As the Coronavirus lockdown continues, the Government has made available a range of financial support options for individuals and companies, both small and large, who have been affected by the pandemic. In this blog, we’ll cover the basics of each, but for more in-depth advice, please contact MCC Accountants directly. We are one of the leading accounting firms in Manchester.
Coronavirus Job Retention Scheme
Perhaps the best known of the measures introduced by the Government is the CJRS, which allows employers to claim 80% of their furloughed employees’ salaries, up to a maximum value of £2,500 per month. It’s open to all employers with a payroll scheme registered before 28th February 2020, but applications will only be opening at the end of April. The scheme was provisionally set to last for three months, though now looks set to be extended for a considerably longer period.
Statutory Sick Pay Relief
For SMEs, the Government has also introduced SSP relief for those workers who have not been furloughed but who have become ill with COVID-19. Companies with fewer than 250 employees will be able to apply for a refund for any employee who has claimed SSP, for a maximum of two weeks. The repayment mechanism has not been finalised with employers eyt; this may take a number of months. To be eligible for the refund, employers must retain records of employee absences and SSP payments, but evidence from employees, such as a GP fit note, are not necessary. Should an employer require a COVID-19 isolation note for their own records, employees can access this via the NHS website.
Self Employment Income Support Scheme
The temporary SEISS has been introduced to support UK self-employed and partnership members who have lost income due to the Coronavirus. Similarly to the CJRS, a grant can be claimed of up to 80% of your trading profits, up to £2,500 a month. A number of prerequisites must be met to be eligible; you must have submitted a tax return during 2018-2019; you must have traded during 2019-2020; you must plan to trade in 2020-2021; and your trading profits must be less than £50,000 and more than half of your total income. Applications for this scheme are not yet open. If you are eligible, HMRC will notify you. You will complete your application online. Please be aware that scammers are currently in operation, purporting to be representatives of HMRC. This scheme can only be accessed via GOV.UK; if you are asked to provide your contact details or bank details by someone claiming that you are owed a tax refund or can claim financial help, it’s a scam. If you are unsure whether the communication you have received is genuine, please contact your accountant.
Coronavirus Business Interruption Loan Scheme
Through this scheme, SMEs will be able to access loans, overdrafts, invoice finance and asset finance up to a value of £5 million for up to six years. A Business Interruption Payment will be made by the Government to cover the first year of interest and lender-levied fees All businesses are eligible provided they have a turnover of less than £45 million. To provide lenders with greater confidence, the loans will be 80% backed by the Government’s British Business Bank. Finance should therefore be available for every SME which requires assistance. Applications are now open; those looking to take advantage of the loans should contact their bank or one of the forty accredited finance providers now.
COVID-19 Corporate Financing Facility
Designed to support larger firms, the Bank of England’s new lending facility provides cash through loans to mitigate the effects of Coronavirus disruption. If the virus has led to a short-term squeeze on funding, companies can apply for the loans to finance their liabilities. Applications are now open.
Retail, Leisure and Hospitality Cash Grant Scheme
Grant funding of £10,000 is available to those businesses who currently receive small business rate relief or rural, rate relief for a property. £25,000 can be claimed by hospitality, leisure and retail businesses with a property with a rateable value of between £15,00 and £51,000. Local authorities will manage the distribution of these grants. Eligible businesses do not need to do anything ahead of time; their local authority will be in contact to provide further information.
Business Rates Holiday
To further support companies in these sectors, as well as nursery businesses, HMRC are introducing a twelve month business rates holiday, effective for the 2020-2021 tax year. Businesses do not need to take any action to take advantage of the rates holiday, but local authorities may need to reissue a rates bill for properties such as hotels, self-catering venues, shops and restaurants.
HMRC has also promised that VAT payments which were due to be paid between 20th March 2020 and 30th June 2020 can be deferred. If a business wishes to defer any of its direct debits, it may simply cancel the payments; an application is not required. Any deferred payments must then be made in their entirety on or before 31st March 2021. If the business does not defer its payments, HMRC expects that tax returns will be completed on time and direct debits paid in the usual way.
There is now also an option to defer the Self Assessment second payment on account, which is currently due by 31st July 2020. Anyone with a second payment on account is eligible; it is not restricted to solely the self-employed. Again, no application is required.
HMRC Time To Pay Scheme
Finally, any business or individual that finds themselves in financial difficulties, with outstanding tax liabilities, may in some cases be eligible for further support with their tax affairs, though this is decided on a case-by-case basis by HMRC. .
MCC Support Packages
One of the leading accounting firms in Manchester, MCC Accountants have a range of services in place to support companies of all sizes at this time. A £400 a month Government Support Review package is available. If you choose this, the MCC team will review your circumstances and assist with applying for Government support, collate relevant financial information, assist with and complete company projections. We also work with accredited lenders.
For more information about these, and other packages available, and to discuss your personal and company requirements, please call 0161 707 1500, or email [email protected].