Financial Advice

Kelly Antsee at Taxswag is one of the reasons I’m still doing this, one of the reasons I haven’t jacked it all in for the ‘ease’ of a normal job, or fallen into the catastrophic whirlpool of one of the many hairbrained ideas I’ve blurted out to her over the phone. In short, I trust her entirely – and am very pleased to share, with permission, some of the excellent advice she’s given to her clients about COVID-19.


As you are aware the Government announced further help with Covid-19.

As previously confirmed by email last week, loans are available from the British Business Bank (Coronavirus Interruption Loan Scheme CBILS). This will be launched and accessible over the coming weeks to support business for cashflow and lending purposes.

The Loans will be backed by the Government (80% guarantee) so that lenders are able to finance the UK’s backbone! Interest will be paid by the Governement for the first 6 months.

Criteria:

  • Be based in the UK based, with annual turnover not exceeding £41 million
  • Operate within an eligible industrial sector
  • Have a sound borrowing proposal, but insufficient security to meet a lender’s normal requirements
  • 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

Mortgages get a three month holiday

Grants

If you usually pay business rates, then a grant of £10,000 will be available. This will include properties with a rateable value of £15000. Check your rateable value here:

If you are entitled to this your local authority will let you know.

Retail, hospitality and leisure sectors with a rateable value of less than £51,000 will be eligible for a cash grant of up to £25,000. Further details are expected within a few days.

Support for businesses through the Coronavirus Job Retention Scheme

Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.

Eligibility

All UK businesses are eligible.

How to access the scheme

You will need to:

  • designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.

Employees and Sickpay – we will need to know the following this month

  • Does anyone need paying sick pay?
  • If so is this at full pay or at SSP rate? This will depend on the employees contract and/or usual practice
  • Have an employees been furloughed? This means, the business has been closed and/or no work is available e.g. anyone who works in a restaurant would be classed as furloughed as the job is no longer available until the business can re-open. Please give me the date they were laid off.

I should imagine that there will be legislation put in place to prevent people from increasing their payrolled salary (Directors are unable to inflate their wages during March.

If you have less than 250 employees:

You can reclaim the refund will be cover up to two weeks per eligible employee who has been off work because of COVID-19

The size of an employer will be determined by the number of people they employed as of 28 February 2020

It has been suggested that this will be running by the end of April.

Temporarily, the employers (company) can pay the SSP to the director/ directors from the day they have to go to self-isolate themselves.

Universal Credit – https://www.gov.uk/universal-credit

For the duration of the outbreak, the requirements of the Universal Credit Minimum Income Floor will be temporarily relaxed for those who have COVID-19 or are self-isolating according to government advice, ensuring self-employed claimants will receive support.

People will be able to claim Universal Credit and access advance payments upfront without the current requirement to attend a jobcentre if they are advised toself-isolate. • Contributory Employment and Support Allowance will be payable, at a rate of £73.10 a week if you are over 25, for eligible people affected by COVID-19 or self-isolating in line with advice from Day 1 of sickness, rather than Day 8.

Paying Taxes: 08000159559

HMRC will have time to pay arrangement for outstanding tax liabilities.

If you are concerned about paying your taxes please call them.

This can include agreeing an instalment arrangement, suspending debt collection proceedings, cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately

The helpline is open from Monday to Friday 8am to 8pm, and Saturday 8am to 4pm (excluding bank holidays).

Extra tax allowances:

Employment Allowance has increased from £3,000 to £4,000 to protect small businesses from the rise in the minimum wage.

Changes had already been announced that the Allowance is only available where from 6 April the Class 1 National Insurance bill of the business or charity was below £100,000 in the previous tax year.

You cannot claim the Employment Allowance from April 2020 if: you’re the director and the only employee paid above the secondary threshold, you employ someone for personal, household or domestic work (like a nanny or gardener) – unless they’re a care or support worker or you’re a public body or business doing more than half your work in the public sector (such as local councils and NHS services) – unless you’re a charity

If you’re a service company working under ‘IR35 rules’ and your only income is the earnings of the intermediary (such as your personal service company, limited company or partnership) • Class 1 National Insurance contributions (NICs) liability are at or above £100,000 in the tax year before the year of claim.

Parliament: Self employed review

Self employed parliament review

It has been proposed that the Self-employed and freelancers should receive either 80% of their net earnings (based on the last three years) or £2917 – whichever is lower.

It is likely that this will include your 2019/20 tax return figures so therefore this isn’t able to be completed until 5th April 2020 has passed. If you have stopped working it’s likely that you could begin to prepare your stuff for 2019/20.

As and when Parliament pass this review and there is more information about how to apply we will let you know.

The house of Commons Edward Davey MP asked an urgent question to the Chief Secretary of the Treasury, Steve Barclay, on financial support for the self-employed in light of the Covid-19 pandemic.

The Chancellor, Rishi Sunak, delivered the 2020 Budget to the House of Commons on 11 March 2020. The Budget included extra measures to help those affected by Covid-19. There are five million self-employed people in the UK, generating about £300bn for the economy, however whilst the government made an announcement to subsidise the wages of direct employees, a support package for self-employed workers has not been announced.

Steve Barclay: “We have not forgotten you, help is coming”

The Chief Secretary of the Treasury, Steve Barclay MP told the House that the government knows many self-employed people are in real distress, but that they are working urgently to address this problem. He added “I say to the self-employed, we have not forgotten you, help is coming.”

The Minister went on to say that the Chancellor has held meetings yesterday with representatives of the self-employed and will continue to meet them.

Speaking about the possibility of a new scheme for the self-employed, the Minister said:

Edward Davey: “The government has to move as fast as possible”

Edward Davey MP told the House that the five million self-employed people across the country are in real stress. He told the Minister that “while we all understand there are complications, the government has to move as fast as possible to meet their concerns because they are literally in many cases simply running out of money.”

The Acting Leader for the Liberal Democrats told the House that the five million self-employed people across the country are in real stress. He told the Minister that “while we all understand there are complications, the government has to move as fast as possible to meet their concerns because they are literally in many cases simply running out of money.”

The Acting Leader for the Liberal Democrats told the House that its important to remember who the self-employed are, adding:

“80% of the five million self-employed are sole traders […] the vast majority are not wealthy people, they are cleaners, they are taxi drivers, they are plumbers, they are hairdressers, they are musicians, tutors and journalists. They are builders and electricians, they are child minders.”

Support for businesses through deferring VAT and Income Tax payments

HMRC will support businesses by deferring Valued Added Tax (VAT) payments for 3 months. If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.

VAT

For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.

Eligibility

All UK businesses are eligible.

How to access the scheme

This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. 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.

Customers who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay. Please do so in sufficient time so that HMRC do not attempt to automatically collect on receipt of your VAT return.

Income Tax

For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.

Eligibility

If you are self-employed you are eligible.

How to access the scheme

This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period.

Customers who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay. Please do so in sufficient time so that HMRC do not attempt to automatically collect on receipt of your VAT return.

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.

Support for businesses who are paying sick pay to employees

We 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 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
  • 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 28 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 and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website
  • eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home 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

Eligibility

You are eligible for the scheme if:

  • your business is UK based
  • your business is a small or medium-sized and employs fewer than 250 employees as of 28 February 2020

How to access the scheme

A rebate scheme is being developed. Further details will be provided in due course once the legalisation has passed.

Support for retail, hospitality and leisure businesses that pay business rates

Business rates holiday for retail, hospitality and leisure businesses

We will introduce a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.

Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.

Eligibility

You are eligible for the business rates holiday if:

  • your business is based in England
  • 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 & boarding premises and self-catering accommodation

How to access the scheme

There is no action for you. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible.

You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator.

Further guidance for local authorities is available in the expanded retail discount guidance.

Cash grants 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.

Eligibility

You are eligible for the grant if:

  • your business is based in England
  • 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

How to access the scheme

You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.

Find your local authority.

Guidance for local authorities

Further guidance for local authorities is available on administering the business grant schemes.

Support for nursery businesses that pay business rates

We will introduce a business rates holiday for nurseries in England for the 2020 to 2021 tax year.

Eligibility

You are eligible for the business rates holiday if:

  • your business is based in England

Properties that will benefit from the relief will be hereditaments:

  • occupied by providers on Ofsted’s Early Years Register
  • wholly or mainly used for the provision of the Early Years Foundation Stage

How to access the scheme

There is no action for you. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill to exclude the business rate charge. They will do this as soon as possible.

You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator.

Further guidance for local authorities is available in the nursery discount guidance.

Support for businesses that pay little or no business rates

The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

Eligibility

You are eligible if:

  • your business is based in England
  • you are a small business and already receive SBBR and/or RRR
  • you are a business that occupies property

How to access the scheme

You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.

Find your local authority.

Guidance for local authorities

Further guidance for local authorities is available on administering the business grant schemes.

Support for businesses through the Coronavirus Business Interruption Loan Scheme

The temporary Coronavirus Business Interruption Loan Scheme supports SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years.

The government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.

The government will provide lenders with a guarantee of 80% on each loan (subject to pre-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The scheme will be delivered through commercial lenders, backed by the government-owned British Business Bank.

There are 40 accredited lenders able to offer the scheme, including all the major banks.

Eligibility

You are eligible for the scheme if:

How to access the scheme

The scheme is now open for applications. All major banks are offering this scheme.

To apply, you should talk to your bank or one of the 40 accredited finance providers (not the British Business Bank) as soon as possible, to discuss your business plan. You can find out the latest on the best ways to contact them via their websites. Please note that branches may currently be shut down to enable social distancing.

The full rules of the scheme and the list of accredited lenders are available on the British Business Bank website.

If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.

Support for larger firms through the COVID-19 Corporate Financing Facility

Under the new Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies.

This will support your company if it has been affected by a short-term funding squeeze, and allow you to finance your short-term liabilities.

It will also support corporate finance markets overall and ease the supply of credit to all firms.

Eligibility

All non-financial companies that meet the criteria set out on the Bank of England’s website are eligible.

How to access the scheme

The scheme is now available for applications.

More information is available from the Bank of England.

Support for businesses paying tax: Time to Pay service

All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.

These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

Eligibility

You are eligible if your business:

  • pays tax to the UK government
  • has outstanding tax liabilities

How to access the scheme

If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559.

If you’re worried about a future payment, please call us nearer the time.

Commercial insurance

Most commercial insurance policies are unlikely to cover pandemics or unspecified notifiable diseases, such as COVID-19.

However, those businesses which have an insurance policy that covers government ordered closure and pandemics or government ordered closure and unspecified notifiable disease should be able to make a claim (subject to the terms and conditions of their policy).

Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers.

Notifiable diseases

Notifiable diseases are certain infectious diseases that registered medical practitioners have a statutory duty to notify the ‘proper officer’ at their local council or local health protection team about when they come across a suspected case.

The government keeps an updated list of notifable diseases. On 5 March 2020, the government added COVID-19 to its list of notifiable diseases.

Many insurers use diseases on this list as triggers for the activation or exclusion of insurance cover. For example, insurers’ policies that cover notifiable diseases will typically only cover a specific subset of notifiable diseases (such as Cholera or Anthrax) that the insurer will reference in the policy documentation. These policies will exclude any notifiable disease not on the insurers list, as well as future/unknown diseases (such as COVID-19). The price that the insurer charges for the policy is modelled against the risk posed by this set list of diseases.

Unspecified notifiable diseases

Some businesses will have purchased add-ons for their insurance that cover for ‘unspecified notifiable diseases’. These policies effectively cover any disease listed as a notifiable disease, enabling the business to claim for losses for all notifiable diseases as well as from diseases that are unknown at the point the policy is written.

The effect of the government adding COVID-19 to its list of notifiable diseases is to ensure that businesses with unspecified notifiable disease cover are able to make a claim – subject to the terms and conditions in their policy. For example, someone infected with COVID-19 may need to have been on the premises.

Government ordered closure

The government asked a number of different businesses and venues to remain closed from 21 March onwards.

Insurers have agreed that this advice is sufficient for businesses covered for COVID-19 losses to make a claim (if the only barrier to them making a claim was a lack of clarity on whether the government had ordered businesses to close). As such, intervention by the police or any other statutory body is no longer required to trigger cover in the current circumstances.

However, most businesses’ commercial insurance policies (including for denial of access) are unlikely to offer cover for COVID-19. Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers.

Event coverage

Businesses with event cancellation policies that include unspecified notifiable disease extensions should be able to make a claim for the necessary and unavoidable cancellation, abandonment, curtailment, postponement and disruption of their event for reasons beyond the control of organisers and participants (subject to the other terms and exclusions of their policy).

Insurance for major events is often bespoke to the specific event, so businesses are encouraged to check the terms and conditions of their specific policy and contact their insurer or broker.

Protection from eviction for commercial tenants

Commercial tenants who cannot pay their rent because of COVID-19 will be protected from eviction.

These measures will mean no business will automatically forfeit their lease and be forced out of their premises if they miss a payment up until 30 June.

There is the option for the government to extend this period if needed.

This is not a rental holiday. All commercial tenants will still be liable for the rent. Commercial tenants are protected from eviction if they are unable to pay rent

Eligibility

All commercial tenants in England, Wales and Northern Ireland are eligible.

How to access the scheme

The change will come into force when the Coronavirus Bill receives Royal Assent. No action is required. As and when more legislation is updated we will let you know! If you would like more details on Business Rates please email us to request.