The coronavirus has arrived having a devastating effect on people’s lives, the way we work and the economy. Once this is over the effects will be felt for months, if not years, to come.
There are still details to be published as to how some of these provisions will work but this page has been updated from 26th March to provide the latest information available.
The government has responded to this with various provisions for businesses and employees. Here’s what we have so far and questions that remain:
Furloughed workers will receive at least 80% of their salary up to a maximum of £2,500 per month. From 1st August employers will have to cover any employers NI contributions and pension contributions. The amount that can be reclaimed has tapered down to 60% in October but this is set to rise to the full 80% under the announced scheme extention for the lockdown starting on November 5th.
The guidance includes information as to:
Who can claim
Employees you can claim for
Agreeing to Furlough
Claims can be made for employees on the payroll on 31st October 2020.
Is the £2,500 inclusive of employers pensions and employer’s NIC? – No
Will the grants cover employers pension contributions. – Not any more
Will the grants cover employer’s NIC? – Not any more
Does it include directors? – Yes it does
Support for Businesses
See our blog post for the list of provisions set out by government.
Covid-19 Business Support so far
A number of measures will not be available immediately. The official line on this would be to access the Coronavirus Business Interruption Loan Scheme. This is open now for applications and the government website provides a list of lenders along with criteria for eligibility.
The government maintain the most recent details on the provisions on their website.
The Self-Employment Income Support Scheme Grant Extension provides critical support to the self-employed in the form of two grants, each available for three month periods covering November 2020 to January 2021 and February 2021 to April 2021
Full details can be found here on the .Gov website.
VAT – deferrals will apply from 20th March to 30th June. There is no need to apply. However, if you pay by direct debit this should be cancelled before any returns filed.
PAYE – speak to HMRC if you are having difficulties paying on 0300 200 3200 or 0800 0159 559 for the Time to Pay scheme.
Income Tax – You are eligible if you are due to pay your second self-assessment payment on account on 31 July. You do not need to be self-employed to be eligible for the deferment. The deferment is optional. If you are still able to pay your second payment on account on 31 July you should do so. You do not need to apply. There will be no late filing penalties for returns submitted by 28th Feb 2021 and no interest will be charged on late paid tax until 1st April 2021.
Support for businesses that pay little or no business rates
The Local Restrictions Support Grant (LRSG) supports businesses that were open as usual, providing services in person to customers from their business premises, but which were then required to close for at least 3 weeks due to local lockdown restrictions imposed by government.
It is for businesses that pay business rates on their premises. Local councils may at their discretion also provide funding for businesses that don’t pay business rates.
Further details can be found on the .Gov website here.
Support for businesses paying tax: Time to Pay service
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.
These arrangements are agreed on a case-by-case basis so the key thing here is to speak to HMRC and come to an agreement.