COVID-19: Support for businesses
In these uncertain times, the impact of the Coronavirus is inevitably causing financial pressure on many businesses and individuals.
To help support our clients during this critical period, we have included below all of the latest advice and updates to help to support you and your business.
If you need advice, then please contact Adam on 01530 833474 or email firstname.lastname@example.org
Please see the tools and resources we have developed to help throughout the Coronavirus Pandemic which are updated on a daily basis.
Click here to visit the Coronavirus Client Hub.
The Coronavirus Business Interruption Loan Scheme (CBILS) can provide facilities of up to £5m for UK smaller businesses (SMEs) who are experiencing increased costs or disruptions to their cashflow.
The scheme provides the lender with a Government-backed guarantee and SMEs from all sectors can apply for the full amount of the facility*. CBILS is available through the British Business Bank's 40+ accredited lenders and partners, which are listed on the British Business Bank website.
CBILS: KEY FEATURES
- Up to £5m facility
- 80% Government guarantee
- No guarantee fee for SMEs to access the scheme
- Interest and fees paid by the Government for 12 months
- Finance terms up to six years
- The borrower always remains 100% liable for the debt.
OUR THOUGHTS ON THE CBILS
Although this looks like a good move by the Government, we are warning clients that obtaining one of these loans is not a sure thing just because the Government is providing 80% security for the loans.
This doesn’t mean you shouldn’t apply, but we know for sure that the strength of your business prior to, during and after this pandemic is what will ultimately determine whether your bank will back you or not, regardless of the Government security!
So your application will need strong financial reports for all the aspects listed below. If you were already struggling before the pandemic then expect your bank to refuse your request for help.
We’re also hearing that the Banks can insist on taking a debenture over your company’s assets and a personal guarantee in case your company does go into liquidation and these will be used before the Government’s 80% security is called upon as a backstop. So effectively you may need to put your personal assets at risk.
From the conversations we have already had with several clients all ended up with them being reluctant to take on this risk let alone the debt they will have to repay in the future.
If you do want to apply we can help give you some guidance free of charge but if the bank does want a 3 ways forecast (i.e. a cash flow forecast that agrees to a profit & loss account and balance sheet) that will incur a fee from us because these are very time-consuming.
SO HERE’S WHAT YOU WILL NEED TO APPLY…
- Last year accounts – showing a healthy profit and balance sheet
- Management accounts – accurate and up to date figures showing a profit
- Cash-flow forecasts – proof that you need the amount requested and of survival
If you would like to discuss applying a Coronavirus Business Interruption Loan Scheme please contact me on 01530 833474 or email email@example.com.
The Coronavirus Self-Employed Support Scheme will allow you to claim a taxable grant of 80% of your average monthly trading profits, paid out in a single instalment covering 3 months, and capped at £7,500 altogether. This is a temporary scheme, but it may be extended. If you receive the grant you can continue to work, start a new trade or take on other employment including voluntary work, or duties as an armed forces reservist.
Who can claim?
You can claim if you are a self-employed individual or a member of a partnership and:
- you carry on a trade which has been adversely affected by coronavirus
- you traded in the tax year 2018 to 2019 and submitted your Self-Assessment tax return on or before 23 April 2020 for that year
- you traded in the tax year 2019 to 2020
- you intend to continue to trade in the tax year 2020 to 2021
Your business could be adversely affected by coronavirus, for example, if:
you are unable to work because you:
- are shielding
- are self-isolating
- are on sick leave because of coronavirus
- have caring responsibilities because of coronavirus
- you have had to scale down or temporarily stop trading because:
- your supply chain has been interrupted
- you have fewer or no customers or clients
- your staff are unable to come in to work
You should not claim the grant if you are above the state aid limits or operating a trade through a trust.
To work out your eligibility we will first look at your 2018 to 2019 Self-Assessment tax return. Your trading profits must be no more than £50,000 and at least equal to your non-trading income.
If you are not eligible based on the 2018 to 2019 Self-Assessment tax return, HMRC will then look at the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019.
For more information and to find out if you are eligible here https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19self-employment-income-support-scheme
How different circumstances affect the scheme
- if your return is late, amended or under enquiry
- if you are a member of a partnership
- if you are on or took parental leave
- if you have loans covered by the loan charge
- if you claim averaging relief
- if you are non-resident or chose the remittance basis
- if you are above the state aid limits
Check these circumstances here: https://www.gov.uk/guidance/how-different-circumstances-affect-the-self-employment-income-support-scheme
How much you will get
You will get a taxable grant based on your average trading profit over the 3 tax years:
- 2016 to 2017
- 2017 to 2018
- 2018 to 2019
HMRC will work out your average trading profit by adding together your total trading profits or losses for the 3 tax years, then we will divide by 3.
The grant will be 80% of your average trading profit, divided by 12 to give a monthly amount. HMRC will then multiply this by 3. We will pay this amount up to a maximum of 7,500.
The grant amount they work out for you will be paid directly into your bank account, in one instalment.
Find out how HMRC will work out your average trading profits including if you have not traded for all 3 years here: https://www.gov.uk/guidance/how-hmrc-works-out-total-income-and-trading-profits-for-the-self-employment-income-support-scheme#3years
How to claim
HMRC will aim to contact you by mid-May 2020 if you are eligible, to invite you to claim using the GOV.UK online service. Payment will be made by early June 2020 if your claim is approved.
If you are unable to claim online an alternative way to claim will be available. HMRC will update the overview with more information soon. We will update you as soon as we know more but keep your eye on https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme
The self-employed are still able to apply for Universal Credit (up to £1,800 per month) and business interruption loans.
For more information on the support that is available for you and your business during the coronavirus pandemic, please contact us on 01530 833474 or email firstname.lastname@example.org
Yesterday the Chancellor, Rishi Sunak, announced more details about the extension to the Coronavirus Job Retention Scheme (CJRS). We have outlined the key information below.
From 1 July 2020, you’ll have the flexibility to bring previously furloughed employees back to work part-time – with the government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August. This flexibility comes a month earlier than previously announced to help people get back to work.
You can decide the hours and shift patterns that your employees will work on their return and you will be responsible for paying their wages in full while working. This means that employees can work as much or as little as your business needs, with no minimum time that you can furlough staff for.
Any working hours arrangement that you agree with your employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, you will need to report and claim for a minimum period of a week. You can choose to make claims for longer periods such as on monthly or two weekly cycles if you prefer. You will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.
If your employees are unable to return to work, or you do not have work for them to do, they can remain on furlough and you can continue to claim the grant for their full hours under the existing rules.
From August, the government grant provided through the job retention scheme will be slowly tapered.
- In June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work – employers will have to pay employees for the hours they work.
- In August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed.
- In September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500.
- In October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500.
- The cap on the furlough grant will be proportional to the hours not worked.
If you are a smaller employer, some or all of your employer NIC bills will be covered by the Employment Allowance, so you should not be significantly impacted by that part of the tapering of the government contribution.
Around a quarter of CJRS monthly claims relate to wages that are below the threshold where employer NICs and auto-enrolment contributions are due, and so no employer contribution will be required for these furloughed employees in August.
It’s important to note that the scheme will close to new entrants from 30 June. From this point onwards, you will only be able to furlough employees that you have furloughed for a full three-week period prior to 30 June.
This means that the final date that you can furlough an employee for the first time will be 10 June for the current three-week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.
Further guidance on how to calculate claims with this extra flexibility will be available by 12 June, including webinars and detailed online guidance.
Due to the fast-paced changes being announced by the Government, we've been compiling useful resources to keep you updated with information that could help your business. Last week we found and reviewed an excellent resource for HR and employment law support during the coronavirus pandemic.
The community is FREE to join and gives you access to the group, a daily webinar and an online Toolkit, which contains policy documents, briefing notes, letters and daily updates. All of which could prove a lifeline for your business during the coming weeks.
To subscribe to this free resource follow this link - https://www.eledeckshr-community.com/community-opt-in
We're all in this together, so if you need someone to talk to then please feel free to contact us on 01530 833474 or drop us an email to info@marlow-proactive and we'll get in touch.
The helpline allows any business or self-employed individual who is concerned about paying their tax due to coronavirus to get practical help and advice.HMRC has a set up a phone helpline to support businesses and self-employed people concerned about not being able to pay their tax due to coronavirus (Covid-19).
For those who are unable to pay due to coronavirus, HMRC will discuss your specific circumstances to explore:
- agreeing an instalment arrangement
- suspending debt collection proceedings
- cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately.
The helpline number is 0800 0159 559 - and is an addition to other HMRC phone contact numbers. The helpline is open from Monday to Friday 8am to 8pm, and Saturday 8am to 4pm (excluding bank holidays).
Other HMRC business payment support contact details can be found here.
Temporary return of Statutory Sick Pay claims
This offers immediate support for small and medium-sized businesses and employers by helping them cope with the extra burden of paying Covid-19-related SSP. Eligible costs will be refunded, with the criteria being as follows:
- this refund will be limited to two weeks per employee
- employers with fewer than 250 employees will be eligible. The size of an employer will be determined by the number of people they employed as of 28 February 2020
- employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of Covid-19
- employers should maintain records of staff absences, but should not require employees to provide a GP fit note
- the eligible period for the scheme will commence from the day on which the regulations extending SSP to self-isolators come into force.
The calculator to claim back SSP due to Coronavirus is now live on the Government website.
You are only responsible for paying SSP if:
- you pay Class 1 National Insurance contributions for your employee (or would do if not for their age or their level of earnings)
- your employee was sick for 4 or more days in a row (including non-working days)
- your employee has told you they’re sick within your own time limit (or 7 days if you do not have one)
You cannot use the calculator for periods of sickness before 6 April 2011.
Contact us if you need assistance. We can help you complete any claim(s).
The Coronavirus Business Interruption Loan Scheme: Delivered via the British Business Bank to support the continued provision of finance to UK businesses during the Covid19 outbreak, with an additional £1bn being made available on top of existing support offered through the Bank. It will operate in much the same way as the current Enterprise Finance Guarantee but on more attractive terms for both businesses and lenders.
Start-Up Loans extension: Funding for the Start-Up Loans programme has been extended until March 2022, with further consideration about how to expand the programme at the upcoming Spending Review. The extension of funding will enable the provision of up to 10,000 more loans to new and early-stage businesses. To date the scheme has made over 69,000 loans worth over £560m with 40% of recipients being women (compared to 22% of existing SMEs that are female-led), 22% being from a BAME background, and 35% being unemployed when they applied.
Further support for innovative high growth firms: £200m has been provided to enable the UK’s high growth businesses to take full advantage of new opportunities now that the UK has left the EU. This is a continuation of the additional support provided in April 2019 and will be deployed by the British Business Bank through venture capital and growth finance funding partners during 2020/21 to ensure that innovative British firms can access more of the finance they need to grow.
Business rates are payable on most non-domestic properties, including buildings part-used for non-domestic activity.
- A property’s rateable value (RV) is based on a Valuation Office Agency (VOA) valuation using open market rental values as of 1 April 2015, which is then multiplied by a centrally set ‘multiplier’.
- The multiplier you need to use may vary based on your company size and location and will indicate the tax liability you will pay in each pound of the estimated rateable value.
- Business rates liabilities for the following tax year will be issued annually by letter via local authorities in February-March.
- You can look up your rateable value, which can be multiplied by the multiplier to calculate liabilities for the applicable financial year.
There are several reliefs and exemptions available for qualifying use-classes, industries and rateable value thresholds. In England your local authority will apply reliefs for:
- Exempted buildings
- Empty buildings - for 3 months after the property becomes vacant in England & Wales. Notify your local authority when a property becomes vacant.
- Transitional relief - phased billing if your liability changes by more than a certain amount at revaluation.
All the big banks have announced that they want to offer full support for small businesses during the crisis – each has set up dedicated advice services.
If you or your business has financial problems, the best advice is to contact your bank as early as possible – they are likely to be besieged with similar requests, so the earlier you speak to your bank the better.
Some banks are offering mortgage holidays, others may increase your overdraft facility or loan facility during this period. Especially discuss with them the ability to use the CBILS government-backed facility whereby the bank can obtain an 80% guarantee from the government if you don’t have any collateral to pledge.
Find more information at:
BARCLAYS - https://home.barclays/
ROYAL BANK OF SCOTLAND - www.business.rbs.co.uk/business/support-centre/service-status/coronavirus.html
In most situations, employees and workers should use their paid holiday (‘statutory annual leave’) in their current leave year. This is 5.6 weeks in the UK.
This is important because taking holiday helps people:
get enough rest
keep healthy (physically and mentally)
During the coronavirus outbreak, it may not be possible for staff to take all their holiday entitlement. They may be getting to the end of their leave year with holiday still left to take.
Carrying over holiday
The government has introduced a temporary new law to deal with coronavirus disruption.
Employees and workers can carry over up to 4 weeks’ paid holiday over a 2-year period, if they cannot take holiday due to coronavirus.
For example, this could be because:
they’re self-isolating or are too sick to take holiday before the end of their leave year
they’ve been temporarily sent home as there’s no work (‘laid off’ or ‘put on furlough’)
they’ve had to continue working and could not take paid holiday
Some employers will already have an agreement to carry over paid holiday. This law does not affect any agreements already in place.
If an employee or worker leaves their job or is dismissed during the 2-year period, any untaken paid holiday must be added to their final pay (‘paid in lieu’).
If someone is temporarily sent home because there’s no work
If someone is temporarily sent home because there’s no work they’ll continue to build up (‘accrue’) holiday in the usual way.
Agreeing how extra holiday is carried over
If employers do not already have an agreement in place, they can decide whether they’ll allow extra holiday (more than the 4 weeks’ paid holiday) to be carried over.
Extra holiday may include:
the remaining 1.6 weeks of statutory annual leave
holiday that’s more than the legal minimum
Employees and workers should check their employment contract or talk to their employer to find out what they’re entitled to.
Reaching an agreement
If the workplace has a recognised trade union, or there are employee representatives who work with the employer on these matters, the employer should involve them in agreeing changes.
If any agreement is made, it’s a good idea for it to be in writing.
Employers should get legal advice if they’re not sure whether to allow extra holiday to be carried over.
If employees and workers cannot take bank holidays off due to coronavirus, they should use the holiday at a later date in their leave year.
If this is not possible, bank holidays can be included in the 4 weeks’ paid holiday that can be carried over. This holiday can be taken at any time over a 2-year period.
Previously booked holidays
If an employee no longer wants to take time off they'd previously booked, for example, because their holiday's been cancelled, their employer may still tell them to take the time off.
If the employee wants to change when they take this time off, they'll need to get agreement from their employer.
Using holiday for a temporary workplace closure
Employers have the right to tell employees and workers when to take holiday if they need to.
An employer could, for example, shut for a week and tell everyone to use their holiday entitlement.
If the employer decides to do this, they must tell staff at least twice as many days before as the amount of days they need people to take.
For example, if they want to close for 5 days, they should tell everyone at least 10 days before.
This could affect holiday staff have already booked or planned. So employers should:
explain clearly why they need to close
try and resolve anyone's worries about how it will affect their holiday entitlement or plans
if you are claiming for your employees’ wages through the Coronavirus Job Retention Scheme (CJRS) then the Government has issued a step by step guide which includes the information that employers need to provide to claim for their employees’ wages.
This step by step guide will take you through five sections:
- Step 1: Essential information
- Step 2: Before you make your claim
- Step 3: Calculating your claim
- Step 4: Making a claim
- Step 5: What to do next
TO DOWNLOAD THE HMRC GUIDE IN PDF FORMAT THEN CLICK HERE
The Access Rules
To access the portal and to make the claim, it is of paramount importance that:
- a PAYE payroll scheme was created and set up on or before 28th February 2020
- A UK bank account
- the business has enrolled for PAYE online. If nobody has done this yet, it is imperative to get the ball rolling.
This link below will help: https://www.gov.uk/paye-online/enrol
Who Can Make the Claim?
- Only the business itself and agents (eg Accountants/Payroll Bureau) authorised to act on your behalf for PAYE matters will be able to make the claim.
- Please note that ‘file only’ agents, which could include some Payroll Bureaus, will not be able to access the service due to data protection reasons.