The impact of the coronavirus and government’s support for business is changing rapidly so we’ve updated our blog to outline the key measures for business and the detail behind them where it is available. We will continue to update this post as more information is released (last update 03/07/20).
We’ve summarised specifically below:
- Coronavirus Self-Employment Income Support Scheme (CSEISS)
- Universal credit
- VAT deferral
- Income tax deferral
- Time to Pay arrangements with HMRC
- Coronavirus Business Interruption Loan Scheme
- Cash grants
- Business rates relief
Please see our separate blog about the Coronavirus Job Retention Scheme (CJRS)
Coronavirus Self-Employment Income Support Scheme (CSEISS)
This scheme enables self-employed taxpayers to claim an initial taxable grant worth 80% of trading profits up to a maximum of £2,500 per month for the next 3 months. This grant must be claimed by 13th July.
A second grant is available to those who are still affected after 13th July which will be worth 70% of trading profits up to a maximum of £2,190 per month for three months.
This applies to sole traders and members of partnerships (not limited companies) who satisfy all of the following conditions:
- You submitted a tax return for 2018/19
- You have traded in the tax year 2019/20
- You are trading now, or would be if the Coronavirus hadn’t closed your business down.
- You intend to continue to trade in 2020/21, and
- You have lost profits due to the Coronavirus.
Profits must also be less than £50,000 and more than half of your income must come from self-employment.
To calculate the amount of your grant, the last three years profits will be added together and an average calculated. The grants will be paid directly into your bank account in two separate installments. The second grant is due to be paid in August.
The full guidance and online form to claim can be found here.
As with the first grant we are unable to make this claim for you. However, if you have had any trouble with this process do get in touch so we can help. We can talk you through the claim or screen share with you to help you get it done.
All businesses were able to defer their VAT payments between 20th March and 30th June 2020. The deferred amount must be paid by 5th April 2021.
There has been no further deferral of subsequent VAT payments so you must ensure that payments due after this date are paid manually or that you reinstate your direct debit. If you are unable to pay the next VAT payment then you will have to contact HMRC and ask for additional time to pay.
Income Tax Payments
Income tax payments are deferred for everyone who has a personal tax return (in self-assessment), so you will not need to make your payment on account on 31st July 2020.
This is an automatic deferral, there is no requirement to let HMRC know. Your full tax bill will be due 31st January 2021 and no interest or penalties will be charged
Time to Pay for Outstanding Tax Liabilities
HMRC have set up a dedicated helpline for businesses and individuals facing financial distress due to COVID-19 who have outstanding tax liabilities. It should be possible to arrange time to pay by phoning HMRC on 0800 0159 559.
Currently they are offering deferral of current outstanding bills, but they may also agree to a payment plan over a longer period, particularly if you present a reasonable payment plan to them.
If you arranged a three month deferral at the start of the pandemic then it is likely your tax is now due, if you call again you may be able to get a further deferral.
Bounce Back Loans
As of the 4th May small businesses can also apply for a bounce back loan of up to £50,000. For more information see our blog.
Coronavirus Business Interruption Loan Scheme
This has been set up to provide loan finance to businesses who otherwise might not be able to access funding. The loans are interest free and charge for 12 months and are government backed.
To access this funding go to the Business Bank website and then choose your lender. You must approach your own lender first, lending has been very slow on these ‘CBILS’ loans but further guidance was issued to tell banks not to ask for future forecasts in order to minimise the information required.
f you have taken a bounce back loan, you may be able to borrow more under CBILS by converting the BBL to form part of the CBILS.
Companies in the leisure, retail and hospitality industry with a rateable value of less than £51,000 will be able to obtain a cash grant of up to £25,000 per business.
Small businesses who currently qualify for small business rates relief will have grants of up to £10,000 available to them. Many businesses have now received this funding, but we would encourage you to check the government guidance here carefully as some businesses who thought they may not qualify have been successful in making claims. Also, although the council has contacted you, if you haven’t seen the communication and responded, they may not reach out to you to try again.
Every business in the retail, leisure and hospitality sector will get a 12 month holiday from paying business rates.
Guidance has been published on which businesses will receive this relief. Broadly it includes businesses that sell goods, food or drink or provide services to visiting members of the public. So most of the businesses who have been told to close, or had to close due to social distancing should be covered by this relief.
Check the list here to see if your business will qualify.
The government announced further top-up grants which may be available to businesses who have so far missed out on the business rates grant support. Information is very limited and the grants will be managed by the local councils.
If you don’t qualify for any income support through other measures, you can claim increased amounts of universal credit. We have a factsheet available to send out if you are looking to claim this and would like some help.
If you are still uncertain as to what help is specifically available to you there is now a HMRC tool which can point you to the scheme which applies to you and do call us if you are still uncertain.