Financial Support – Update – Coronavirus (COVID-19) Crisis
Further to our financial support summary on Friday, we have been looking at each of the announcements in more detail over the weekend, with more information available on who is entitled to apply for the various support packages and how to they can apply for same.
Below is a mixture of business and individual support.
More detail is due to be announced this week, but this grant will apply automatically. Your local council should contact you directly.
To recap, a grant of £10,000 is to be made available to all small businesses who are eligible for the Small Business Rate Relief Scheme (or Rural Rate Relief).
Another grant of £25,000 is to be provided to businesses in the hospitality, tourism and retail sectors with a rateable value from £15,000 up to £51,000.
Keep an eye on this link for further announcements.
LOAN SCHEME (Coronavirus Business Interruption Loan Scheme)
As referred to in our previous article, 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.
This is being delivered through the British Business Bank and there are 22 participating lenders in Northern Ireland.
You should talk to your bank or finance provider as soon as possible to discuss your business plan with them.
The scheme will support loans (including term facilities, overdrafts, invoice finance and asset finance) of up to £5m. Businesses can access the first 12 months of the finance interest free.
Please access this link for further information.
As previously announced, all Northern Ireland businesses will have their rates waived for 3 months. Bills for 2020/21 will not be issued until June 2020. This will happen automatically.
More information can be found here.
JOB RETENTION GRANTS
The government will pay a grant to cover 80% of furloughed workers’ wage costs, up to a cap of £2,500 per employee per month. A furloughed worker is someone who has been allowed or forced to take temporary leave from work. In this case that means anyone asked to stop working during the coronavirus pandemic but not made redundant. Note that changing the status of employees to ‘furloughed’ remains subject to existing employment law.
The employer is not required to top this grant up.
ALL UK businesses will be eligible, irrespective of size.
The scheme will be open for 3 months and will be backdated to 1 March 2020, however it may be extended. It is available for all employees currently paid via PAYE.
Employers will be required to submit the relevant information to HMRC via a portal, the detail of which has yet to be announced. The aim is that the first grants will be paid within weeks and before the end of April, however there may be a funding gap between the payment of wages and the eventual receipt of the grant.
Remember, if your business cannot wait on this system to be set up and needs short term cash flow support, you may be eligible for the Coronavirus Business Interruption Loan (see “Loan Scheme” section above).
A reminder that there are a number of measures available from HMRC for those struggling with cashflow, 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 set up a dedicated helpline which is 0800 0159 559);
- 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. There is no need to apply for this scheme, it applies automatically Note businesses will be given until the end of 2020/21 to settle outstanding VAT liabilities that have accumulated as a result of the 3-month deferral. Effectively, this relieves the requirement to pay VAT for VAT periods ending February, March and April 2020 until 2021. Note, HMRC will continue to pay VAT refunds and VAT reclaims as normal for eligible claims.
For all HMRC related advice for businesses, please click here.
STATUTORY SICK PAY (‘SSP’)
Employers will be able to reclaim up to 2 weeks of SSP payments per employee where those SSP payments related to Coronavirus. This applies to all UK employers with 250 employees or less as at 28 February 2020. The reclaim will not be via RTI, instead, HMRC will set up a new portal to facilitate this.
Note individuals will be eligible for SSP for the first day of absence if the absence relates to Coronavirus.
The individual will need to visit here in order to obtain an isolation note in line with advice issued on Friday 20 March 2020. They will still be entitled to the normal maximum of 28 weeks in any 3-year period with the same employer, however there is no need to wait for 3 working days before they would be eligible where COVID-19 applies.
The self-employed will be eligible to make a claim for Universal Credit or new style Employment Support Allowance. Self-employed people will receive a rate equivalent to SSP.
If a company’s accounts are unlikely to be filed on time owing to being affected by COVID-19, then an application can be made to extend the period allowed for filing. Applications will be considered on a case by case basis.
If an application is not made and a company files late, then the normal penalty regime will apply, therefore it is important to make the application ahead of the deadline.
Please see this link for further information.
MORTGAGE PAYMENT HOLIDAY
A reminder that 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.
RENT PAYMENT HOLIDAY
Tenants, as well as mortgage borrowers, can apply for a 3-month payment holiday. Interest will continue to be charged on any amount that they owe. The government has announced that the intention is that no one can be evicted from their home over the next 3 months where this applies.
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.