COVID Advice for Businesses
In what are very difficult times for businesses and individuals alike, as the world deals with the impact of the Covid-19 Coronavirus, we would like to reassure our corporate and commercial clients that we are keeping abreast of the situation and are here to provide support if needed.
Primarily, this communication is to update you on the measures which have been announced by the Government to provide support for companies and their workers.
The Chancellor has set out a package of temporary and targeted measures which will be made available throughout this period of disruption.
Although exact details are still to be confirmed, specific support to businesses is set to include:
Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme is a government grant which will reimburse employers for 80% of furloughed workers* wage costs, to a cap of £2,500 per month. The latest guidance says that employers can choose to top-up pay, either for the unfunded 20% of pay or the amount above £2,500 for higher earners, but this will not be a formal requirement to obtain access to the scheme.
The scheme will be:
Backdated to March 1st
Open initially for at least three months but extended ‘for longer if necessary’.
With regards to the total funding pot available, the chancellor has been quoted as saying: “I am placing no limit on the amount of funding available for the scheme. We will pay grants to support as many jobs as necessary.”
Who is eligible for the scheme?
All UK businesses are eligible.
In the Chancellor’s words: “Any employer in the country – small or large, charitable or non-profit – will be eligible for the scheme.”
The Coronavirus Job Retention Scheme (CRJS) will be administered by HMRC.
To access it, employers will need to:
Designate affected employees as ‘furloughed workers’ (see further below)
Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC is expected to set out further details on the information which will be required in the coming weeks)
The employer will be expected to make the payment and will then be reimbursed by HMRC.
When will the scheme be live?
The date has not yet been confirmed, but indications are it will not be immediate, the chancellor has been quoted as saying:
“HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.”
“HMRC are working night and day to get the unprecedented Coronavirus Job Retention Scheme up and running and we expect the first grants to be paid within weeks.”
“If your business needs short term cash flow support, you may be eligible for the Coronavirus Business Interruption Loan Scheme”
* What is a furloughed worker?
We understand the definition to be members of the “workforce who remain on payroll but are temporarily not working during the coronavirus outbreak”. For more information please refer to this news story on the GOV.UK website.
Employers will be expected to notify employees of this change in their employment status to ‘furloughed’. Be aware that changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
For further support in implementing these changes please contact us.
Other measures for businesses include:
Deferred VAT and Income Tax payments
No VAT payments will be due between April 2020 and June 2020, although returns will still need to be submitted. Liabilities will need to be cleared by March 2021.
For individuals, no payments on account will be due in July 2020, with the balance being payable in full by January 2021.
Statutory Sick Pay relief package for SMEs
Companies will receive full reimbursement of statutory sick pay, from day 1 for up to 14 days for workers who are sick or who are unable to work due to following government guidance with regards Self Isolation. This will be dealt with through payroll and offset against PAYE.
A 12-month business rates holiday for all retail, hospitality and leisure businesses
Local authorities are expected to ‘re-bill’ as soon as possible.
Small business grant funding of £10,000 for those in receipt of small business rate relief or rural rate relief with a rateable value of less than £12,000
This will be administered by local authorities, who will automatically be in touch with applicable businesses in due course. No time frames are yet known.
Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
As above, this will be administered by local authorities, who will automatically contact applicable businesses.
Coronavirus Business Interruption Loan Scheme (CBIL) offering loans of up to £5 million for SMEs through the British Business Bank
Further details of the Governments CBIL are expected to be released to Banks to discuss with their clients this week.
What we know so far is:
It is available to all SMEs with a turnover of less than £45m;
The government will guarantee 80% of the loan value and pay all interest and charges for the first 12 months;
The scheme is available to support loans, overdrafts asset finance and invoice finance;
Overdrafts must be repaid within 3 years and loans within 6 years;
There are some sector exclusions including financial services, schools, political bodies and trade unions
Further information can be found at https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses and https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/
HMRC Time To Pay Scheme
For debts already overdue, agreement can be reached with HMRC for staged payment.
As further details are released, we will update all our clients. However, should you need any urgent support, please do not hesitate to get in touch with us.
HMRC guidance will be updated on their dedicated page for businesses: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#support-for-businesses-that-pay-business-rates
Vincents Solicitors will continue to provide the full range of legal services for all of our clients over the coming weeks. Our staff are working from home but please be assured we have the systems and processes to make this a seamless transition for our clients.
If you require advice or support in navigating through these difficult times, please get in touch with your usual contact with our Commercial Team as soon as possible.
Craig Aikman Commercial Property email@example.com
Matt Scott Corporate firstname.lastname@example.org
David Southern Corporate and Employment email@example.com
Ansar Ali Employment firstname.lastname@example.org
Anas Shah Litigation email@example.com
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COVID Advice for Businesses
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