts of Universal Credit
- Business Interruption Loan Scheme
If you’re a director of your own company and paid through PAYE you may be able to get support using the Job Retention Scheme.
We must re-iterate that this grant is only available to those already registered as self-employed or a partnership with HMRC and is not available to those required to complete a self-assessment tax return for any other reason.
If you are potentially eligible for this grant then you MUST NOT have ceased and must have the intention to continue trading as soon as the restrictions due to Coronavirus have been lifted.
At Crowther we are always here to help clients and will continue to do so during these difficult times but HMRC will be writing to all eligible individuals directly so we will not be able to make any applications on anyone’s behalf.
The Government, on Friday, announced further measures to support businesses and individuals with the ongoing Conronavirus crisis and we have updated these announcements below to support you.
Clearly there is a lot of detail that needs to be worked on with regards to the various packages of support but there are a number of dedicated help lines available:-
Coronavirus Job Retention Scheme & Furlough Leave
On Friday 20th March, Rishi Sunak announced initial details of the support measures which the government was intending to introduce to help assist businesses and employees through the Coronavirus crisis.
The details which have been announced to date are sparse and incomplete however this article sets out the headline points and explains what we currently know about the Job Retention Scheme which will allow employers to claim up to 80% of wages for their employees who have been laid off. We do not have full details of the government’s proposal, but will we keep updating you as soon as additional details are confirmed and legislation put in place.
Coronavirus Job Retention Scheme- What is it?
As we understand it at the moment, this scheme will allow all UK employers to access financial support to continue paying part of an employee’s salary where those employees have been subject to lay off. The government have not yet confirmed what it means by “lay off” and whether or not this will include “redundancies”. All businesses are eligible to access the scheme including limited companies, sole traders, LLPs and charities.
How will it work?
At the moment, all we know is that employers will have to “designate affected employees” as Furloughed Workers (a brand new category of worker) and “notify their employees of this change”. The government has stated that changing the employment status of employees is subject to existing employment and depending on the wording of an employee’s contract, subject to negotiation and variation.
Further details will be announced by the government in due course, but as it stands it seems like an employer cannot simply say that an employee is a Furloughed Worker: they will need to consult with affected employees and get their consent to this variation. Although employers will have to consult with employees in this regard it seems entirely likely that employees will agree to this variation as the alternatives will probably either be: redundancy (with no pay, as the employer may have insufficient funds) or, being laid off as a “normal worker” as opposed to a Furloughed Worker without access to the Job Retention Scheme.
Once employees have been designated as Furloughed Workers, the next thing an employer needs to do is submit to HMRC information about those employees who have been Furloughed through new online portal. (The Portal is NOT live yet and it likely to be some time before it is, however we will keep you updated). Upon receipt of this information, “HMRC will reimburse 80% of Furloughed workers’ wage costs. There will be a cap of £2500 per month although it is not yet clear whether this is the maximum wage or the maximum payment. We are also not clear whether employees who earn more than this amount normally will be treated in the same way.
The Employees Guidance about the Job Retention Scheme says that, in order to qualify the scheme, they should NOT undertake any work for their employer whilst on Furlough Leave.
The Employees Guidance also refers to an employer being able to choose to top up their wages to 100% but the Employers Guidance is silent on it. The significance of this appears to be that if the employer chooses to withhold 20% of wages it will need the employees’ agreement to such before designating them as a Furloughed Worker.
Where a claim is made under the Job Retention Scheme it has been said that payments will be backdated to 1 March 2020, it is however unclear whether an employee can be retrospectively treated as a Furloughed Worker given the need for the employees to have agreed to this before being laid off.
There are an awful lot of questions surrounding the Job Retention Scheme which we may get answers to shortly but one thing you might have to start thinking about is how to manage those employees who are still working, when others who have been laid off (perhaps due to reduced competency levels…) are not working at all but still receiving 80% of their wage. It is possible there will be “consequences” or taking Furloughed Leave announced in due course but we don’t know yet.
Employers reclaiming Statutory Sick Pay (SSP)
In our email last week we informed you that employees suffering from, or having symptoms of Coronavirus can claim 14 days’ SSP from day one. This also includes employees having to self-isolate due to household members suffering from or showing symptoms of Coronavirus.
Employers are entitled to reclaim the SSP paid to these employees but at present the facility isn’t yet available. We are awaiting new regulations to include this and from this date the SSP repayments can be made. We wanted to warn you, however, that this is not something that we are expecting imminently and it is likely to be a number of months before SSP repayments are made.
If we look after your company’s payroll and the payroll software allows this then we will look after this and keep you informed.
As soon as we have a further update on this then will we be informing ALL clients.
Other announcements made in Friday’s statement include:
-Coronavirus Business Interruption Loan Scheme- increase in interest free period from six to twelve months. Loans to be available with effect from today, Monday 23rd March 2020.
-Further cashflow support through the tax system: deferral of VAT payments until 30th June 2020. A further email will be issued today in relation to this.
-Abolition of business rates for 12 months for those in hospitality, retail and leisure. UPDATE: This has now been extended to included nurseries.
-Increase in the Universal Credit standard allowance, for the next 12 months, by £1,000 a year.
-Increase in the Working Tax Credit basic element by £1,000 a year
-Suspension of the minimum income floor for self-employed workers affected by the economic impacts of coronavirus meaning every self-employed person can now access, in full, Universal Credit at a rate equivalent to Statutory Sick Pay for employees.
-Deferral of self-assessment payments due on 31st July 2020 for the self-employed until January 2021.
-£1bn of support for renters. It has also been announced that mortgage lenders are unable to reposess properties and landlords are unable to evict tenants over the next 3 months. It was also announced that the 3 month mortgage payment holiday has been exteded to landlords with the intention that they can work with the tenants who may be unable to meet rent payments due to the current situation.
To keep yourself up-to-date with all the Governement bulletins please sign up by following this page:-https://www.gov.uk/help/update-email-notifications
NOTE – this site is for guidance only and you should not under any circumstances respond with any business or personal information as it could be open to fraudulent activity.
Clearly there is a lot of detail that needs to be worked on with regards to the various packages of support but there are a number of dedicated help lines available:-
HMRC helpline for the self-employed: 0800 019 5559
HMRC helpline for payment assistance : 0800 015 9559
We would very much encourage you to visit the various websites and helplines available and we have detailed these for you in this update.
In the Budget 2020, the Chancellor announced that a ‘Coronavirus Business Interruption Loan Scheme’ (CBILS) will temporarily replace the Enterprise Finance Guarantee (EFG), becoming available very shortly.
It will operate in a similar way to EFG and be provided by the British Business Bank, but will offer more attractive terms for both businesses and lenders, with the aim of supporting the continued provision of finance to UK businesses during the Covid-19 outbreak.
It was announced last night that the loans will be ready from next week to apply for and that the Government have released substantial additional funds. The loan will be up to £5M, interest free for 6 months.
More information will be available in the coming days, please click on the link below for updated advice:-https://www.british-business-bank.co.uk/ourpartners/supporting-business-loans-enterprise-finance-guarantee/
Business rates and Grants
In the budget the Government announced a £3K grant to businesses eligible to 100% business rates relief. This has been increased to £10K (£25K if in eligible industries such as retail, hospitality and leisure with a rateable value is £15k but less than £51k). The UK’s smallest 700,000 – across all sectors of the economy – will also be eligible for cash grants of £10,000. This will be claimed direct from local authorities and they will write to you in due course. However if you need immediate assistance please contact your Local Authority.
HMRC and Time to Pay
HMRC have launched a helpline to help businesses concerned about paying their tax due to coronavirus (COVID-19). Again, this appears to be a “work in progress”. You will find more details below, but if you have any concerns about making payments to the tax authorities please call their helpline on 0800 0159 559.
Official guidance for employers
For HMRC’s guidance for employers, please follow the link below:-https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/guidance-for-employers-and-businesses-on-covid-19
Statutory Sick Pay SSP Support
To support businesses experiencing increases in costs or financial disruptions the government will bring forward legislation to allow small and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19.
The eligibility criteria for the scheme will be as follows: –
- This refund will cover up to two weeks’ SSP per eligible employee who has been off work because of COVID-19.
- This also includes employees who need to self-isolate due to members of the household contracting or having symptoms of Coronavirus.
- 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 29 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, but employees will not need to provide a GP fit note.
- The eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to self-isolators comes into force.
- The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.
- Existing systems are not designed to facilitate employer refunds for SSP. We will continue to monitor this and advise once further information is available.
Review your overheads
- If you are predicting cashflow difficulties it is sensible to review your overheads in the business and pause any spending you feel may not be necessary at this time.
- The first thing to do is categorise expenditure (both personal and business) into “essential” and “nice to have”. Once you have those numbers you can better appraise your situation and we can support you further with short term cash flow forecasts.
- Our HR support is through Crowther People Solutions. If you need any support relating to HR, please call our office and speak with the team. Jill Jones heads up H R and she is here to help and support you and your business. You can discuss your issues/concerns.
Your own bank
- Contact your own bank, either your dedicated manager if you have one or your business call centre to discuss your options should you need a new or increased overdraft limit, asset finance, credit cards or other forms of temporary finance. Do not delay contacting the bank-we have had meetings with them and they are gearing up to support you.
Other potential funding sources
- Please note these are only a few of the options available to you and these do not form a recommendation by Crowther Chartered Accountants:-
- Capital On Tap – https://www.capitalontap.com/en/
- Funding Circle – https://www.fundingcircle.com/uk/
- Iwoca – https://www.iwoca.co.uk/
- NatWest Rapid Cash – https://rapidcash.natwest.com/
At Crowther we are more than happy to discuss your individual circumstances and advise on the best way forward.
We appreciate these are unprecedented and challenging times to be in business and we all face a period of uncertainty. No one can predict the future but we believe we can all pull together as businesses and support each other.
The Crowther team are here to help and support you.
If you need a sounding board, some advice or a steer in the right direction, then please don’t hesitate to get in touch.
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