In a Time of Distance : Practical Help, Government Support and something for the soul

My previous article focussed more on the systematic risk event unfolding in the financial markets as the markets reacted to the uncertainty of the Covid -19 pandemic.  We are confident the markets will recover, that’s what markets do, we just don’t know when or how quickly. 

The velocity of change and information being exchanged is something I’ve not witnessed in my lifetime. We’ve all had a massive personal shock. Last week I will admit that I found it difficult to focus as I came to terms with not just the systematic risk event unfolding in the markets but the more human side, the effects on our lives, our businesses and communities.

Hello, my name is Jill and I am a life centered financial planner, helping my clients to save for their future, have the best life possible with the money that they have, manage risk and protect the ones they love.

As we all face at least three weeks of home stay, some of us have lost our incomes and some us are now homeschooling our children. This article will focus on :

1. Practical Sources of Help both Personally and for your Business, from people in my community 
2. Summary of Government support  - please let me know if you would like a copy of my budget summary.
3. A poem from Alexander McColl Smith which so eloquently describes the vibe I am feeling right now.  

Whilst our office has closed temporarily, I would like to reassure you that I am back at my home office and have long been able to work remotely, I have a paperless office and access to all the resources and people I need either online or by phone.  We have also bought enough stamps in advance of the restriction of movement and shop closures. 

My partner has lost all their income but that does allow full time support for our children who are now being homeschooled and frees me to concentrate on supporting my clients and continuing with business as fairly normally as possible.

It’s inevitable that there will be some disruption, for example I was talking with the Halifax this morning to understand how they will value properties and to administration heavy businesses that aren’t equipped for their staff to work from home.

The government need to throw all the resources they can to protect the economy and prevent a systematic risk in the financial markets turning into a more serious depression. We have to keep the faith, that the wheels are turning, keep patient and in the meantime control the controllables. 

We have to keep the faith, that the wheels are turning, keep patient and in the meantime control the controllables. 

So #no1 some resources from people I know and trust: 

• Rob Taylor of 0114 Marketing has made the entire digital premium platform available free of charge. This means you can access premium content to review and structure your marketing approach as you redefine your customer needs. To access this resource use the promo code 0114VIP at https://0114marketing.co.uk/essentials/ 
• Steve Knapp, The Sales Mindset coach is making available free of charge the Sales in Your Business Strategy Course available from the premium digital The Accelerator Programme. This means you can take this time to build a sales plan that is relevant to you  needs today and have lifetime access of the course to rebuild it when things return to normal.  All you have to do is follow this link https://bit.ly/2U0XZH4 and you will be emailed your discount coupon code.
• Steve Miller Founder of Business Enjoyment and author of the book, Hope won’t pay the wages is offering a free webinar : Surviving the Financial Crisis with the Guy who Wrote the Book, 30th March 9:30 am. You can register here https://www.eventbrite.co.uk/e/surviving-the-financial-crisis-with-the-guy-who-wrote-the-book-on-it-tickets-100494686312
• 4.  Judy Parsons - the Linked in Lady is offering free Linked in training on Thursday 26th March you will need to contact her directly via her linked in profile to book onto the zoom training. She also has a free ebook to help get your linked in profile up to speed and replace face to face networking during this period.  https://www.dhirubhai.net/posts/judithparsons_1-hour-to-a-linkedin-profile-that-gets-you-ugcPost-6646700259970027520-4vek

#no2 Summary of Government Help

Please let me know if you would like a copy of my budget summary report. 

This is a brief summary of the measures for employers and small to medium sized business owners as we understand them today. Understandably, little has emerged on implementation yet but I hope this serves as guidance.

• Statutory Sick Pay

For businesses with fewer than 250 employees the cost of providing 14 days of Statutory Sick Pay per employee would be funded by the Government in full. This will also apply to those who are in self isolation. The three day waiting period for statutory sick pay will also be removed, but legislation will be needed to implement this so we await more information.

Statutory sick pay is ￡94.25 per week and can be paid for 28 weeks, you must earn ￡118 per week to qualify

Your rights if you're self-employed. If you're on a zero hours contract, you can get statutory sick pay if you're earning over ￡118/week. Yet you can't get statutory sick pay if you're self- employed - though if you have to take time off work and don't get paid while you're off, you might be entitled to claim benefits. The government is currently working on measures to help the self employed but this is deemed more technical so it is slower. 

The following have been temporarily removed to help self-employed and temporary workers:

?  Universal Credit (UC) minimum payment floor - This means that self-employed people on low earnings will be able to get the same amount of UC as an employed person would.

?  Employment and Support Allowance (ESA) waiting days - This means that contribution- based ESA will be available from day one, rather than having to wait seven days for a payment.

You can use the benefits calculator on the following website to help you understand what benefit support you are entitled to:

https://www.turn2us.org.uk/

? The 'minimum income floor' for the universal credit benefit will be removed. If you've been running your business for a year or longer when you claim universal credit, the Government works out your benefit payment based on the minimum income floor.

If you earn more than the minimum income floor you get less universal credit, while if youearn less than the minimum income floor you currently don't get any extra money to make up the difference.

Removing the minimum income floor means that some claimants will get extra money to make up for lost earnings, if they decrease due to the coronavirus.

The Budget included a ￡500 million ‘hardship fund’ available to local authorities to help them support vulnerable people during the outbreak. The additional support will boost local Council Tax relief schemes as well as “complimentary reliefs,” which may refer to the flexible support offered through Local Welfare Assistance schemes,The Ministry of Housing, Communities and Local Government will provide further detail on this funding, including allocations. We have not had any further announcements on these yet. 

https://commonslibrary.parliament.uk/insights/coronavirus-claiming-welfare-benefits/ 

https://www.moneysavingexpert.com/news/2020/03/uk-coronavirus-help-and-your-rights/ 

https://www.turn2us.org.uk/ https://

https: // www.understandinguniversalcredit.gov.uk/coronavirus/ 

• Government support for small businesses

The government wants to ensure businesses are supported to deal with the temporary economic impacts of an outbreak of coronavirus. We have taken some details from this that may be helpful.

Full details are in the document published by the government on the 18th of March and the link is below:

https://www.gov.uk/government/publications/support-for-those-affected-by-covid-19 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/873676/Covid-19_fact_sheet_18_March.pdf

• Job Retention Scheme

For all employees who remain on the payroll but would otherwise be laid off, the Government will pay 80% of their basic salary up to a cap of ￡2,500 per month. Employers will have the ability to top-up the salary to 100% of salary if they choose.

All businesses are eligible for this scheme but in order to access it they need to:

• Designate affected employees as ‘furloughed workers’ (which just means they are being retained but would normally be laid off) and notify those employees of this change. Changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation, so you should obtain employee law advice where necessary.
• Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal. HMRC will provide more information soon on exactly what they need.

Businesses can apply from Monday 23rd March. It will be in place for three months and then reviewed every month. The money will be available from the end of April but will take affect from 1st March.

 HMRC are now working to set up a system for reimbursement as existing systems are not set up to facilitate payments to employers and will publish further guidance when available.  

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

• Coronavirus Business Interruption Loan Scheme (CBILS)

The Government intends to support businesses who have short-term cash flow needs and need money before the end of April when the Job Retention Scheme kicks in through business loans which will be interest free for 12-months, rather than the six months previously announced. The scheme provides the lender with a Government-backed guarantee against the outstanding facility balance.

 It will be administered through the British Business Bank and is due to launch in the week commencing 23 March. It will be available through high street banks and 40 other credited finance providers 

The limit of funding has increased from the ￡1.2 million announced on the 11 March to ￡5 million for companies with a turnover of less than ￡45 million.

 Finance terms are from three-months up to ten years for term loans and asset finance and up to three-years for revolving facilities and invoice finance.

 To be eligible the Scheme, the business must:

• Be UK-based, with turnover of no more than ￡45 million per annum.
• Operate within an eligible industrial sector (a small number of industrial sectors are not eligible for support or subject to limitations – see link).
• Be able to confirm that they have not received de minimis State aid beyond €200,000 equivalent over the current and previous two fiscal years.
• Be unable to meet a lender’s normal lending requirements for a fully commercial loan or other facility but would be considered viable in the longer-term.

https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme

•  COVID Corporate Financing Facility (CCFF) and Bank Lending

Whilst not directly applicable to small to medium sized business, this fund aims to provide essential liquidity amongst banks and in turn allow them to lend to the small and medium sized businesses who depend on them. This adds to the previous week’s launch by the Bank of England of a new Term Funding Scheme (TFSME) with additional incentives for lending to SMEs. This will, over the next 12 months, offer four-year funding to banks of at least 5% of participants’ stock of real economy lending at interest rates at, or very close to, Bank Rate. Additional funding will be available for banks that increase lending, especially to small and medium-sized businesses.

 The CCFF is being made available through the Bank of England for the next 12 months who will purchase 1 year corporate bonds subject to an assessment of their credit rating prior to the pandemic.

 The Government has pledged that it will make ￡330 billion (equivalent to 15% of GDP) of guaranteed funding available to any business that needs it. The Chancellor has also stated that, if demand is greater than the ￡330 billion of funding, he will provide additional funds.

 With this in place, all of the UK’s main clearing banks are now creating funds which they will make available to small businesses under their own schemes. For example, Lloyds now has a ￡2bn fund and NatWest has earmarked ￡5bn. If you anticipate financial difficulties, you should begin discussions with your bank as early as possible.

 Many businesses with banking covenants will be in danger of breaching them as the pandemic drags on. The breaches could be on performance covenants or an inability to provide financial information due to loss of staff. Banks will be expecting this so early communication is advisable and, where possible, covenant waivers should be sought. For businesses with serious cash constraints, it is also recommended that the subject of payment holidays is discussed.

• Cash Grants and Business Rates

 Businesses which pay minimal or no business rates and are eligible for small business rate relief (SBBR) or rural rate relief will be eligible for a one-off grant of up to ￡10,000 from April 2020 onwards. These grants will be provided by Local Authorities and it is understood that small businesses will be contacted by their Local Authority shortly (rather than having to proactively approach their Local Authority) with information on exactly how to access these grants.

A further grant of ￡10,000 to ￡25,000 is being made available to businesses operating from smaller premises in the retail, hospitality and leisure sectors, which have a rateable value of ￡15,000 to ￡51,000 and business rates for businesses in these sectors will be suspended for the 2020/2021 tax year. This is designed to assist the payment of rent in particular.

If any business which qualifies for this relief does not receive a letter from their local council, they should contact them directly to claim it. 

• Self-Employed and Universal Credit

 The self-employed will not have to make a tax payment on account in July and the payment will be deferred until January 2021. The minimum income floor for Universal Credit has been removed and it has been increased by ￡1,000 per year, ensuring the self-employed will get this Universal Credit at the statutory sick pay level. The chancellor also announced a further ￡1bn to cover 30% of house rental costs for the self-employed.

• Mortgage Holidays

Whilst much of the attention will be on personal home mortgages, three-month payment holidays are available for business mortgages also. Talk to your lender.

• Deferred VAT payments

 Business VAT payments for the next quarter (until 30 June 2020) will be deferred until the end of the year.

•  Deferral of IR35

HMRC have confirmed that the proposed changes to IR35, which were due to take place with effect from 6 April 2020, have now been pushed back to 2021.

• Extension to Filings with Companies House

Companies House and the Financial Reporting Council have confirmed that all companies with imminent filing deadlines – predominantly 30 June 2019 year-ends which are due for filing by 31 March 2020 – will be granted a two-month extension.

 If your annual accounts are not yet finalised and may not get completed by the filing deadline, you must still contact Companies House, but they are automatically accepting Coronavirus as a reason and providing a two-month extension. In extreme circumstances they can grant a further one-month extension.

 You will need to provide them with your company number, an e-mail address and state that you are extending due to Coronavirus, but make sure you apply for the extension before the deadline or it will be rejected.

 If you have passed the filing deadline and are receiving notices concerning the overdue accounts, you must contact Companies House to explain the circumstances behind the delay. If Coronavirus is a factor, let them know this by emailing [email protected].

• Time to Pay HMRC

HMRC has set up a dedicated helpline at 0800 0159 559 to help businesses and self-employed individuals in financial distress and with outstanding tax liabilities so they can receive support with their tax affairs. It may be possible to agree a ‘Time to Pay’ arrangement with deferrals being agreed on a case by case basis. This arrangement will see the usual 3.5% annual interest on deferred tax being waived.

• Late Filing of VAT and PAYE Returns

If your business is unable to file a VAT or PAYE return due to staff absence, you should contact HMRC before the due date to explain the situation and mitigate any surcharges that may be levied.

#no3 something for the soul - as we come to terms with new ways of working, living and communicating I share a poem from Alexander McColl Smith - In A Time of Distance 

In a time of distance

The unexpected always happens in the way

The unexpected has always occurred:

While we are doing something else,

While we are thinking of altogether

Different things – matters that events

Then show to be every bit as unimportant

As our human concerns so often are;

And then, with the unexpected upon us,

We look at one another with a sort of surprise;

How could things possibly turn out this way

When we are so competent, so pleased

With the elaborate systems we’ve created –

Networks and satellites, intelligent machines,

Pills for every eventuality – except this one?

And so we turn again to face one another

And discover those things

We had almost forgotten,

But that, mercifully, are still there:

Love and friendship, not just for those

To whom we are closest, but also for those

Whom we do not know and of whom

Perhaps we have in the past been frightened;

The words brother and sister, powerful still,

Are brought out, dusted down,

Found to be still capable of expressing

What we feel for others, that precise concern;

Joined together in adversity

We discover things we had put aside:

Old board games with obscure rules,

Books we had been meaning to read,

Letters we had intended to write,

Things we had thought we might say

But for which we never found the time;

And from these discoveries of self, of time,

There comes a new realisation

That we have been in too much of hurry,

That we have misused our fragile world,

That we have forgotten the claims of others

Who have been left behind;

We find that out in our seclusion,

In our silence; we commit ourselves afresh,

We look for a few bars of song

That we used to sing together,

A long time ago; we give what we can,

We wait, knowing that when this is over

A lot of us – not all perhaps – but most,

Will be slightly different people,

And our world, though diminished,

Will be much bigger, its beauty revealed afresh.

Wishing you well over the coming months and with thanks to Helen Wardle and the Women in Financial Services Community for the curation of much of the information around benefits.  This information is provided at a fast moving time and may alter at anytime, it is offered as guidance and you should check the relevant government websites regularly.  As always, if there is anything I can help with, please get in touch.

Jill Turner is principal adviser at Jill Turner Associates, Holistic Financial Planning and Wealth Management, an appointed representative of Quilter Financial Planning who are regulated by the financial conduct authority. Jill is a finalist in the Money Management Financial Planning Awards 2016 in the Protection Category, a member of the Personal Finance Society, the London Institute of Banking and Finance and a member of the UK Sustainable Investment and Finance Association. Information in this article is for guidance and does not constitute advice, please check the relevant websites and government sites for upto date information.