COVID-19  
 
Employment, finances & taxes  
 

Employment 

Coronavirus Job Retention Scheme 
 
Under the Coronavirus Job Retention Scheme, employers can access grant support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off due to Covid-19. HMRC will reimburse 80% of the wage costs of ‘furloughed workers’, up to a cap of £2,500 per month. Directors, Agency Workers, Casual Workers and salaried members of Limited Liability Partnerships can be furloughed if they are paid via PAYE. You will need to: 
 
designate affected employees as ‘furloughed workers,’ and notify your employees of this change in writing. 
submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal 
 
Once you’ve claimed, you’ll get a claim reference number. HMRC will then check that your claim is correct and pay the claim amount into your bank account within six working days. 

Coronavirus Self-Employment Support Scheme 

Eligible self-employed persons will be able to claim up to 80% of their average monthly earnings based on the last 3 years from 2018/19. The scheme is being administered by HMRC and is expected to be available in June 2020 via the .GOV website. The payment will be a single sum based on 3 months from March to June, it will be reviewed before the end of June 2020. 
 
Eligibility Criteria 
 
Sole Traders, Partnerships and non-Salaried LLP members, who have submitted their 2018/19 Tax return before 23 April 2020. 
Average taxable trading profit is below £50,000 in 2018/19 or on average over the last 3 years. 
Self-Employment Income forms less than 50% of their total income 
Actively trading or would have been so if not for COVID 19 when the claim is made. 
Intending to continue to trade in 2020/21. 
 
For self-employed workers who don’t match the eligibility criteria, there are other “safety nets” available including Universal Credit, Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBLS). 

Sick pay 

If your business has fewer than 250 staff, you will be able to reclaim Statutory Sick Pay (SSP) for sickness absence due to Covid-19. The refund will cover up to two weeks’ SSP per eligible employee. More details will be provided by the UK Government when the necessary legislation has been passed. 

Financial Support 

Coronavirus Business Interruption Loan Scheme (“CBILS”) 
 
A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, launched on 23 March and will remain open until the end of September 2020 at which time it will be reviewed. The UK Government will provide lenders with a guarantee of 80% on each loan up to £5 million. The first 12 months will be interest free. The SME Scheme applies to Businesses with Annual Turnover up to £45 Million. 
 
SME Scheme - Eligibility Criteria 
 
UK based Business activity 
Sole Trader, Partnership, Limited Liability Partnership, Limited Company 
50% of turnover has to generated from Sales of Goods or services 
Have been established a minimum of 3 years 
Is not classified as a “Business in Difficulty”. 
 
SME are given access to Loans, Overdrafts, Invoice Finance and Asset Finance for amounts up to £5 Million. Repayment Terms on Loans and Asset Finance can be up to 6 years. 

Coronavirus Bounce Back Loan Scheme (“CBBLS”) 

On the 28th April the Government announced the Bounce Back Loan scheme for Micro Businesses who are unable to access the CBILS scheme, the application process is promised to be much simpler and less onerous for small businesses, the scheme goes live on the 4th May 2020 , no details of the qualifying criteria for businesses has yet been released. 

Coronavirus Large Business Interruption Loan Scheme (“CLBILS”) 

Eligibility Criteria 
 
UK based Business activity 
Sole Trader, Partnership, Limited Liability Partnership, Limited Company 
50% of turnover has to generated from Sales of Goods or services 
Have been established a minimum of 3 years 
Is not classified as a “Business in Difficulty”. 
 
CLBILS gives access to Loans, Overdrafts, Invoice Finance and Asset Finance for amounts up to £25 Million. Repayment Terms on Loans and Asset Finance can be up to 3 years. A1 Capital Ltd is a broker and not a lender, we have a number of funders who offer CBILS products including but not limited to Loans, Asset Finance and Leasing , there will be businesses who do not fit the criteria laid down by CBILS, these businesses can still access funding using non CBILS products.– dialogue is ongoing into how we can help get money out to businesses that need it. To find out more about the CBILS talk to us or visit the British Business Bank website. 

Company accounts filing extension 

Limited companies can now apply for a three-month extension for filing their accounts with Companies House. Those companies that cite issues around Covid-19 will be automatically and immediately granted an extension. Applications can be made through a fast-tracked online system, which will take just 15 minutes to complete. 

Lease/Loan Deferment 

The majority of lenders including Mortgage providers, Banks, Asset Finance and Vehicle Leasing Companies are open to payment deferment requests. All the lenders are affected by the COVID 19 lockdown and the usual call centres are experiencing long waiting times due to lower than normal staff levels. We recommend emailing the lender with any request for deferment of payments. Provide the following information to the lender in our experience the more help you give to the lender the higher the probability of getting the deferral request approved. Include the following: 
 
Agreement Number/Reg No/Address 
How COVID 19 has impacted on your income of business turnover 

Taxes 

Taxes 
 
If your business has a VAT payment due between 20 March 2020 and 30 June 2020, you have the option to: 
 
defer the payment until a later date 
pay the VAT due as normal 
 
You do not need to tell HMRC that you are deferring your VAT payment. If you normally pay by Direct Debit you should contact your bank to cancel your Direct Debit as soon as you can, or you can cancel online if you are registered for online banking. If you choose to defer your VAT payment as a result of Covid-19, you must pay the VAT due on or before 31 March 2021. HMRC has also scaled up its Time to Pay offer to all firms and individuals, this applies to Business Taxes such as Corporation Tax, PAYE, and VAT as well as Personal Income Tax so any business or individual who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities can be helped. 
 
If you are concerned about being able to pay your tax due to Covid-19, call HMRC’s dedicated helpline on 0800 0159 559. Lines are open from Monday to Friday, 8am to 8pm and on Saturday, 8am to 4pm. For those who are unable to pay due to coronavirus, HMRC will discuss your specific circumstances to explore: 
 
agreeing an instalment arrangement 
suspending debt collection proceedings 
cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately 
 
Before contacting HMRC it is advisable to have financial forecasts and a statement of assets and liabilities available. 

Business Rates 

The UK Government will introduce a business rates holiday for retail, hospitality and leisure businesses for the 2020-21 tax year. To be eligible, the business premises must be occupied and wholly or mainly used: 
 
as shops, restaurants, cafes, drinking establishments, cinemas and live music venues 
for assembly and leisure 
as hotels, guest & boarding premises and self-catering accommodation 
 
You do not need to apply for this relief – it will be applied to your next council tax bill in April 2020. If you’re struggling to pay your non-domestic rates bill you should contact your local council and ask them about your payment options. 

Grants 

Local Authorities are administering the Grants to qualifying Hospitality and Leisure Businesses as well as Rural Rate paying Businesses. A £25,000 grant will be provided to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value between £15,000 and £51,000. You should contact your local council to find out more. A £10,000 grant will be available for businesses that are eligible for Small Business Rate Relief or Rural Rate Relief. If your business is eligible, you do not need to apply – your local council will contact you. 
 
This information is current as of 20 April 2020. 

Useful Links 

To keep up to date with developments, visit: 
 
The Federation of Small Businesses is a valuable source of advice and guidance: https://www.fsb.org.uk/campaign/covid19.html 
British Vehicle Rental and Leasing Association COVID 19 Business Advice: https://www.bvrla.co.uk/guidance/covid-19-business-advice.html 
Financial Conduct Authority COVID 19 Support: https://www.fca.org.uk/coronavirus-support 
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