FINANCIAL SUPPORT INFORMATION – CORONAVIRUS (COVID-19) CRISIS
In order to support our clients in the current climate, and indeed provide advice to other businesses out there, we have summarised below some of the financial support packages which have been announced by the government in recent days. These include:
- Government backed loans;
- Rates holidays;
- Job retention grants;
- HMRC support.
As well as business support, there is also support for individuals. One of the first initiatives announced was the Mortgage Payment Holiday, therefore we include some information about this also.
As you will appreciate, the guidance is quite detailed, but we’ve tried our best to summarise the key points. Some of it is changing daily, but we will update you again as information evolves.
The Northern Ireland Executive has announced two grants to be made available to businesses impacted by coronavirus.
A grant of £10,000 is to be made available to all small businesses who are eligible for the Small Business Rate Relief Scheme.
Another grant of £25,000 is to be provided to companies in the hospitality, tourism and retail sectors with a rateable value from £15,000 up to £51,000.
Further details on these two grants are due to be announced soon, but in the meantime please access this link for more information.
A new temporary Coronavirus Business Interruption Loan Scheme will launch next week to support primarily small and medium-sized (SMEs) businesses to access bank lending and overdrafts.
The government will provide a guarantee of 80 per cent on each loan (subject to a per-lender cap on claims) to give lenders confidence in providing 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.
In addition, the government will cover the first 12 months of interest payments.
Further details, including details of the banks providing access to this scheme, conditions for eligibility and approval etc., will be announced in the coming days. The scheme will be available from week commencing 23 March 2020.
Please access this link for further information.
Rate bills for 2020-21 were due to be issued in April 2020. To avoid placing financial pressure on ratepayers affected by COVID-19, rate bills will not be issued until June 2020.
This will happen automatically. Ratepayers do not need to request to have their rate bill deferred until June 2020.
When rate bills issue in June 2020, ratepayers can still choose to pay their bill in monthly instalments between June 2020 and March 2021.
Monthly Direct Debit payment plans will be automatically updated to collect payments between June 2020 and March 2021.
Rates holiday for businesses
There will be a three-month rates holiday for all business ratepayers, excluding public sector and utilities.
This means that no rates will be charged for April, May and June 2020, thereby reducing the 2020-21 annual rate bill by 25 per cent. This reduction will also be given automatically and does not need to be paid back.
More information can be found here.
JOB RETENTION GRANTS
Employers can submit information to HMRC via a portal about employees whose jobs may be threatened by the outbreak of the virus.
HMRC will then reimburse 80% of the wage cost of those employees who are retained, capped at £2,500 per month, for an initial period of three months. The payment will not be available until end of April 2020 but will be backdated to 1st March.
All businesses are eligible, irrespective of size.
More details, for example in relation to the portal, are to be announced.
In order to assist those struggling with cashflow, there are a number of measures available from HMRC, to include the following:
- Opportunity to agree a bespoke Time To Pay arrangement, to enable the spread of liabilities owed to HMRC over a longer period;
- HMRC have also agreed to waive late payment penalties where businesses experience administrative difficulties contacting HMRC or paying taxes due to COVID-19;
- Self-Assessment payments on account due by the end of July 2020 can be deferred until January 2021;
- The next quarter VAT payment will be deferred until the end of June, i.e. no VAT payments will be required from any business from now until the end of June.
Further information can be found here.
MORTGAGE PAYMENT HOLIDAY
The FCA has issued new guidance to lenders in relation a Mortgage Payment Holiday, which makes it clear that lenders should:
- Grant customers a payment holiday for an initial period of 3 months, where they may experience payment difficulties as a result of coronavirus (COVID-19) and where they have indicated they wish to receive one;
- Ensure that there is no additional fee or charge (other than additional interest) as a result of the payment holiday.
The guidance also sets out the steps lenders should take to ensure that the payment holiday does not have a negative impact on the customer’s credit score.
For further information in relation to this scheme, and how to apply for same, please click on this link. or refer to your mortgage provider.
We will keep you informed and stay in contact with all our clients directly to assist with their specific needs.
If you have any questions about the above or are concerned about your personal and /or business finances, please do get in touch with any one of our staff at Arthur Boyd and Company. It is critical that early advice is sought and we will be pleased to help you in any way we can.