Circular – 25th March

March 25th, 2020Generaldreamscape

Deferral of Payment of VAT and Income Tax

The government have deferred all payments of VAT that are due between 20^th March 2020 to 30^th June 2020. This is a deferral and not a cancellation. Deferred payments will become due on or before 5^th April 2021.

Similarly, self employed people who pay tax under self assessment, and who are due to make a payment on account on 31^st July 2020, will have that payment deferred and added to the balancing payment due on 31^st January 2021.

Cash Grant for Small Businesses

A one-off grant of £10,000 will be made to all Small Businesses who:

Is based in England
Already receives Small Business Rate Relief or Rural Rate Relief, and
Occupies property.

This will be administered by the local authority who will contact you if you are eligible for this grant. It is automatic and you need do nothing at present.

Retail and Hospitality Grant and Business Rates Holiday

If your premises are used wholly or mainly in the retail, hospitality and leisure industries and have a rateable value of between £15,000 and £51,000 then this grant is increased to £25,000. If the rateable value to less than £15,000 then the grant is £10,000.

These businesses will also enjoy a business rates holiday for the 2020-2021 tax year.

This grant is available to:

Shops, restaurants, cafes, drinking establishments, cinemas and live music venues
Premises used for assembly and leisure
Hotels, guest and boarding houses, and self-catering accommodation

This will be administered by the local authority who will contact you if you are eligible for this grant. It is automatic and you need do nothing at present.

Nursery Businesses Rates Holiday

Nurseries who are based in England and who are on Ofsted’s Early Years Register or which wholly or mainly provide Early Years Foundation Stage will enjoy a business rates holiday for the 2020-21 tax year.

This will be administered by the local authority who will contact you if you are eligible for this grant. It is automatic and you need do nothing at present.

Coronavirus Job Retention Scheme

There is a package on offer for employers to help with staffing costs. Finer details about the scheme are awaited but we have summarised below as much as we know now about the scheme.

The Government is offering all employers across the UK access to a grant which will cover up to 80% of the total cost of the wages of their workforce who remain on payroll but are temporarily not working due to the coronavirus outbreak, subject to a cap of £2,500 per employee.

For a grant to be obtained in relation to a specific employee, that employee needs to be designated by the employer as a “furloughed” employee. The government has indicated that to be “furloughed”, the employee needs to remain employed, but be asked by the employer not to undertake any work for them. It will be very rare for a contract of employment to allow an employer to withhold work from an employee in this way and so an employer will need the employees’ agreement to this change in employment status. Consultation, with affected employees will be necessary and if their agreement is reached, this should be confirmed in writing.

We await details about how the 80% grant and cap will be calculated. However current guidance refers to “overall cost” and so it is anticipated that pension contributions and national insurance payments will be included in the “cost” and that it not be limited to basic salary.

The choice of which employees to furlough rests with the employer. We are not aware of any guidance saying that employers cannot pick and choose who is to be designated as furloughed and it would make sense for employers to have this right: not all employers would need to lay-off or make their whole workforce redundant as a result of coronavirus if this package was not on offer. They will need to ensure that they do not discriminate when selecting employees.

It is probable that employees need to be designed as furloughed for all of their working week. It is certain that furloughed employees must not undertake any work for the employer. It is currently unclear whether workers can lift and then redesignate workers as furloughed as required.

It is up to the employer to decide whether to make up any difference in pay. If they choose not to employers will the need to obtain agreement from employees to them only receiving a proportion of their pay. Consultation and any agreement in writing will be essential.

Currently the scheme is in place for 3 months (but this could be extended depending on how things pan out) and the grant can be obtained for costs incurred from 1 March.

Claims will be made via a Portal which is still under construction by HMRC. You will need to:

Designate affected employees as “furloughed workers” and notify them of this change in status
Submit information to HMRC about employees who have been furloughed.

Rebate of SSP Payments for Small Employers

This applies to businesses which:

Are based in the UK
Employed fewer that 250 employees as at 28^th February 2020.

Employers can claim a rebate of up to 2 weeks payments of SSP to employees who have been off work because of the Coronavirus. The support is available immediately. The method of claiming is currently under development.

Coronavirus Business Interuption Loan Scheme

This loan scheme is being delivered through commercial lenders, backed by the British Business Bank. It will provide access to working capital of up to £5million to SMEs for up to 6 years. The government will pay any fees levied by the lenders, and also pay any interest payments in the first 12 months. The government will provide a guarantee to the lender for 80% of the finance provided.

The finance can be in the form of: