The Chanceller Rishi Sunak announced a number of helpful measures on Friday March 20.
CORONAVIRUS JOB RETENTION SCHEME
With the aim of avoiding people losing their jobs altogether, the government will reimburse 80% of the wage costs of "furloughed workers", ie workers who are sent home and do not do any further work for the organisation.
All UK employers, including charitable or non-profits, are eligible.
Employers need to:-
- designate employees as "furloughed workers" and notify employees, taking into account employment law issues
- submit details to HMRC through a new online portal
HMRC will reimburse 80% of furloughed workers wage costs, backdated to 1 March, up to a cap of £2,500 per month. The scheme can cover wage costs of workers already laid off, if they are re-employed.
Payments will start by the end of April. In the meantime employers may be eligible for a Coronavirus Business Interruption Loan Scheme, and could also benefit from the deferral of VAT and income tax payments.
CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME
UK based businesses with a turnover of no more than £45m per year are eligible for the Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank. These loans are up to £5m and are interest free for the first twelve months. The scheme will launch in the week commencing 23 March 2020 and will be available through all major banks - further details are on British Business Bank Website.
You should contact your bank or finance provider (not British Business Bank) and discuss business plans and other requirements.
DEFERRAL OF VAT AND INCOME TAX PAYMENTS
VAT payments due from 20 March 2020 until 30 June 2020 are deferred. This is automatic and applies to all businesses. Nothing needs to be done to benefit from the deferral. Businesses will have until 5 April 2021 to pay the deferred VAT. VAT repayments and refunds will be processed as normal.
Income tax self-assessment payments due on 31 July 2020 are deferred until 31 January 2021 with no interest and penalties. This applies to all self-employed people and is automatic - nothing needs to be done to benefit from it.
HMRC TIME TO PAY SCHEME
All businesses and self-employed people in financial distress may be eligible to receive support through HMRC's time to pay scheme, where a timetable for payment of tax liabilities is agreed with HMRC.
If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC's dedicated helpline: 0800 0159 559. If you're worried about a future payment, please call HMRC nearer the time.
Further details on these measures are available at Covid-19:support for business
Please contact us if you have queries about any of these measures.
Contributor
Director of Corporate Tax
