Further to our original post regarding COVID-19, we are now writing with some additional information and a summary of further measure’s announced on Friday. It is important to note that it can take several days for the government to provide the necessary detail of each of the measures and therefore some of the questions you may have are unable to be answered at this time.
We can assure you that as soon as we are aware of any additional information, we will provide this to you in a timely manner.
Coronavirus Job Retention Scheme
If you (as the employer) cannot cover staff costs due to COVID-19, you may be able to access support to continue paying part of their wage, to avoid redundancies.
If, as the employer, you intend to access the Coronavirus Job Retention Scheme, you will have to discuss with your employees the possibility of them being classified as a ‘furloughed’ worker. This would mean that your employees will remain on the payroll, rather than being laid off.
To qualify for this scheme, employees should not undertake work for you whilst they are furloughed. This will allow you to claim a grant of up to 80% of all employment costs, up to a cap of £2,500 per month.
Your employees will remain employed while furloughed. It will be up to you as the employer to choose whether to fund the differences between this payment and their normal salary but you do not have to.
If your employees salary is reduced as a result of these changes, they may be eligible for support through the welfare system, including Universal Credit.
Director’s salary – this payment will not cover any dividend payments that you receive and we are awaiting more details regarding your salary that is processed through payroll.
Please note that “HMRC are working night and day to get the unprecedented Coronavirus Job Retention Scheme up and running and we expect the first grants to be paid within weeks” (taken from the government website) :-
Your employees will also be asking lots of questions – please direct them to
Government backed loans
Acknowledging that “businesses are hurting now”, the chancellor has outstripped measures he pledged on Tuesday and expanded the coronavirus business interruption loan scheme from six months interest-free to 12 months interest-free. The Chancellor revealed that these loans will be available from Monday 23rd March 2020.
The scheme provides the lender with a government-backed guarantee against the outstanding facility balance, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’. NB – the
borrower always remains 100% liable for the debt.
The maximum value of a facility provided under the scheme will be £5 million (the original announcement suggested a maximum value of £1.2 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 apply for an CBILS-backed facility, businesses may wish to consider approaching one or more participating lenders to discuss their borrowing needs.
The Department for Business, Energy & Industrial Strategy will be working with local authorities to outline the scheme and encourage local authorities to prepare.
However, once up-and-running, your local authority will contact you rather than having to apply yourself. Grant money will not be available until early April, as stated on the government website.
Guidance will be issued to local authorities by 1 April and they will write to businesses shortly thereafter with details of how to claim the grant.
In respect of the £10,000 cash grant (businesses with a rateable value of less than £15,000), Eligibility is still based around rate relief. Those who qualify for Small Business Rate Relief (SBBR) or Rural Rate Relief will be able to get the funding.
Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.
To bring rapid cashflow relief to businesses, Rishi Sunak has announced a VAT holiday from now to June.
This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.
During this time VAT will have to be submitted as normal.
You should cancel your direct debits in respect of VAT payments, but to avoid any additional charges in the future you should re-instate this after the deferral period.
Statutory Sick Pay (SSP)
Your employees can get £94.25 per week Statutory Sick Pay (SSP) if they are too ill to work. It will be paid for up to 28 weeks.
If they are staying at home because of COVID-19 they can now claim SSP. This includes individuals who are caring for people in the same household and therefore have been advised to do a household quarantine.
If they have COVID-19 or are advised to stay at home, they can get an ‘isolation note’ by visiting NHS 111 online, rather than visiting a doctor. For COVID-19 cases this replaces the usual need to provide a ‘fit note’ (sometimes called a ‘sick note’) after 7 days of sickness absence.
The government will refund £94 per week, maximum £188, to your company.
It will also refund SSP for staff of businesses with less than 250 employees for up to two weeks.
If you are not eligible for SSP – for example if you are self-employed or earning below the Lower Earnings Limit of £118 per week – and you have COVID-19 or are advised to stay at home, you can now more easily make a claim for Universal Credit or new style Employment and Support Allowance.
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.
July Self-Assessment tax payments
VAT wasn’t the only deferral announced by the Chancellor. Sunak also delayed the next round of self-assessment payments, which were originally scheduled for 31 July 2020, until 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.
Mortgage and rent holiday
Mortgage borrowers can apply for a three- month payment holiday from their lender. Both residential and buy-to-let mortgages are eligible 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. 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.
Businesses that have cover for both pandemics and government-ordered closure should be covered. 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 should check the terms and conditions of their specific policy and contact their providers.