(update as at 23rd July 2020)
CORONAVIRUS IMPACT AND EDWARDS & KEEPING
Please note that our office remains open 8:30 am to 5:00 pm to allow mail to be accepted, telephone calls handled and books to be received (these can be safely left in the lobby). We have a limited number of staff working on site and social distancing is being strictly observed. The majority of our staff are currently working from home and the overall situation is being carefully managed to ensure that both staff and clients are suitably protected and that robust levels of service are maintained during this difficult time for us all. If you have any worries or concerns in this respect, please contact us by telephone or email and we will be pleased to clarify matters for you.
WHAT FINANCIAL SUPPORT IS AVAILABLE?
H M Revenue & Customs have issued a user-friendly question-based assessment form, which allows you to enter details of your business in the form of answering ten simple questions. The first question is “Where is your business based?” and on answering from one of the four answers given, you move onto the next question. On completion of this it then details the support which is available for you and your business, with links to the various schemes which are detailed below. The link to the support finder is as follows.
Based upon the current announcements by the government, we detail below the information currently available for employers and businesses. Full details of the guidance can be found on the following website links. These websites are updated regularly, following government announcements. Guidance and support can be found via the following link.
SICK PAY FOR EMPLOYEES
This is available to employers with less than 250 employees, as determined by the number of employees they employed as at the 28 February 2020. These new measures introduced, were effective from the 13 March 2020. Employers will be able to claim up to two weeks Statutory Sick Pay (SSP) per employee as a result of COVID-19, and should maintain records of staff absences, although staff will not be required to provide a fit note (Sometimes referred to as a sick note) from their GP. An isolation note is available through NHS 111.
The payment to staff will be available from the first day and there will be no waiting period.
To recover the statutory sick pay use the following link.
Those not eligible for Sick Pay such as employees earning below the Lower earnings Limit of £118 per week, can make a claim for Universal Credit or Contributory Employment and Support allowance. This is also available to the self-employed.
Guidance was detailed in the Budget 2020 and can be found on the following website link.
Details regarding SSP have been expanded and applies to those who follow advice to stay at home, even if they are not sick themselves. If evidence is required to cover self-isolation or household isolation beyond the first 7 days of absence, then employees can get an isolation note from NHS 111 online.
CORONAVIRUS JOB RETENTION SCHEME [CJRS]
If a business is unable to operate or has no work for its employees due to the coronavirus, then providing the employee agrees, he will become a furloughed employee. The government will fund grants to employers up to 80% ( this amount changes from the 1 September, see notes below) of the furloughed employees monthly wage cost, up to £2,500 a month, plus the associated Employers National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage, provided they keep the worker employed. The scheme will cover wages backdated to 1 March 2020. During this period the employee cannot undertake any work. (See notes below for changes to the scheme from the 1 July regarding flexible furloughing.) The workers will still retain all employment rights during this period. The employees wages will still be liable to Income tax and national insurance, as well as automatic enrolment contributions.
If your employee does not wish to go on furlough, then redundancy or termination of employment can follow.
Eligibility for the scheme
Any UK organisation with employees can apply, including
- Recruitment agencies (agency workers paid through PAYE)
- Public authorities
You must have created and started a PAYE payroll scheme on or before the 28 February 2020 and have a UK bank account.
Employers can use a portal to claim for 80% (this amount changes from the 1 September, see notes below) of furloughed employees usually monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic employer pension contributions on that wage. Fees, commission and bonuses should not be included.
An employer can choose to top up an employee's salary beyond this but is not obliged to under this scheme.
The following link, details how much you can claim for most employees.
Changes to the scheme
The job retention scheme closed to new entrants from the 30 June, therefore employers will only be able to furlough employees that they have furloughed for a full three weeks prior to 30 June.
Flexible furloughing became available from the 1 July, as detailed below, claim periods will no longer be able to overlap months from that date onwards.
See the link below
From the 1 July, employers have been able to bring back workers who have been previously furloughed on a part time basis, known as flexible furloughing, for any amount of time. The government will continue to pay 80% of their wages up to a cap of £2,500 as well as the employer National insurance contributions and pension contributions for the hours the employee does not work. The Employer will have to pay the employees for the hours they work. The cap on the furlough grant will be proportional to the hours not worked.
Examples of how to calculate the amount you should claim for an employee who is flexibly furloughed can be found from the following link.
From the 1 August, the government will continue to pay 80% of their wages up to a cap of £2,500, but will not pay the employers national insurance contributions and pension contributions.
In September, the government will continue to pay 70% of their wages up to a cap of £2,187.50 for the hours the employee does not work, but will not pay the employers national insurance contributions and pension contributions. The employer will need to pay the employers National Insurance contributions, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500.
In October, the government will continue to pay 60% of their wages up to a cap of £1,875 for the hours the employee does not work, but will not pay the employers national insurance contributions and pension contributions. The employer will need to pay the employers National Insurance contributions, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500.
Full and part time employees
The employees actual salary before tax, as of 28 February should be used to calculate the 80%. Fees, commission and bonuses should not be included.
Employees whose pay varies
If the employee has been employed for a full twelve months prior to the claim, you can claim the higher of either:
- The same months earnings from the previous year
- Average monthly earnings from the 2019/20 tax year.
If employed for less than twelve months, you can claim for an average of their monthly earnings since they started work. If they started in February 2020, use a pro-rata for their earnings so far to claim.
Owner managed companies
This scheme is also available on the salaries paid to company directors under the Pay as You Earn Scheme. Details can be found on the following link.
Employer National Insurance and Pension Contributions
All employers remain liable for associated Employer national Insurance contributions and minimum automatic enrolment employer pension contributions on behalf of their furloughed employees. This will be covered by a grant also, but the automatic enrolment contributions are limited to 3%.
National Living wage/National Minimum Wage
Furloughed workers, who are not working, must be paid the lower of 80% of their salary, or £2,500 even if, based on their usual working hours, this would be below the National Living Wage/National Minimum Wage.
To make a claim
The following details will be required.
- Your ePAYE reference number
- The number of employees being furloughed
- The claim period (start and end date)
- Amount claimed (per the minimum length of furloughing of 3 weeks)
- Your bank account number and sort code
- Your contact name
- Your telephone number
- Claims for periods ending on or before 30 June 2020 must be made by 31 July 2020.
- Claim periods starting on or after 1 July must start and end within the same calendar month and must last at least 7 days unless you're claiming for the first few days or the last few days in a month. You can only claim for a period of fewer than 7 days if the period you are claiming for includes either the first or last day of the calendar month, and you have already claimed for the period ending immediately before it.
Full details on the guidance can be found on the following links
LAY-OFFS AND SHORT TIME WORKING
As an employer you can ask your staff to stay at home or take unpaid leave if there's not enough work. This is an area fraught with difficulty and would suggest you take legal advice before proceeding down this avenue. Further guidance can be found on the following website links:
If you have taken out a tax fee protection insurance policy with us you may be eligible to receive complimentary expert telephone advice on employment law, HR and health and safety matters:
Support for self-employed through the Self employment Income Support Scheme (SEIS)
The scheme will support self employed individuals, including members of a partnership, who have lost income due to Coronavirus.
The scheme for the first grant is now closed, but a second grant is available from the 17 August 2020, to those businesses who have been adversely affected on or after the 14 July. The scheme allows you to claim a second and final taxable grant worth 70% of your monthly average trading profits, paid out in a single instalment covering three months worth of profits, and capped at £6,750 in total. As with the first grant, H M Revenue & Customs will contact you if you are eligible. The eligibility criteria is the same as the first grant. The second and final grant must be claimed on or before the 19 October 2020.
H M Revenue & Customs will contact you if you are eligible for the scheme and then invite you to apply online through the GOV.UK site. The grant once claimed will be paid into your bank account within 6 working days.
To check if you are eligible, enter your Unique tax reference number followed by your National Insurance number, in the following link.
To be eligible, you must have
- Submitted your self-assessment tax return for the year ended 5 April 2019. If you have not filed this, H M Revenue & Customs will allow late returns filed before the 23 April.
- Have traded in the current tax year 2019-20.
- Are trading when you apply, or would be except for Covid-19.
- Intend to trade in the tax year 2020/21.
- Have lost trading/partnership profits due to Covid-19.
- Your self-employed trading profits must be less than £50,000 and more than half of your income from self-employment. This is determined by 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/partnership 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, HM Revenue & Customs will only use those years for which you filed a self-assessment tax return.
If successful, the grant will need to be disclosed on any claim for tax credits.
Details can be found on the following links.
Previous advice for the self-employed has been noted below.
You are able to claim Universal Credit, providing you meet the usual eligibility criteria.
To support you with the economic impact of the outbreak and allow you to follow government guidance on self-isolation and social distancing, from 6 April the requirements of the Minimum Income Floor will be temporarily relaxed. This change will apply to all Universal Credit claimants and will last for the duration of the outbreak.
New claimants will not need to attend the jobcentre to demonstrate gainful self-employment.
There will be a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.
A business rates holiday will be introduced for nurseries in England for the 2020 to 2021 tax year.
No action needs to be taken, as the local authority will reissue your bill automatically.
You can calculate the amount you will not have to pay, by following the attached link.
The guidance issued to the local authorities can be found via the following link.
Dorset Council has issued advice regarding business rates bills and the link is as follows.
SMALL BUSINESS GRANT FUND AND THE RETAIL, HOSPITALITY AND LEISURE GRANT FUND
Under the Small Business Grant Fund (SBGF) all businesses in England in receipt of Small Business Rates Relief (SBRR) and Rural Rates Relief (RRR) in the business rates system will be eligible for a payment of £10,000 in line with the eligibility criteria as set out in paragraphs 15-21.
Under the Retail, Hospitality and Leisure Grant (RHLG) businesses in England in receipt of the Expanded Retail Discount (which covers retail, hospitality and leisure) with a rateable value of less than £51,000 will be eligible for the following cash grants per property.
Eligible businesses in these sectors with a property that has a rateable value of up to £15,000 will receive a grant of £10,000, in line with the eligibility criteria as set out in paragraphs 22-27.
Eligible businesses in these sectors with a property that has a rateable value of over £15,000 and less than £51,000 will receive a grant of £25,000, in line with the eligibility criteria as set out in paragraphs 22-27.
Businesses with a rateable value of £51,000 or over are not eligible for this scheme.
The eligibility criteria can be found on the following link.
To find your local authority, use the following link.
Guidance has been issued to the local authorities on administering the scheme as follows and pages 3 detail the person entitled to the grant and on pages 7 to 9 the information the authority will need to obtain.
Grant funding income is outside the scope of VAT; therefore, VAT is not payable on it when it is received.
This type of grant funding income should be reported in the profit and loss account within income when they are receivable.
LOCAL AUTHORITY DISCRETIONARY GRANTS FUND
This fund is aimed at small and micro businesses which were trading on 11 March 2020 and have not received cash grants from any central government COVID- related scheme other than the Coronavirus Job related Scheme.
Thus, a business will be precluded if it has claimed.
- Self Employed Income Support Scheme
- Small Business Grant Fund
- Retail, Hospitality and Leisure Grant
- The Fisheries Response Fund
- Domestic Seafood Supply scheme (DSSS)
- The Zoos Support Fund
- The Dairy Hardship Fund.
The Grants, which will be taxable income, will be for £25,000, £10,000 and any amount under £10,000. The value of the payment is at the discretion of the local authority.
The Grants will be aimed at those small and micro businesses, with relatively high ongoing fixed property-related costs, have suffered a significant fall in income due to COVID 19 and which occupy a property, with a rateable value or annual rent or annual mortgage payments below £51,000.
To be classed as a small business, you must satisfy two or more of the following requirements in a year.
- Turnover not more than £10.2 million
- Balance sheet total, not more than £5.1 million
- Less than 50 employees
To be classed as a micro business, you must satisfy two or more of the following requirements in a year.
- Turnover not more than £632,000
- Balance sheet total, not more than £316,000
- Less than 10 employees
The Fund will prioritise the following types of businesses for grants.
- Small businesses in shared offices or other flexible workspaces. E.g. those that do not have their own business rates assessment.
- Regular market traders with fixed building costs, such as rent, who do not have their own business rates assessment.
- Bed & Breakfasts which pay Council tax instead of business rates and
- Charity properties in receipt of charitable business rates relief which would otherwise have been eligible for Small business Rates Relief or Rural Rate Relief.
Full details can be found on the following website link
Dorset Council applications can be made via the following link
BOUNCE BACK LOANS
Businesses can borrow between £2,000 and £50,000 and is subject to a cap of 25% of your turnover. The loans carry an interest rate of 2.5% with terms of up to six years There are no repayments required or interest charged during the first 12 months of the loan. The loans can be repaid at any time with no early repayment charge. The loans are 100% backed by the Treasury and therefore you do not need to give the lender any security for the loan.
The accredited lenders can be found by using the link below. A simple on line application is completed.
Any business which has taken out a Coronavirus Business Interruption Loan, detailed below, of less than £50,000 can convert the loan to a Bounce Back loan.
This scheme is expected to remain open until the 4 November 2020.
SUPPORT FOR BUSINESSES THROUGH THE CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME (CBILS) FORMERLY KNOWN AS THE ENTERPRISE FINANCE GUARANTEE (EFG)
This will be available to smaller businesses that are viable but unable to obtain finance due to having insufficient security to meet the lenders normal requirements. CBILS will provide the lender with a government backed 80% guarantee.
Loans of up to £5 million will be supported and businesses will be able to access the first 12 months of that finance interest free, as the government will cover the first 12 months of interest payments.
However, the borrower, always remain liable for 100% of the debt.
To be eligible the small business must be
- UK based.
- Turnover of less than £45 million.
- Operate within an eligible Industrial sector.
- Have a borrowing proposal which if it were not for the current pandemic, would be considered viable by the lender.
Guidance on the British Business Bank can be found on the following website link:
This scheme is expected to remain open until the 23 September 2020.
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. All UK businesses are eligible. The scheme was available in the week beginning the 23 March 2020 and will operate for at least 12 months. More information can be found at the following link.
IF YOU CANNOT MAKE TAX PAYMENTS
Self-Assessment tax payments
Income tax self-assessment payments due on the 31 July 2020, will be deferred until the 31 January 2021. This is automatic and no applications are required. No penalties or interest will be charged in the deferral period.
If you normally pay by direct debit, you should cancel this with your bank if you are unable to pay. Please do so in enough time, so that HMRC do not attempt to automatically collect.
However if you can make payment, we suggest you do so, so as to not place a cashflow burden on your business in January.
The vat deferral scheme ended on the 30 June. This deferred payments between the 20 March 2020 and 30 June 2020. These deferred payments must be paid in full on or before the 31 March 2021.
New tax payment helpline
There is a new tax helpline available to business about paying their tax due. The number is 0800 0159 559. The opening hours are Monday to Friday 8am to 8pm and Saturday 8am to 4pm. The service will not be available on Bank Holidays. H M Revenue & Customs will discuss your specific circumstances, but you will need to hand the following.
- Your reference number
- The amount of the tax bill you're finding it difficult to pay and the reasons why.
- What you have done to try to get the money to pay the bill.
- How much you can pay immediately and how long you may need to pay the rest.
- Your bank account details.
Further detailed guidance can be found on the following website link.
Most commercial policies will not cover a pandemic or unspecified disease, 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 of your policy). Businesses are therefore advised to check their policies.
If businesses have policies with cover for “unspecified notifiable diseases” then a claim may be able to be made.
PROTECTION FROM EVICTION FOR COMMERCIAL CLIENTS
Commercial tenants in England, Wales and Northern Ireland 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. These measures were originally in place until the 30 June but this has now been extended until the 30 September.
This is not a rental holiday; commercial tenants will still be liable for the rent.
THE FOLLOWING BUSINESSES MUST REMAIN CLOSED
On the 23 March, the government provided guidance on businesses and premises which had to close, but these restrictions are slowly lifting. Details of those businesses which are reopening and those that must remain closed are detailed in the following link.
GUIDANCE FOR UK BUSINESSES TRADING INTERNATIONALLY
Advice for UK businesses that export or deliver goods and services abroad has been issued. The Department for International Trade can support businesses by providing assistance with Customs authorities to ensure smooth clearance of their products and offering advice on intellectual property and other issues with business continuity. Details can be found on the following link.
COMPANIES HOUSE FILING EXTENSION
Businesses will be given an additional 3 months to file accounts with Companies House to help companies avoid penalties. Companies will need to apply. Details can be found on the following link.
Guidance for residential landlords and tenants
The Government's guidance for residential landlords and tenants can be found at the following link:
Further useful information can be obtained from the Residential Landlords' Association: