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BUILDING LEGACIES COVID-19 BRIEFING – 23/03/2020

BUILDING LEGACIES COVID-19 BRIEFING – 23/03/2020

The Covid-19 situation in the UK is now extremely serious, and you will no doubt be aware that the Government has made several announcements detailing support packages for individuals and organisations, together with a number of accelerated and somewhat exceptional edicts and advice to help people stay safe and virus-free.

This guidance appertaining to these announcements is detailed in www.gov.uk under the section ‘COVID-19: support for businesses’.

Building Legacies will shortly be releasing details of further detailed informative advice and communications in relation to what SMEs need to do to access those areas of government support which are applicable and relevant to their business or organisation.

In the interim, if any Building Legacies clients require 1-2-1 support in terms of either the above, or general business continuity & resiliency issues, they should contact their designated Business Growth Manager via email or mobile phone in the first instance.  

We have also detailed below our latest Briefing which is in two sections; the first dealing with economic & financial matters and the second with important health issues.

We appreciate this Briefing might at first view appear to be somewhat of a ‘weighty tome’ and contain a lot of detail, and you may in fact have seen much of it already in the last 24 hours. We would however advocate that you take time to read it carefully, as it may help you prioritise those key areas which require the most urgency and/or where you may require further advice over and above that detailed in the government guidance.

We are here to help you remain resilient and maintain continuity in these extremely challenging times, so please do make time to contact your Business Growth Manager for any business-related queries you have. 

We will issue further advice and guidance Bulletins as the Covid-19 situation develops.

ECONOMIC & FINANCIAL MATTERS

On Friday 20 March the Chancellor of the Exchequer set out a package of temporary and targeted measures to support public services, people and businesses through this period of disruption caused by Covid-19. He has since confirmed that timeframes may be extended and support increased as required, with no fiscal limit at present.

The support packages for business include:

  • a Coronavirus Job Retention Scheme
  • deferring VAT and Income Tax payments
  • a Statutory Sick Pay relief package for SMEs
  • a 12-month business rates holiday for all retail, hospitality and leisure 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 offering loans of up to £5 million for SMEs through the British Business Bank
  • 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

Support for businesses through the Coronavirus Job Retention Scheme

Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. All UK businesses are eligible.

In order to access the scheme business owners will need to:

  • designate affected employees as ‘furloughed workers’ (this in effect means indefinite unpaid leave but not altering their current employment status) and notifying these employees of this change. It is important to remember that changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal, which will be accessible soon via your organisation’s existing HMRC online facility. If in doubt, you can contact the HMRC free telephone hotline on 0300 200 3300 HMRC will ‘shortly’ set out further details on the information required.

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement and it anticipated that the system will be running and making payments by the end of April at the latest. Don’t forget that all payments under this scheme can be backdated to 1 March 2020. Existing systems are not set up to facilitate payments to employers.

If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.

Support for businesses through deferring VAT and Income Tax payments

The Government will support businesses by deferring Valued Added Tax (VAT) payments for 3 months. If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.

VAT

For VAT, the deferral will apply from 20 March 2020 until 30 June 2020 and all UK businesses are eligible. This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the Government as normal.

Income Tax

For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021. If you are self-employed you are also eligible. This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period. HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.

Support for businesses that are paying sick pay to employees

The Government will shortly introduce legislation to allow small and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to Covid-19. The eligibility criteria for the scheme will be as follows:

  • this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of Covid-19
  • employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020
  • employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of Covid-19
  • employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website
  • eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force
  • the Government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible

You are eligible for the scheme if:

  • your business is UK based
  • your business is a small or medium-sized and employs fewer than 250 employees as of 28 February 2020

A rebate scheme is being developed. Further details will be provided in due course once the legalisation has passed.

Business rates holiday for retail, hospitality and leisure businesses

The Government will introduce a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year. Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.

You are eligible for the business rates holiday if:

  • your business is based in England
  • your business is in the retail, hospitality and/or leisure sector

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being 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 take any action to access this scheme. It will apply to your next council tax bill in April 2020; however, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible. You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator. Further guidance for local authorities is available in the expanded retail discount guidance.

Cash grants for retail, hospitality and leisure businesses

The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property. For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000. For businesses in these sectors with a rateable value of between £15,001 and £51,000, they will receive a grant of £25,000.

You are eligible for the grant if:

  • your business is based in England
  • your business is in the retail, hospitality and/or leisure sector

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

  • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
  • for assembly and leisure
  • as hotels, guest and boarding premises and self-catering accommodation

To access this scheme you do not need to do anything at present. Your local authority will write to you if you are eligible for this grant. Guidance for local authorities on the scheme will be provided shortly. Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority. Find your local authority.

Support for businesses that pay little or no business rates

The Government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs. You are eligible if:

  • your business is based in England
  • you are a small business and already receive SBBR and/or RRR
  • you are a business that occupies property

You do not need to do anything at present to access this scheme. Your local authority will write to you if you are eligible for this grant. Guidance for local authorities on the scheme will be provided shortly. Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority. Find your local authority.

Support for businesses through the Coronavirus Business Interruption Loan Scheme

A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch early during w/c 23 March to support primarily small and medium-sized businesses to access bank lending and overdrafts.

The Government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value.

Businesses can access the first 12 months of that finance interest free, as the Government will cover the first 12 months of interest payments.

You are eligible for the scheme if:

  • your business is UK based, with turnover of no more than £45 million per year
  • your business meets the other British Business Bank eligibility criteria

The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website. All the major banks will offer the Scheme once it has launched. There are 40 accredited providers in all. You should talk to your bank or finance provider (not the British Business Bank) as soon as possible and discuss your business plan with them. This will help your finance provider to act quickly once the Scheme has launched. If you have an existing loan with monthly repayments, you may want to ask for a repayment holiday to help with cash flow.

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 and are tailored to individual circumstances and liabilities. You are eligible if your business:

  • pays tax to the UK Government
  • has outstanding tax liabilities

If you have missed a tax payment or you might miss your next payment due to Covid-19, please call HMRC’s dedicated helpline: 0800 0159 559. If you’re worried about a future payment don’t contact HMRC until nearer the time that it is due.

Insurance

Businesses that have cover for both pandemics and Government-ordered closure should be covered, as the Government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc. is sufficient to make a claim as long as all other terms and conditions are met. Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.

Financial help for Sole Traders, un-registered organisations and Self-Employed people

The Government has acknowledged that its current financial packages do not yet provide the same level of help and support as is now available for businesses. It has not yet finalised its plans for a comprehensive assistance package for these groups of people, although the Chancellor of the Exchequer is expected to make further announcements during w/c 23 March. We will advise you on any details of measures that he announces in relation to these people.

STAY IN TOUCH AND GET HELP

As a Building Legacies client you can contact us for help and advice via email, social media and our website. You can also get in touch with your Business Growth Manager (BGM).

If you are not already on the Building Legacies programme, now is as good a time as ever to get the right support for your business to survive and thrive. Register with us to gain access to our FREE business support programme and receive our regular Covid-19 briefings plus other useful information directly into your inbox.

We will issue further advice and guidance Bulletins as the Covid-19 situation develops.