Business Support Available to SME’s
The government has unveiled an unprecedented support package to help businesses through the COVID-19 crisis, with many expecting further measures to be announced soon to help the self-employed.
We have summarised below the help that is available to SME’s and where the information is available, we also confirm how you can access this help. We will keep this page updated as the government announces further information.
Refund of Statutory Sick Pay (SSP)
In circumstances where an employee is absent from work due to coronavirus or have to self-isolate in line with government guidance, Statutory Sick Pay will be payable from day one of absence rather than day four. SSP remains at £94.25 per week.
SSP is ordinarily a cost to the employer, however, the government has confirmed that it will repay up to two weeks SSP for each employee that takes time off due to coronavirus.
Will my business qualify for this?
You will be able to reclaim the costs of up to two weeks of sick pay per employee provided you are a small or medium-sized business with no more than 250 employees on 29th February 2020 and your business is based in the UK.
How do I claim this?
At the time of writing it is not clear how this scheme will work as there is no process in place currently to allow the refund of SSP. The government has committed to working with businesses to ensure this mechanism is set up as soon as possible. We will keep this page updated with any changes.
What if I do not qualify for SSP?
If you are not an employee of the business, or you pay yourself a salary below £118 per week you will not be eligible for SSP, however you are able to claim Employment Support Allowance or Universal Credit. This is claimed directly from the government and further information is available here.
Deferral of VAT payments
From 20th March to 30th June, you will not need to make payment of your VAT return, although you must still submit this to HMRC as usual. This means that for the quarters ending 29/02/2020, 31/03/2020 and 30/04/2020 no VAT payments need to be made. Whilst this is welcome news from a cashflow perspective, you should be mindful that you will still need to pay this money, it has simply been deferred and must still be paid in full by 5th April 2021. If you can afford to pay this, you should consider doing so.
Can I claim this?
All VAT registered UK businesses can take advantage of this scheme. So, if you are VAT registered then you are eligible.
How can I claim this?
You do not need to apply for this. You simply don’t make your VAT payment in this period. You must still file your VAT return as usual and any VAT refunds will be processed as normal. If you have arranged a direct debit you will need to cancel this to ensure payment will not be taken.
80% of wages paid for employees
The government announced the Coronavirus Job Retention Scheme. This is a commitment from the government that they will pay 80% of the salary costs for employees that would have been laid off due to coronavirus. Under this scheme, businesses can access grants of up to 80% of their employees’ wages up to a total of £2,500 per month per furloughed employee. These payments can be backdated to1st March and will initially be for three months, though this may be extended if necessary.
Can I claim this?
In order to access this scheme, businesses need to designate their workers as ‘furloughed employees’. A furloughed employee is an employee that remains on the payroll but is not working due to the coronavirus outbreak. If you have employees that are unable to work, you may be eligible to claim 80% of their salary.
We are still awaiting government guidance on this measure and we will update this page as soon as we further information.
How do I claim this?
HMRC are developing a new online portal to facilitate this and working on a way to reimburse these costs to business. There is no system in place at present, however we will keep this page up to date with developments.
Loans for SME’s
The Coronavirus Business Interruption Loan Scheme is being implemented to encourage finance providers to continue lending to small and medium sized businesses amidst the crisis. The government will provide lenders with a guarantee of 80% on each loan and will support loans of up to £5 million.
Can my business claim this?
- All UK business’ with turnover of less than £45 million per year
- Further eligibility criteria can be found here
How can we claim this?
All the major banks will be able to offer the scheme so you should speak to your existing bank as soon as possible. Further details of the scheme and a list of lenders is available here.
Small business grant funding
The government has committed to a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.
In order to be eligible for this assistance, you will need to have business premises and already qualify for small business rate relief (SBRR) or rural rate relief (RRR).
Your local authority will contact you if you are eligible for this grant.
Extension to Companies House filing deadline
Businesses impacted by coronavirus can apply for an extension to their accounts filing deadline of up to three months. You will need to apply for this. However, Companies House have confirmed that 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. Further information on applying for an extension can be found here.
Time to pay
A helpline has also been set up to help those who are unable to pay their tax bills to discuss Time to Pay support. If you believe you will be unable to pay a tax liability due to COVID-19 you can contact HMRC on 0800 0159 559.
Deferral of self-assessment payments
The government announced that any self-assessment payments on account previously due to be paid on 31st July 2020 will be deferred until 31st January 2021.
Can I claim this?
If you submit a self-assessment tax return and were due to make a payment on account on 31st July 2020 you will qualify for this scheme.
How do I claim this?
You do not need to apply for this. Simply do not make your payment on account on 31st July 2020. There will be no interest charged or penalties. However, you must be mindful that this is not a grant, you will still need to make the payment with your payment for the 2019/20 tax year on 31st January 2021. Therefore, if you can afford to make the payment, you should consider doing so.
Self-employed income support scheme
The Self-employment Income Support Scheme (SEISS) has been introduced to support self-employed individuals (including members of partnerships) who have lost income due to coronavirus (COVID-19).
This new scheme will allow the self-employed to apply for a grant of 80% of their average profits up to a maximum of £2,500 per month. To calculate your average income, HMRC will look at your last three tax returns. If you have not traded for three years HMRC will take the average of the tax returns you have submitted.
To be eligible for the scheme you must have taxable profits of less than £50,000, make the majority of your income from self-employment and have filed a 2018/19 tax return. The government has given late filers until 23rd April to get their tax return submitted.
Self-employed workers will be able to access the scheme from the beginning of June by submitting an online form, although this is still in development. If you believe you are eligible for the scheme you do not need to contact HMRC at this stage. They will be in contact with taxpayers that are eligible for this scheme directly.
The government has been clear that this scheme will not be open to those workers operating through their own limited company. Instead, you will need to consider if you are eligible for a grant under the Coronavirus Job Retention Scheme.
If you would like to discuss the above further, please get in contact with your accountant who will be happy to offer support. Please be aware that due to the current circumstances your accountant will be working from home. Please email in the first instance and they can arrange a time to call you.
We will be making updates to these pages as and when there are further announcements from the government.
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