COVID-19: Always up to date guidance for small businesses and the self-employed


Last Updated 29th May 2020 circa 22:45 (Update in progress, due to be available on 3rd July 2020)

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The priority is clear: The health of the nation is paramount.

Since the Prime Minister’s address on the evening of 23rd March 2020, the priority has been clear: The nation’s health.

Follow the ‘lockdown’ guidance. Business comes second to your health and the health of the nation.

But for now:

 


 

Confused?

As we said in podcast 7, the chancellor has put in place some extraordinary measures to support small businesses and the self-employed amid measures to control the spread of COVID-19. But what EXACTLY can you do if you are a limited company owner/director, self-employed, or on a zero-hours contract!?

Many are not clear if the currently announced measures include them or not, and most agree what has so far been announced does not yet go far enough.

If you’re confused by the guidance so far, you’re far from alone.

We are constantly monitoring the official advice and will be releasing podcasts that explain how we think you can benefit. Currently:

Podcast 8 looked at the options for SSP for those who were self-isolating due to suffering from those two specific symptoms or following doctor’s advice after contact with someone who had been infected

Podcast 9 looks at all we now understand from this document, as of March 25th AM

Podcast 10 looks at the Coronavirus Job Retention scheme and the Self-Employed income Support scheme, and also suggests which is applicable if you are a limited company owner/director

All this advice is intended for small business owners and the self-employed (through a limited company or as a sole trader) and is being updated as details emerge. It should go without saying: it doesn’t constitute medical advice! Refer to the proper authorities for that.

 

Firstly: Beware scams

Don’t fall for a scam. Refer to the official gov.uk website, and NOT via any link you are sent in an unsolicited message or email, but by TYPING gov.uk into your browser and searching for the information you need using the search box there. If you can’t corroborate an unsolicited text or email you’ve received (e.g. you can’t find the same information for yourself on gov.uk) it’s probably a scam. Just delete the email or message.

‘Good will payments’

Beware: “HMRC is aware of COVID-19-Corona Virus SMS scams telling customers they can claim a ‘goodwill payment’.” – see here for latest official details: https://www.gov.uk/government/publications/phishing-and-bogus-emails-hm-revenue-and-customs-examples/phishing-emails-and-bogus-contact-hm-revenue-and-customs-examples

‘£250 fine’

Another new one: “HMRC is aware of a SMS scam which states you will be fined £250 for leaving the house more than once. The message asks recipients to call an 0800 telephone number to appeal.” – you should neither reply, nor call the number. Even though the link in the SMS is to gov.uk/coronavirus, a legitimate resource (which is particularly troubling as it will lend confidence to the legitimacy of the SMS to those who follow the link) the SMS itself IS a scam. It is also listed on https://www.gov.uk/government/publications/phishing-and-bogus-emails-hm-revenue-and-customs-examples/phishing-emails-and-bogus-contact-hm-revenue-and-customs-examples

 

Regarding the Sick, Self-Isolating or ‘Shielding’

If you are sick or self-isolating due to doctor’s advice or because you or someone else in your household has recently displayed any of the three identified symptoms, because you are ‘shielding’, or because you have been asked to self-isolate as part of ‘track and trace’:

If you are on PAYE and have been regularly drawing a salary of more than the Lower Earnings Limit (£118 per week or £512 per month), you can claim SSP from day 1 through your payroll system/provider. No doctors note is required, simply keep a record. That’s £94.25 per week drawn from your company, and the government will reimburse up to 2 weeks of this – the mechanism for this is now available here, and it is based on the SSP having been noted on a proper payroll system linked electronically to HMRC via the so-called Real Time Information system. If you outsource your payroll, they should be able to help. If you do it yourself, refer to your payroll software provider, and make the proper claim yourself here.

For guidance on what you need to record, see here: https://www.gov.uk/guidance/claim-back-statutory-sick-pay-paid-to-employees-due-to-coronavirus-covid-19

You do not have to use SSP if, for example, you have furloughed yourself and your furloughed rate of pay is greater than SSP.

If you do not pay yourself via PAYE, like many limited company owners who pay themselves only dividends and the self-employed who calculate submit accounts and pay tax annually, Employment and Support Allowance is your first option for sick pay and is subject to pretty much the same restrictions above. Find out more here: https://www.gov.uk/employment-support-allowance

Note: Staying at home more generally due to the current ‘lockdown’ will not count for the purpose of claiming sick pay, either through ESA or SSP.

If you are an employer, and some of your employees are off sick or self-isolating because they or someone else in their household has recently displayed any of the three identified symptoms, because they are ‘shielding’, or because they have been asked to self-isolate as part of ‘track and trace’:

For PAYE employees, you must pay at least SSP, in which case you should do so from day 1 with no fit note required. The government will later reimburse you if you had fewer than 250 employees on 28th February 2020, for up to two weeks per employee (see above, same advice).

The mechanism to reclaim SSP costs is now available here, and it is based on the SSP having been noted on a proper payroll system linked electronically to HMRC via the so-called Real Time Information system. If you outsource your payroll, they should be able to help. If you do it yourself, refer to your payroll software provider, and make the proper claim yourself here.

For guidance on what you need to record, see here: https://www.gov.uk/guidance/claim-back-statutory-sick-pay-paid-to-employees-due-to-coronavirus-covid-19

You do not have to use SSP if, for example, you have furloughed staff and their furloughed rate of pay is greater than SSP – since both of these may be reclaimed, it would most likely be better for them (and no worse for you) to keep them on their furloughed rate of pay. You must pay them at least SSP if they are sick, though, if for example their furloughed rate of pay is less than this.

Note that though employees ‘shielding’ according to public health guidance are entitled to SSP (if they cannot work while shielding), for the full 12-week+ period that shielding may last, you can only reclaim up to 2 weeks of this SSP. It may make more sense, as above, to furlough these workers, as that can be reclaimed.

For self-employed and limited company contractors – I am sure they know they are not entitled to sick pay from you, but you can direct them to ESA, as above. (You could also direct them here, as this page is intended for such folks!)

 

That’s it for sick pay. Since neither of these are particularly satisfactory on their own, all affected should also consider Universal Credit, further below.

 

Regarding paying your employees

Support for paying your PAYE employees

If they are working, pay them normally if you can. If there is no work for them to do, ‘furlough’ them (a status for workers on the payroll but sent home without work to do) rather than lay them off and HMRC will pay up to 80% of their ‘regular earnings’ (“such as wages, compulsory commission and fees are past overtime” but not “discretionary commission (including tips) payments or bonuses, non-cash payments or benefits in kind”), up to £2,500 per month.

In the first instance, you should agree this with your employee (assuming you do not already have a collective agreement with a trade union), and, in particular, note: “To be eligible for the grant employers must confirm in writing to their employee confirming that they have been furloughed. A record of this communication must be kept for five years.” – it has also been noted that eligibility includes zero-hours workers and apprentices. Note that “the usual PAYE deductions (such as income tax, national insurance and student loan contributions)” will still need to be made.

It has been confirmed that his approach will work for workers who work PAYE but via an umbrella company with you. It may be your responsibility as the client to inform the umbrella company that they should be ‘furloughed’, but “it will be for the umbrella company and the worker to agree whether to furlough the worker or not.”.

Likewise, if you employ workers through an agency, the official guidance states: “Furlough should be agreed between the agency, as the deemed employer, and the worker, though it would be advised to discuss the need to furlough with any end clients involved.”

Employees on any type of employment contract are eligible, as are foreign nationals. The scheme was extended, on 17th April, to continue up to the end of June, and extended again on 12th May to continue up to the end of October.

On 29th May, further details emerged on how the extension will be handled, namely:

“June and July: The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything.

August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.

September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.

October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.”

Note also that from 1st July, there will be flexibility to bring furloughed employees back part-time.

The Coronavirus Job Retention Scheme online portal is now open. You can find it at: https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme

“Once you’ve claimed, you’ll get a claim reference number. HMRC will then check that your claim is correct and pay the claim amount by Bacs into your bank account within 6 working days.”

I expect this service to be under heavy load in the days after launch (20th April), but they have a service availability link you can use to check it’s all operational, too: https://www.gov.uk/government/publications/coronavirus-job-retention-scheme-service-availability-and-issues/coronavirus-job-retention-scheme-service-availability-and-issues

If you’re not sure how to calculate what you can claim, a calculator has also now been added that “can currently be used to work out what you can claim for most employees who are paid either regular or variable amounts each pay period, here: https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme

And on 14th May, examples to help employers calculate 80% of their employees’ wages for the Coronavirus Job Retention Scheme were added here

An HMRC document, produced for the point of view of your PAYE employees, has been made available here: https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme

An HMRC document, produced for the employers point of view, has been made available here: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

A step-by-step guide for employers was published on 17th April, updated on 11th May, available here: https://www.gov.uk/government/publications/coronavirus-job-retention-scheme-step-by-step-guide-for-employers

Support for paying your self-employed workers

During the daily briefing on the evening of 26th March, the Chancellor announced a package of support for the self-employed (the Self-Employment Income Support Scheme or SEISS) stating that a grant is available (now known to be available to be claimed up until 13th July), worth 80% of their average monthly profits over the previous 3 years, up to £2,500 per month, for at least 3 months, provided as a single instalment. On 29th May, the Chancellor then revealed a similar grant to become available in August, for 70% of this same average, to cover an additional three months. They will be able to claim this and continue to do business, even if you yourself have limited or no work for them.

It is open to anyone with trading profits up to £50k for whom they make the majority of their income from self-employment, and who are already in self-employment, with a 2018-19 tax return filed. (The Chancellor has since explicitly stated that neither eligibility nor the calculation will extend to 2019-20 self assessments.) They can check if they’re eligible to claim for Self Employed Income Support Scheme at https://www.tax.service.gov.uk/self-employment-support – however, the benefit of this tool may be limited, given that HMRC will work out who is eligible and write to them, anyway.

Note that “If you receive the grant you can continue to work, start a new trade or take on other employment including voluntary work, or duties as an armed forces reservist.” Also, “If you have other employment as a director or employee paid through PAYE your employer may be able to get support using the Coronavirus Job Retention Scheme” highlighting that use of one scheme does not necessarily preclude the use of the other for those with both Limited company directorships and/or PAYE employment and Self Employment. Though the following statement was added to the guidance document on 13th May: “You should not claim the grant if you’re a limited company”, this is not well written – a limited company is a separate legal entity to an individual: Use of the word ‘you’re’ indicates the limited company itself may not claim, but a self-employed individual who happens to also be a person of significant control (e.g. sole director) of a limited company would not seem to be specifically excluded from claiming by this statement, if they are otherwise eligible.

It will be applied for via a simple online form and money will go straight into their bank accounts. HMRC will write to those eligible and the online portal for the first grant opened on 13th May. However, “If you’re eligible, we will tell you the date you can make your claim from.” – presumably a way of spreading the load on this system, and I expect that to be enforced. Once approved, “you’ll receive your payment within 6 working days.”

The online portal for the second grant will not be available until August. Note also that “An individual does not need to have claimed the first grant to receive the second grant: for example, they may only have been adversely affected by COVID-19 in this later phase.”

Additionally, the chancellor has decided to allow anyone who missed the 31st January filing deadline to submit their tax return by 23rd April to still qualify.

HMRC guidance on the scheme can be found here: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

Also, a ‘How to make a claim’ video was added on 14th May, here

For those who need cash flow sooner than this becomes available, support remains available from the other schemes here such as the Coronavirus Business Continuity Loan, deferred income tax payment, and the welfare system such as Universal Credit. For now, refer them to these schemes.

Support for paying limited company contractors

HMRC will allow the ‘furlough’ status to apply to limited company owner/directors who pay themselves a salary via PAYE.

We previously relied on a statement by Ben Kerry (Head of Labour Markets, HMT) made during a CBI webinar, but now have official guidance to this effect under a ‘Company Director’s heading in the ‘employers’ document regarding the Coronavirus Job Retention Scheme: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme#employees-you-can-claim-for

Unlike the self-employed, they cannot continue to work as normal, and must be ‘furloughed’.

Refer them to the current HMRC document aimed toward PAYE employers:

https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

If your limited company contractors are explicitly excluded given the rules for this scheme, e.g. if they pay themselves dividends only, or only set up their own payroll after 19th March, Universal Credit and the other help noted toward the bottom of this page may be all that is available.

Note: In the rare case whereby the worker is self-employed providing services to their own limited company, which contracts with you, they can only claim from the Self-Employed Income Support Scheme and not the Coronavirus Job Retention Scheme. They cannot furlough themselves, but they can both continue to work for you and make a claim from that scheme.

 

Regarding paying yourself, the business owner

As a sole-trader

During the daily briefing on the evening of 26th March, the Chancellor announced a package of support for the self-employed (the Self-Employment Income Support Scheme or SEISS) stating that a grant is available (now known to be available to be claimed up until 13th July), worth 80% of their average monthly profits over the previous 3 years, up to £2,500 per month, for at least 3 months, provided as a single instalment. On 29th May, the Chancellor then revealed a similar grant to become available in August, for 70% of this same average, to cover an additional three months. They will be able to claim this and continue to do business.

It is open to anyone with trading profits up to £50k for whom they make the majority of their income from self-employment, and who are already in self-employment, with a 2018-19 tax return filed. (The Chancellor has since explicitly stated that neither eligibility nor the calculation will extend to 2019-20 self assessments.) You can check if you’re eligible to claim for Self Employed Income Support Scheme at https://www.tax.service.gov.uk/self-employment-support – however, the benefit of this tool may be limited, given that HMRC will work out if you’re eligible and write to you if you are, anyway.

Note that “If you receive the grant you can continue to work, start a new trade or take on other employment including voluntary work, or duties as an armed forces reservist.” Also, “If you have other employment as a director or employee paid through PAYE your employer may be able to get support using the Coronavirus Job Retention Scheme” highlighting that use of one scheme does not necessarily preclude the use of the other for those with both Limited company directorships and/or PAYE employment and Self Employment. Though the following statement was added to the guidance document on 13th May: “You should not claim the grant if you’re a limited company”, this is not well written – a limited company is a separate legal entity to an individual: Use of the word ‘you’re’ indicates the limited company itself may not claim, but a self-employed individual who happens to also be a person of significant control (e.g. sole director) of a limited company would not seem to be specifically excluded from claiming by this statement, if they are otherwise eligible.

It will be applied for via a simple online form and money will go straight into their bank accounts. HMRC will write to those eligible and the online portal for the first grant opened on 13th May. However, “If you’re eligible, we will tell you the date you can make your claim from.” – presumably a way of spreading the load on this system, and I expect that to be enforced. Once approved, “you’ll receive your payment within 6 working days.”

The online portal for the second grant will not be available until August. Note also that “An individual does not need to have claimed the first grant to receive the second grant: for example, they may only have been adversely affected by COVID-19 in this later phase.”

Additionally, the chancellor has decided to allow anyone who missed the 31st January filing deadline to submit their tax return by 23rd April to still qualify.

HMRC guidance on the scheme can be found here: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

Details on how HMRC will calculate what you can claim can be found here: https://www.gov.uk/guidance/how-hmrc-works-out-total-income-and-trading-profits-for-the-self-employment-income-support-scheme

Also, a ‘How to make a claim’ video was added on 14th May, here

For those who need cash flow sooner than this becomes available, support remains available from the other schemes here such as the Coronavirus Business Continuity Loan, deferred income tax payment, and the welfare system such as Universal Credit.

However, the Chancellor, consistent with the concept of never letting a crisis go to waste (so loved by politicians), used the opportunity to promote the concept that this makes it “harder to justify inconsistent contributions” of the self-employed saying “we must all pay in equally in future”. It would appear that the government intends to conflate its responsibility toward the safety and security of all its citizens, and how it gathers contributions from society as a whole, with the differing in-work risks, protections and National Insurance benefits available to the self-employed vs employed workers.

As a limited company owner/director

The Self-employed Income Support scheme is not applicable to a limited company owner/director, so you may only claim 80% of your salary through the Coronavirus Job Retention scheme, assuming your payroll was set up on or before 19th March. Your dividends will not contribute toward this calculation. As we currently understand it, you will not be able to continue to work while ‘furloughed’ under this scheme, except for your statutory duties. This may change from 1st July, however, whereby there is planned to be flexibility to return part-time.

The current guidance document for the job retention scheme from the perspective of an employer contains a section on ‘Company Directors’, which explicitly states:

“As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme. Company directors owe duties to their company which are set out in the Companies Act 2006. Where a company (acting through its board of directors) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed. Where one or more individual directors’ furlough is so decided by the board, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned.

Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, for instance, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.

This also applies to salaried individuals who are directors of their own personal service company (PSC).”

Note that, when Michael Gove was asked the following question during the daily briefing on 4th April:

“on the help for the self employed … is there any possibility that this could be reviewed given that people with company directorships, who often don’t get much money from those company directorships, are now blocked from having any of that help?”

He answered:

“if there are specific examples of inefficiencies in the way in which the business support scheme or support for the self employed is operating, then I know that the treasury will want to look at them in order to make sure that the support is targeted as effectively as possible”

This may give hope to limited company owner/directors that more help may come, and the Institute of Directors has been challenging this gap since 31st March.

Note: On 10th April, the Coronavirus Job Retention Scheme documentation was also updated to confirm that those working through limited companies, in-scope of IR35 legislation and with a public-sector engagement (‘off payroll’) may be furloughed under this scheme for that engagement – details here

The Coronavirus Job Retention Scheme online portal is now open. You can find it at: https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme

“Once you’ve claimed, you’ll get a claim reference number. HMRC will then check that your claim is correct and pay the claim amount by Bacs into your bank account within 6 working days.”

I expect this service to be under heavy load in the days after launch (20th April), but they have a service availability link you can use to check it’s all operational, too: https://www.gov.uk/government/publications/coronavirus-job-retention-scheme-service-availability-and-issues/coronavirus-job-retention-scheme-service-availability-and-issues

Unfortunately, the calculator that “can currently be used to work out what you can claim for most employees who are paid either regular or variable amounts each pay period, explicitly excludes those who “get director’s payments”

It was also explicitly noted on 1st May that company directors with an annual pay period, whose only salary payment to themselves in 2019-20, notified to HMRC through payroll software, was (or would have been) after 19th March 2020, are explicitly held to the same rules as other kinds of employee and are thus not eligible for this scheme.

If, in addition to your directorship, you are also self-employed, you should note that regarding the Self Employment Income Support Scheme: “If you receive the grant you can continue to work, start a new trade or take on other employment including voluntary work, or duties as an armed forces reservist.” and “If you have other employment as a director or employee paid through PAYE your employer may be able to get support using the Coronavirus Job Retention Scheme” – This highlights that use of one scheme does not necessarily preclude the use of the other for those with both Limited company directorships and/or PAYE employment and Self Employment.

A step-by-step guide for employers was published on 17th April, updated on 11th May, available here: https://www.gov.uk/government/publications/coronavirus-job-retention-scheme-step-by-step-guide-for-employers

 

For now, if it appears you will not be covered sufficiently by either schemes, turn to Universal Credit and the other help noted toward the bottom of this page.

 

Grants and Business Rate Relief

Can you get a grant?

If you occupy a property, are a retail, hospitality or leisure business and you pay business rates, or if you’re a small business in any sector that occupies a property and would pay business rates if it weren’t for Small Business Rate Relief or Rural Rate Relief, your local authority (e.g. your local council) will write to you. See the main document for more info.

Note that though the local authority will write to you, some are operating an applications procedure.

Can you get a Business Rates Holiday?

If you are a retail, hospitality, leisure or nursery business. No action required, the council tax bill will apply this (a bill may need to be reissued but that will be taken care of). Again, see the main document for more info.

Otherwise?

A relatively unpromoted press release was made on 2nd May by several government departments, speaking of a “Top-up to local business grant funds scheme” designed “to accommodate certain small businesses previously outside the scope of the business grant funds scheme.” The release states: “We are asking local authorities to prioritise businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for Small Business Rates Relief, and bed and breakfasts that pay council tax rather than business rates. But local authorities may choose to make payments to other businesses based on local economic need. The allocation of funding will be at the discretion of local authorities. Businesses must be small, under 50 employees, and they must also be able to demonstrate that they have seen a significant drop of income due to Coronavirus restriction measures. There will be three levels of grant payments. The maximum will be £25,000. There will also be grants of £10,000. local authorities will have discretion to make payments of any amount under £10,000. It will be for councils to adapt this approach to local circumstances.”

Since then, on 29th May a new guidance document was added to cover the so-called Local Authority Discretionary Grants Fund, whereby “Small and micro businesses with fixed property costs that are not eligible for the Small Business Grant Fund or the Retail, Hospitality and Leisure Grant Fund may be eligible for the Discretionary Grants Scheme.” – though this document currently redirects you to your local council to apply.

 

Can you get a loan?

Registered for VAT?

A loan of a sort: a holiday from your VAT bill (20 March 2020 until 30 June 2020) which will not be due until the end of the 2020/21 tax year.

Explicit guidance has been added to state that: if you are VAT registered and want to defer your next VAT payment for the bill that would have been due between 20th March and 30th June 2020, you should cancel your direct debit.

“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.”

Though this specific statement has since been removed, the advice remains in the official HMRC guidance document. This will incur no penalties or interest for late payment provided you “pay the VAT due on or before 31 March 2021.” – though you should probably ensure you allow for the different dates used for quarterly returns and make the full payment on whichever date your quarterly bill would be paid between January and March 31st 2021.

You can defer quarterly and monthly VAT returns’ payments for the periods ending in February, March and April; payments on account due between 20 March 2020 and 30 June 2020; and annual accounting advance payments due between 20 March and 30 June 2020.

This deferral does not apply payments for VAT MOSS or import VAT.

An official HMRC document on this has now been produced, available here: https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19

Owe the Taxman?

“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.”

Again, a loan of a sort: the possibility of deferring payment on any self-assessment payments you are already late with. For this, call: 0800 024 1222

Paying Self-Assessment Contributions in Advance?

And another loan of a sort: “Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.” – if this applies to you.

On 15th May, a guidance document was introduced for those who complete Self Assessments and would have a payment on account due in July, to help them “Choose how and when you can delay making your second payment on account for the 2019 to 2020 tax year” – in particular, stating that “You do not need to tell HMRC that you’re deferring your payment on account.” and “HMRC will not charge interest or penalties on any amount of the deferred payment on account, provided it’s paid on or before 31 January 2021”

Cannot pay your commercial rent?

The government has now said that “Commercial tenants who cannot pay their rent because of COVID-19 will be protected from eviction.” for missed payments until 30th June, with the option for the government to extend this if needed. It’s another ‘loan in effect’ as it is not a holiday and you will still be liable for the rent.

Have one or more existing loans?

Contact your lender(s) and arrange a payment holiday if at all possible, thereby effectively getting a ‘loan’ at the amount of your existing repayments in the short term, with no new liabilities to add to your balance sheet.

On this very topic, on 2nd April, the Financial Conduct Authority proposed temporary financial relief for customers impacted by coronavirus, later confirming those measures on 9th April. These measures include firms being expected to:

“Offer a temporary payment freeze on loans and credit cards for up to three months, for consumers negatively impacted by coronavirus”

“Allow customers who are negatively impacted by coronavirus and who already have an arranged overdraft on their main personal current account, up to £500 charged at zero interest for three months”

“Make sure that all overdraft customers are no worse off on price when compared to the prices they were charged before the recent overdraft pricing changes came into force” (most banks had recently raised their overdraft interest rates to 39.9% in response to these changes)

“Ensure consumers using any of these temporary payment freeze measures will not have their credit file affected”

These measures have been specifically noted to include: “guarantor loans, logbook loans, home collected credit, a loan issued by Community Development Finance Institution and some loans issued by credit unions, but only where these are regulated. The guidance also applies to firms which have acquired such loans. These measures won’t replace normal forbearance rules where these would be more suitable for a consumer in serious and immediate financial difficulty”

The press release on these confirmed measures can be found here and these measures are in effect as of 14th April.

Also, as of 27th April, FCA rules are in effect to ensure consumers can access “a 3 month payment freeze for motor finance, buy-now pay-later (BNPL), rent-to-own (RTO) and pawnbroking agreements. For high-cost short term credit (including payday loans) payments will be frozen for one month with no additional interest to be charged.”

 

Not enough? Need a real loan?

‘Bounce Back’ Loans

On 27th April, the government announced a new ‘Bounce Back Loan’ scheme: “whereby businesses will be able to borrow between £2,000 and £50,000 and access the cash within days […] interest free for the first 12 months, and businesses can apply online through a short and simple form”

This is a “new fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders […]  designed to ensure that small firms who need vital cash injections to keep operating can get finance in a matter of days […] No repayments will be due during the first 12 months.”

Also, “the government will work with lenders […] and agree a low standardised level of interest for the remaining period of the loanwhich has since been confirmed at the incredibly low rate of 2.5%

The scheme opened for applications on Monday 4 May via https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/ – but  no single “short and simple form” appears to be available at this time, as all potential applicants are being directed to choose a lender and find out how to apply through them, individually. However, a Treasury press release claims that (presumably for each lender) “small business owners can apply to accredited lenders by filling out a simple online form, with only seven questions.”

Notably, in contrast with the older Coronavirus Business Interruption Loans (below) that many small businesses have struggled to apply for: “There will be no forward-looking tests of business viability; no complex eligibility criteria; just a simple, quick, standard form for businesses to fill in.” and “For most firms, loans should arrive within 24 hours of approval.”

Small and medium sized businesses may “borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000.” also “there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.” suggesting that interest will not accrue immediately. Also, “The length of the loan is 6 years, but you can repay early without paying a fee. No repayments will be due during the first 12 months.”

However, I am not reassured by the statement: “The lender will decide whether to offer you a loan or another type of finance” as it makes me wonder whether lenders may choose to direct you to products that are more profitable to themselves, rather than this scheme, after you apply. Though it is reassuring to note that “If one lender turns you down, you can apply to other lenders in the scheme”

It’s shaping up to be a popular avenue, as “More than 69,000 Bounce Back Loans worth over £2 billion have been approved during the first 24 hours of the scheme” (according to this press release from HM Treasury), with almost £8.4 billion having been lent via over 268,173 loans by 11th May (see here)

Note that you cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS). However, if you’ve already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender until 4 November 2020.

Also note that the eligibility criteria that a business “was not an ‘undertaking in difficulty’ on 31 December 2019” has now been removed from the bounce back loan scheme, meaning that such businesses may apply, and clarity has since been added that the scheme is only open to businesses “established before 1 March 2020”

Most of the cautionary statements below will still apply here.

Coronavirus Business Interruption Loan?

Coronavirus Business Interruption Loans are available up to £5m for 6 years, for businesses with a revenue of up to £45m, with no interest payments due for the first 12 months. The fact that the government is providing the lenders with a guarantee worth 80% of the value is neither here nor there, you’ll have to pay this loan back and with interest.

(Note: a similar scheme, introduced on 3rd April, for larger businesses was announced – The Coronavirus Large Business Interruption Loan Scheme – for businesses with a turnover between £45m and £500m, though we shall not cover it here due our audience being predominantly small-business. See the press release for more info.)

Until the scheme rules changed on 3rd April, personal guarantees were still often a requirement due to the government’s insistence (presumably to protect the taxpayer) that the lender’s normal lending criteria apply. Not only that, but the rules stated that businesses must have been refused for a commercial lending product first – both details that were not made clear to the small businesses hoping to take advantage of the scheme, making banks an immediate scapegoat as the reality of the process became clear to those scrambling to apply only when they were met with this plethora of restrictions, delivered by embattled bank call-centre staff unable to provide the ‘over-spun’ offer due the restrictions placed upon them. It is for this reason, that up until this date, only 983 loans had been approved out of 130,000 applications.

In fact, the Business Secretary stated, during the daily briefing on 1st April: “The Chancellor, together with the bank of England and the Financial Conduct Authority, wrote to the chief executives of the UK banks to urge them to make sure that the benefits of the loan scheme are passed through to businesses and consumers. And it would be completely unacceptable if any banks were unfairly refusing funds to good businesses in financial difficulty. Just as the taxpayer stepped in to help the banks back in 2008, we will work with the banks to do everything they can to repay that favour and support the businesses and people of the United Kingdom in their time of need.”

This is an incredible exercise in finger-pointing from the government, especially as the banks had in fact been lobbying the government to fix the aforementioned requirements so that they could extend lending. They can now proceed without personal guarantees for loans of up to £250,000 – even if the government insists on spinning it as ‘banning’ the banks from doing so, rather than removing their restriction that they adhere to normal lending criteria. They can also now lend via the scheme without having to force the small business to attempt an application for a commercially available product first.

Those who have already taken out a loan under the scheme will no-doubt welcome the statement that “this will apply to finance already offered under the scheme, to ensure that all business owners receive the same level of government protection.”

Still, if you are considering taking out a loan, think hard about this.

How was your business performing before the coronavirus outbreak? How is it likely to perform afterwards, when the face of the country has changed? Will the government jump in to deliver on their guarantee if you struggle with repayments three years from now, or will businesses have to have gone bankrupt in order for the government to deliver on their guarantee to lenders? I suspect the latter, so this business loan is all on you and your business.

Is it a good idea to plug the hole for who-knows-how-long with a loan? Is it possible to temporarily suspend or cut-down your business activities rather than struggle on through? It’s your choice. Just, please, do not carry on with your business as if nothing is happening.

(In fact, it’s an important note that you may even benefit from the new places money is flowing, if one of your business areas is suddenly valuable – do consider this if you haven’t already. You can make money in a crisis without ‘profiteering’, just by doing something valuable that people or businesses want to pay for right now. Just look at the online video-conferencing marketplace, for example.)

Essentially, by taking out a loan to carry on through this, your business is absorbing some of the economic hurt of coronavirus by reducing your future earnings. Perhaps, if your revenue has been fundamentally reduced, then it is worth seriously considering suspending your business activities, furloughing your workers and signing yourself up for Universal Credit to come back in however many months time. You shouldn’t need to go bankrupt or close down completely to do this, but those options are of course always available.

In fact, the British Business Bank page on the Coronovirus Business Interruption Loan quietly added the following statement on 15th April: “Lenders will need further information to confirm eligibility. All lending decisions remain fully delegated to the 40+ accredited lenders” – presumably small businesses are unsure why their loan requests are being turned down given they believe they satisfy the requirements otherwise listed there: “Your business must: Be UK-based in its business activity; Have an annual turnover of no more than £45 million; Have a borrowing proposal which the lender would consider viable, were it not for the current pandemic; Self-certify that it has been adversely impacted by the coronavirus (COVID-19).” If lenders are turning down otherwise healthy businesses in need of the loan, according to their own additional proprietary criteria, this route may not even be guaranteed to be available to your business.

Also, on 24th April, the British Business Bank quietly amended the eligibility criteria listed, namely highlighting the ineligibility of small businesses who “have been classed as a ‘business in difficulty’ on 31 December 2019, if applying to borrow £30,000 or more.”

Details on the Coronavirus Business Interruption Loan can be found here: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/for-businesses-and-advisors/

It is worth noting that not only vanilla cash loans are available – overdrafts, invoice finance and asset finance are also included under this umbrella term.

 

Regarding everybody with reduced earnings

Universal Credit (or Tax Credits, if you already get them)

This benefit is calculated using your actual income. This is true even if you have been in business for more than a year. (There was a restriction called the Minimum Income Floor that would have based your income calculation on the National Minimum Wage at a minimum, after 12-months. This restriction is currently removed.)

Guidance can be found at https://www.understandinguniversalcredit.gov.uk/coronavirus/

Also, Turn2Us offers a great benefits calculator, so consider running your anticipated earnings through that.

The basic element of this (and of Working Tax Credits if you’re still on the older system) has gone up by £20 per week from 6th April along with the usual annual minor rise, which all claimants receive. I have been informed that for Working Tax Credits this will be first paid on 10th April, but will be backdated to 6th April.

Also, “From April, Local Housing Allowance rates will be increased to the 30th percentile of market rents. This will apply to all private renters who are new or existing Universal Credit housing element claimants, and to existing Housing Benefit claimants.” but I find this highly misleading as many local authorities already used the 30th percentile of market rents.

If you are already on Housing Benefit or getting the equivalent via Universal Credit, you can check the current LHA rates to see if 30% would represent a rise in the amount, here: https://lha-direct.voa.gov.uk/

Applicable to those already claiming Tax Credits, an HMRC press release from 4th May states that “Tax credits customers will continue to receive payments even if working fewer hours due to COVID-19” also stating “These customers do not need to contact HMRC about this change. We will treat customers as working their normal hours until the Job Retention Scheme and Self-Employment Income Support Scheme close, even if they are not using either scheme.”

Help with your home mortgage?

Mortgage holidays are available for up to 3 months – ask your lender. A great reference can be found at monesysavingexpert.com including a summary of what’s on offer from which provider, as far as they know. And as they note: “You will still be charged interest – but it’s added to the total cost and you get short-term respite.”

Help with your private rent?

Landlords who have a buy-to-let mortgage can also benefit from a 3 month mortgage holiday, so contact your landlord if you need a rent holiday and hopefully than can pass this on. They cannot legally evict you for 3 months even if they are unable or unwilling to help with that, according to the Prime Minister’s last guidance. However, details are light.

Help with your credit card or loan repayments?

On 2nd April, the Financial Conduct Authority proposed temporary financial relief for customers impacted by coronavirus, later confirming those measures on 9th April. These measures include firms being expected to:

“Offer a temporary payment freeze on loans and credit cards for up to three months, for consumers negatively impacted by coronavirus”

“Allow customers who are negatively impacted by coronavirus and who already have an arranged overdraft on their main personal current account, up to £500 charged at zero interest for three months”

“Make sure that all overdraft customers are no worse off on price when compared to the prices they were charged before the recent overdraft pricing changes came into force” (most banks had recently raised their overdraft interest rates to 39.9% in response to these changes)

“Ensure consumers using any of these temporary payment freeze measures will not have their credit file affected”

These measures have been specifically noted to include: “guarantor loans, logbook loans, home collected credit, a loan issued by Community Development Finance Institution and some loans issued by credit unions, but only where these are regulated. The guidance also applies to firms which have acquired such loans. These measures won’t replace normal forbearance rules where these would be more suitable for a consumer in serious and immediate financial difficulty”

The press release on these confirmed measures can be found here and these measures are in effect as of 14th April.

Help with motor finance and high-cost credit?

On 17th April, the FCA announced “another proposed package of measures to directly support consumers facing payment difficulties due to coronavirus (Covid-19). The range of targeted temporary measures cover motor finance and high cost credit agreements, which include: high-cost short-term credit (including payday loans), buy-now pay-later (BNPL), rent-to-own (RTO) and pawnbroking.”

In particular, regarding motor finance, the FCA expects firms “to provide a 3-month payment freeze to customers who are having temporary difficulties” taking care of some potential loop-holes in advance, such as ensuring firms “should not change customer contracts in a way that is unfair [… e.g.] firms should not try to use temporary depreciation of car prices caused by the coronavirus situation to recalculate Personal Contract Purchase (PCP) balloon payments at the end of the term”

Also, the FCA proposed a “a 1 month interest-free payment freeze” on pay-day loans and a “3-month payment freeze” on buy-now pay-later (BNPL), rent-to-own (RTO) and pawnbroking agreements.

These, now finalised, proposals will come into force as of Monday 27th April.

Help with your insurance costs?

On 15th May, the FCA made a press release, “FCA confirms measures to help insurance customers who may be suffering financial difficulties as a result of coronavirus” – requiring firms to reassess the risk profile of customers as “there may be scope to offer customers materially lower premiums”, consider if there are other more suitable products to switch customers to e.g. “a motor insurance customer might no longer need associated add on cover such as key cover or could be moved from fully comprehensive cover to third party fire and theft”, and also waive cancellation fees and other fee associated with adjusting policies.

“These actions could result in a reduction in the monthly premium for customers paying by instalments or a partial refund of the premium for customers who have paid up front. Where amendments to the insurance cover do not help alleviate the temporary payment difficulties for customers paying their premium in instalments, then the FCA expects firms to grant customers a payment deferral unless it is obviously not in the customer’s interests to do so.

The payment deferral should be granted for a period of between 1 and 3 months, though firms can go beyond 3 months should they wish to do so, and it is in the customer’s interests.

Customers should be able to request a payment deferral at any point during the period up to 18 August 2020 while the window for requesting a payment deferral is open.”

Alternatives are listed where payment deferral is not considered appropriate and there is a continued expectation to consider lowering interest rates. The measures would come into force by the end of May 2020. See the full press release here

 

Miscellaneous Items

BIDs ballots delayed

In case it affects you, Business Improvement District ballots are being delayed, to allow local authorities to concentrate on more pressing matters.

You’re probably not insured against this

The guidance has been updated to reflect that the government has added COVID-19 to the list of ‘notifiable diseases’ (a technical category used by insurers and may be referenced in your insurance policy documentation) change the phrasing in a way to make it more clear that most are unlikely to be insured: “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” and that “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”

As always, check your specific policy. And if you can’t understand it, since insurance legalese is notoriously complex to comprehend, call your insurer.

If you’re in the events industry, you might also like to note that “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)”

Many small businesses had some form of ‘business interruption’ insurance policy that either explicitly did not apply or was sufficiently vague to be contested by their insurer. On 1st May the FCA made a press release stating the “FCA seeks legal clarity on business interruption insurance alongside package of measures to help consumers and small businesses […] The Financial Conduct Authority (FCA) has today announced it intends to seek legal clarity on business interruption (BI) insurance to resolve doubt for businesses who are facing uncertainty on their claims.” Mel Stride, chair of the Treasury Committee, has commented on this, calling the steps taken by FCA “extremely welcome” and stating that “The Committee will be pressing for rapid progress. Those who should be paid, should be paid as soon as possible.” So hopefully there will be some development soon for those awaiting to understand if their insurance policy should pay out.

However, on 13th May we learned that “Businesses with supply chains which rely on Trade Credit Insurance and who are experiencing difficulties maintaining cover due to Coronavirus will get support from the government, the Economic Secretary to the Treasury, John Glen has announced.” – see press release here

‘Wrongful trading’ rules suspended

According to a recent daily briefing, and the associated HMRC press release at https://www.gov.uk/government/news/regulations-temporarily-suspended-to-fast-track-supplies-of-ppe-to-nhs-staff-and-protect-companies-hit-by-covid-19:

“The government will also temporarily suspend the wrongful trading provisions to give company directors greater confidence to use their best endeavours to continue to trade during this pandemic emergency, without the threat of personal liability should the company ultimately fall into insolvency.”

This will be “retrospectively from 1 March 2020 for three months” but the press release also notes:

“Existing laws for fraudulent trading and the threat of director disqualification will continue to act as an effective deterrent against director misconduct.”

The rule suspension has since been extended to 30th June.

What support is there for charities?

Acknowledging “there are nearly 170,000 charities in this country”, the Chancellor announced £750m of support for charities on 8th April, including hospices and those supporting domestic abuse victims, with £360 million direct from government departments and £370 million for smaller charities, including through a grant to the National Lottery Community Fund. The government will also match donations to the National Emergencies Trust as part of the BBC’s Big Night In fundraiser later this month – pledging a minimum of £20 million.

No further detail is available as yet, beyond the news release, here:

https://www.gov.uk/government/news/chancellor-sets-out-extra-750-million-coronavirus-funding-for-frontline-charities

What support is there for startups?

If your business is UK-incorporated, has raised £250k or more already from equity investment in the last 5 years, has none of its shares traded on a regulated market, multilateral trading facility or other listing venue, was incorporated on or before 31st December 2019 and either half or more employees are UK-based OR half or more revenues are from UK sales… Then the Future Fund may be worth considering, which “will provide government loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors”

Full details, including a Convertible Loan Agreement, are available on the fund’s guidance page. It will open to applications on 20th May.

If these support measures don’t help? If you ‘slip through the cracks’?

Unfortunately, many do. However, the Treasury Select Committee has asked the Chancellor to address a list of gaps, as part of its “Economic impact of Coronavirus” inquiry.

This includes issues like Personal Service Companies paying their directors a mixture of salary and dividends, self-employed workers with over £50,000 in savings, graduates, people newly self-employed, people who were only added to the payroll after the 19th March cut-off etc.

You can find out more about what the Treasury Select committee has suggested, here:

https://committees.parliament.uk/committee/158/treasury-committee/news/145875/treasury-committee-urgent-action-needed-for-those-not-eligible-for-treasurys-support-measures/

However, the Chancellor’s response will likely do little to fill you with confidence, as very little flexibility was shown: https://committees.parliament.uk/committee/158/treasury-committee/news/146064/chancellor-responds-to-treasury-committee-on-help-for-those-not-eligible-for-governments-support-measures/

 

Is there any way you can help?

If your business can help with things like:

– medical testing equipment
– medical equipment design
– protective equipment for healthcare workers, such as masks, gowns and sanitiser
– hotel rooms
– transport and logistics, for moving goods or people
– manufacturing equipment
– warehouse or office space, for medical use or storage
– expertise or support on IT, manufacturing, construction, project management, procurement, engineering or communications
– social care or childcare

You can let the government know here

 

That’s it for now.

Updates will follow as they come to light.

 

 

References:

The most up to date guidance and support documents for small businesses and employers, direct from gov.uk, can be found here:

https://www.gov.uk/government/collections/financial-support-for-businesses-during-coronavirus-covid-19

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/guidance-for-employers-and-businesses-on-coronavirus-covid-19

And, as lockdown measures are gradually phased back, a specific collection of guidance documents have been launched: “Working safely during coronavirus (COVID-19)” which you can find here: https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19

But these documents leaves a lot of questions unanswered, which is why we will continue to monitor them, and other sources, as the help available expands and details on existing schemes emerge.

The ‘Business Support Finder’ tool, to help find what support is available for your business, was launched on 20th April, here: https://www.gov.uk/business-coronavirus-support-finder

Also, HMRC introduced a digital assistant to aid in finding information about Coronavirus support schemes on 2nd May. It can be found here: https://www.tax.service.gov.uk/ask-hmrc/virtual-assistant/support-for-coronavirus

Also, the Business Support FAQ has been updated re coronavirus at https://www.businesssupport.gov.uk/faqs/, but it offers little new information. We will watch this document, also.

A specific, better laid out site at https://www.businesssupport.gov.uk/coronavirus-business-support/ has now been launched – no new information there for now, but it easier to navigate and we’ll continue to monitor it.

A similar resource, specifically focused on the Self-Employment Income Support Scheme, can be found here: https://www.businesssupport.gov.uk/self-employment-income-support-scheme-faqs/

HMRC official guidance outlining the specific support they are offering has also been launched, including:

https://www.gov.uk/guidance/claim-back-statutory-sick-pay-paid-to-employees-due-to-coronavirus-covid-19

https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme – for employees

https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme – for employers

https://www.gov.uk/government/publications/coronavirus-job-retention-scheme-step-by-step-guide-for-employers – a step-by-step guide for employers

https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme – the online portal

https://www.gov.uk/government/publications/coronavirus-job-retention-scheme-service-availability-and-issues/coronavirus-job-retention-scheme-service-availability-and-issues – the online portal service availability checker

https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme – the calculator for employers to work out what they can claim (for most but not all situations)

The CBI webinar in which Ben Kerry, Head of Labour Markets, HMT, first revealed that limited company directors could claim under the Coronavirus Job Retention Scheme for their PAYE earnings: https://www.cbi.org.uk/articles/daily-coronavirus-webinar-job-retention-scheme-27-03-2020/ (time stamp 27:20)

https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19

And the announcement of a tax helpline to support businesses affected by coronavirus – 0800 024 1222 – details on this can be found here: https://www.gov.uk/government/news/tax-helpline-to-support-businesses-affected-by-coronavirus-covid-19

If you think you can help during this national time of need, see this page: https://www.gov.uk/coronavirus-support-from-business

The HMRC press release that notes the intention for ‘wrongful trading’ rules to be suspended, can be found here: https://www.gov.uk/government/news/regulations-temporarily-suspended-to-fast-track-supplies-of-ppe-to-nhs-staff-and-protect-companies-hit-by-covid-19

The Coronavirus Business Interruption Loan scheme details are most thoroughly outlined here: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/for-businesses-and-advisors/

Coronavirus Large Business Interruption Loan scheme details via Business Support FAQs: https://www.businesssupport.gov.uk/coronavirus-large-business-interruption-loan-scheme/

 

 

How has the advice changed?

Material changes to gov.uk advice and guidance documents:

29th May

– A new guidance document was added to cover the Local Authority Discretionary Grants Fund, whereby “Small and micro businesses with fixed property costs that are not eligible for the Small Business Grant Fund or the Retail, Hospitality and Leisure Grant Fund may be eligible for the Discretionary Grants Scheme.” – though this document currently redirects you to your local council

– During the daily briefing this evening, the Chancellor announced the extension of the Self-Employment Income Support Scheme for another three months, with those eligible able to claim a second “and final” grant, this time at 70% of average profits and capped at £6,570. It will be paid, as before, in a single instalment and is planned to be available in August. “An individual does not need to have claimed the first grant to receive the second grant: for example, they may only have been adversely affected by COVID-19 in this later phase.” See the associated press release, here

– Also during the daily briefing, the Chancellor explained the tapering and planned end of the Coronavirus Job Retention Scheme, and an earlier delivery of the planned flexibility to bring furloughed employees back part-time, which will start from 1st July. Regarding tapering, the result will be that:

“June and July: The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything.

August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.

September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.

October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.”

More details available in the associated press release, here

28th May

– Clarity brought to SSP reclaim guidance to highlight that “You can now claim for employees who are self-isolating because they’ve been notified by the NHS or public health bodies that they’ve come into contact with someone with coronavirus” complimenting the launch of ‘track and trace’

26th May

– As planned, the “Coronavirus sick pay scheme opens for applications” which “allows small and medium sized employers, with fewer than 250 members of staff, to apply to recover the costs of paying coronavirus-related Statutory Sick Pay for two weeks – worth nearly £200 per employee.” And “after making an application employers will receive the money within six working days.” – see press release, access the service here, service availability information can be found here

22nd May

FCA and the Treasury both announced an extension to the help for homeowners with their mortgages, whereby “Where consumers can afford to re-start mortgage payments, it is in their best interests to do so. But where they can’t, a range of further support will be available. People who are struggling and have not had a payment holiday, will continue to be able to apply until 31 October.” Note in particular that “the current ban on repossessions of homes will be continued to 31 October 2020” and that “Payment holidays and partial payment holidays offered under this guidance should not have a negative impact on credit files.”

19th May

– The SSP rebate scheme is set to launch from 26th May, according to this press release, and “a loss of, or change in, your normal sense of taste or smell (anosmia)” was added to the list of symptoms whereby display of any such symptoms require the sufferer and their household to self-isolate and thus become eligible for SSP (self-isolation guidance can be found here)

– The link to “check the status of your payment” was reinstated on the page where you can claim through the Self Employment Income Support Scheme

18th May

– A Convertible Loan Agreement document was added to the Future Fund guidance, and it is noted that it will open for applications on 20th May

– The maximum loan size available to large businesses was raised from £50m to £200m according to this press release, subject to restrictions on dividend payments, senior pay and share buy-backs during the loan period, “including a ban on dividend payments and cash bonuses, except where they were previously agreed” applying “beyond 12 months from today” to “ensure that the money is used to keep the company going through the crisis. The Bank will also publish a list of companies who have benefitted under CCFF on 4 June.”

15th May

– A guidance document was introduced for those who complete Self Assessments and would have a payment on account due in July, to help them “Choose how and when you can delay making your second payment on account for the 2019 to 2020 tax year” – in particular, stating that “You do not need to tell HMRC that you’re deferring your payment on account.” and “HMRC will not charge interest or penalties on any amount of the deferred payment on account, provided it’s paid on or before 31 January 2021”

– The link to “check the status of your payment” has been removed from the page where you can claim through the Self Employment Income Support Scheme – either it was not the proper place, or the service has been removed (when I go to where the previous link led, I am now met with an error message: “For your security, this service has been reset. The details you have given have been deleted.”)

14th May

“FCA confirms measures to help insurance customers who may be suffering financial difficulties as a result of coronavirus” – requiring firms to reassess the risk profile of customers as “there may be scope to offer customers materially lower premiums”, consider if there are other more suitable products to switch customers to e.g. “a motor insurance customer might no longer need associated add on cover such as key cover or could be moved from fully comprehensive cover to third party fire and theft”, and also waive cancellation fees and other fee associated with adjusting policies. “These actions could result in a reduction in the monthly premium for customers paying by instalments or a partial refund of the premium for customers who have paid up front. Where amendments to the insurance cover do not help alleviate the temporary payment difficulties for customers paying their premium in instalments, then the FCA expects firms to grant customers a payment deferral unless it is obviously not in the customer’s interests to do so. The payment deferral should be granted for a period of between 1 and 3 months, though firms can go beyond 3 months should they wish to do so, and it is in the customer’s interests. Customers should be able to request a payment deferral at any point during the period up to 18 August 2020 while the window for requesting a payment deferral is open.” Alternatives are listed where payment deferral is not considered appropriate and there is a continued expectation to consider lowering interest rates. The measures would come into force by the end of May 2020. See the full press release here

– Self Employment Income Support Scheme statistics released: on 13th May 441,000 claims were made totalling £1.3bn – see statistics here

– A ‘How to make a claim’ video regarding the Self Employment Income Support Scheme was added here

– The temporary suspension of ‘wrongful trading rules’ was extended to 30th June – see the updated press release here

– Examples to help employers calculate 80% of their employees’ wages for the Coronavirus Job Retention Scheme were added here

13th May

– The Self Employment Income Support Scheme is now generally available for applications here, though the guidance document states you should “Make your claim from the date we gave you when you checked your eligibility.” The following statement has also been added: “You should not claim the grant if you’re a limited company”, though this is not well written – a limited company is a separate legal entity to an individual: Use of the word ‘you’re’ indicates the limited company itself may not claim, but a self-employed individual who happens to also be a person of significant control (e.g. sole director) of a limited company would not seem to be specifically excluded from claiming by this statement, if they are otherwise eligible. Note “If you submitted your returns between 26 March 2020 and 23 April 2020 check your eligibility again as the online service has been updated.” – according to the associated press release, which could be due to the many claims that the calculator has been giving false results – the guidance document notes that “If you still think you should be able to claim you can ask HMRC to review your eligibility”, which you can do here. People can claim “on a specified date between 13-18 May, based on their Unique Tax Reference number” which “can be checked on HMRC’s online checker” here, and “will be able to receive the government grant by 25 May, or within six days of a completed claim.”

“Businesses with supply chains which rely on Trade Credit Insurance and who are experiencing difficulties maintaining cover due to Coronavirus will get support from the government, the Economic Secretary to the Treasury, John Glen has announced.” – see press release here

12th May

– The chancellor revealed that the furlough scheme will be extended until the end of October. “From the start of August, furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff. The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month. […] The scheme will continue in its current form until the end of July and the changes to allow more flexibility will come in from the start of August. More specific details and information around its implementation will be made available by the end of this month.” – The chair of the Treasury Committee has also commented, welcoming the measure, but also stating: “The Chancellor also said that there will be no changes to the scheme until July. This will be worrying for those who continue to fall through the gaps of the Government’s support measures such as the lack of furlough support to help cover dividend income generated through self-employment.”

11th May

– New collection of guidance documents have been launched: Working safely during coronavirus (COVID-19)

– Revised version of Coronavirus Job Retention Scheme: step by step guide for employers was published “that is clearer and includes recent additions to the process”

7th May

– The Coronavirus Job Retention Scheme service now allows you to save a claim and finish it later

– More details emerged re the Bounce Back Loan, with clarity added to the guidance document to highlight that small and medium sized businesses may “borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000.” also “there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.” suggesting that interest will not accrue immediately. Also, “The length of the loan is 6 years, but you can repay early without paying a fee. No repayments will be due during the first 12 months.” However, I am not reassured by the statement: “The lender will decide whether to offer you a loan or another type of finance” as it makes me wonder whether lenders may choose to direct you to products that are more profitable to themselves, rather than this scheme, after you apply. Though it is reassuring to note that “If one lender turns you down, you can apply to other lenders in the scheme”

6th May

“More than 69,000 Bounce Back Loans worth over £2 billion have been approved during the first 24 hours of the scheme” according to this press release from HM Treasury

5th May

– A specific date for the Self-Employment Income Support Scheme online service to be online was added: 13th May. However, “If you’re eligible, we will tell you the date you can make your claim from.” – presumably a way of spreading the load on this system, and I expect that to be enforced. Once approved, “you’ll receive your payment within 6 working days.”

4th May

– A tool was added to allow you to check if you’re eligible to claim for Self Employed Income Support Scheme: https://www.tax.service.gov.uk/self-employment-support – however, the benefit of this tool may be limited, given that HMRC will work out if you’re eligible and write to you if you are, anyway)

– The bounce back loan scheme online application form opened, here: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/ – however no singleshort and simple form” appears to be available at this time, as all potential applicants are being directed to choose a lender and find out how to apply through them individually. However, a Treasury press release claims that (presumably for each lender) “small business owners can apply to accredited lenders by filling out a simple online form, with only seven questions.” – More importantly, however: “The government has also agreed with lenders that an affordable flat rate of 2.5% interest will be charged on these loans” (Note: the government covers the cost of any fees and interest for the first 12 months) “And any business that has already taken out a Coronavirus Business Interruption Loan of £50,000 or less can apply to have these switched over to this generous new scheme.”

– The eligibility criteria that a business “was not an ‘undertaking in difficulty’ on 31 December 2019” has now been removed from the bounce back loan scheme, meaning that such businesses may apply

– Applicable to those claiming tax credits, an HMRC press release today states that “Tax credits customers will continue to receive payments even if working fewer hours due to COVID-19” also stating “These customers do not need to contact HMRC about this change. We will treat customers as working their normal hours until the Job Retention Scheme and Self-Employment Income Support Scheme close, even if they are not using either scheme.”

2nd May

– The Self-Employed Income Support Scheme guidance document added the following explicit statement: “If you receive the grant you can continue to work, start a new trade or take on other employment including voluntary work, or duties as an armed forces reservist.” (It continues to state “If you have other employment as a director or employee paid through PAYE your employer may be able to get support using the Coronavirus Job Retention Scheme”) – examples of ways you may have been adversely affected by coronavirus were added, highlighting that this is not restricted to being directly affected only by sickness or the Government instructions for the public to stay at home (e.g. it includes interrupted supply chains, fewer customers/clients and staff unable to come to work.) – it has also been highlighted that “Your tax agent or adviser cannot make the claim for you. You must make the claim yourself. If you use an agent you should contact them if you need any help or support.”

– HMRC introduced a digital assistant to aid in finding information about Coronavirus support schemes. It can be found here: https://www.tax.service.gov.uk/ask-hmrc/virtual-assistant/support-for-coronavirus

– A relatively unpromoted press release was made by several government departments, speaking of a “Top-up to local business grant funds scheme” designed “to accommodate certain small businesses previously outside the scope of the business grant funds scheme.” The release states: “We are asking local authorities to prioritise businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for Small Business Rates Relief, and bed and breakfasts that pay council tax rather than business rates. But local authorities may choose to make payments to other businesses based on local economic need. The allocation of funding will be at the discretion of local authorities. Businesses must be small, under 50 employees, and they must also be able to demonstrate that they have seen a significant drop of income due to Coronavirus restriction measures. There will be three levels of grant payments. The maximum will be £25,000. There will also be grants of £10,000. local authorities will have discretion to make payments of any amount under £10,000. It will be for councils to adapt this approach to local circumstances.” With no further guidance given on how small businesses can claim from this scheme, the only point of contact would be your local authority – though be aware that they may not yet know any of the details about this scheme as “Further guidance for local authorities will be set out shortly.”

1st May

– Comments were added to the Coronavirus Job Retention Scheme guidance documents to cover where more complex scenarios apply, involving maternity pay, adoption pay, paternity pay, shared parental pay or parental bereavement pay. Also, Company directors with an annual pay period, whose only salary payment to themselves in 2019-20, notified to HMRC through payroll software, was (or would have been) after 19th March 2020, are explicitly held to the same rules as other kinds of employee and are thus not eligible for this scheme. Larger employers may be reassured to see the explicit statement that “Coronavirus Job Retention Scheme grants are not classed as state aid.”

“FCA seeks legal clarity on business interruption insurance alongside package of measures to help consumers and small businesses […] The Financial Conduct Authority (FCA) has today announced it intends to seek legal clarity on business interruption (BI) insurance to resolve doubt for businesses who are facing uncertainty on their claims.” – see the full press release here – Mel Stride, chair of the Treasury Committee, has commented on this, calling the steps taken by FCA “extremely welcome” and stating that “The Committee will be pressing for rapid progress. Those who should be paid, should be paid as soon as possible.”

– More examples were added to the guidance document: How HMRC works out trading profits and non-trading income for the Self-Employment Income Support Scheme to handle some more complex scenarios

28th April

– Webinar about Coronavirus (COVID-19) Statutory Sick Pay (SSP) rebate scheme has been added: https://www.gov.uk/guidance/help-and-support-if-your-business-is-affected-by-coronavirus-covid-19

27th April

– The VAT payments eligible for deferral have been outlined in greater detail: You can only defer quarterly and monthly VAT returns’ payments for the periods ending in February, March and April; payments on account due between 20 March 2020 and 30 June 2020; annual accounting advance payments due between 20 March and 30 June 2020. As before, “the deferral does not cover payments for VAT MOSS or import VAT”. It is also highlighted that HMRC will “continue to process VAT reclaims and refunds as normal […and…] not be offset against any deferred VAT”. If you wish to defer your VAT payment, you are still advised to cancel your Direct Debit, and you that you must pay the VAT due on or before 31 March 2021.

– The Coronavirus Job Retention Scheme calculator can now be used to work out what you can claim for employees who are paid variable amounts each pay period: https://www.tax.service.gov.uk/job-retention-scheme-calculator/

– In a statement to the Houses of Parliament, the chancellor said “over 20,000 Coronavirus Business Interruption Loans have now been approved” (which to my mind seems a ridiculously small number compared to the 5.82 million small businesses in the UK) and that “HMRC are also on track to deliver the Self-employed Income Support Scheme, as promised, in early June, and we will publish detailed guidance this week.” He also revealed the new Bounce Back Loans (see below)https://www.gov.uk/government/speeches/chancellors-statement-to-parliament

– The government announced a new ‘Bounce Back Loan’ scheme: “whereby businesses will be able to borrow between £2,000 and £50,000 and access the cash within days […] interest free for the first 12 months, and businesses can apply online through a short and simple form” This is a “new fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders […]  designed to ensure that small firms who need vital cash injections to keep operating can get finance in a matter of days […] No repayments will be due during the first 12 months.” Also, “the government will work with lenders […] and agree a low standardised level of interest for the remaining period of the loan” The scheme will launch for applications on Monday 4 May. “There will be no forward-looking tests of business viability; no complex eligibility criteria; just a simple, quick, standard form for businesses to fill in.” and “For most firms, loans should arrive within 24 hours of approval.” Once available, you may apply here (some eligibility criteria are already stated): https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan

24th April

– “The FCA will be introducing the package of measures outlined last week to support consumer credit customers facing payment difficulties due to coronavirus (Covid-19).” – https://www.fca.org.uk/news/press-releases/fca-confirms-support-motor-finance-and-high-cost-credit-customers – now in force as of Monday 27th April: “a 3 month payment freeze for motor finance, buy-now pay-later (BNPL), rent-to-own (RTO) and pawnbroking agreements. For high-cost short term credit (including payday loans) payments will be frozen for one month with no additional interest to be charged.”

– The British Business Bank has amended the eligibility criteria listed on its website for the Coronavirus Business Interruption Loan Scheme, namely highlighting the ineligibility of small businesses who “have been classed as a ‘ business in difficulty ’ on 31 December 2019, if applying to borrow £30,000 or more.”

23rd April

– A section was added to the Coronavirus Job Retention Scheme guidance documents making it clear that if an employee was made redundant or stopped working after 28th February (but were on their payroll at that time), or after 19th March (but were on their payroll at that time), the employer can agree to re-employ them and place them on furlough.

– Collective agreements between trade unions and employers are now considered acceptable agreements that employees may be furloughed under the Coronavirus Job Retention Scheme

– The Treasury Committee requested cooperation from lenders for daily updates on the coronavirus business loans: https://committees.parliament.uk/committee/158/treasury-committee/news/146089/committee-requests-cooperation-from-cbils-lenders-on-providing-daily-data-update/

– Webinar about Coronavirus (COVID-19) – Self-employment Income Support Scheme (SEISS) and a YouTube video with a step-by-step guide on how to make a claim through the Coronavirus Retention Scheme have been added.: https://www.gov.uk/guidance/help-and-support-if-your-business-is-affected-by-coronavirus-covid-19

21st April

– The Chancellor responded to the Treasure Committee on help for those not eligible for Government’s support measures: https://committees.parliament.uk/committee/158/treasury-committee/news/146064/chancellor-responds-to-treasury-committee-on-help-for-those-not-eligible-for-governments-support-measures/

– The Treasury Committee requested daily updates on the coronavirus business loans: https://committees.parliament.uk/committee/158/treasury-committee/news/145972/treasury-committee-requests-daily-updates-on-coronavirus-business-loans-to-drive-further-vital-lending/

– Webinar about Coronavirus (COVID-19) Job Retention Scheme – how to make a claim has been added: https://www.gov.uk/guidance/help-and-support-if-your-business-is-affected-by-coronavirus-covid-19

– The Chancellor answered the Treasury Committee’s requests regarding those ineligible for the existing support measures – but little flexibility was displayed. You can find the response here: https://committees.parliament.uk/committee/158/treasury-committee/news/146064/chancellor-responds-to-treasury-committee-on-help-for-those-not-eligible-for-governments-support-measures/

20th April

– The Coronavirus Job Retention Scheme online portal is now open: https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme – “Once you’ve claimed, you’ll get a claim reference number. HMRC will then check that your claim is correct and pay the claim amount by Bacs into your bank account within 6 working days.”

– A service availability link was added that you can use to check it’s all operational: https://www.gov.uk/government/publications/coronavirus-job-retention-scheme-service-availability-and-issues/coronavirus-job-retention-scheme-service-availability-and-issues

– A calculator was added that “can currently be used to work out what you can claim for most employees who are paid the same amount each pay period” – https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme

– The Future Fund was announced, whereby the government “will provide [convertible] government loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors” provided your business “has previously raised at least £250,000 in equity investment from third-party investors in the last 5 years” – to launch in May. Details here: https://www.gov.uk/guidance/future-fund

– A ‘Business Support Finder’ tool was launched, which can be found here: https://www.gov.uk/business-coronavirus-support-finder

17th April

– The Coronavirus Job Retention Scheme was extended by one month (to the end of June) to reflect continuing social distancing measures – see the press release, here: https://www.gov.uk/government/news/chancellor-extends-furlough-scheme-to-end-of-june

– A step-by-step Coronavirus Job Retention Scheme guide for employers was published on 17th April, available here: https://www.gov.uk/government/publications/coronavirus-job-retention-scheme-step-by-step-guide-for-employers

– Since SSP was extended to cover all those who are shielding, the guidance was updated to highlight that employers can also reclaim for those employees claiming SSP who “are shielding in line with public health guidance” – but the reclaimable amount is still limited to up to 2 weeks of this 12-week+ self-isolation period, throughout which they will be entitled to SSP

– A guidance document was published, entitled “Work out 80% of your employees’ wages to claim through the Coronavirus Job Retention Scheme”, here: https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme

“The FCA has today announced another proposed package of measures to directly support consumers facing payment difficulties due to coronavirus (Covid-19). The range of targeted temporary measures cover motor finance and high cost credit agreements, which include: high-cost short-term credit (including payday loans), buy-now pay-later (BNPL), rent-to-own (RTO) and pawnbroking.”https://www.fca.org.uk/news/press-releases/fca-proposes-help-motor-finance-high-cost-credit-customers-coronavirus

16th April

We missed it at the time, but legislation came into force extending SSP to cover those who are shielding – http://www.legislation.gov.uk/uksi/2020/427/pdfs/uksi_20200427_en.pdf

15th April

– The Treasury announced an extension of the eligibility cut off date for the Coronavirus Job Retention Scheme. The date that an employee must have been on the payroll (on or before) to be eligible was extended from 28th February to 19th March – see: https://www.gov.uk/government/news/furlough-scheme-cut-off-date-extended-to-19-march

– The British Business Bank page on the Coronovirus Business Interruption Loan quietly added the following statement: “Lenders will need further information to confirm eligibility. All lending decisions remain fully delegated to the 40+ accredited lenders” – presumably small businesses are unsure why their loan requests are being turned down given they believe they satisfy the requirements otherwise listed there: “Your business must: Be UK-based in its business activity; Have an annual turnover of no more than £45 million; Have a borrowing proposal which the lender would consider viable, were it not for the current pandemic; Self-certify that it has been adversely impacted by the coronavirus (COVID-19).” – Are lenders turning down otherwise healthy businesses in need of the loan according to their own additional proprietary criteria?

14th April

– HMRC introduced a guidance document illustrating how they calculate total income and trading profits for the Self-Employment Income Support Scheme: https://www.gov.uk/guidance/how-hmrc-works-out-total-income-and-trading-profits-for-the-self-employment-income-support-scheme

– The Chancellor revealed, during the daily briefing, that the ‘online portal’ for the Coronavirus Job Retention Scheme is currently in testing, and anticipated to become available on or around 20th April, after which it will be “several days to get the cash”

12th April

– The Business Support FAQs page specifically on Coronavirus was removed, now pointing instead to the recently compiled collection: https://www.gov.uk/government/collections/financial-support-for-businesses-during-coronavirus-covid-19

10th April

– Coronavirus Job Retention Scheme documentation updated to confirm that those working through limited companies, in-scope of IR35 legislation and with a public-sector engagement (‘off payroll’) may be furloughed under this scheme for that engagement, and also that foreign nationals are eligible – details here

– Clarity brought re SSP eligibility while ‘furloughed’ under the Coronavirus Job Retention Scheme: You may (but do not have to) use SSP for workers who are furloughed and then become sick (though sick workers must be paid at least SSP) – since both are reclaimable, the higher pay rate will probably be the best to use for all involved

9th April

– “FCA confirms temporary financial relief for customers impacted by coronavirus” – https://www.fca.org.uk/news/press-releases/fca-confirms-temporary-financial-relief-customers-impacted-coronavirus

8th April

– The previously linked and heavily referenced ‘COVID-19 Support For Businesses’ document was removed, replaced with a ‘collection’ of guidance documents representing it’s former constituent parts: https://www.gov.uk/government/collections/financial-support-for-businesses-during-coronavirus-covid-19

This document was updated to reflect that the Chancellor has explicitly stated on 3rd April, via a video Tweet, that neither eligibility nor the calculation of the Self-Employment Income Support Scheme will extend to 2019-20 self assessments – see this via the moneysavingexpert blog, here: https://blog.moneysavingexpert.com/2020/04/nine-things-the-chancellor-could-tweak–to-help-people-through-t/#provisionaltax

The support for charities announcement was added: https://www.gov.uk/government/news/chancellor-sets-out-extra-750-million-coronavirus-funding-for-frontline-charities

The Treasury Select Committee inquiry request for the Chancellor to address the gaps was added: https://committees.parliament.uk/committee/158/treasury-committee/news/145875/treasury-committee-urgent-action-needed-for-those-not-eligible-for-treasurys-support-measures/

4th April

Business FAQs updated with sections on: ‘I have questions about employment and employing my staff – where can I go?’, ‘ What proof do my employees need to provide to take sick leave?’, ‘ I employ people on zero hours contracts / gig economy workers. Can they access support?’, ‘ How does this impact my apprentices or apprenticeships?’, ‘ I cannot afford to pay my mortgage, what do I do?’, ‘ Can I get any help to reduce my business’ energy bills?’, ‘ What can I do as a small business experiencing late payments from bigger businesses?’ and ‘ Can I help with the supply of ventilators?’

– Coronavirus Job Retention Scheme guidance updated, including for specific scenarios including apprentices, limited company directors, agency workers and those working through an umbrella company. The guidance also clarified: the applicable ‘earnings’ upon which the 80% calculation will be based; that usual PAYE deductions (such as income tax, national insurance and student loan contributions) are still due; that a worker may not do work for the employer ‘or a company linked or associated to your employer’ while furloughed, presumably to prevent some gaming of the system; that ’employers must confirm in writing to their employee confirming that they have been furloughed’ and that a record ‘must be kept for five years.’

3rd April

– The Coronavirus Business Interruption Loan scheme rules were significantly changed, after a mere 983 loan approvals out of 130,000 applications over this previous week. The (unnecessarily anti-bank spun) official press release can be found here: https://www.gov.uk/government/news/chancellor-strengthens-support-on-offer-for-business-as-first-government-backed-loans-reach-firms-in-need

– The Coronavirus Large Business Interruption Loan Scheme page was inexplicably removed, and then added again here: https://www.businesssupport.gov.uk/coronavirus-large-business-interruption-loan-scheme/

– New guidance from HMRC re employers reclaiming Coronavirus-related SSP costs (but no new information and no online portal for claiming as yet) https://www.gov.uk/guidance/claim-back-statutory-sick-pay-paid-to-employees-due-to-coronavirus-covid-19

– Coronavirus Large Business Interruption Loan scheme info added to the main ‘Covid-19: support for business’ document

– Advice for those wanting to receive the grants available to those in the retail, hospitality or leisure industries paying business rates, or those paying little or no business rates due to Small Business Rate Relief or Rural Rate Relief, has been updated to indicate that though the local authority will still write to you, some are still operating an applications procedure

– Business FAQs added a specific FAQ page on the Self-Employment Income Support scheme, here: https://www.businesssupport.gov.uk/self-employment-income-support-scheme-faqs/

– VAT deferrals confirmed not to include payments for import VAT

2nd April

– The Financial Conduct Authority has proposed temporary financial relief for customers impacted by coronavirus, expected to become effective from 9th April. Press release, here: https://www.fca.org.uk/news/press-releases/fca-proposes-temporary-financial-relief-customers-impacted-coronavirus

– The central ‘COVID-19: support for businesses’ document has removed it’s partial outlining of the scheme rules for the Coronavirus Business Interruption Loan scheme, instead now redirecting the reader to https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/for-businesses-and-advisors/

– The Coronavirus Large Business Interruption Loan Scheme was added, details available here: https://www.businesssupport.gov.uk/coronavirus-large-business-interruption-loan-scheme/

1st April

– SSP guidance updated to include Coronavirus: https://www.gov.uk/guidance/statutory-sick-pay-manually-calculate-your-employees-payments

(Note for payroll experts: I previously suggested that Periods of Incapacity for Work (PIW) may in the end be worked out as un-linked in the case of either contributing periods being due to Coronavirus, but the absence of this change in the above document now suggests this will not be the case. Regardless, it should have no effect on the pay available to employees, as SSP is payable from day 1 of any Coronavirus-related leave (regardless of PIW calculations) anyway and Coronavirus-related leave is always more than 3 days, so following unrelated sickness would also never have any ‘waiting days’ to ‘carry over’)

31st March

– We found and referenced the press release from 28th March detailing how ‘Wrongful trading’ rules are intended to be suspended for limited company directors to allow them to trade through this with confidence they will not become personally liable for their company’s debts

28th-30th March 2020

– Business Support FAQs were updated to include a reminder that the planned ‘off-payroll’ (IR35) changes are not going ahead for the tax year 2020-21

– Minor changes to wording of HMRC guidance documents that improve clarity

– Ben Kerry (Head of Labour Markets, HMT) spoke during a webinar held by the CBI, clarifying the applicability of the Coronavirus Job Retention Scheme to limited company owner/directors – see timestamp 27:20 of the following recording: https://www.cbi.org.uk/articles/daily-coronavirus-webinar-job-retention-scheme-27-03-2020/

– Business Support FAQs overhauled the section ‘I employ people on zero hours contracts / gig economy workers. Can they access support?’ – previously this section directed the reader only to SSP and ESA – it now points toward the Coronavirus Job Retention scheme

– Business Support FAQs overhauled the section ‘What if I am self-employed?’ – previously this section directed the reader to Universal Credit, Rent deferral, Mortgage deferral, Tax Bill deferral, Business VAT deferral, IR35 deferral and (in a previous instance) Energy Bill deferral – it now points toward the Self-employed Income Support scheme

– The ‘COVID-19: support for businessses’ document was amended to better explain the Coronavirus Job Retention scheme, brought clarity that it is ‘Self-Assessment payments on account’ that may be deferred, and no ‘Income Tax’ more generally, specifying 31st January 2021 as last payment date beyond which those payments would be once again regarded as late. Also, the Time To Pay service telephone number was amended from 0800 0159 559 to 0800 024 1222 (the old number was thus removed from this page)

27th March 2020

– New HMRC guidance documents launched, referenced above

– A new scam is noted regarding a ‘£250 fine’

– The Self-employed Income Support scheme seems to be inapplicable to limited company owner/directors, due to the concluding paragraph of the guidance document

– Business Support FAQs were updated to include a link to a resource to tell the government if you think your business can help: https://www.gov.uk/coronavirus-support-from-business

26th March 2020

– The general banner explaining the need to ‘stay at home’ was reworded, to little effect

– The main links at the top of the businesssupport.gov.uk website were updated to become more specifically focused on coronavirus – in particular we have started to watch the general page: https://www.businesssupport.gov.uk/coronavirus-business-support/ which appears to be a hub for detail on the available support

– The businesssupport.gov.uk FAQ page removed a list item suggesting that Energy Bill deferral would be available to the Self Employed. If it was not there in error in the first place, this might seem to indicate that the energy sector is unwilling to provide the support that the government had hoped it would be able to offer – since we had heard nothing about such support through any other channels, it may be simply have been an error.

– A resource at https://www.businesssupport.gov.uk/self-employment-income-support-scheme/ was added to outline the new support available for the self-employed

– A more useful HMRC guidance document for Coronavirus Self Employment Income Support scheme was introduced, and can be found here: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme (links to the businesssupport.gov.uk website, mentioned above, have now been replaced with this more authoritative reference throughout this page)

25th March 2020

– Commercial insurance section expanded with an event coverage section added, making it more clear that you probably are NOT covered, as ‘pandemic’ or ‘notifiable disease’ cover is not common.

– A link stating “Check the business support website for answers to frequently asked questions” was added, but the FAQ offers little new information as yet.

– The specific statement: “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.” has been removed. Since the advice has not been formally retracted, it is just no longer being given, my personal recommendation would be to continue to cancel the direct debit if you need to. It has been amended to clarify that no late penalties or interest will be applied “if you defer payment until January 2021”, presumably to ensure it is not misinterpreted as inferring you would never attract penalties or late interest if you were to withhold payment indefinitely.

– A banner across the top of the site giving a general ‘stay at home’ message was added

24th March 2020

– Specific links to the guidance for local authorities were added for the rates holidays schemes, presumably because many were unaware of the guidance and were referring to this same document themselves

– Explicit guidance has been added to state that if you are VAT registered and want to defer your next VAT payment for the bill that would have been due between 20th March and 30th June 2020, you should cancel your direct debit – no late penalties or interest will be payable.

– Sections added to inform us that commercial renters are being protected from eviction and that BID ballots are being delayed

23rd March 2020

– Minor typos and clarity over the £15,000 vs £15,001 limit on rateable value for grants regarding property

– The section entitled “Cash grants for retail, hospitality and leisure businesses” has had it made clear that these rates are related to property. This is a welcome change as businesses without property were unsure if they could benefit from these grants – they can’t.

– The section “Support for nursery businesses that pay business rates” was added

– The section entitled “Support for businesses through the Coronavirus Business Interruption Loan Scheme” was updated to make it clear that the scheme is now available through 40 commercial lenders, “including all the major banks.” with a list added, available here: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/accredited-lenders/

– Also, the following was added: “If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow”

– Under the section “Support for larger firms through the COVID-19 Corporate Financing Facility” a note was added that, rather than all UK businesses being eligible, there was a backtrack and now “All non-financial companies that meet the criteria set out on the Bank of England’s website are eligible.” – presumably leaving some large financial institutions out in the cold.

– Also, specific links were added for businesses based in Scotland, Wales and Northern Ireland, as “some elements of business support are devolved”

 

 

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Posted in COVID-19.