Here’s a quick summary of new measures announced by the government to assist businesses experiencing disruption to their cashflow as a result of the COVID-19 outbreak. You can read the latest full guidance from the government on its dedicated page.
Coronavirus Jobs Retention Scheme
The government is aiming to help employers in covering redundancy workers who would otherwise be laid off during the crisis. These new measures would reimburse up to 80% of employees’ wages to a maximum of £2,500 a month.
The scheme, which will be backdated to 1March will be in place by the end of April. It will be valid for at least 3 months, with the possibility of extending it if necessary.
Statutory Sick Pay refund
Employees who need to self-isolate will temporarily be paid from the first day of sickness. The government will refund SSP to employers for up to two weeks.
Deferral of VAT payments
Businesses will not need to make any VAT payments until the end of June 2020, while they will have until the end of the 2020-21 tax year to settle any liabilities accumulated during this period.
The deferral applies automatically, i.e. there is no need to apply for it. VAT refunds will be paid by HMRC as normal.
Support for self-employed
Another measure to support the self-employed people is the postponement of the next round of self-assessment payments, which were usually set for 31 July 2020, to January 2021.
Furthermore, with the removal of the minimum income threshold for universal credit, sole traders can now have access to the benefit at a rate equivalent to the Statutory Sick Pay for employees.
Support for businesses that pay rates
Businesses in the retail, leisure and hospitality sectors occupying properties with a rateable value below £51,000, are eligible to a 100% discount on their business rates for 2020-21 tax year.
Further support is provided through cash grants up to £25,000 depending on the rateable value of the property being occupied. Local authorities will get in touch with businesses who are eligible for these measures, without any action needed by the claimants.
HMRC Time to Pay
The scheme enables companies and individuals in temporary financial distress as a result of Covid-19 to delay payments of outstanding tax liabilities.
Coronavirus Business Interruption Loan Scheme
These loans, which should be available from Monday 23rd March, can provide for a facility up to £5 million. The borrower remains liable for 100% of the debt, however no interest will be charged for the first 12 months.
Off-payroll working deferral (IR35)
Contractors worried about getting taxed as an employee from 6 April 2020 will have a year’s reprieve until 6 April 2021.
