COVID-19 Update from Balance Accountants (2)
The National Lockdown is about to enter its 6th week and it doesn’t sound like there are any plans to lift the restrictions to any great extent in the near future. Every single one of our clients will be feeling the financial effects of the restrictions, whether, employed, self-employed or a business owner and the potential financial devastation for some must be causing great worry and anxiety.
Here at Balance we recognise how lonely it can be, even at the best of times, at the head of your own business with no one to talk to about business and financial matters and the restrictions that were imposed on 23 March this year will have only served to heighten the worry and anxiety so much more.
So, if you feel that you need someone to discuss these worries with then why not give us a call. As your trusted adviser, we are here to help. We don’t have a magic wand to wave your financial and business worries away but we may be able to help you to come up with some practical solutions or act as a sounding board for ideas or just someone to share your worries with. After all, they say “A trouble shared is a trouble halved”.
Since the lockdown began, we have been inundated with questions and queries about the various types of financial support provided by the government to help during the lockdown. Hopefully you will have been able to gain an understanding of what is available to you from the various e mails we have been sending to you as new measures have been introduced and updated but we set below a quick recap on the current range of support available and how to access them:
- Business rates relief—there will be no business rates to pay in the 2020/21 financial year for businesses operating in the retail, hospitality and leisure sectors. No action needs to be taken to receive this benefit as your local authority should automatically cancel your business rates charge.
- Business Support Grants—there are 2 categories of taxable grant available:
- For businesses operating in the retail, hospitality and leisure sectors, there are grants of £10,000 (property rateable value up to £15,000) and £25,000 (property rateable value from £15,001-£51,000).
- For small businesses who receive Small Business Rates Relief/Rural Rates Relief then there is a grant of £10,000 as long as the rateable value of your business property is £15,000 or less.
Many of these grants have already been paid out. Each local authority has an online application process on their website and you should go to their website to make your claim now if you meet the criteria and have not yet submitted a claim.
- Corona Virus Job Retention Scheme—you can claim up to 80% of your employees’ wages (up to a maximum of £2,500 per month) plus employers’ national insurance and pension contributions if you have to lay them off (Furlough them) as a result of Corona Virus. In order to access the scheme, you will have to use the new HMRC portal which was opened last week.
- Self-employed income support scheme—If you are self-employed and have lost work due to Corona Virus then you will be able to claim a taxable grant worth 80% of your trading profits, up to a maximum of £2,500 per month. The grant will be based upon your average annual taxable profits for the 3 tax years ended 5 April 2019 so, unfortunately, you will not receive any grant if your self-employment commenced after 5 April 2019. You do not need to take any action at this stage as HMRC should contact you in mid May to invite you to make a claim via their online services. Payments are expected to commence mid June. In the meantime, you have the option of claiming universal credit.
- Government Statutory Sick Pay Scheme—the government will repay employers the current rate of Statutory Sick Pay (SSP) where sick pay is paid to employees for periods of sickness commencing on or after 13 March 2020. This repayment will cover 2 weeks SSP if the employee is unable to work because they either have Corona Virus, are self isolating or are shielding in line with Public Health guidance. The SSP repayments have not yet commenced and we will provide further details as they become available.
- Deferral of VAT payments—If you have VAT to pay between 20 March 2020 and 30 June 2020 then you can defer your payment until 31 March 2021. You will need to submit your VAT returns as usual but then simply do not pay.
- Deferral of Self Assessment payments—If you have self assessment tax to pay in July 2020 then you can delay payment until 31 January 2021. Again no formal action required, just don’t pay.
- Corona Virus Business Interruption Loans (CBIL)—Loans, overdrafts, invoice financing and asset financing are available for businesses with up to £45M turnover. The government will pay the first 12 months interest and arrangement fees as well as guaranteeing 80% of the finance. You will have to apply through your bank but be aware that the banks are applying fairly stringent criteria and not making it particularly easy to obtain this finance.
That is a brief outline of the various types of government support. There is significantly more in the detail but you can contact us for further information if required,
In the meantime, keep safe and sane and hopefully we will see you again in the not too distant future.