The UK Government is offering a number of grants and schemes to help businesses deal with the challenges resulting from the COVID-19 pandemic.
Under the Coronavirus Job Retention Scheme, employers can claim back up to 80% of wages for staff designated as ‘furloughed’, up to a maximum of £2500 per month per worker.
The employee should be formally notified of this change in writing, which means they will not be permitted to carry out any work for their employer while furloughed.
Statutory sick pay
Under new legislation, qualifying employers are now able to claim back up to two weeks of statutory sick pay (SSP) that they have paid out to workers absent from work due to COVID-19.
Employers with fewer than 250 employees as at 28 February 2020 are able to claim. Employees will not have to provide a fit note for the employer to claim, although they may be asked to provide an isolation note from NHS 111.
VAT & income tax deferral
VAT and income tax payments are being automatically deferred as a result of the pandemic.
VAT payments will be deferred automatically from 20 March to 30 June 2020. Businesses must, however, continue to file their VAT return on time.
For the self-employed, self-assessment income tax payments due on 31 July 2020 will now be due by 31 January 2021.
All self-employed individuals are eligible for the deferral, with no penalties or interest charged for late payment during the deferral period.
Business rates relief
The Government is providing business rates relief due to the coronavirus to businesses in a number of sectors hit by the outbreak.
Businesses in retail, leisure and hospitality in based in England can claim a grant of up to £25,000 in addition to a business rates payments ‘holiday’ for the 2020 – 2021 tax year.
The Retail, Hospitality and Leisure Grant Fund (RHLGF) allows businesses in these sectors with a property that has a rateable value of £15,000 and under to receive a cash grant of £10,000, while properties with a rateable value of between £15,000 and £51,000 will receive a grant of £25,000.
The business rates holiday will apply automatically to the business’ council tax bill in April 2020, while eligibility for the Retail and Hospitality Grant Scheme will be determined by your local authority.
Business support grant funds
Business support grants are being made available to businesses in England. Under the Small Business Grant Fund (SBGF), businesses in England with a property that was eligible for a small business rates relief (SBRR), including those eligible for tapered relief (as of 11 March 2020) or rural rates relief (RRR), are eligible for a grant of £10,000.
Support for small and medium-sized businesses
The Coronavirus Business Interruption Loan Scheme, the Future Fund and the Bounce Back Loan are available for small to medium-sized businesses.
The interruption scheme, for example, offers businesses experiencing lost or deferred revenues access to short-term cash flow support from accredited lenders for up to £5million.
The UK Government is providing a guarantee of 80% on each loan but is not charging businesses or banks for this guarantee.
Under the Bounce Back Loan scheme, smaller businesses can access loans between £2,000 and £50,000, up to 25% of their turnover, backed with a 100% government loan guarantee.
The Government has also provided funding for a £20 million grant scheme for small businesses in England directly affected by the pandemic.
Support for large businesses
Larger businesses can claim financial help through the Business Interruption Loan Scheme and COVID-19 Corporate Financing Facility.
Self-employed income support
Individuals who are self-employed can claim financial support under the Self Employment Income Support Scheme.
Under the scheme, self-employed workers can claim 80% of trading profits up to a maximum of £2,500 a month. The grant will not be repayable but will be subject to income tax and National Insurance.
To calculate how much can be claimed, trading profits will be based on an average of the last three years of self-assessment tax returns. Trading profits can not be more than £50,000 and more than half of the individual’s total income.
To be eligible, individuals must be self-employed or a member of a partnership; have submitted a Self Assessment tax return for the tax year 2018 to 2019; have traded in the tax year 2019 to 2020; be trading when they apply, or would have been trading if not for coronavirus; intend to continue to trade in the tax year 2020 to 2021; have lost trading profits due to coronavirus; and be able to prove to HMRC that the business has been adversely affected by coronavirus.
The matters contained in this article are intended to be for general information purposes only. This article does not constitute tax, financial or legal advice, nor is it a complete or authoritative statement of the rules and should not be treated as such.
Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission.
Before acting on any of the information contained herein, expert tax, financial, legal or other advice should be sought.