One-stop list, UK Gov C-19 support

In response to the growing COVID-19 emergency, the Chancellor has set out a package of temporary and targeted measures of support to get all through this period of disruption.

His support package includes:

• The Self-employment Income Support Scheme
• Coronavirus Job Retention Scheme
• Deferral of VAT and Income Tax payments
• Statutory Sick Pay (SSP) relief package for small and medium sized businesses (SMEs)
• 12-month business rates holiday for all retail, hospitality, leisure and nursery 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 occupying property with a rateable value between ￡15,000 and ￡51,000
• Coronavirus Business Interruption Loan Scheme offering loans of up to ￡5 million for SMEs through the British Business Bank
• 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
• HMRC’s Time to Pay Scheme

Below I have summarised the key features of each support package:

The Self-employment Income Support Scheme (SEISS)

SEISS has been designed to target support for self-employed individuals (including members of partnerships) who have lost income due to coronavirus (COVID-19).

Eligibility - UK self-employed persons 

To access the scheme - self-employed person need to have had self-employed income in the 2018-19 tax year, filed a 2019 self-assessment tax return, continued to be self-employed during 2019-20

They must also have the intention to continue to be self-employed in 2020-21, lost trading income because of COVID-19 and have average self-employed income for the three years ending 5 April 2019 of less than ￡50,000 and more than 50% of their average total taxable income during the same period.

Note:

If self-employment started after 6 April 2016 HMRC will only refer to the years where self-employed income has been reported.

The income from self-employment will still need to be less than ￡50,000 per annum and more than 50% of average taxable income in the same period(s).

Features

HMRC will pay a taxable grant worth 80% of trading profits up to a maximum of ￡2,500 per month for the next 3 months.

This may be extended if needed

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.

Eligibility - all UK businesses are eligible.

To access the scheme - employers will need to: Designate affected employees as ‘furloughed workers’, notify their employees of this change and then submit information to HMRC through a new online portal

Features - HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of ￡2,500 per month. 

Note: Changing the status of employees remains subject to existing employment law HMRC site states ‘if your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.’

Deferring VAT and Income Tax payments

The Chancellor has promised to support businesses by deferring the requirement to make VAT payments for 3 months.

Furthermore, the 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 applies from 20 March 2020 until 30 June 2020. Businesses will not need to make a VAT payment during this period and will be given until the end of the 2020 to 2021 tax year to pay any liabilities that might accumulate during the deferral period. 

Eligibility - all UK businesses are eligible.

Access to the scheme - automatic, no applications required. 

Note: VAT refunds and reclaims will be paid by the government as normal.

Income Tax

Self-Assessment, payments due payable on the 31 July 2020 will be deferred until the 31 January 2021.

Eligibility - available to all who are self-employed.

Access to the scheme - automatic, no applications required.

Note:  No penalties or interest for late payment will be charged in the deferral period.

Businesses paying COVID-19 related sick pay 

Legislation is being passed to allow small-and medium-sized businesses and employers to reclaim SSP paid for sickness absence due to COVID-19. 

The refund will cover up to two weeks SSP per eligible employee who has been off work because of COVID-19

The UK government will work with employers over the coming months to set up the repayment mechanism.

Eligibility - available to UK based employers with fewer than 250 employees, the number of people employed as of 28 February 2020 will be used as the determining factor.

Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the eligibility criteria) as a result of COVID-19

The 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

Access to the scheme -  the scheme is being developed. Details will be published in due course.

Note: Where evidence is required by an employer, those with symptoms of coronavirus should 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

Support for retail, hospitality and leisure businesses that pay business rates

The government is to introduce a business rates holiday for retail, hospitality and leisure businesses in England for the 2020/21 rates year.

Relief will be applied to April 2020 non-domestic rates bill. 

Eligibility- a business is eligible for the business rates holiday if it is based in England and it operates in the retail, hospitality and/or leisure sector

Access to scheme - properties that will benefit from the relief will be those that are wholly or mainly being used as:

Shops, restaurants, cafes, drinking establishments, cinemas and live music venues or assembly and leisure as hotels, guest & boarding premises and self-catering accommodation

Access to the scheme -   automatic, no action required. 

Note: Further guidance for local authorities is available in the GOV.UK 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.

Eligibility - a business is eligible for the grant if based in England and it is in the retail, hospitality and/or leisure sector

Properties that will benefit from the relief will be occupied and 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

Access to the scheme - automatic, no action required. 

Note: 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 nursery businesses that pay business rates

The UK government is to introduce a business rates holiday for nurseries in England for the 2020 to 2021 tax year.

Eligibility - a nursery business is entitled to a business rates holiday if based in England. Properties will benefit from the relief if occupied by providers on Ofsted’s Early Years Register, or wholly or mainly used for the provision of the Early Years Foundation Stage

Access to the scheme - automatic, no action is required. Relief will be applied to a business’s next council tax bill in April 2020. 

Note: Further guidance for local authorities is available in the nursery discount guidance.

Support for businesses that pay little or no business rates

The government is to 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. 

The aim is to provide a one-off grant of ￡10,000 to eligible businesses to help meet their ongoing business costs.

Eligibility - a business is eligible if it is based in England, a small business and already receive SBBR and/or RRRand it occupies property

Access to the scheme - automatic, no action is required. Local authorities will write to and if a business is eligible for this grant.

Note: 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

The new Coronavirus Business Interruption Loan Scheme supports SMEs with access to working capital (including loans, overdrafts, invoice finance and asset finance) of up to ￡5 million in value and for up to 6 years.

The government is to pay to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will not face any upfront costs and will benefit from lower initial repayments.

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.

This scheme is being delivered through commercial lenders, backed by the British Business Bank.

Eligibility - businesses are eligible for the scheme if they are UK based, with turnover of no more than ￡45 million per year and they meet the other British Business Bank eligibility criteria

Access to the scheme - the scheme is open for applications. 

To apply, a business should contact its bank or one of the 40 accredited finance providers (not the British Business Bank). 

Note: All major banks are offering this scheme. Full rules of the scheme and the list of accredited lenders are available on the British Business Bank website.

Support for larger firms through the COVID-19 Corporate Financing Facility

Under the new Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies.

This support is intended to help companies affected by a short-term funding squeeze by providing finance for short-term liabilities.

It will also support corporate finance markets overall and ease the supply of credit to all firms.

Eligibility - all UK businesses are eligible.

Access to the scheme - the scheme is available. More information is available from the Bank of England.

HMRC : Time to Pay service

Time to pay is available to all businesses and self-employed people in financial distress, with outstanding tax liabilities. 

Arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

Eligibility - a business is eligible if it pays tax to the UK government and has outstanding tax liabilities

Access to the scheme - if taxpayers have missed a tax payment or are worried that they might miss their next payment due to COVID-19 they should call HMRC’s dedicated helpline: 0800 0159 559.

Note: If worried about a future payment call HMRC nearer the time.

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.

About the author

Brian Palmer is an independent tax policy adviser, writer and observer on all things tax

[email protected]

07971 640 931