Accounting, corporation tax, Payroll, self-assessment, Taxation, VAT

Covid-19 Government Aid Rundown

This is a summary of the support relevant to most of my clients:

1. Coronavirus Business Interruption Loan Scheme (CBILS)

Announced on Wednesday, 11 March 2020, this will be administered by lenders that partner with the British Business Bank.

The scheme is expected to become available in the week commencing 23 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 Government will cover the first 12 months of interest payments, so businesses will benefit from lower initial repayments. The business remains liable for repayments of the capital. The maximum value of a facility provided under the scheme will be £5 million.

Most high Street banks will be providers of CBILS.

2. Self Employed people and Universal Credit

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

3. Income Tax July 2020 Payments

Tax payments due by 31 July 2020 under Self Assessment will be deferred to 31 January 2021. The deferral is automatic ie no applications are required.

4. VAT Payments

Next quarters payments will not need to be made until 30 June 2020 and businesses have until the end of the 2020/2021 tax year to settle any liabilities accumulated during the deferral period.

Deferrals are automatic ie businesses do not need to apply for them. Refunds and reclaims will be paid by the government as normal.

5. Coronavirus Job Retention scheme – Employers

Government grants will cover 80% of the salary (up to a maximum of £2,500) of PAYE employees who would otherwise have been laid off due to the crisis.

The scheme will cover the cost of wages from 01 March 2020 and will be open before the end of April.

It will continue for at least three months.

Employers wishing to claim under the scheme must:
1. designate affected employees as ‘furloughed workers’, and notify employees of this change. Furloughed workers are those granted leave of absence, ie laid off temporarily.
2. submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal. We are awaiting more details.

6. Statutory Sick Pay (SSP)

Directors of limited companies with less than 250 employees can pay themselves two weeks of SSP if they need to self-isolate subject to meeting the minimum payroll requirement for SSP (pay must be at least £118 per week). The government will refund £94 per week, maximum £188, to the company.

The government will also refund SSP for staff for a maximum of two weeks.

7. Mortgage and Rent Holiday

Mortgage borrowers (whether residential or buy-to-let) can apply for a three- month payment holiday from their lender.

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.

Note that the amounts are not written off ie tenants and home owners owe the amounts not paid. Additionally, for mortgages, interests will continue to accrue.

 

About Phoenix

Accountant | Tax Specialist | Mother | Entrepreneur | Blogger

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