COVID-19 Guidance for Businesses and Employees – 20 March 2020

As you are all aware that we are in the middle of Coronavirus (Covid-19) pandemic which is having serious effects on health, jobs, business and livelihood of peoples in the country.

To counter the disruption caused by Covid-19 pandemic, the Chancellor (government) has announced a package of measures to support businesses and individuals in the country.

Coronavirus Job Retention Scheme

Under this scheme, all UK employers will be able to access support to continue to pay part of their employees’ salaries for furloughed employees.

• HMRC will reimburse the wage to employers’ for the payment of those employees that would have been laid off or are in unpaid leave.
• The reimbursement will be 80% of the original gross wages/salary of the employee.
• The maximum amount of reimbursement is £2,500 per month.
• The employers may top up the difference if they so wish but is not compulsory
• This reimbursement is a grant and not a loan, hence it is not repayable to government.

Eligibility

• The employees should not undertake work for Employers while they are furloughed
• The employees should have been in the February 2020 payroll to be eligible
• The amount can be backdated from 01 March 2020 and is currently applicable for 3 months but chancellor may extend this period if necessary

How to claim

• The Employers will need to send the details of affected employees via a new portal which HMRC will release soon.
• HMRC are working urgently to set up a system for reimbursement. The first grants are expected to be paid in April 2020. (We will update you same once we hear from the government) 

Statutory Sick Pay (SSP) Relief to Employers/SMEs

Normally Employers should pay SSP of £94.25 or more per week to eligible employees for up to 28 weeks for the qualifying days.

• In response to Covid-19, the government is bringing forward emergency legislation.
• This means the eligible employees who are off from work due to Covid-19 will be able to get SSP from the first day rather than the 4^th
• This will also include employees who are caring for people in the same household and therefore have been advised to do a household quarantine.
• Employers should maintain records of staff absences and payments of SSP 

Proof of sickness

• Employees may not need to provide “sick note” / “fit note” from GP but if they are advised to stay at home employees can get “isolation note” by visiting NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website to provide to the employers.

SSP start date

• Once the legislation has been passed, this will apply retrospectively from 13 March
• The rest of the eligibility criteria for SSP for employees remains the same. 

Eligibility

• The business should be based in the UK
• The employers with fewer than 250 employees as of 28 February 2020 will be eligible 

How to claim

• SMEs/Employers can now reclaim the payment of SSP due to Covid-19 for up to 2 weeks period.
• HMRC are working urgently to set up a system for reimbursement. Further details will be provided in due course once the legalization has passed.

Business rates Holiday

Business rates holiday for 12 months is applicable for retail, hospitality and leisure businesses for the tax period of 2020/2021 i.e. from 01 April 2020

• The government had previously announced business rates discounts of 50% for retailers, cinemas and music venues with a rateable value below £51,000, and a £5,000 discount for pubs.
• On 17 March the Chancellor announced that the business rates discount will be increased to 100% and expanded further to include all hospitality, retail, and leisure businesses, no matter what their rateable value, for the 2020/21 tax year.
• Business rates have been devolved to Scotland, Northern Ireland, and Wales, so the UK government has announced measures that affect business rates in England. We have not considered other parts of the UK in this summary.
• 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 retail sector with a rateable value of £51,000 or more, or 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.

Eligibility

• This is applicable for the businesses based in England only (NOT Scotland, Wales or NI)
• The business should be in the retail, hospitality and/or leisure sector

How to access the scheme:

• You do not have to do any action. You will shortly hear from your Local Authority. If you have any questions, you should contact your Local Authority.

Cash grants for retail, hospitality and leisure businesses

• If your business is in the retail, hospitality or leisure sector in England, then you may also be entitled to a cash grant.
• 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 £15,001 and £51,000 then you will be entitled to a cash grant of £25,000.

Eligibility:

• This is applicable for the businesses based in England
• The business should be in the retail, hospitality and/or leisure sector 

How to access the scheme:

• 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. You do not have to do any action.
• The Department for Business, Energy and Industrial Strategy (BEIS) will provide guidance for Local Authorities on how to administer these grants shortly.

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 (SBBR), 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. 

Eligibility:

• This is applicable for the businesses based in England
• You are a small business and already receive SBBR and/or RRR
• You are a business that occupies the property 

How to access the scheme:

• 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. You do not have to do any action.

Cash Flow Support: Coronavirus Business Interruption Loan Scheme (CBILS)

• A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch early next 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 financial interest-free, as a government will cover the first 12 months of interest payments.
• The scheme is expected to be launched on Monday 23 March 2020.
• All the major banks will offer the Scheme once it has launched. There are 40 accredited providers in all.
• The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website.

 Eligibility:

• Your business is UK based, with a turnover of no more than £45 million per year
• Your business meets the other British Business Bank eligibility criteria 

How to access the scheme:

• 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.

Deferring VAT Payments:

• HMRC has deferred the payment of VAT due by businesses, so that no VAT is due for payment for the VAT incurred till the end of June 2020.
• This will apply for VAT liability from 20 March 2020 until 30 June 2020
• This will help with Cash Flow of business for 3 months
• The government will still pay any VAT refunds as per normal.
• Businesses will have until the end of the 2020/21 tax year (12 months from now i.e. March 2021) to settle VAT liabilities that arose & accumulated in the deferment period. 

Eligibility:

• All UK businesses are eligible. 

How to access the scheme:

• There is no need to apply for deferment as it applies automatically to all businesses.

Deferring Payment of Income Tax

• For Income Tax Self-Assessment, any second payment on account due on the 31 July 2020 will be deferred until the 31 January 2021. 

Eligibility:

• If you are self-employed you are eligible. 

How to access the scheme:

• This is an automatic offer with no applications required.
• No penalties or interest for late payment will be charged in the deferral period.

Expanded access to Time to Pay

• The government will ensure that businesses and self-employed individuals in financial distress and with outstanding tax liabilities receive support with their tax affairs.
• HMRC has set up a dedicated COVID-19 helpline, on 0800 0159 559, for those in need, and they may be able to agree a bespoke Time to Pay arrangement.
• The helpline is open from Monday to Friday from 8 am to 8 pm, and Saturday 8 am to 4 pm (excluding bank holidays).
• “Time to Pay” gives businesses a time-limited deferral period on HMRC liabilities owed and a pre-agreed time period to pay these back.
• For those who are unable to pay due to coronavirus, HMRC will discuss your specific circumstances to explore:
• agreeing on an instalment arrangement
• suspending debt collection proceedings
• cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately

Tax Credit Support for Families

• Both the Universal Credit Standard Allowance and the Working Tax Credit basic element will increase by £1,000.
• This increase will apply for at least the next 12 months.

Mortgage Support

• 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 also 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 month 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.

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