Coronavirus Business Support – general updates and information
The UK Government has taken unprecedented steps to support businesses affected by the economic impact of the Coronavirus pandemic, announcing billions of pounds of funding and finance to help them during these challenging times, although some aspects of the Government’s plans are yet to be finalised.
We fully understand the difficulties that you may be facing during these uncertain times and we want to assure you that our team are here to help. To find out how we can support you, please speak to one of our team today.
The information included on this page is our interpretation of what has been published at this time, this may change in the future as further information and clarity of the information already published becomes clearer. We will be updating this page regularly with general information and guidance.
Updated – 17th August 2020
Key dates for Coronavirus support schemes, tax and Companies House
With numerous Government schemes open to businesses and individuals to help deal with the impact of the Coronavirus outbreak, there are more than 60 key dates to be aware of in the coming months where these schemes will end or change, plus the usual HMRC and Companies House deadlines.
To help you keep track of these we have created this useful key dates guide for you to download here.
Updated – 3rd August 2020
Post-COVID-19 support for businesses
New measures announced in economic update.
Since the Budget in March, businesses have seen a stream of different support schemes and policies announced to help them manage the financial impacts of the coronavirus lockdown.
When Chancellor Rishi Sunak stood in the House of Commons again on 8 July, it was in the context of the gradual reopening of the economy, with several lockdown restrictions having been lowered on 4 July.
The update wasn’t an official Budget speech or fiscal statement, and it only lasted around half an hour, but it contained several measures focused on a “three-point plan for jobs”.
Those three points – to protect, support, and create jobs – come as part of a “second phase” of support, aimed at keeping employment levels as high as possible as the country faces the challenges of a deep global recession.
Whether or not the new measures will be enough to get the public out and spending again, at a time when people face continued health concerns as well as uncertainty over their own financial futures, remains to be seen.
But the additional support has been largely welcomed by businesses as other government schemes, such as furlough payments and self-employed income support, are set to close by the end of October.
Mike Cherry, chairman of the Federation of Small Businesses, said: “The Chancellor is absolutely right to stress that the job of getting the economy back on its feet has only just begun.
“The key now is making sure these positive new measures work for all, especially the small firms that make up 99% of our business community and employ 17 million people.”
VAT cut in hospitality and tourism sectors
One of the headline measures of the Chancellor’s speech was a temporary cut to VAT for food, accommodation and attractions, from 20% to 5%.
From 15 July 2020 to 12 January 2021, the reduced VAT rate applies to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises, and to supplies of accommodation, such as hotels and B&Bs, and admission to attractions.
The measure is intended to encourage consumer activity in the hospitality and tourism sectors, which have been hit particularly hard by the effects of the coronavirus pandemic.
However, there are some concerns it could increase complexity for the businesses it aims to help.
Some will need to deal with varying rates of VAT on different products and services they offer, as well as managing old invoices that use the original 20% rate.
There’s also a risk of cashflow problems for businesses that have not set aside their VAT, and now need to pay the 20% due for previous quarters, while only collecting 5% from consumers.
Essentially, the change means more care needs to be taken over VAT accounting in most cases. If your business has been affected, get in touch with us for support.
Furlough bonus scheme
During the speech, Sunak took the opportunity to emphasise that the coronavirus job retention scheme, or furlough scheme, will not be extended beyond its current end date of 31 October.
However, as concerns remain about rising redundancies with employers no longer able to claim furlough pay, the Chancellor offered an incentive for businesses to bring back currently furloughed staff and keep them in employment over the next six months.
Employers who bring back furloughed staff and keep them in continuous employment to the end of January 2021 will be able to claim a job retention bonus of up to £1,000 per employee.
This only applies if workers are paid at least £520 a month during the second and final phase of the furlough scheme, which is the lower earnings limit for National Insurance, from November 2020 to January 2021.
Payments to employers on the scheme are expected to be made from February 2021.
Other measures in the speech were focused on supporting jobs for the younger generation, with Sunak noting that under-25s are “two-and-a-half times as likely to work in a sector that has been closed” during lockdown.
One part of this was a ‘kickstart’ scheme, which aims to incentivise employers to offer six-month work placements to people aged between 16 and 24, who are on Universal Credit and deemed at risk of long-term unemployment.
This offers funding for each placement, covering 100% of the national minimum wage for 25 hours per week, plus the associated employer National Insurance contributions and minimum automatic enrolment contributions.
Traineeships & apprenticeships
Additionally, the Government is encouraging employers to offer work experience to young people on traineeships, offering a £1,000 bonus for each new trainee they take on.
And from 1 August 2020 until 31 January 2021, employers in England will receive payments for hiring apprentices, of £2,000 for each new apprentice under the age of 25, or £1,500 for new apprentices over 25.
These payments will be in addition to the existing £1,000 payment the government already provides for new 16-18 year-old apprentices, and those aged under 25 with an education, health and care plan – where that applies.
Half-price discount on eating out
Finally, a Government-backed ‘eat out to help out’ scheme will offer diners a 50% discount of up to £10 per head on their meal or drinks at participating businesses.
That means restaurants, cafes, pubs, and other food service firms can sign up to be fully reimbursed for the 50% discount.
The discount can be used unlimited times, and will run from Mondays to Wednesdays throughout August.
To be eligible to join the scheme, a business must sell food for immediate consumption on its premises, provide its own dining area or share a dining area with another establishment for eat-in meals, and it must have been registered as a food business with the relevant local authority on or before 7 July 2020.
Establishments that only offer takeaway food or drink, dining and catering services, and mobile food vans cannot join the scheme.
Businesses can register through the Government’s website.
In addition to the measures aimed at businesses, the Chancellor announced a stamp duty land tax holiday, raising the lower threshold at which the tax is due from £125,000 to £500,000 for transactions between 8 July 2020 and 31 March 2021.
Stamp duty land tax applies to the transfer of residential properties in England and Northern Ireland.
Additionally, a green homes grant is being made available to homeowners and landlords from September, providing a minimum of £2 for every £1 spent on making residential properties more energy efficient.
This will cover up to £5,000 per household, or £10,000 for lower-income households.
Talk to us about coronavirus-related support.
Updated – 8th July 2020
Government confirms Coronavirus tax concessions in amended Finance Bill
The Finance Bill 2020 has now reached the report stage in Parliament. In response to the impact that COVID-19 has had on the country, the Government has confirmed several temporary tax concessions.
To help you make sense of these changes we have prepared a useful summary:
Taxation of Coronavirus support payments
The Government has confirmed that grants to help businesses, employers and individuals affected by the Coronavirus crisis are taxable income. This includes payments made under the:
- Coronavirus Job Retention Scheme (CJRS)
- Self-Employment Income Support Scheme (SEISS)
- Coronavirus Statutory Sick Pay Rebate Scheme (CSSPRS)
- Business supporting grant schemes.
The legislation ensures that grants made under the schemes are within the scope of Income Tax and Corporation Tax. However, whether any tax is paid will depend on the overall tax position in each case.
The amendment to the Bill also provides HM Revenue & Customs (HMRC) with additional compliance and enforcement powers in relation to the CJRS and SEISS.
Protected pension age of members employed as a result of Coronavirus
The tax regime applicable to registered pension schemes will be amended to ensure that those who have retired but return to employment to support the Coronavirus response do not suffer adverse tax impacts.
This amendment ensures that individuals in this position do not lose their ability to receive pension benefits at an age below the current normal minimum pension age. The changes are retrospective to 1 March 2020.
Modifications of the statutory residence test in connection with the Coronavirus
The statutory residence test will be modified so that a day on which an individual is required to be in the UK to undertake work specifically related to coronavirus will be disregarded for the purposes of determining whether they are tax resident in the UK in the 2019-20 or 2020-21 tax years.
Future Fund – EIS and SEIS relief
Through its latest amendments to the Bill, the Government has confirmed that investors in a company who support the company using a Future Fund convertible loan note will not lose relief on any previous EIS or SEIS investments when that loan is redeemed, repaid or converted.
If any of these actions occur in the relevant holding period for the shares, they may be treated as the passing of value from the company to the investor.
Interest and surcharges on liabilities deferred due to the Coronavirus pandemic
Section 135 Finance Act 2008 provides that no interest or surcharge applies to payments due to HM Revenue & Customs (HMRC) deferred as a result of a disaster or emergency specified by HM Treasury (HMT).
A new measure outlined in the Bill enables HMRC to disapply interest and surcharges which would otherwise arise in relation to the specified deferrals that have been offered during the pandemic.
The disposal of interest from a main residence in a three-year period
Through amendments to the Bill the Government will introduce an extension to the three-year time limit in which to dispose of a previous main residence, and so qualify for a refund of the three per cent higher rate tax, where exceptional circumstances prevent the sale of a previous main residence within that period.
This temporary change only applies where the three-year time limit to sell the previous main residence ended on or after 1 January 2020.
Enterprise management incentives – disqualifying events
The Government will introduce a time-limited exception for participants of enterprise management incentives (EMI) share schemes who are not able to meet the necessary working time commitment due to COVID-19.
The modifications affect all matters from 19 March 2020 and will come to an end on 5 April 2021. This includes a provision for HM Treasury to extend the exception for a further 12 months by regulations if the Coronavirus pandemic has not ended by April 2021.
Updated – 1st July 2020
Helping your employees feel safe as they go back to the workplace
As we emerge from lock down and return to the workplace, managers will need to ensure that employees feel safe.
Over the coming weeks and months, many businesses will return to some form of normal operations. This means that staff will begin to return to offices, factories and other places of work. Managers will need to help their people back into their work routine.
It’s only natural that employees will feel uneasy about going back to their place of work. Employers can help by keeping up to date with the latest government guidelines. These guidelines should be communicated to all staff on a regular basis so that everyone is aware of the relevant policies and procedures. This in itself can help to calm people’s nerves as it demonstrates that the firm is implementing the latest health and safety recommendations and is taking their well being seriously.
As ever, communication is key. Managers should have open conversations about personal protective equipment (PPE), respecting social distancing guidelines, etc. Some employees may have different views on what safety precautions are necessary in the workplace. As such, the management team should create appropriate training materials and deliver training to all staff so that everyone knows what is required of them. It is important to remind everyone that they have a responsibility to others and that if everyone follows the guidelines, then risks to staff and customers will be minimised.
Business premises should be set up to comply with social distancing guidelines. This may include setting out floor markings to encourage social distancing, setting up workstations that are a good distance apart and putting screens in place where customer interactions take place. Businesses will also need to put an appropriate cleaning regime in place in order to prevent the spread of COVID-19.
The UK Government has issued a number of guides to help business to return to work safely. These are freely available on www.gov.uk
Updated – 30th June 2020
Limited companies and LLP’s
How to apply for breathing space to consider a rescue plan for your company, under measures to support companies and other types of business in financial difficulty.
If your business has or is really struggling, you can get “formal” breathing space to consider a rescue plan for your company.
A moratorium gives struggling businesses formal breathing space in which to explore rescue and restructuring options, free from creditor action.
Except in certain circumstances, no insolvency proceedings can be instigated against the company during the moratorium period. It also prevents legal action being taken against a company without permission from the court – with the exception of employment tribunal proceedings, or proceedings between an employer and a worker, which do not require permission of the court to commence or continue.
Directors remain in control of the company and will still need to meet their filing obligations with Companies House. Late filing penalties will still be applied where accounts are filed late.
How to get a moratorium
The directors must file for or apply to court for a moratorium. It will give the company 20 business days to consider rescue options.
The moratorium will be managed by a monitor, who is a licensed insolvency practitioner.
Extending a moratorium
The moratorium can be extended for a further 20 business days without creditor consent, or for a longer period with creditor consent, by filing relevant statements with the court. It can also be extended further on application to the court.
Any extension must be made before the current expiry of the moratorium.
What to send to Companies House
To make sure the company’s record is accurate and up to date, any notices must be delivered to Companies House as quickly as possible.
The monitor must deliver notice of the commencement of a moratorium to Companies House.
They also need to receive a notice if:
- the moratorium is extended
- the moratorium is terminated early
- the monitor is replaced, or an additional monitor is appointed
- the court makes an order giving permission for the disposal of property
The moratorium will expire at the end of the initial 20 business day period or any extended period.
The monitor is not required to deliver a notice stating that the moratorium has ended if it has expired by time.
The monitor must deliver a notice if it has ended for another reason, such as:
- it has been terminated early by the monitor
- the company has entered an insolvency procedure
Who it applies to:
A moratorium can be applied for by companies and LLPs registered in England and Wales, Scotland and Northern Ireland.
If you are in difficulty, please talk to us and we will do our best to help you review all available options.
Statutory sick pay paid to employees due to coronavirus (covid-19)
Change have been made to the guidance to include information about employees who have transferred under the TUPE regulations has been added.
This scheme is for employers. You can claim back up to 2 weeks of SSP if:
- you have already paid your employee’s sick pay (use the SSP calculator to work out how much to pay)
- you are claiming for an employee who is eligible for sick pay due to coronavirus
- you have a PAYE payroll scheme that was created and started on or before 28 February 2020
- you had fewer than 250 employees on 28 February 2020 across all your PAYE payroll schemes
UK – rules that have been relaxed to help businesses during the coronavirus pandemic
The Department for Business, Energy & Industrial Strategy have published a list of the rules that have been temporarily relaxed to make it easier for businesses to continue working through the disruption caused by coronavirus (COVID-19).
The government has temporarily relaxed the rules in the following areas:
- Annual leave: Workers will be allowed to carry over leave into the next 2 years.
- Business rates revaluation postponed: Revaluation of business rates will no longer take place in 2021 to help reduce uncertainty for firms affected by the impacts of coronavirus.
- Childcare funding: Councils will be able to move around government funding for free childcare entitlements to make sure sufficient childcare places are available for vulnerable children and those of critical workers.
- Companies House enforcement: Enforcement process has been relaxed, including temporarily pausing the strike off process to prevent companies being dissolved.
- Competition law: Rules have been relaxed for certain agreements that would normally be considered anti-competitive.
- Corporate insolvency and governance: New measures have been introduced to relieve the burden on businesses, including:
- temporary easements on filing requirements and Annual General Meetings (AGMs)
- a new moratorium to give companies breathing space from their creditors while they seek a rescue
- temporarily removing the threat of personal liability for wrongful trading from directors
- Delivery drivers’ hours: Rules have been relaxed for 30 days for drivers supplying supermarkets.
- Destroying spoilt beer: Temporary measure to help brewers and publicans.
- Driver CPC requirement: Temporary changes to allow bus and lorry drivers who cannot complete compulsory Driver CPC training to continue to drive.
- Energy supply: Guidance from Ofgem on how to manage this.
- Eviction protection for commercial tenants: A ban on eviction for businesses who cannot pay their rent.
- Filing accounts and annual statements: 3-month extension from Companies House.
- Gender pay gap reporting: Deadline suspended for one year.
- Hotel accommodation for key workers: Letter to hotel chief executives allowing them to offer accommodation to support key workers and vulnerable people.
- Intellectual property services alterations: Patent applications.
- MOTs suspended: vehicle owners have been given a 6-month exemption.
- Navigation charges deferred: Charges for air navigation services in European airspace deferred for up to 14 months.
- Off-payroll working rules (IR35): The new rules have been delayed by 12 months.
- Personal protective equipment (PPE) and hand sanitiser: New suppliers will be able to bring products to market more quickly and easily.
- Pubs and restaurants to operate as takeaways: Pubs and restaurants will not need planning permission.
- Right-to-work checks: Temporary adjustments will make it easier for employers to carry out.
- Statutory Residence Test: Temporary changes for those coming to the country to work on COVID-19 related activity.
- Tax cuts to reduce PPE cost: PPE purchased by care homes, businesses, charities and individuals to protect against coronavirus will be free from VAT for a 3-month period.
- Taxable expenses: Find out what is taxable while employees are working from home.
Updated – 24th June 2020
PM announces easing of lockdown restrictions
From Saturday 4th July, the Prime Minister has announced that pubs, restaurants and hairdressers will be able to reopen, providing they adhere to COVID Secure guidelines.
From the same date, he has set out that two households will be able to meet up in any setting with social distancing measures, and that people can now enjoy staycations in England with the reopening of accommodation sites.
In order to begin restoring the arts and cultural sector, some leisure facilities and tourist attractions may also reopen, if they can do so safely – this includes outdoor gyms and playgrounds, cinemas, museums, galleries, theme parks and arcades, as well as libraries, social clubs, places of worship and community centres.
Following a review, the Prime Minister has also set out that where it is not possible to stay two metres apart, guidance will allow people to keep a social distance of ‘one metre plus’. This means staying one metre apart, plus mitigations which reduce the risk of transmission.
Working safely during coronavirus
These 10 guides cover a range of different types of work. Many businesses operate more than one type of workplace, such as an office, factory and fleet of vehicles.
You may need to use more than one of these guides as you think through what you need to do to keep people safe. Further guidance will be published as more businesses are able to reopen.
Download your guide here: https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19?utm_source=46816538-975c-422b-bdb7-20ee0a378642&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate
Changes to notifying an option to tax land and buildings during coronavirus (covid-19)
If you are notifying HMRC of a decision to opt to tax land and buildings, you are normally required to notify them within 30 days by either:
- printing and sending HMRC the notification, signed by an authorised person within the business
- emailing a scanned copy of the signed notification
Social distancing in response to coronavirus has made these rules challenging to follow. HMRC have temporarily changed the rules to help businesses and agents.
HMRC have temporarily extended the time limit to 90 days from the date the decision to opt was made. This applies to decisions made between 15 February and 31 October 2020.
You can email notifications to firstname.lastname@example.org.
Updated – 20th June 2020
Latest information for farmers, landowners and rural businesses
Fund to support dairy farmers opens for applications
The Dairy Response Fund is now open for eligible farmers to apply for a single payment from the fund.
Amendments to BPS applications using the Rural Payments service
If you have already submitted a BPS application online and you need to change it, you may be unable to do this after 23 June. In this case, you should create a new BPS application in the Rural Payments service and submit it to us.
Once you have done this, email them at email@example.com , using the subject title ‘Amendments to BPS 2020 application’, and explain that your new application is a change to your previously submitted application. For more information, read page 54 of the ‘How to apply for BPS in 2020’.
If you are unable to create or submit a new BPS application online, email RPA at firstname.lastname@example.org ,using the subject title ‘Amendments to BPS 2020 application’, and explain the updates that you want to make to your application. Your email must include the field number, parcel size, land use, requested activated area and be signed by an empowered contact in the relevant business.
Please remember to include your SBI in any emails you send to RPA.
The final BPS application deadline, with penalties, is midnight on 10 July 2020.
Updated – 19th June 2020
Employer bulletin: June 2020
HMRC publishes the employer bulletin 6 times a year, giving employers and agents the latest information on topics and issues that may affect them.
The employer bulletin is only available online. You can register for HMRC’s employer email alert service to receive emails from HMRC which tell you when the latest issue is available.
If you administer your own payroll this is an essential read where HMRC keep you up to date on recent changes and practices. The June publication clearly covers Government supports but also maternity and paternity pay matters.
Apply for the food charities grant fund
Apply for a grant of up to £100,000 for your charity helping people affected by coronavirus (COVID-19).
If you run a front-line food aid charity in England, you can apply for a grant of up to £100,000 to help you continue to provide food to the vulnerable. You can apply for funding as a group of charities to meet the criteria for applications.
The Department for Environment, Food and Rural Affairs (Defra) will assess applications to the fund in the order they are submitted.
Updated – 17th June 2020
Businesses need to reinstate VAT direct debits
The deferral of VAT payments due to coronavirus comes to an end on 30 June and businesses need to take action to reinstate their direct debit mandates.
The Institute of Chartered accountants in England and Wales (ICAEW) Tax Faculty has reminded its members.
The VAT payment deferral means that all UK VAT-registered businesses have the option to defer VAT payments due between 20 March and 30 June 2020 until 31 March 2021.
However, ICAEW is reminding businesses that they need to take steps to reinstate their direct debit mandates so that they are in place in time for payments due in July 2020 onwards. Any outstanding returns should be filed, and three working days should be allowed to elapse before reinstating the direct debit mandate.
HMRC will issue guidance on the end of the VAT deferral period very soon but, to be effective, direct debit mandates usually need to be set up three working days before a VAT return is filed.
We cannot set up direct debit mandates on behalf of our clients; the business needs to set up the mandate through their business tax account.
HMRC has confirmed that it will not collect the outstanding balance of deferred VAT when the direct debit mandate is reinstated. HMRC has made the necessary systems change to avoid this happening for businesses in MTD for VAT.
Updated – 15th June 2020
Check which expenses are taxable if your employees work from home due to covid-19
Find out what equipment, services or supplies are taxable if your employees are working from home due to coronavirus (COVID-19).
Who is not affected
Furloughed workers who are eligible for the Coronavirus Job Retention Scheme.
Type of equipment, service or supply
Mobile phones and SIM cards (no restriction on private use)
If you provide a mobile phone and SIM card without a restriction on private use, limited to one per employee, this is non-taxable.
If your employee already pays for broadband, then no additional expenses can be claimed.
If a broadband internet connection is needed to work from home and one was not already available, then the broadband fee can be reimbursed by you and is non-taxable.
In this case, the broadband is provided for business and any private use must be limited.
Laptops, tablets, computers, and office supplies
If these are mainly used for business purposes and not significant private use, these are non-taxable.
Reimbursing expenses for office equipment your employee has bought
If your employee needs to buy home office equipment to allow them to work from home, they will need to discuss this with you in advance.
If you reimburse your employee the actual costs of the purchase, then this is non-taxable provided there is no significant private use.
If you do not reimburse your employee, then they can claim tax relief for these purchases on their tax return or P87 as long as the amount claimed is incurred wholly, exclusively and necessarily in the performance of their duties of employment.
Your employees will need to keep records of their purchase and claim for the exact amount. For more information on the strict tests that need to be passed in order to qualify for tax relief see the guidance on Employment Income.
Additional expenses like electricity, heating or broadband
Payment or reimbursement to your employees of up to £4 a week (£6 a week from 6 April 2020) is non-taxable for the additional household expenses incurred when your employee is working from home.
If the claim is above this amount, then your employee will need to:
- check with you beforehand to see if you will make these payments
- keep receipts
Employer provided loans
A salary advance or loan to help your employee at a time of hardship counts as an employment-related loan.
Loans provided with a value less than £10,000 in a tax year are non-taxable.
If your employee needs to self-isolate but cannot do so in their own home, you can reimburse hotel expenses and subsistence costs, these are taxable.
Employees using their own vehicle for business
You can pay approved mileage allowance payments of 45p per mile up to 10,000 miles (25p per mile thereafter) free of tax and National Insurance contributions.
If you do not pay mileage allowance, your employee can claim tax relief through their Personal Tax Account.
Significant private use
For items which are taxable, exemptions for work related benefits must show that there is no significant private use.
HMRC accepts that where:
- your policy about private use is clearly stated to your employee and sets out the circumstances in which private use may be made (this may include making the conditions clear in employment contracts or asking employees to sign a statement acknowledging company policy on what use is allowed and any disciplinary consequences if the policy is not followed)
- any decision of the employer not to recover the costs of private use is a commercial decision, rather than rewarding your employee
Significant private use should not be based on the time spent on different uses. It should be based on your employee’s duties and the need for them to have the equipment or services provided so they can do their job.
You do not have to keep detailed records of every instance of private use to prove a claim for exemption.
How to report to HMRC
Taxable expenses or benefits
Any expenses or benefits which are related to coronavirus can be reported on your PAYE Settlement Agreement.
This means you can settle tax and National Insurance contributions on any expenses or benefits, even though the responsibility would usually be on your employee, or on both you and your employee.
This applies to coronavirus related items only, for example, a new desk can go onto the PAYE Settlement Agreement, but a new sofa cannot.
If you are currently payrolling benefits in kind, you may continue to report expenses and benefits through your payroll. You may also continue to report expenses and benefits through P11D returns.
Taxable benefit charge – returning office equipment
Equipment provided by employer
You may have supplied employees with office equipment so they could work from home. There is no tax charge when they return the equipment to you, so long as there’s no transfer of ownership.
If you do transfer ownership of the equipment to an employee, at any time, this will become an employee benefit. The charge will be on the market value of the equipment at the time of the transfer, minus any amount the employee may have paid towards the equipment.
Equipment reimbursed by employer
Your employee may have agreed to buy their own home office equipment for use whilst working at home and you have reimbursed the exact expense. Unless you have specified that they must transfer ownership to you, the equipment is owned by your employee.
There is no benefit charge on the reimbursement. There is also no benefit charge if you let your employee keep the equipment as it is something that they already own.
Please contact us if you need assistance.
Updated – 12th June 2020
Information for farmers, landowners and rural businesses
The latest information for farmers, landowners and rural businesses during the coronavirus (COVID-19) outbreak. Read the page link below for regular updates.
8 June 2020
Rural Payments helpline open 13 and 14 June
The Rural Payments helpline – 03000 200 301 – will be open on Saturday 13 June and Sunday 14 June from 8.30am to 2pm. This is to support customers leading up to the 15 June deadline for Basic Payment Scheme (BPS) applications, and Countryside Stewardship (CS) and Environmental Stewardship (ES) annual revenue claims.
For all updates see: https://www.gov.uk/guidance/coronavirus-covid-19-information-for-farmers-landowners-and-rural-businesses?utm_source=57fd4d3c-03f5-4240-97f0-4eb531454af9&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate
Transport and travel guidance
Information for people using transport or working in the transport sector during the coronavirus outbreak. This was updated 12 June.
For the latest guidance see: https://www.gov.uk/government/collections/coronavirus-covid-19-transport-and-travel-guidance?utm_source=fd5cf8f8-04a0-4b0c-9758-a96daf7c9d3d&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate
Safer air travel guidance for passengers
The Government issues advice to air travellers.
You can help control coronavirus (COVID-19) and travel safely by:
- avoiding the busiest times and routes
- keeping your distance when your travel (2 metres apart where possible)
- washing or sanitising your hands regularly
You should not travel if you:
- are experiencing any coronavirus symptoms or have in the last 7 days
- are self-isolating as a result of coronavirus symptoms
- are sharing a household with somebody has experienced coronavirus symptoms in the last 14 days
- have been told to self-isolate as a result of having been in close contact with someone who has been confirmed to have coronavirus in the last 14 days
If you have any symptoms of coronavirus you should self-isolate at home and arrange to have a test to see if you have COVID-19.
If anyone in your household has symptoms of coronavirus you should self-isolate.
Updated – 10th June 2020
Parents returning to work after extended leave eligible for furlough
People on paternity and maternity leave who return to work in the coming months will be eligible for the government’s furlough scheme, HM Treasury announced 9 June.
- Parents on statutory maternity and paternity leave who return to work in the coming months will be eligible for furlough scheme even after 10 June cut-off date
- Coronavirus Job Retention Scheme will close to new entrants at the end of June as new flexibilities are introduced to support economy
- This will only apply where they work for an employer who has previously furloughed employees
- This also applies to people on adoption leave, shared parental leave, and parental bereavement leave.
Sending your forms to Companies House during the coronavirus outbreak
As an emergency response to coronavirus (COVID-19), Companies House has developed a temporary online service to upload a number of completed forms and send them to Companies House digitally.
As part of their response to coronavirus, they are currently working new ways to allow users to file documents with them. They have introduced a temporary service to upload a document to Companies House during the coronavirus outbreak.
Read the guidance to find out which documents you can upload using the new upload service.
They are continually working to improve the service. As this service is updated, it will include more document types and features such as acknowledgments and payments.
This service will not be available for Companies House documents you can already send to them online.
You must use the existing online services to:
- file your accounts
- file your confirmation statement
- make changes to your company
- close your company
Updated – 5th June 2020
Reverse charge vat for construction services – delay in implementation
This brief explains that the introduction of the domestic reverse charge for construction services will be delayed for a period of 5 months from 1 October 2020 until 1 March 2021 due to the impact of the coronavirus pandemic on the construction sector.
In addition, there will be an amendment to the original legislation, which was laid in April 2019, to make it a requirement that for businesses to be excluded from the reverse charge because they are end users or intermediary suppliers, they must inform their sub-contractors in writing that they are end users or intermediary suppliers.
Financial support for voluntary, community and social enterprise (vcse) organisations to respond to coronavirus (covid-19)
The government has pledged £750 million to ensure VCSE can continue their vital work supporting the country during the coronavirus (COVID-19) outbreak, including £200 million for the Coronavirus Community Support Fund, along with an additional £150 million from dormant bank and building society accounts.
Get a payment deferral or deregister from money laundering supervision due to coronavirus (covid-19)
If you are due to renew money laundering supervision with HMRC you can:
- defer payment for up to 6 months
- deregister if you stop trading due to coronavirus
- This applies to all businesses with an annual fee due between 1 May and 30 September 2020.
If you continue to operate and carry out activity covered by the Money Laundering Regulations (MLR), you must:
- stay registered with HMRC
- meet your obligations under the MLR, to protect your businesses and the UK from criminal activity
HMRC will send you an email reminder before the date your payment is due, and you can either:
- pay by your original due date
- defer and pay at any time up to 6 months from your original due date
Guidance for companies house customers, employees and suppliers
Companies House has plans in place to maintain services for our customers and protect the welfare of our employees during the coronavirus (COVID-19) outbreak.
Updated – 19th May 2020
Coronavirus Statutory Sick Pay Rebate Scheme set to launch
Employers will be able to make claims through the Coronavirus Statutory Sick Pay Rebate Scheme from 26 May.
The government has announced a new online service will be launched on 26 May for small and medium-sized employers to recover Statutory Sick Pay (SSP) payments they have made to their employees.
Employers are eligible if they have a PAYE payroll scheme that was created and started before 28 February 2020 and they had fewer than 250 employees before the same date.
The repayment will cover up to 2 weeks of SSP and is payable if an employee is unable to work because they:
- have coronavirus; or
- are self-isolating and unable to work from home; or
- are shielding because they have been advised that they are at high risk of severe illness from coronavirus
You can check if your business can claim back Statutory Sick Pay paid to employees due to coronavirus (COVID-19) here: https://www.gov.uk/guidance/claim-back-statutory-sick-pay-paid-to-employees-due-to-coronavirus-covid-19
This scheme will allow small and medium-sized employers, with fewer than 250 employees, to apply to HMRC to recover the costs of paying coronavirus-related SSP.
Employers will be able to make their claims through a new online service from 26 May. This means they will receive repayments at the relevant rate of SSP that they have paid to current or former employees for eligible periods of sickness starting on or after 13 March 2020.
To prepare to make their claim, employers should keep records of all the SSP payments that they wish to claim from HMRC.
The current rate of SSP is £95.85 per week (before 5 April the rate was £94.25). Employers can choose to go further and pay more than the statutory minimum. This is known as occupational or contractual sick pay.
Where an employer pays more than the current rate of SSP in sick pay, they will only be able to reclaim the SSP rate.
The scheme covers all types of employment contracts, including:
- full-time employees
- part-time employees
- employees on agency contracts
- employees on flexible or zero-hour contracts
Note: Other SSP eligibility criteria apply.
Connected companies and charities can also use the scheme if their total combined number of PAYE employees is fewer than 250 on or before 28 February 2020. Employees do not have to provide a doctor’s fit note for their employer to make a claim under the scheme.
Employers can furlough their employees who have been advised to shield in line with public health guidance and are unable to work from home, under the Coronavirus Job Retention Scheme. Once furloughed, the employee should no longer receive SSP and would be classified as a furloughed employee. Where an employee has been notified to shield and has not been furloughed, the rebate will compensate up to 2 weeks of SSP from 16 April 2020.
If you need assistance with a claim please contact us.
Guidance for Employers, employees and businesses
The Government has updated its Guidance on support for businesses and the self-employed.
This guidance will assist employers and businesses in providing advice to their staff on:
- coronavirus COVID-19
- how to help prevent spread of COVID-19
- what to do if someone has symptoms of COVID-19 has been in business settings
- eligibility for sick pay
This guidance also provides details of support available to businesses including:
- a Coronavirus Job Retention Scheme
- deferring VAT and Self-Assessment payments
- Self-employment Income Support Scheme
- statutory sick pay relief package for small and medium-sized enterprises (SMEs)
- a 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England
- small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
- grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
- the Coronavirus Business Interruption Loan Scheme to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance
- a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
- the HMRC Time To Pay Scheme to help with tax
It is clear that this guidance will be updated regularly as the situation changes and you are asked to refer to the web page above regularly for updates.
Small Business Discretionary Grant Payments
Top-up to local business grant funds scheme
The Government has announced a discretionary fund has been set up to accommodate certain small businesses previously outside the scope of the business grant funds scheme.
The Business Secretary Alok Sharma and Minister for Regional Growth and Local Government, Simon Clarke spoke to local authorities in England yesterday to set out that up to £617 million would be made available.
This is an additional 5% uplift to the £12.33 billion funding previously announced for the Small Business Grants Fund (SBGF) and the Retail, Hospitality and Leisure Grants Fund (RHLGF), so up to £617 million. The Government will confirm week commencing 4 May the exact amount for each local authority.
This additional fund is aimed at small businesses with ongoing fixed property-related costs. The Government are asking local authorities to:
Prioritise businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for Small Business Rates Relief, and bed and breakfasts that pay council tax rather than business rates. But local authorities may choose to make payments to other businesses based on local economic need. The allocation of funding will be at the discretion of local authorities.
To be eligible:
- businesses must be small
- under 50 employees
- and they must also be able to demonstrate that they have seen a significant drop of income due to Coronavirus restriction measures.
There will be three levels of grant payments. The maximum will be £25,000. There will also be grants of £10,000. Local authorities will have discretion to make payments of any amount under £10,000. It will be for councils to adapt this approach to local circumstances.
Further guidance for local authorities will be set out shortly.
Updated – 28th April 2020
BBLS Guidance – Bounce Back Loans scheme for small businesses
The Chancellor has announced a new loans measure, known as the Bounce Back Loans Scheme (BBLS), which will allow small businesses to borrow up to 25 per cent of their turnover, up to a maximum of £50,000.
The BBLS will be 100% backed by a Government guarantee, unlike the Coronavirus Business Interruption Loan scheme (CBILS) and will offer an interest-free period for 12 months.
Businesses will be able to apply online via a short and simple two-page self-certification form and because the loan is entirely Government-backed it is hoped that lenders will have the confidence to offer finance without the lengthy and complex red tape associated with CBILS and other loan schemes.
Importantly, firms applying for the new loans will only have to prove that they were viable in the past before the crisis, not that they will remain viable after the crisis. This future viability criteria been a major issue with CBILS.
There remains some concern that banks will still wish to assess the latest financials through a ‘cash available to service debt’ calculation. Where there isn’t sufficient cash to service the debt then there are fears that the loan may still not be granted despite the Government guarantee. Further clarification is expected soon.
The scheme has been designed specifically for small firms, including sole traders, that require ‘vital cash injections’ to help them operate during these challenging times. It will launch for applications from 9am on Monday 4 May and the loans will be provided through a network of accredited lenders.
The Government said that loans will be “advanced as quickly as possible” and that they will “agree a low standardised level of interest for the remaining period of the loan.”
We will keep you up to date on the application process once more is known.
Updated – 27th April 2020
Child Benefit and the High-Income Child Benefit Charge during the coronavirus outbreak
The impact of the coronavirus outbreak on incomes in the most affected sectors has the potential to have a knock-on effect on eligibility for Child Benefit and the High-Income Child Benefit Charge.
The High Income Child Benefit Charge was introduced by the Government to recoup some or all of the Child Benefit received by households in which at least one person earns more than £50,000 a year and either they or their partner or spouse receives Child Benefit.
The charge is set so that Child Benefit is gradually cancelled out between £50,000 and £60,000, with people earning above this rate effectively having their child benefit negated entirely.
However, it has been possible to opt-out of Child Benefit in order not to pay the High Income Child Benefit Charge.
Anyone in this position, whose income has fallen below £50,000 may wish to apply for Child Benefit.
However, people who have opted to pay the High-Income Child Benefit Charge, while still receiving Child Benefit, face a more complicated situation. In these circumstances, their income must fall below £50,000 for a whole tax year before they can stop paying the charge.
Coronavirus Statutory Sick Pay Rebate Scheme
HM Revenue & Customs (HMRC) is expected to release a new online service to help companies reclaim Statutory Sick Pay (SSP) that has been paid as a result of COVID—19.
As such, it has updated its guidance on its website to help businesses prepare to reclaim SSP.
The Coronavirus Statutory Sick Pay Rebate Scheme will repay employers the current rate of SSP (£95.85 per week) that they have paid to current or former employees for periods of sickness starting on or after 13 March 2020.
Some employers may be contractually obliged to pay more than the current rate of SSP through top-up payments, but HMRC has confirmed that the scheme will only cover the current statutory rate.
The reimbursement scheme covers up to two-weeks of SSP starting from the first day of sickness if an employee is/was unable to work because they either have/had coronavirus, are shielding in line with guidance or are self-isolating at home. Employees do not have to have provided a doctor’s fit note for you to make a claim.
To be eligible for a repayment of SSP, an employer has to:
- be claiming for an employee who is eligible for sick pay due to coronavirus
- have a PAYE payroll scheme that was created and started on or before 28 February 2020
- have had fewer than 250 employees on 28 February 2020.
The scheme covers all types of employment, including agency workers and those on flexible or zero-hour contracts.
Connected companies and charities can also use the scheme if their total combined number of PAYE employees was fewer than 250 on or before 28 February 2020.
To make a claim an employer must keep a record of:
- the reason why an employee could not work;
- details of each period when an employee could not work, including start and end dates;
- details of the SSP qualifying days when an employee could not work; and
- National Insurance numbers of all employees who have received SSP as a result of coronavirus.
Businesses must keep these records for at least three years following their claim.
Payment of dividends during the Coronavirus outbreak
It is common for directors of limited companies, who are also shareholders, to receive much of their income in the form of dividends instead of through a salary, owing to the tax benefits this can entail.
However, there are strict rules governing the circumstances in which a company may pay a dividend to its shareholders, some of which could affect directors’ income.
Companies must have sufficient profits to pay dividends at the time that it is paid. So directors must be confident that the firms retained reserves brought forward together with the current results are greater than the amount of the payment.
Another issue that could arise in relation to dividends during the Coronavirus outbreak is that of whether a previously agreed dividend payment can be cancelled owing to any change in a company’s financial position.
Whether a board can do this with ease will depend on the type of dividend agreed upon. An interim dividend is decided on and announced by directors, which only becomes a binding obligation to shareholders of a company once it is paid.
A final dividend is one which is recommended by directors to shareholders that is approved by shareholders via an ordinary resolution and which is binding at the point of approval.
This latter classification of dividend may be more difficult to cancel and could be more likely to lead to action through the courts or other legal disputes, which is something businesses should be aware of.
Contact us for advice on dividend payments during the Coronavirus outbreak, please contact us today.
Updated – 22nd April 2020
I’m a director of a small company – what support is open to me during the Coronavirus outbreak?
If you are a director of a company where you are the sole employee, navigating the support available to help you throughout the Coronavirus outbreak could look like a daunting prospect.
To help you make the most of the support available, we have compiled the following top tips:
1. You can furlough yourself, receive up to 80 per cent of your usual wages and work for a new employer – The Government’s Coronavirus Job Retention Scheme enables employers to furlough workers and receive a grant for 80 per cent of their usual wages, capped at £2,500 per month, and the associated employer National Insurance Contributions and automatic enrolment pension contributions.
Furloughed workers remain on the payroll but may not carry out any work for the employer during the period of furlough.
The good news if you are a director of a small company is that you can furlough yourself. However, the rules appear to be extremely restrictive and limit you to fulfilling only your filing duties under the Companies Act.
While you are furloughed, you can work elsewhere as long as it is not for a linked or associated organisation, but continue to receive your furlough payment.
2. You can defer your July Income Tax payment – All taxpayers who are due to pay their second Self-Assessment payment on account on 31 July 2020 can defer their payment until 31 January 2021. This is an automatic offer with no application required.
3. You can ask to defer your business taxes – HM Revenue & Customs has launched a dedicated Time to Pay helpline to arrange tax payments in instalments. The number is 0800 024 1222.
Time to Pay is only available where all other avenues of financing have been exhausted.
4. You can apply for a Coronavirus Business Interruption Loan (CBILS) – These loan facilities are provided by more than 40 lenders accredited with the British Business Bank and are for sums of between £1,000 and £5 million. The facilities are interest-free for 12 months and are backed by an 80 per cent Government guarantee.
5. You can apply for a three-month mortgage holiday – These are available to all homeowners who are up to date on their mortgage repayments. However, you will continue to accrue interest and so will likely have to pay more when payments resume
6. You may be able to claim Child Benefit – if you have children and were previously earning more than £50,000, and opted out of Child Benefit in order not to pay the High Income Child Benefit Charge, you may wish to apply again for Child Benefit.
– If you have been paying the High-Income Child Benefit Charge, while still receiving Child Benefit, the situation is more complicated in these circumstances, your income must fall below £50,000 for a whole tax year before you can stop paying the charge.
For detailed advice, please contact us today, you can also view and download our infographic explaining the process here.
Government announces Future Fund for fast-growing businesses
The Government has announced a new scheme to help businesses with the impact of Coronavirus. The Future Fund is aimed at rapidly growing businesses that typically rely on equity investment.
These businesses are often pre-revenue or pre-profit and have been unable to access existing schemes, such as the Coronavirus Business Interruption Loan Scheme (CBILS).
The scheme will provide loans from the Government worth between £125,000 and £5 million, which must be at least matched by private investors.
Loans under the scheme will automatically convert into equity on a firm’s next qualifying funding round or if the funds have not been repaid by the end of the loan period.
The scheme will be delivered in partnership with the British Business Bank and full details of how to apply are expected to be announced shortly.
Government launches Business Support Finder tool
With an increasing array of Coronavirus business support measures available to different types and sizes of business, the Government has launched a new Support Finder tool to help businesses identify what support packages they could be eligible for.
The new tool asks for some basic information about a business, including turnover and the number of people it employs, before highlighting packages that could be suitable.
These include measures such as:
- The Coronavirus Job Retention Scheme (CJRS), which allows employers to furlough eligible staff and claim a grant in respect of up to 80 per cent of their usual wages, capped at £2,500 a month, plus employer National Insurance Contributions (NICS) and minimum automatic enrolment pension contributions.
- The Coronavirus Business Interruption Loan Scheme (CBILS), which enables businesses with a turnover of up to £45 million to access Government-backed loans of between £1,000 and £5 million.
- A three-month VAT payment deferral.
- A range of business rates breaks and grants.
The Business Support Finder can be found at: https://www.gov.uk/business-coronavirus-support-finder.
Updated – 21st April 2020
Statutory Residence Test changed to allow skilled workers from around the world to assist the UK’s coronavirus response
The Chancellor, Rishi Sunak, has written to the Treasury Select Committee, to inform it that the Statutory Residence Test (SRT) is being relaxed temporarily so ‘highly skilled’ individuals from around the world can join the UK’s coronavirus response without jeopardising their tax status.
The measures apply to workers such as anaesthetists and engineers working on ventilator design and production. The move means that time spent in the UK working on the country’s coronavirus response between 1 March and 1 June 2020 will be disregarded for the purpose of the SRT. The period the relaxed measures apply to may be extended.
Without the measure, these skilled workers could have seen their global earnings becoming taxable in the UK.
Full details of the changes to the SRT are set to be included in the Finance Bill 2020.
Updated – 16th April 2020
CGT reporting of property sales to be given more time
It was announced that from the start of April all Capital Gains Tax (CGT) from residential property sales would have to be reported and paid to HM Revenue & Customs (HMRC) within 30 days where tax is due.
However, HMRC has now confirmed that it will not charge late filing penalties for reports of CGT on disposals of UK residential property by UK residents made by 31 July 2020 that are made after 30 days.
The announcement, revealed in an HMRC question and answer factsheet shared with ICAEW’s Tax Faculty indicates that despite the change in rules, taxpayers will not be fined for a breach of the regulations.
HMRC stated: “To help those selling properties familiarise themselves with the change in the rules and a new on-line process, HMRC is allowing a period of time to adjust and will not issue late filing penalties for CGT payment on account returns received late up to and including 31 July 2020.
“For UK residents, this means transactions completed between 6 April and 30 June 2020 and reported up to 31 July 2020. Transactions completed from 1 July 2020 onwards will receive a late filing penalty if they are not reported within 30 calendar days. Interest will accrue if the tax remains unpaid after 30 days.”
It is thought that the temporary loosening of the rules is designed to help those struggling to contact agents or report CGT as a result of the Covid-19 pandemic.
ICAEW Tax Faculty said that the Q&A seemed to suggest that the easement only applied to UK residents and not for non-residents who have already had the rules applied to them
Whilst the charging of late penalties has been postponed temporarily interest will still run on the CGT due, so filing and paying as soon as possible is still highly recommended where possible.
OBR warns that the UK economy may contract by more than a third before bouncing back by end of 2020
The Office for Budget Responsibility (OBR) has released a new report which suggests that the UK economy may shrink by 35 per cent in June as a result of the Government’s ‘Stay at Home’ guidance, before ‘bouncing back’ in the following months.
The OBR report, which is not considered an exact prediction, suggest that UK gross domestic product (GDP) could drop by more than a third in the second quarter of the year and by 13 per cent for 2020 as a whole.
As a result, it has warned that unemployment may rise by 10 per cent and that people could see a hit to living standards below that of the 2008 financial crisis, but it said that the country’s recovery would be quick, thanks in part to the Governments measures and stimulus package.
The OBR’s report is based on the assumption that the UK lockdown will last for at least three months. It said: “The longer the period of economic disruption lasts, the more likely it is that the economy’s future potential output will be scarred.”
The OBR concluded by saying that GDP could recover to its pre-virus levels as quickly as the end of this year if the right steps were taken and businesses could get back to work.
If you have any queries relating to any of the points covered in the updates above or you require support with any matters, please speak to a member of our experienced team today.
Updated – 8th April 2020
Cash grants for businesses that pay little or no business rates
In our previous article we pointed out that businesses that are eligible for small business rate relief (SBBR), rural rate relief (RRR) and tapered relief are eligible to claim a cash grant of £10,000. We are now starting to see local authorities making these cash payments directly into business bank accounts. We would recommend that if you are paying rates on a small building, whether this be rented or owned, that you check to see whether the rateable value is below £15,000 and if it is make a claim to your local authority.
Cash grants for retail, hospitality and leisure premises
There is also help for businesses in certain sectors with a rateable value of less than £51,000 that can claim a cash grant of up to £25,000 per property. In order to make this claim you need to be in the retail, hospitality or leisure sector. Please note that the definition of retail is quite wide and it is worth checking the situation regarding your own particular business using this link
Please note that if your rateable value is over £51,000 you will not qualify for this grant.
Please also note that the rateable value of a property is not the amount of rates that you pay, it is the amount on which the calculation is based. Your rates bill will detail this.
Updated – 1st April 2020
Holiday rules relaxed to allow annual leave to be carried over to next two years
The Government has announced that existing rules around annual leave will be relaxed to allow workers who have not used their statutory annual leave entitlement this year due to COVID-19 to carry it over into the next two years.
Prior to this announcement, unless allowed for within an individual’s existing work contract or an employer’s workplace policies, holiday entitlement cannot normally be carried between leave years, meaning that a worker can lose their paid holiday time if they do not use it. Indeed, employers are required by law to try and ensure their workers take their statutory entitlement in any one year, with penalties issued against those who fail to do so.
This new measure will allow workers to carry up to four weeks of unused leave into the next two leave years, thus reducing the chance of an employer being penalised and freeing up the time for employees in key sectors.
It is hoped that this change will allow staff to continue working as part of a national effort against the Coronavirus without them losing out on missed holiday.
The changes amend the existing Working Time Regulations that apply to almost all workers, including agency workers, those who work irregular hours, and workers on zero-hours contracts.
Despite the change, there remains an obligation on an employer to ensure that their workers have an adequate opportunity to take their holiday.
This holiday cannot be replaced with a payment in lieu unless the worker is leaving their employment.
Soft-landing period for Making Tax Digital (MTD) for VAT extended to April 2021
HM Revenue & Customs (HMRC) has announced that the second phase of MTD for VAT will now be postponed until 1 April 2021
The first year of MTD was subject to a one-year “soft-landing period”, which has seen HMRC holding back from pursuing businesses that should have signed up. Similarly, HMRC has taken a lenient approach in cases where businesses that have signed up to MTD have had problems with making their first returns for whatever reason.
However, from 6 April this year, this soft-landing period was due to come to an end. The latest announcement from HMRC in response to the COVID-19 pandemic means that businesses now have until their first VAT return period starting on or after 1 April 2021 to put the necessary digital links in place and comply with the MTD rules fully.
The change also means that penalties for failing to report VAT via MTD will also be postponed. These fines could have been up to £400, depending upon the size of the business.
Despite the changes to the rules, it is important that businesses still prepare themselves for MTD for VAT. If you haven’t taken action already to become compliant, it is important that you do so now.
Suspension of director liability for wrongful trading
Seeking to provide reassurance to business directors in light of the ongoing COVID-19 pandemic, the Government has retrospectively suspended restrictions around wrongful trading from the 1 March 2020 for three months
Under English law, where a company continues to trade, even in the face of unavoidable insolvency, the company’s directors can be found personally liable for the losses suffered to creditors as a result, potentially leading to a court-ordered contribution to the assets of the insolvent company.
By suspending the rules, directors of struggling business who continue to operate, in the full knowledge that they face the prospect of insolvency, will not be penalised for doing what they can to keep their business operational.
On top of this suspension, the Government will also introduce new emergency legislation that will:
- Create new restricting ‘tools’, including a moratorium, for companies giving them a holiday from creditors enforcing their debts for a period of time whilst they seek a rescue or restructure.
- Introduce a new restructuring plan, that binds creditors to that plan;
- Allow companies to buy essential supplies while attempting a rescue or restructure.
The Government hopes that by taking these measures they can reduce the number of contract cancellations, supply chain issues and a wide range of other issues that are affecting the UK economy.
CAF (Charities Aid Foundation) Coronavirus Emergency Fund
In an effort to help smaller charities affected by the impact of COVID-19, CAF (Charities Aid Foundation) has launched a rapid response Fund, Grants of up to £10,000 are available which will help charities to continue to deliver much needed support to communities across the UK.
CAF (Charities Aid Foundation) have stated that due to the high numbers of applicants anticipated, they will not be able to offer a grant to all eligible applicants. However, they do aim to make payments to selected organisations within 14 days of application.
Who can apply?
Organisations with a charitable purpose and charitable activities, which had income of £1million or less in their last financial year.
- UK registered charities (registered with Charity Commission, Scottish Charity Regulator or Charity Commission for Northern Ireland, or as shown in the Charities Act 2010)
- Organisations registered with Companies House or the Public Mutuals Register, as a charitable or not-for-profit entity, eg Community Interest Companies, Companies Limited by Guarantee and others
- Unregistered entities and social enterprises.
Charities can apply for unrestricted funding for core costs, staffing, volunteer costs, supplies and equipment, communications or other critical charitable areas. Applicants must be able to describe how an emergency grant will improve the situation for their organisation and community.
For more details of the grants, and to begin the application process, visit https://www.cafonline.org/charities/grantmaking/caf-coronavirus-emergency-fund
Updated – 31st March 2020
H M Revenue and Customs have confirmed that, despite the impact of COVID-19, businesses should continue to complete and file their VAT Returns in the normal way and by the existing due dates. Whilst it has already been announced that the payments for VAT liabilities arising in the period 20 March to 30 June 2020 do not need to be made until the end of the financial year, no changes have been made to the underlying requirement to submit the VAT Returns. This is extremely pertinent to those businesses filing monthly VAT Returns, who will need to submit multiple Returns during this period.
As a reminder, if you currently pay your VAT by Direct Debit, you will need to cancel the Direct Debit instruction if you do not want to pay the VAT during the above period.
In lieu of any new guidance, we must assume that the existing rules remain in force where a business fails to submit a VAT Return by the due date. If a VAT Return is filed after the due date, the business will begin a (minimum) 12 month surcharge period, during which time HM Revenue & Customs can levy surcharges (penalties) based on the VAT liabilities arising on the VAT Returns filed late. A business is able to challenge the surcharges if there are exceptional circumstances which led to the late filing; H M Revenue and Customs will review these on a case by case basis.
The existing guidance on VAT surcharges and penalties can be found here – https://www.gov.uk/vat-returns/surcharges-and-penalties
Updated 26th March 2020
To help you plan through this pandemic, we have put together a checklist to help you mitigate some of the business impacts:
- Consult with employees, on matters including:
– Statutory sick pay
– Coronavirus Job Retention Scheme
– Redundancies and layoffs
- Defer tax payments by establishing Time to Pay agreements with HM Revenue & Customs (HMRC), for:
– CIS (Construction Industry Scheme)
– MGD (Machine Games Duty)
- Claim business rates reliefs and grants announced by the Government, via your local authority
- Consider using the Government’s Coronavirus Business Interruption Loan Scheme
- Consider using the three-month rental moratorium on commercial leases
- Prepare new or updated bank facilities, including overdrafts and capital holidays
- Liaise and notify customers, suppliers, contractors and trading partners of your contingency plans
- Defer capital expenditure
- Defer finance payments, hire purchase and leasing
- Accelerate income, where possible
- Update credit control procedures
- Reduce stock levels
- Review insurance policies
- Review all contractual obligations and advanced orders
- Review your business’s terms & conditions
Here to Help
This checklist, while detailed, is not comprehensive and we recommend that you speak with us to put a clear plan of action in place to address the short and medium-term impact of this crisis on your business.
We are helping several businesses with their preparations for Coronavirus and are standing by to assist you. To find out how we can help you and your business, please contact us.
Business rates relief extended
Two significant elements of the measures announced by the Government to ease the financial impact of the Coronavirus crisis have been business rates reliefs and grants to certain ‘at risk’ businesses.
These include grants for businesses in the hospitality, leisure and retail sectors, a grant for businesses that pay no or little business rates and 100 per cent business rates relief for businesses working in certain sectors.
Estate agents, lettings agencies and bingo halls
Businesses in a wide range of sectors that have been particularly badly hit by the Coronavirus crisis are now eligible for a 100 per cent discount on their business rates from 1 April 2020 to 31 March 2021.
The Government has now confirmed that this list of sectors now includes estate agents, lettings agencies and bingo halls, as they have been adversely affected by the pandemic and were not in the original list of industries.
The full list of sectors to receive a discount is as follows:
- Music venues
- Small hotels
- Sports clubs
- Night clubs
- Estate agents
- Lettings agencies
- Bingo halls
Where a property has been closed owing to the crisis, it will still be treated as occupied.
However, where a property becomes vacant in the next 12 months, a 100 per cent full rate will be charged after three months of void rate holiday, unless the rules are amended.
Local Billing Authorities will administer the application process and they should already have knowledge of which properties are eligible, so it would be best to contact them in the first instance.
Many businesses will be struggling with a variety of issues due to the impact of the Coronavirus outbreak, but a key consideration for many will be employment costs and staff safety.
The Government has taken significant steps to help businesses protect jobs by introducing measures that seek to subsidise wages and provide refunds for those on sick pay as a result of the virus.
Statutory Sick Pay (SSP)
Anyone who contracts Coronavirus, or who is required to self-isolate under the Government’s current guidance may be entitled to statutory sick pay (SSP).
Only qualifying employees, whose average weekly earnings are above £118 are entitled to SSP. SSP is paid at a rate of £94.25 per week.
Full details of the new measures relating to SSP can be found in our earlier guidance by clicking here.
The Government has provided further advice to employees, which can be found by clicking here.
Contractual Sick Pay
It may be necessary to pay additional sick pay in circumstances where this is provided for in a contract of employment, in the employee handbook, or even where it is usual practice to do so.
Layoffs owing to reduced work
It is possible that businesses, especially those in certain sectors, will see a reduced workload as a consequence of Coronavirus.
In these circumstances, and where allowed for in the contract of employment, employees can be laid off temporarily.
Employees who are laid off must be paid a guarantee payment of up to £29 a day and a maximum of £145 in a three-month period. After four weeks, employees may be able to request that they are made redundant. In most cases, businesses are likely to make use of the Coronavirus Job Retention Scheme now that it is available to employers.
Here to Help
If you require assistance with your payroll or have queries regarding any of these measures, please contact our team today.
Tax and Companies House Deferrals
As part of its measures to reduce the economic impact of the Coronavirus crisis, the Government has announced deferrals to a number of HM Revenue & Customs (HMRC) and Companies House deadlines to ease the strain on businesses and self-employed individuals.
VAT payments have been deferred by three months from 20 March 2020 until 30 June 2020. During this period, businesses will not need to make VAT payments to HM Revenue & Customs (HMRC).
Businesses will have until the 5th April 2021 to pay any liabilities that have accumulated during this period. It is our understanding that no interest is payable on the amount that should have been paid. Although there is no guidance at present, interest may well start too accrued on any part of the liability with effect from the 6th April 2021. The deferral is automatic and businesses do not need to apply to be able to benefit from it.
However, you must cancel the direct debit manually with your bank immediately to make use of this deferment.
VAT refunds and reclaims will be paid by the Government as normal.
Again at present there is no guidance, but we believe that businesses should still complete and file Vat returns as normal, in order to establish the liability/refund. There may of course be circumstances when this is not possible, and we believe that H M Revenue and Customs will take these into account, when looking at reason why Vat Returns may not have been filed on time.
Income Tax Self-Assessment payments due on 31 July 2020 will be deferred until 31 January 2021 for self-employed individuals.
Again, this is an automatic offer and it is not necessary to apply to benefit from it. No penalties or interest for late payment will be charged during the deferral period.
Time to Pay (TTP) Arrangements
HMRC is making TTP arrangements available to any business that can show that all other avenues for financing have been exhausted.
Companies House Filing
Businesses affected by the COVID-19 pandemic can apply to Companies House to request an extension to file their accounts, reports and confirmation statements.
Companies House is offering a maximum extension of three months for struggling businesses, but they must meet stringent conditions, including a rule that an appeal to extend must be lodged before a company’s current filing deadline.
Appeals will be treated on a case-by-case basis and the process will mirror the existing criteria based on cases for unforeseen poor health.
Companies House has made it clear that any company accounts filed late will still incur an automatic penalty.
Here to Help
If you require assistance with the deferral of tax or Time to Pay arrangements, please speak to our team.
The ongoing COVID-19 pandemic is having a significant impact on all aspect of individual’s lives, not least their personal finances.
During this difficult period, it is likely that your staff may look to you for advice if their own income is affected by the economic impact of this virus.
To help them make sense of your rights and what financial support may be available to them, we have prepared a useful summary below:
Statutory Sick Pay
Anyone who contracts Coronavirus, or who is required to self-isolate under the Government’s current guidance may be entitled to statutory sick pay (SSP). SSP is paid at a rate of £94.25 per week.
We are currently awaiting an announcement from the government as to the additional measures that are going to be introduced for the self-employed. We will update this note once further details are available
If you cannot work due to Coronavirus and are self-employed you are not likely to be eligible for sick pay and may find that the volume of work available to you subsides.
If you find yourself in this situation you can apply for Universal Credit and/or apply for New Style Employment and Support Allowance (ESA) to top up your income.
It is strongly advised that you don’t delay making a benefit claim if you think you may be affected by Coronavirus. To make a claim you will not be required to produce a Fit Note.
The Government has confirmed that self-employed individuals can claim ESA from the first day of illness or self-isolation instead of waiting for seven days, but it may take several weeks for a claim to be processed under Universal Credit.
Through ESA you can claim up to £73 per week – the amount won’t be affected by either you or your partner’s savings or income, though if you get a private pension worth more than £85 per week it could be reduced.
Payments for ESA are made fortnightly in arrears. Claimants who meet the criteria should, therefore, receive their first payment after two weeks.
Those who are self-isolating will not be required to go to a jobcentre to begin this process as it can all be done online.
To help those applying for Universal Credit, the Government has removed the Minimum Income Floor.
Typically, if you’ve been running a business for a year or longer when you claim Universal Credit, the Government works out your benefit payment based on the minimum income floor.
Removing the floor means that some claimants will get extra money to make up for lost earnings if they decrease due to the Coronavirus.
More than 500,000 people have made a new claim for Universal Credit in the last week or so to cover their lost income. If you need to make a claim, it is therefore advised that you do so at the earliest opportunity.
For further advice on the options available to you and to make an application, please click here.
Further measures to support those in self-employment are expected imminently.
HM Revenue & Customs (HMRC) has launched a new helpline to support individuals that are concerned about paying their tax due to disruption related to Coronavirus.
During this crisis, some households will see a decline in their household income, which may make paying bills a challenge.
To help with this, lenders have agreed with the Government to offer tolerance and help on mortgage payments.
Those struggling with their mortgage payments will be given a three-month ‘holiday’, allowing customers a temporary break from making payments during this time.
Banks are offering different solutions to this ‘holiday’, with some extending the term of the mortgage, while others are adjusting payments so that unpaid months are spread over the life of the mortgage, meaning that borrowers experience a very small uplift in future payments. Be aware that the shorter the term left on your mortgage the larger the increase will be in your future monthly payments.
It is advised that you speak with your bank in advance if you anticipate that you may need to make use of this facility so that you are clear on the terms being offered.
Lenders may wish to confirm the following key points to satisfy their eligibility criteria for a mortgage payment holiday:
- Your finances have been affected by Coronavirus
- You are up to date with your monthly mortgage payments and not in arrears
- You have consent from everyone named on the mortgage
Some lenders have already contacted mortgage holders to offer a mortgage holiday, which in some cases can be requested online via an application form or a fast track approval process. Requesting a holiday should not affect your credit rating.
Loans and credit cards
Although the Government hasn’t asked banks to help those with loans and credit card payments, many banks have already announced that they will offer support here too for those struggling with debts.
Most banks and credit card firms have confirmed with the MoneySavingExpert website that they will allow emergency credit limit increases if necessary, while others are offering repayment holidays and a few will waive fees for missed payments.
During these uncertain times, it is recommended that you speak with all lenders to see what assistance is offered instead of having missed payments without permission, which may incur fees and affect your credit score.
Savings and investments
Banks are now making it easier to access fixed-rate savings accounts without penalty to help those affected by the pandemic.
According to the MoneySavingExpert website, nine banks have so far offered this facility to savers, so it is worth checking with your bank or building society to see whether your money can be accessed easily.
During uncertain economic times such as these, if you hold any investments it is best to seek specialist advice from an independent financial adviser to make sure that you are not adversely affected. If you do not have an adviser then we can recommend somebody suitable.
Schools across the UK are closed and many will be worried about parents and grandparents who have been asked to employ social distancing and self-isolation.
Due to these arrangements, it may be necessary to take time off work to care for another person. Whether workers have a right to be paid will depend on the terms of their contract.
There is an implied term (unwritten) in all employment contracts that workers must obey reasonable instructions from their employer.
The Advisory, Conciliation and Arbitration Service (ACAS) has called on employers to listen to the concerns of their staff but said that workers who refuse to follow instructions could still face disciplinary action.
Where an employee has urgent caring responsibilities, they may be able to take a ‘reasonable’ amount of time off for dependents but this does not have to be paid unless stipulated in a person’s contract.
The Government has introduced new legislation that has suspended the eviction process for tenants for at least three months to help those struggling with their rent.
To ensure buy-to-let landlords aren’t adversely affected they will be able to make use of the same three-month mortgage holiday as regular lenders.
Renters may also wish to check whether they are entitled to any financial help with their housing, which could be from benefits such as Universal Credit. You should also check whether you could apply for a discretionary housing payment from your local council.
Many of those affected by the closure of companies, debts or loss of investments may need to consider personal insolvency options, which include:
- Individual voluntary arrangement (IVA)
- Debt relief order (DRO)
If you are considering taking any of these steps in the coming months it is vitally important that you seek professional advice.
Here to Help
The Government continues to make new announcements daily and has said it will do ‘whatever it takes’ to help individuals through this crisis. If you are concerned about your finances you must speak to a professional adviser to see what options may be available to you. To find out how our dedicated team can help you, please contact us today.
Working from home
With the Government recommending that people work from home where possible, many businesses will have had employees working from home for the first time in recent weeks.
Amidst the logistics and practicalities of setting employees up to work from home, it could be easy to overlook the implications of increased home working for your business’ tax bill.
To help you navigate the various tax considerations, we have put together a short guide to the points you need to be aware of.
For most office-based employees, the obvious piece of equipment they will need to be able to work from home is a computer.
However, equipment will not necessarily be limited to computer equipment and can also include stationery and consumables such as printer ink. HM Revenue & Customs provides exemptions in respect of items and equipment provided to employees to enable them to carry out their jobs.
Provisions covered by the exemption include stationery, office furniture, office and workshop supplies, as well as computer equipment. The exemption may also extend to the provision of home telephone lines but only in circumstances where there is a clear business case for this.
Two further conditions need to be met for the exemptions to apply:
- The provision must not be used significantly for private purposes by the employee or a member of the employee’s family; and
- The provision must be provided solely for the employee to be able to carry out their duties and must not belong to one of the following excluded categories:
– Vehicles, boats and aircraft;
– Any construction, extension or alteration of the employee’s living accommodation, such as the installation of a loft conversion office space or a garden office.
Clearly, there is a potential for employees to incur additional costs, such as heating and lighting.
The employer can reimburse these costs tax-free where there is a ‘homeworking arrangement’ between an employer and an employee and the employee must work at home under the terms of these arrangements.
A notable exception here is costs that are unaffected by whether or not an employee is working from home or not, like mortgage repayments or rental payments.
Similarly, the cost of existing broadband connections cannot be reimbursed tax-free, although new connections can be, where the employee does not already have a broadband connection.
Tax relief for employees working from home
In circumstances where the employer does not meet the additional costs of an employee working from home – such as heating, water and electricity – but requires the employee to work from home, it may be possible for the employee to claim tax relief in respect of these costs.
Expenses for both personal and business use are not eligible for tax relief.
Employees can use HMRC’s online tool to determine whether particular expenses would be eligible for tax relief. The tool can be viewed here.
Here to Help
The best way of ensuring that you can make the most of the various tax reliefs available is to ensure that there is a written agreement in place between you and the employee that can be provided as evidence to HMRC.
Contact us today for detailed advice, tailored to your specific circumstances.
Commercial Rent Deferrals
To support UK businesses, the Government has confirmed that commercial tenants that are unable to pay their rent due to disruption caused by the Coronavirus pandemic will not face eviction.
The Government had already banned evictions on private residential tenants but has now confirmed that the three-month moratorium on evictions and debt enforcement will be extended to cover commercial leases as well.
Although many commercial landlords and tenants are already coming to voluntary arrangements about rental payments, the Government is taking steps to support businesses struggling with their cash flow due to Coronavirus who are concerned about the prospect of debts and possible eviction.
The new measures confirmed in the emergency Coronavirus Bill ensures that no business will be forced out of their premises if they miss a payment in the next three months.
However, tenants will still be liable for the rent due in arrears after this period and the Government has said it is actively monitoring the impact on commercial landlords’ cash flow to ensure their operations are not put at risk.
It is not yet clear how tenants will be expected to repay deferred rent payments and this might differ from one lease to another, but a variety of options may be available, including:
- Extending the length of the lease to cover the time lost
- Distributing the lost rental income across the entirety of the remaining lease period
- Increasing rents in future to make up for any loss.
Tenants and landlords must discuss these options and agree on the future arrangements of the lease.
If you are affected by this change then you should seek advice at the earliest opportunity. To find out more about our services and support, please contact us.