Last week Rishi Sunak, the current Chancellor of the Exchequer, started to outline the Government’s economic support package for businesses in response to the current Coronavirus crisis.
The headlines are all positive but as they say, ‘the devil is in the detail’ and further clarification is expected in the coming days.
We have outlined below what we know so far, and will be issuing further guidance and details as they become available. You can visit the gov.uk website which has various useful articles – COVID-19: guidance for employees, employers and businesses.
VAT Payment Deferral
Any payment due between 20/03/20 and 30/06/20 (that would be the q/e 29/02/20 payment) can be deferred for up to the end of the 20/21 tax year, so until 05/04/21. No interest or penalties will be applied to the late payment but the payment still has to be made – it is not being cancelled.
Coronavirus Job Retention Scheme
This applies to any employee on the company’s payroll that the company would wish to retain the services of, but would otherwise have been forced to lay off. There is a new term for this arrangement – furlough. A worker who has agreed to go on a furlough basis can be paid 80% of their average net pay, up to a maximum of £2,500 per month, without it being subject to any tax or NI.
Statutory Sick Pay (SSP) Relief
Where workers cannot work due to having symptoms or are told they should self-isolate, they can go on SSP from day 1 for 14 days and this will be refunded by HMRC. Currently this pay is only £94.25 per week though.
Coronavirus Business Interruption Loan Scheme
Available for credit worthy businesses from your banks in order to get through cash flow issues created by coronavirus. The government would fund the first 12 months interest and any lending fees charged. You obviously still have to repay the loan in full though.
HMRC Time To Pay Service
Allows deferred and instalment payments of tax (corporation tax for instance) upon application to HMRC.
Commercial Tenant Eviction Protection
Missed payments up to 30/06/20 will not result in eviction and this may be extended. The rent will still be due of course.
Today it has also been announced that businesses will be given an extra three months to file their annual accounts. The move is designed to help companies avoid penalties as they deal with the impact of COVID-19. As part of the agreed measures, those citing issues around COVID-19 will be automatically and immediately granted an extension. Applications can be made through a fast-tracked online system which will take just 15 minutes to complete.