Last updated 1st June 2020
Coronavirus (COVID-19) Bulletin
Vital information that may well be of interest and assistance to you
We are living through unprecedented times and such is the speed at which decisions and policies are being made by the Government, HMRC and other financial authorities that it is extremely difficult to analyse all the latest developments that could affect our clients.
We are doing our best, however, to bring you the most up-to-date news and developments. Much of the latest information that we have received is listed below and where useful we have also included the relevant website addresses. We will also be regularly updating this page so please keep referring to it to see how the latest announcements may affect your business.
Could I ask you to please be patient. At the moment everything is new and everything is changing and because at Lancashire Accountants we do not have a Tax Specialist Department, a dedicated IT Department or a swathe of secretaries, it means that I am still personally involved in producing urgent Accounts and VAT Returns. That is in addition to fielding an increasing number of Coronavirus based queries. Moreover, because of school closures I am also home-schooling our son. However, if you do require further assistance please do not hesitate to contact me. I will do my best to help, but please remember, this is a new and complex situation and I, like everyone, am learning as I go along.
Jane Lancashire
Chancellor extends Self-Employment Support Scheme and confirms furlough next steps
There was more good news from the Chancellor last Friday when Rishi Sunak announced that the Self-Employment Income Support Scheme will be extended – with those eligible able to claim a second and final grant capped at £6,570.
The Chancellor also outlined further details of his plans to extend the Coronavirus Job Retention Scheme, including improved flexibility to bring furloughed employees back part time in July. The announcement also confirmed that over the coming months government contributions will gradually be reduced and employers will also have to contribute modestly to furloughed salaries from August.
Full information on the Chancellor’s statement can be found here
A new support scheme for self-employed
Last night the Prime Minister addressed the nation with details about the government’s proposed pathway to relaxing lockdown rules. These measures will only apply to England however, because the other three UK nations: Scotland, Wales and Northern Ireland have confirmed that they are sticking to existing ‘stay at home’ rules.
The other big news is that the Chancellor, Rishi Sunak, has announced a new scheme to support self-employed people impacted by coronavirus. The scheme is about to launch ahead of schedule and it could provide a taxable grant of 80% of average monthly trading profits paid as a single installment of up to a total of £7,500.
You will require a Government Gateway Account in order to apply, but to check if you are eligible for the Self-Employed Income Support Scheme and to find out how to apply for a Government Gateway Account online you will find the information you require here. https://content.govdelivery.com/accounts/UKHMRCED/bulletins/289f6d6
If you would like to discuss the new Self-Employed Income Support Scheme, please don’t hesitate to contact me.
New Bounce Back loan scheme for small businesses is launched Monday 4th May!
Last week we received an announcement from the Chancellor revealing that a new Bounce Back loan scheme was being introduced specially designed to assist small businesses during the Coronavirus crisis.
The scheme has been officially launched today - 4thMay 2020.
The key points of the new initiative are that small businesses can now apply for a minimum of £2,000 up to a maximum of £50,000 over a period of up to 6-years (or 25% of the firm’s business turnover, whichever is the lower) there are no repayments required during the first year and the government will pay the interest for the initial 12-months. After this period a low and very competitive interest rate will be negotiated.
The other main benefit of the scheme is that applying for the loan has been made extremely simple and according to the Chancellor most loans will be paid within 24-hours of approval.
This has to be excellent news for any small businesses that are currently facing financial
problems because of the emergency.
Full details regarding the Bounce Back loan scheme, including who is eligible along with information and links of how to apply can be found here.
If you would like to discuss the new Bounce Back loan scheme, please don’t hesitate to contact me.
Coronavirus Job Retention Scheme goes live Monday 20th April!
In last week’s update we focused on the government’s Coronavirus Job Retention Schemewith advice on how to make a claim if you manage a business that is facing problems because of the COVID-19 health crisis. We also hinted that speculation suggested that the start date for the Job Retention Scheme could begin on the 20thApril. Now the good news is that we can confirm that the Scheme does indeed go live today and the government has published new updated guidance on how to calculate and complete your claim.
Full information regarding the latest advice can be found here: Job Retention Scheme
This new document also contains links explaining everything you need to do in order to calculate and make your claim.
Getting ready for the Coronavirus Job Retention Scheme
Well, we’re now into week 4 of the lockdown and we are still receiving useful and helpful information regarding the difficult problems that businesses are facing because of the COVID-19 crisis. This latest government update arrived late last week. If you manage a business that is preparing to make a claim under the Coronavirus Job Retention Scheme, you will certainly find it of value.
Take a look at the latest government advice here: Government advice
There has been some speculation that the start date for the Job Retention Scheme will be on the 20thApril. We have to say though that at this moment in time this has not been confirmed. If you do require any further information, please do not hesitate to contact me and I will do my very best to be of assistance.
Do sole directors qualify for the Coronavirus Job Retention Scheme?
The subject of this week’s coronavirus (COVID-19) update is whether sole directors can make use of the Coronavirus Job Retention Scheme and how the government’s furlough scheme applies to owner-managed limited companies.
Last week we came across a very informative article published by ICAEW that provides clear advice on this complex subject.
You can read the article here: ICAEW article
At last, financial help for the self-employed
You can use this scheme if you’re self-employed or a member of a partnership and have lost income due to coronavirus.
This information was taken from the Gov.UK website. If you are self-employed and are worried about the financial
implications that you now face, you will find some valuable guidance on how you could claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3-months. This scheme may be extended if necessary.
If you do require any further information, please do not hesitate to contact me and I will do my very best to be of assistance.
HMRC will contact you if you are eligible for the scheme and provide the correct form for you to complete. This should happen in June.
Companies to receive 3-month extension period to file accounts during COVID-19
Businesses will be given an additional 3-months to file accounts with Companies House to help them avoid penalties as they deal with the impact of COVID-19.
This PDF file provides further information.
Coronavirus Job Retention Scheme
Government grants will cover 80% of the salary of PAYE employees who would otherwise have to be laid off. The scheme is available to any employer operating in the UK and it will cover the cost of wages backdated to 1st March 2020. It will remain open until the end of April and will continue for at least three months but could be extended. It can include workers who were in employment on 28th February 2020.
In order to claim under the Coronavirius Job Retention Scheme employers need to:
- Designate affected employees as ‘furloughed workers’ and notify 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; and - Submit information to HMRC about the employees that have been furloughed and their earning
through a new online portal. HMRC will 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.
(A furloughed worker is an employee who is kept on their employer’s payroll rather than being laid off)
HMRC is currently working to implement this system of reimbursement although at this moment it is not yet operational. Businesses suffering short-term cash flow problems could benefit from the VAT deferral – see below.
VAT Payments
The next quarter of VAT payments will be deferred, so you will not need to make VAT payments until the end of June 2020. Businesses will then have until the end of the 2020-21 tax year to settle any liabilities that have accumulated during the deferral period.
The deferral applies automatically and businesses do not need to apply for it. VAT refunds and reclaims will be paid by the government as normal.
Income Tax Payments
Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
Income Tax Self-Assessment payments due on the 31st July 2020 will be deferred until the 31st January 2021. This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period.
Eligibility is limited to the self-employed, ie, the deferral does not apply to those that are in self-assessment but are not self-employed. At the moment it appears that the deferral applies to any taxpayer who was self-employed in the 2018/19 tax year on which the payment on account is based.
Universal Credit
Self-employed people are now entitled to access full Universal Credit at a rate equivalent to statutory sick pay.
HMRC Time to Pay
The HMRC Time to Pay scheme enables firms and individuals experiencing temporary financial difficulties as a result of COVID-19 to delay payment of outstanding tax liabilities. You can obtain help and advice from the HMRC COVID-19 Helpline: 0800 0159 559.
Business Rates Holidays and Cash Grants
- •No rates payable for the 2020-2021 tax year for any business in the retail, hospitality or leisure sectors.
- In those sectors, if your rateable value is between £15K and £51k, you'll also receive a cash grant of up to £25,000 per property.
- Any business that receives small business rates relief, including those in the retail, hospitality or leisure sectors, will receive a cash grant of £10,000 (increased from £3,000 announced in the 11th March Budget).
- The rates holiday and cash grants will be administered by local authorities and should be delivered automatically, without businesses needing to claim.
Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.
Coronavirus Business Interruption Loan Scheme
The coronavirus Business Interruption Loan Scheme (CBILS) will assist businesses to access funding if certain eligibility criteria are met.
Further information can be found here: https://www.gov.uk/coronavirus
COVID-19 Corporate Financing Facility
- To support larger firms, the Bank of England has announced a new COVID-19 Corporate Financing Facility designed to provide a quick and cost-effective way to raise working capital via the purchase of short-term debt.
- This will support companies that are fundamentally strong, but have been affected by a short-term funding squeeze, enabling them to continue financing their short-term liabilities. It will also support corporate finance markets overall and ease the supply of credit to all firms.
- The Government will very soon be announcing further information on this facility.
Mortgage and Rent Holiday
Mortgage borrowers are now eligible to apply for a three-month payment holiday from their lender. Both residential and buy-to-let mortgages may apply for the holiday. It is important to remember that borrowers still owe the amounts that they don't pay as a result of the payment holiday and interest will continue to be charged on the amount they owe.
Tenants can apply for a three-month payment holiday from their landlord. No one can be evicted from their home or have their home repossessed over the next three months.
Insurance Claims
Businesses that have cover for both pandemics and government-ordered closure should be covered. The government and insurance industry confirmed on 17th 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 should check the terms and conditions of their specific policy and contact their providers.
Statutory Sick Pay (SSP)
- If you're a director of a limited company with less than 250 employees, you can pay yourself two-weeks of SSP if you need to self-isolate subject to meeting the minimum payroll requirement for SSP.
- The government will refund £94 per week up to a maximum of £188, to your company.
- It will also refund SSP for staff of businesses that have less than 250 employees for up to two- weeks.
Useful website addresses
You can obtain further information by visiting these website addresses:
For information about Statutory Self-employment pay:
Call Lancashire Accountants Ltd now: 0161 494 1173
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