Latest government updates here
Our summary as of 22.03.20
As of today there are a number of government support proposals, these notes may help but please accept the caveat that guidance is changing frequently – this information was updated AM today. Items in italics are my emphasis or notes.:
- VAT deferral – no VAT needs to be paid for 3 months. Businesses don’t need to pay any VAT due between 20th March and 30th June. It is automatic so no need to apply. I think VAT returns should be made as usual but check whether payments are made automatically via direct debit – if they are then cancel the DD. If anyone is due a refund on a VAT return it will be paid as usual. The deferred amount can be paid off between 1st July and 5th April 2021.
- Income Tax – The July payments on account have been deferred until January next year and will be settled with tax returns by 31st January 2021.
- Time to pay on other taxes is available through the HMRC helpline – clients have been holding for 1.5 hours but get approved once they get through. The number is 0800 0159 559 – only call near the time the payment is due or if you have missed a payment.
- Job Retention scheme – the headline HMRC will pay 80% of wages and salaries to a cap of £2,500 per month for 3 months, this may be back-dated to 1st March. The proposal is that workers who would have been laid off as a result of the virus crisis need to be designated as “Furloughed Workers” – they are vague over the employment law situation and warn that the change of status may be subject to negotiation. Once this is done a new portal will be available to submit info to HMRC – this does not yet exist. HMRC will reimburse money probably via the employer – they don’t know how that will be done at the moment. More information is on the news item from our friends at 360HR.
- Business interruption loan – delivered by The British Business Bank through the main banks, due to be launched sometime this week, the Government will guarantee 80% of the loan or overdraft to the lender. It covers various types of lending – Overdraft, Term Loans, Asset Finance, Invoice Finance. Loans are to a maximum of £5m over 6 years and the Government will pay the first 12 months’ interest. Essentially they are providing this cover to turn a “No” decision by a bank into a “Yes” decision but the usual bank lending rules will apply, albeit with a more long term view. This doesn’t mean that they cover the borrower – the first call is on the borrower who is 100% liable for the debt so be as careful as usual about signing up to personal guarantees. Loans under £250,000 can be made without collateral but bear in mind that the banks are having to cover the 20% not covered by the government so may be tough on these decisions. Your main residence cannot be taken as security for these loans by the banks. The scheme is now open, contact your bank or credit provider. Fuller details are here.
- Business rate holidays for nursery, retail, hospitality and leisure businesses for the whole 2020-2021 tax year. It will be automatic and may require any existing demands for next year to be re-issued.
- Cash grants for retail, hospitality and leisure businesses – £25k if they have a rateable value between £15,001 and £51,000 and £10k if they have a rateable value under £15,000 or pay little business rates due to small business rate relief or rural rate relief. The local authority will write to the businesses – details on how it will be paid are unavailable at present.
- SSP repayment to employers who pay SSP due to Covid-19, covers 2 weeks SSP, the repayment mechanism is not yet sorted. Needs to be an employer with less than 250 employees based on the Feb 2020 payroll. You need to keep records but don’t need a GP note, if required employees can get an isolation note via NHS 111 online.