In recent days, we have been inundated with queries from clients, professional contacts and prospects alike, about the constantly changing environment we are facing and the hugely uncertain times ahead. It is heartening to see the Government take significant steps to help business and individuals alike.
Today Chancellor Rishi Sunak has gone even further and announced a series of new measures aimed at helping ease job fears and assist cash flow of both businesses and individuals which we summarise below:
- The Coronavirus Job Retention Scheme is in effect a government grant covering 80% of wages for employees who are not working and have been designated as “furloughed worker”, up to £2,500 per month. Businesses can apply for the grant from HMRC. This grant system will be available for 3 months initially, but may be extended if required. Applications need to be made by the end of April 2020.
We understand the grant will cover any employees who were on a company’s payroll as at 28 February, regardless of whether they are still with the business. This means that those who have recently lost their jobs will be included so long as they are brought back into the workforce.
- The Coronavirus Business Interruptions Loan Scheme interest free period that was previously announced has now been extended from 6 to 12 months, the government will effectively cover the first 12 months interest payments. This funding should be available from mainstream lenders assuming you meet the criteria set by the British Business Bank.
- Businesses due to make a VAT payment to HMRC in the next quarter have had their payment deferred until the end of June in a bid to ease cash flow for businesses. This is often a significant amount of money each quarter that businesses collect on behalf of HM Revenue & Customs. There was no announcement about VAT Return submission, but we would expect VAT returns will be required to be filed as normal
- Furthermore, if you are self-employed, income tax payments due in July 2020 will be deferred until January 2021. No application is required and there will be no interest or penalties during the deferral period. It does not appear on the face of it that this will apply to those completing tax returns for other reasons, so landlords and other individuals may not benefit from this measure.
- Much needed help for the self-employed who may have to self-isolate is being provided. Every self-employed person can now access, in full, Universal Credit at a rate equivalent to Statutory Sick Pay for employees.
- £1bn of support was also announced for renters, by increasing the generosity of housing benefit and Universal Credit, so that the Local Housing Allowance will cover at least 30% of market rents.
There was however a further, but not unexpected, blow to business at the same time as bars, nightclubs, restaurants, theatres, cinemas, gyms and leisure centres will be forced to close from tonight. This will undoubtedly be a huge concern for those business owners, particularly those who are unable to claim on insurance. There are packages and help available for those affected, advice can be found on our website and on Gov.uk.
These are unprecedented measures from a government who appear to be working hard to help ease the concerns of the British public.
If you have any questions or concerns please contact the Tax team on Tax@randall-payne.co.uk or call 01242 776000.