We hope you are well even though the current circumstances.
Your business is important to us and we are committed to keep you updated with the latest guidance for employers and business owners as in the early stages of the coronavirus outbreak, many small and medium-sized businesses are already feeling its effects.
As you may be aware, the Chancellor has announced a temporary package of government-backed and targeted measures to support people and businesses experiencing financial difficulties through this period of disruption caused by COVID-19, which can be found on the following website: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses .
Please find below a brief statement of the main points which might help you:
INFORMATION FOR SELF-EMPLOYEDS
• If you are self-employed not eligible for SSP (for example if you are self-employed or earning below the Lower Earnings Limit of £118 per week) and you have COVID-19 or are advised to self-isolate, you can now more easily make a claim for Universal Credit (UC) or new style Employment and Support Allowance. For more information on how to claim, please visit https://www.gov.uk/universal-credit and https://www.gov.uk/guidance/new-style-employment-and-support-allowance.
• If you are self-employed and receiving Universal Credit and you have COVID-19 or are advised to self-isolate, the requirements of the Minimum Income Floor will be temporarily relaxed. This change took effect on 13th March and will last for the duration of the outbreak to ensure that self-employed UC claimants will receive support.
If you need to claim Universal Credit but have COVID-19 or are self-isolating, you will now be able to claim and to access advance payments upfront without needing to attend a Jobcentre Plus. Please visit https://www.gov.uk/universal-credit for more information.
If you are eligible for new style Employment and Support Allowance, it will now be payable from day 1 of sickness, rather than day 8, if you have COVID-19 or are advised to self-isolate.
• Income tax payments due in July 2020 under the Self-Assessment system:
They will be deferred to January 2021, benefitting up to 5.7m self-employed businesses
• If you think you may need financial support from your Local Authority in England, you may be entitled to support from the £500 million Hardship Fund:
Most of this funding will be used to provide more Council Tax relief, either through existing Local Council Tax Support schemes, or through similar measures.
The Ministry for Housing, Communities and Local Government (MHCLG) will set out more detail on this funding, including allocations, shortly.
• If you are experiencing financial difficulties meeting your mortgage repayments because of COVID-19, you may be entitled to a mortgage or rental holiday for 3 months.
The government has agreed with mortgage lenders that they will offer repayment holidays of 3 months to households in financial difficulty due to COVID-19.
This will apply to landlords whose tenants are experiencing financial difficulties because of COVID-19.
The offer of a payment holiday can be made available to customers who are up to date with payments and not already in arrears.
Customers who are concerned about their current financial situation should contact their lender at the earliest possible opportunity to discuss if this is a suitable option for them.
Emergency legislation will be taken forward so that landlords will not be able to start proceedings to evict tenants for at least a 3 months period. This applies to private and social renters.
At the end of this period, landlords and tenants will be expected to work together to establish an affordable repayment plan, taking into account tenants’ individual circumstances.
• If you are experiencing difficulties paying back personal loans or credit card bills as a result of COVID-19, you should read the following information:
The Financial Conduct Authority (FCA) called on lenders to use flexibility built into their rules to support consumers, taking into account customers’ individual circumstances. Many major lenders have already made statements to this effect.
If you are experiencing difficulties paying back loans or credit card bills because of COVID19, you should talk to your lender.
If you agree a payment holiday with your lender, they should record these in such a way that will not impact on your credit score.
INFORMATION FOR BUSINESSES
• Coronavirus Job Retention Scheme for Employers to keep jobs and avoid laid off:
Employers will be able to contact HMRC for a grant to cover most of the wages of their workforce who remain on payroll but are temporarily not working during the coronavirus outbreak.
Any employer in the country- small or large, charitable or non-profit – will be eligible for the scheme.
UK workers of any employer who is placed on the Coronavirus Job Retention Scheme can keep their job, with the government paying up to 80% of a worker’s wages, up to a total of £2,500 per worker each month. These will be backdated to 1st March and will be initially open for 3 months, to be extended if necessary.
• VAT bills will be deferred until the end of the tax year:
VAT payments due between 20th March until 30th June/2020 will be deferred until the end of the tax year. No VAT registered business will have to make a VAT payment normally due with their VAT return to HMRC in that period to ease cash flow for UK VAT registered businesses.
• Coronavirus Business Interruption Loan Scheme:
Designed to support primarily small and medium-sized businesses to access bank lending and overdrafts.
Businesses can access the first 12 months of that finance interest free, as government will cover the first 12 months of interest payments.
You should contact your bank for further information.
• If you are a small- or medium-sized business, you may be entitled to reclaim the costs of Statutory Sick Pay (SSP) for sickness absence due to COVID-19:
This refund will cover up to two weeks’ SSP per eligible employee who are either ill or been told to self-isolate because of COVID-19. This is in line with the recommended isolation period. Guidance on self-isolation can be found here: www.nhs.uk/conditions/coronavirus-covid-19.
Employers with fewer than 250 employees will be eligible. The size of an employer will be determined by the number of people they employed as of 28th February 2020.
Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19.
Employers should maintain records of staff absences, but employees will not need to provide a GP fit note.
The eligible period for the scheme began on 13th March.
The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.
• Some businesses, including nurseries in England will be eligible for a Business Rates holiday for 1 year from 1 April 2020:
If you are currently receiving the retail discount for your Business Rates bill, you will receive a revised bill with 100% relief shortly.
If your business occupies a property in the leisure or hospitality sectors you may also be eligible for the 100% discount on your business rates bill.
You will shortly hear from your Local Authority. If you have any questions, you should contact your Local Authority.
If you are a nursery, you will be entitled to the 100% relief for the next year. You should contact your Local Authority for more information.
• If your business is eligible for small business rate relief or rural rate relief in England, you are entitled to a one-off cash grant of £10,000:
If your business is in the retail, hospitality or leisure sector in England, then you may also be entitled to a cash grant. If you have a property with a rateable value of less than £15,000 then you will be entitled to a grant of £10,000, whether or not you are entitled to small business rate relief or rural rate relief. If you have a property with a rateable value of between £14,999 and £51,000 then you will be entitled to a cash grant of £25,000.
The Department for Business, Energy and Industrial Strategy (BEIS) will provide guidance for Local Authorities on how to administer these grants shortly.
If you are an eligible business, your Local Authority will then be in touch in the coming weeks to provide details of how to claim this money.
• If you are a large business facing cash flow issues as a result of COVID-19, you may want to read the following information:
Companies commonly sell short term debt (‘commercial paper’) to the market. This is a quick and cost effective to raise working capital.
The new COVID-19 Corporate Financing Facility means that the Bank of England will buy short term debt from companies.
This will support companies which are fundamentally strong, but have been affected by a short-term funding squeeze, enabling them to continue financing their short-term liabilities. It will also support corporate finance markets overall and ease the supply of credit to all firms.
Further details can be found in the exchange of letters between the Governor of the Bank of England and the Chancellor, found here: https://www.gov.uk/government/publications/launch-of-covid-19-corporate-financing-facility-ccff.
• If you are self-employed or own a business and you are concerned about not being able to pay your tax bills because of COVID-19, you may be eligible for support through Her Majesty’s Revenue and Customs’ (HMRC) Time to Pay service:
If you think you or your business is eligible for support through Time to Pay, you can call the Tax helpline number to get practical help and advice: 0800 0159 559.
These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
For more information, please check the HMRC site here: https://www.gov.uk/government/news/tax-helpline-to-support-businesses-affected-by-coronavirus-covid-19.
• If you own a pub that serves food or a restaurant in England, you will be able to operate a hot food takeaway to serve people staying at home, without going through the usual planning process:
The Ministry for Housing, Communities and Local Government (MHCLG) will shortly legislate to bring forward a temporary Permitted Development Right to allow for change of use from A3 (Restaurant) and A4 (Pub) to A5 (Hot Food Takeaway).
The intention is that once the legislation has come into force a pub or restaurant will be able to notify their Local Authority that they are now operating as a takeaway without any prior approval.
• If you contract your services to large- or medium-sized organisations outside of the public sector you should read the following information:
The government announced on 17th March that the reform to the off-payroll working rules (commonly known as IR35) – that would have applied for people contracting their services to large or medium-sized organisations outside the public sector – will be delayed for one year from 6 April 2020 until 6 April 2021.
Business and individuals do not need to take any action.
• If the only barrier to your business making an insurance claim was a lack of clarity on whether the government advising people to stay away from businesses, rather than ordering businesses to shut down, was sufficient to make a claim on business interruption insurance:
The government’s medical advice of 16th March is sufficient to enable those businesses which have an insurance policy that covers both pandemics and government ordered closure to make a claim – provided all other terms and conditions in their policy are met. Businesses should check the terms and conditions of their specific policy and contact their providers if in doubt.
However, most businesses have not purchased insurance that covers pandemic related losses. As such, any affected businesses should note the government’s full package of support described above.
We hope you find the below information helpful and please feel free to contact us for any additional support or resources you might need.