COVID-19

Updated 3rd April 2020

The chancellor revised the scheme:

  • Lenders would be banned from requesting personal guarantees – which mean borrowers often have to put their homes on the line – on loans under £250,000.

  • The loan scheme would be extended so that it covered all small companies affected by Covid-19 and not just those unable to get commercial funding.

  • There would be a new scheme to bolster support for larger firms not currently eligible for loans, under which the government would provide a guarantee of 80% so that banks could make loans of up to £25m to firms with an annual turnover of between £45m and £500m.
    https://www.theguardian.com/politics/2020/apr/02/uk-banks-banned-from-requesting-personal-guarantees-for-loans 

Updated 4th April 2020

Claim for your employees' wages through the Coronavirus Job Retention Scheme

HMRC will retain the right to retrospectively audit all aspects of your claim.

Company Directors

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).

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

Mortgages and BCP Council Support 

While the holidays were initially only available only to owner-occupiers, lenders extended the scheme to buy-to-let landlords   https://www.moneyexpert.com/news/banks-reveal-details-3-month-mortgage-holidays-promised-chancellor/

£128m rate relief to support local businesses
BCP Council has received £128m from the Ministry of Housing, Communities and Local Government to provide grants to support local business rate payers affected by coronavirus (COVID19).

The grants will be given by the Council to businesses that are considered eligible. Find out if your business is eligible here. If your business is eligible, you will be required to fill in a form. This is available on the Council’s website.



Claim a grant through the coronavirus (COVID-19) Self-employment Income Support Scheme  https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme


Claim for wage costs through the Coronavirus Job Retention Scheme  https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme


To be eligible for the subsidy, when on furlough, an employee can not undertake work for or on behalf of the organisation. This includes providing services or generating revenue. While on furlough, the employee’s wage will be subject to usual income tax and other deductions.

This scheme is only for employees on agency contracts who are not working.

If an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for this scheme and you will have to continue paying the employee through your payroll and pay their salary subject to the terms of the employment contract you agreed.


This makes it almost impossible for a sole director to claim as they will be trying to restart their business, seeking sales and making sales, doing admin, having online meetings etc - very few will be able to just do filing of returns and so can't do as suggested by Martin Lewis in the Tweet opposite.

HMRC will be checking for Fraud when this crisis is over.

Part 1, para 76, Coronavirus Act 2020 states: ‘Her Majesty's Revenue and Customs are to have such functions as the Treasury may direct in relation to coronavirus or coronavirus disease.’

Advisedly this could give the tax authority the potential to have unlimited powers to check records and access taxpayers' information, although lawyers have stressed that the use of the word 'function' mean it is administrative rather than tax collecting related.

https://www.accountancydaily.co/covid-19-coronavirus-act-2020-allows-hmrc-extended-powers 

Coronavirus -
What Every Business Needs to Know

Coronavirus is creating unprecedented challenges for every business in the UK. Fortunately, Indicators team of experts has the answers to all your questions about the impact of coronavirus – it now covers employment, tax & VAT, contracts, finance, directors’ duties and more.

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Department for Work and Pensions

Part of the Universal Credit payment is a standard amount for your household. This is known as your standard allowance. Your monthly amount will depend on whether you are single or in a couple, and your age.

Your circumstances

Monthly standard allowance

Single and under 25

£251.77

Single and 25 or over

£317.82

In a couple and you’re both under 25

£395.20

In a couple and either of you are 25 or over

£498.89

If you are responsible for a child (or children) who normally lives with you, you may qualify for the child amount.


Number of childrenExtra monthly amount
For your first child£277.08 (born before 6 April 2017)
£231.67 (born on or after 6 April 2017)
For your second child£231.67 per child
https://www.understandinguniversalcredit.gov.uk/new-to-universal-credit/how-much-youll-get/


Below are some key Government websites where you can access the latest information:

 

•     Government action plan:
https://www.gov.uk/government/publications/coronavirus-action-plan

 

•     Guidance on social distancing and stay at home:

https://www.gov.uk/government/topical-events/coronavirus-covid-19-uk-government-response

 

•     Travel advice:

https://www.gov.uk/guidance/travel-advice-novel-coronavirus

 

•     Support for businesses:

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

 

•     Tax helpline to support businesses who are concerned about paying their taxes:

https://www.gov.uk/government/news/tax-helpline-to-support-businesses-affected-by-coronavirus-covid-19

 

•     Guide for employees, employers and businesses:

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

 

•     Budget 2020: tax-related documents:

https://www.gov.uk/government/collections/budget-2020-tax-related-documents

 

•     NHS Coronavirus (COVID-19):

https://www.nhs.uk/conditions/coronavirus-covid-19/


The copy has been taken and edited from the Government COVID-19 Web pages:   https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#support-for-businesses-through-deferring-vat-and-income-tax-payments

 

#1 GOVERNMENT SUPPORT FOR BUSINESSES

 

On Friday 20th the Chancellor set out a package of measures to support public services, people and businesses through the period of disruption caused by COVID-19.

 

The package of measures to support businesses includes:

·       Coronavirus Job Retention Scheme

·       Deferring VAT and Income Tax payments

·       A Statutory Sick Pay relief package for SMEs

·       A 12-month business rates holiday for all retail, hospitality and leisure businesses in England

·       Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief

·       Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000

·       The Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank

·       A new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans

·       HMRC Time To Pay Scheme

 

We will keep you informed about the details of each of these packages and how to apply. Be safe and stay strong!

  

 

#2 CORONAVIRUS JOB RETENTION SCHEME

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

 

Eligibility:

 

You will need to:

·       designate affected employees as ‘furloughed workers,’ and notify your employees of this change - changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.

·       submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required).

 

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


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


#3 DEFERRING VAT AND INCOME TAX PAYMENTS

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

 

VAT

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

 

All UK businesses are eligible.

 

How to access the scheme

This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.

 

INCOME TAX

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

 

If you are self-employed you are eligible. This is an automatic offer with no applications required.

 

No penalties or interest for late payment will be charged in the deferral period.

 

HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.

 

#4 SUPPORT FOR BUSINESSES WHO ARE PAYING SICK PAY TO EMPLOYEES

The Government will make legislation to allow small and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:

 

·       this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19

·       employers with fewer than 250 employees will be eligible - the size of an employer will be determined by the number of people they employed as of 28 February 2020

·       employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19

·       employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that have symptoms can get a note from the NHS website

·       eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force

·       the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.

 

You are eligible for the scheme if your business is UK based and your business is a small or medium-sized and employs fewer than 250 employees as of 28 February 2020.

 

#5 SUPPORT FOR BUSINESSES THAT PAY BUSINESS RATES

 

Business rates holiday for retail, hospitality and leisure businesses

 

The Government is introducing a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.

 

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

 

You are eligible for the business rates holiday if:

·       your business is based in England

·       your business is in the retail, hospitality and/or leisure sector

·       Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

o   as shops, restaurants, cafes, drinking establishments, cinemas and live music venues

o   for assembly and leisure

o   as hotels, guest & boarding premises and self-catering accommodation

 

How to access the scheme:

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

 

See: https://www.gov.uk/calculate-your-business-rates where you can estimate the business rate charge you will no longer have to pay and further guidance can be found at: https://www.gov.uk/government/publications/business-rates-retail-discount-guidance

 

 

 

#6 CASH GRANTS FOR RETAIL, HOSPITALITY AND LEISURE BUSINESSES

The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property. For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000. For businesses in these sectors with a rateable value of between £15,001 and £51,000, they will receive a grant of £25,000.

 

You are eligible for the grant if:

·       your business is based in England

·       your business is in the retail, hospitality and/or leisure sector

 

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

·       as shops, restaurants, cafes, drinking establishments, cinemas and live music venues

·       for assembly and leisure

·       as hotels, guest and boarding premises and self-catering accommodation

 

Accessing the scheme:

You do not need to do anything. Your local authority will write to you if you are eligible for this grant. Guidance for local authorities on the scheme will be provided shortly. Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.

 

To find your local authority: https://www.gov.uk/find-local-council

 

#7 SUPPORT FOR BUSINESSES THAT PAY LITTLE OR NO BUSINESS RATES

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

 

 

You are eligible if:

·       your business is based in England

·       you are a small business and already receive SBRR and/or RRR

·       you are a business that occupies property

 

How to access the scheme

You do not need to do anything. Your local authority will write to you if you are eligible for this grant. Guidance for local authorities on the scheme will be provided shortly.

 

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

 

To find your local authority: https://www.gov.uk/find-local-council

 

#8 SUPPORT FOR BUSINESSES THROUGH THE CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME

 

A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch this week to support primarily small and medium-sized businesses to access bank lending and overdrafts.

 

The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value.

 

Businesses can access the first 12 months of that finance interest free, as government will cover the first 12 months of interest payments.

 

You are eligible for the scheme if:

·       your business is UK based, with turnover of no more than £45 million per year

·       your business meets the other British Business Bank eligibility criteria

 

How to access the scheme

The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

 

All the major banks will offer the Scheme once it has launched. There are 40 accredited providers in all.

 

You should talk to your bank or finance provider (not the British Business Bank) as soon as possible and discuss your business plan with them. This will help your finance provider to act quickly once the Scheme has launched. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.

 

The scheme will be available from early week commencing 23rd March. We will keep you informed on how to apply as the details emerge.

 

#9 SUPPORT FOR LARGER FIRMS THROUGH THE COVID-19 CORPORATE FINANCING FACILITY

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

 

This will support your company if it has been affected by a short-term funding squeeze and allow you to finance your short-term liabilities. It will also support corporate finance markets overall and ease the supply of credit to all firms. All UK businesses are eligible. The scheme will be available early in week beginning 23 March 2020. We will provide information on how to access the scheme here shortly. More information is available from the Bank of England: https://www.bankofengland.co.uk/markets/market-notices/2020/ccff-market-notice-march-2020

 

#10 SUPPORT FOR BUSINESSES PAYING TAX: TIME TO PAY SERVICE

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

 

These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. You are eligible if your business pays tax to the UK government and has outstanding tax liabilities.

 

If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559. If you’re worried about a future payment, please call them nearer the time.

 

#11 INSURANCE

Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17th March 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim as long as all other terms and conditions are met.

 

Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.

#12 COMPANIES HOUSE

From today (25 March 2020), businesses will be able to apply for a 3-month extension for filing their accounts.

This joint initiative between the government and Companies House will mean businesses can prioritise managing the impact of Coronavirus.

There are approximately 4.3 million businesses on the Companies House register, and all companies must submit their accounts and reports each year. Under normal circumstances, companies that file accounts late are issued with an automatic penalty.

As part of the agreed measures, while companies will still have to apply for the 3-month extension to be granted, those citing issues around COVID-19 will be automatically and immediately granted an extension. Applications can be made through a fast-tracked online system which will take just 15 minutes to complete.

https://www.gov.uk/government/news/companies-to-receive-3-month-extension-period-to-file-accounts-during-covid-19
https://www.gov.uk/guidance/apply-for-more-time-to-file-your-companys-accounts

#13 SELF EMPLOYED INCOME SUPPORT SCHEME

This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed.

You can apply if you’re a self-employed individual or a member of a partnership and you:

  • have submitted your Income Tax Self Assessment tax return for the tax year 2018-19
  • traded in the tax year 2019-20
  • are trading when you apply, or would be except for COVID-19
  • intend to continue to trade in the tax year 2020-21
  • have lost trading/partnership trading profits due to COVID-19

Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment. This is determined by at least one of the following conditions being true:

  • having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
  • having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period

If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.

You’ll get a taxable grant which will be 80% of the average profits from the tax years (where applicable):

  • 2016 to 2017
  • 2017 to 2018
  • 2018 to 2019

To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.

It will be up to a maximum of £2,500 per month for 3 months.

HMRC will pay the grant directly into your bank account, in one instalment.


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


#14 CHANGES TO INSOLVENCY LAWS - WRONGFUL TRADING


Under the plans, the UK’s Insolvency Framework will add new restructuring tools including:

  • a moratorium for companies giving them breathing space for from creditors enforcing their debts for a period of time whilst they seek a rescue or restructure;
  • protection of their supplies to enable them to continue trading during the moratorium; and;
  • a new restructuring plan, binding creditors to that plan

The proposals will include key safeguards for creditors and suppliers to ensure they are paid while a solution is sought.

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.

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

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 

#15 CHARITY REPORTING

  Any charity that needs an extension to their annual return deadline can contact the Charity Commission to ask for one. 

Charities can also call the charity contact centre.

Contact centre

Telephone
0300 066 9197


Open Monday to Friday
9am to 5pm


The SORP-making body has published guidance for trustees and preparers of charity accounts looking at the potential impact of the control measures to contain COVID-19 on financial reporting by charities. The guidance considers the implications for the trustees’ annual report, going concern and the alternative basis to going concern when preparing accounts under the SORP:

Implications of COVID-19 control measures and charity financial reporting: PDF | Microsoft Word

Trustees may also find the FRC’s guidance to company Directors helpful when looking at their assessment of going concern: https://www.frc.org.uk/news/april-2016/guidance-on-the-going-concern-basis-of-accounting