Jack Sales of TN Accountancy takes a look at the measures announced so far.
Support for Businesses
The government has put together a package of measures to support public services, people and businesses through this period of disruption caused by COVID-19.
This includes a package of measures to support businesses including:
- a Coronavirus Job Retention Scheme
- deferring VAT and Income Tax payments
- a Self-employment Income Support Scheme
- a Statutory Sick Pay relief package for small and medium sized businesses (SMEs)
- a 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England
- 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 £15,000 and £51,000
- the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
- a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
- the HMRC Time To Pay Scheme
Information on the above, including eligibility criteria and how to access the various schemes can be found on the Government website here which is continuously updated as things develop, so is the best source of information for businesses.
Self-employed and business owners
The Self-employment Income Support Scheme was announced yesterday which will support self-employed individuals (including members of partnerships) who have lost income due to coronavirus (COVID-19).
This scheme will allow individuals to claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed.
Individuals cannot apply for this scheme yet – it is not expected to be available until June.
HMRC will contact individuals if they are eligible for the scheme and will invite them 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.
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
Further information regarding the Self-employment Income Support Scheme can be found here.
Directors of Limited Companies
Individuals who pay themselves a salary and dividends through their own company are not covered by the scheme, but should be covered for their salary using the Job Retention Scheme.
Support for businesses through deferring VAT and Income Tax payments
One area that will affect the vast majority of our clients is the announcements that VAT and income tax payments will be deferred.
VAT payments have been deferred for 3 months (the deferral will apply from 20 March 2020 until 30 June 2020). Businesses will not need to make a VAT payment during this period and 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.
For the self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021. No penalties or interest for late payment will be charged in the deferral period.
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.
Keeping up to date
The UK Government website (see link to the support for businesses page here) is continuously updated as things develop, so is the best source of information for businesses on an ongoing basis
Please note that the above is for general information only and does not constitute financial or tax advice. You should not rely on this information to make or refrain from making any decisions. You should always obtain independent professional advice in respect of your own situation.