Covid 19 – Government Assistance

So it has now been a number of  weeks since the introduction of the Governments  Financial assistance package with many changes along the way

The main areas of assistance and the updates are:-

Job retention scheme

If staff are unable to work due to the virus and lockdown, 80% of their salary cost, up to a maximum of £2500 per month, can be claimed back. The system introduced by HMRC went live on the 20th April 2020 and payments are now being received by applicants.

For staff to qualify, they originally had to be on the payroll at 28th February 2020. This has been extended to RTI submissions made to HMRC on 19th March 2020. The scheme is in place until 30th June 2020.

Business Support Grants

Most local authorities have now opened access to these although all seem to be slightly different when applying

If you qualify for Small Business Rates Relief or Rural Rates Relief, whereby your rateable value is below £15,000, you could be entitled to a grant of £10,000.

For business’s in the Retail, Hospitality and Leisure sectors with rateable values between £15,000 and £51,000 an enhanced grant of £25,000 is available.

Please check your local authority website for further information and to if you are eligibile for Business rates relief.

Deferral of Taxes – VAT

HMRC announced the availability of deferring Payments for VAT.

For VAT, you can only defer quarterly and monthly VAT returns’ payments for the periods ending in February, March and April payments on account due between 20 March 2020 and 30 June 2020 and annual accounting advance payments due between 20 March 2020 and 30 June 2020. The deferred payments must be caught up by 31 March 2021.

If you pay your VAT by Direct debit, this should be cancelled and a new mandate applied for when submission return to normal.

  • Self Assessment

For personal tax payments made under self-assessment you are able to defer your July 2020 payment, however this must be paid by 31 January 2021.

Coronavirus Business Interruption Loan Scheme

The loan scheme, which has some 40 accredited lenders, has been much publicised with much pressure from the government for the banks to lend to those who qualify for loans of up to £5m. The loans can be for up to 6 years with interest being paid for up to 12 months by the government and with an 80% guarantee by them too. These loans are restricted to multiples of payroll costs and require cashflows and forecasts for the application.

New – Bounce Back Loan

Announced by the Chancellor this week, a new loan scheme for small and medium sized businesses which is to be launched on the 4 May.  We look forward to seeing more details. Initially  it seems the loans can be from £2,000 to £50,000 , payable over 6 years with no capital repayments, interest or fees in the first year and the government are to work with lenders to make these low interest loans.  The bounce back loan is 100% guaranteed by the GOV! – Watch this space!!

Still to come – Self Employed Income support scheme

Initially announced for roll out in June, HMRC are aiming to contact the self-employed mid May 2020 and will make payments by early June 2020. This scheme is similar to the job retention scheme where those who are self employed and have submitted a Tax Return for the year ended 5 April 2019 and who’s income is more than 50% from self-employment and less than £50,00 per year. Payments are to be based on 80% of average earnings to a maximum of £2500 per month and to run for a 3 month periods.

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