Coronavirus Government Grants

From everyone at OnTheGo we hope you are well and keeping safe.

This is a difficult time for everyone at the moment so whilst we are still waiting for the finer details from HMRC surrounding their plans to help UK businesses and employees, we wanted to keep you up to date with what we know so far:

Coronavirus Job Retention Scheme 

Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employee’s salary as opposed to them being laid off.

The salary subsidy will be paid through a new HMRC system (HMRC will set out further details on the information required) and will reimburse 80% of furloughed workers wage cost, up to a cap of £2,500 per month.

It is not clear whether directors / shareholders of owner managed companies can put themselves ‘on furlough’, we are still waiting on further details.

VAT payments

For VAT returns submitted between 20th March 2020 and 30th June 2020, the VAT payments can be deferred. Businesses will then have until the end of the 2020-21 tax year to settle any liabilities that have accumulated during the deferral period.

All UK businesses are eligible for the deferral and do not need to apply for it. VAT refunds and reclaims will be paid by the government as normal.

Please be advised that if you would like to defer your next VAT payment and have a direct debit setup, you will need to cancel this.

Income Tax payments

Individuals assessed under the Self-Assessment system liable to make a payment on account on the 31st July 2020 can defer their payments to 31st January 2021.

This offer is automatic with no application required. No penalties or interest for late payment will be charged in the deferral period.

Universal credit

Self-employed people can now access full universal credit at a rate equivalent to statutory sick pay.

HMRC Time to Pay

HMRC’s Time to Pay scheme can enable firms and individuals in temporary financial distress as a result of Covid-19 to delay payment of outstanding tax liabilities. HMRC’s dedicated Covid-19 helpline provides practical help and advice on 0800 0159 559.

Business Rates Holidays and Cash Grants

For businesses currently paying little or no business rates due to small business rates relief, they will receive a cash grant of £10,000 (increase from £3,000 announced in the March 20 budget). You do not need to do anything, your local authority will write to you if you are eligible for the grant.

Any businesses in the retail, hospitality and leisure sector in England will pay no business rates in the 2020/21 tax year. Furthermore, businesses in these sectors with a rateable value between £15k and £51K will also receive a cash grant of £25,000 per property. There will be no actioned required by you, your local authority will be in touch with a revised business rates bill and confirm your eligibility for the cash grant.

Support through the Coronavirus Business Interruption Loan Scheme

A new coronavirus business interruption loan scheme has been setup to provide support for small and medium-sized businesses. This scheme will give businesses access to a wide range of funding including: overdrafts, loans, asset finance and invoice finance of up to £5 million in value for up to 6 years.

The government will provide lenders with a guarantee of 80% on each loan and will pay to cover the first 12 months of interest payments along with any lender-levied fees.

This scheme is being delivered through commercial lenders, you can find more on the key features, along with the eligibility criteria on the British Business Bank website. We partner with a credit broker, Capitalise, who partner with all major commercial lenders including those offering CBILS, so do let your dedicated Accountant know if this is of interest.

We hope to be able to send out something more concrete as soon as HMRC have made the information available but in the meantime we will be monitoring this on a daily basis and please be assured we are here if you need any help anything.