COVID-19 support available for business owners

Over the course of the past week, there have been numerous updates from the government around how they plan to support those organisations and individuals affected by the impact the government measures imposed to minimise the spread of COVID-19.

Over the course of the past week, there have been numerous updates from the government around how they plan to support those organisations and individuals affected by the impact the government measures imposed to minimise the spread of COVID-19.

Now that some of the finer details have come to light, we are sharing a round-up as to what support has been announced for UK business owners and employers in our latest blog.

If you are self-employed, or a landlord, we will be sharing additional updates as to what support is available for yourselves.

Grants

Applications are now open for business grants for those businesses who have premises with a rateable value of less than £15,000 and who are already in receipt of the Small Business Rate Relief, Rural Rate Relief or tapered relief. Those who fit into this criteria will be eligible for a grant of £10,000 which will be paid via the relevant local authorities.

For businesses in the retail, hospitality and leisure sectors that have a rateable value of between £15,000 and £51,000 they will be eligible for a £25,000 grant.

If your business is in Kirklees, you can apply via this link

If your business is in Calderdale, you can apply via this link

To apply, you will need to have your Business Rates account number and business bank details to hand.

Be aware that although this grant doesn't need to be repaid, it is likely that it will be taxed as part of profits for the period in which it is received.

Furloughing Workers / Job Retention Scheme

There has been much confusion over the past week as to how 'furloughed' workers would work in practice. Furloughing workers, allows you to retain staff who would typically have been laid off or even made redundant during the crisis to have some form of job security.

As it stands, if an employee was on your payroll as of the 28th February 2020, you can furlough them. What this means in practice is that for at least three months, the government will pay staff 80% of their wages up to a maximum amount of £2500 gross through the PAYE system.

If you made staff redundant before the government's announcement, or they have left for another job following that date, it is encouraged that you re-hire them and put them on furlough which has been advised as being acceptable by Chancellor Rishi Sunak.

If you are unsure as to where you stand on this matter, HR firm, Howarth's has a range of resources to help you understand your responsibilities as a business owner.

Directors on a small salary and dividend arrangements

It's less positive news for this group of people. As a director and shareholder of their own company, these individuals are not classed as self-employed, even though they may feel they are.

It's looking doubtful that any further support will come for individuals in this situation. However, it has been confirmed that directors can be furloughed under the Job Retention Scheme (see above), so something is available at least.

VAT Deferral

For VAT payments for the quarter ended February, March or April 2020, the government has advised that you can postpone payments until March 2021. Although this is a useful injection of cash into your business, you need to be mindful that this will need to be paid back and manage your business cashflow accordingly.

You do still need to ensure you submit your tax return as per your obligations. However, you do not need to notify HMRC you play to defer this payment, but if you have a direct debit set up, make sure you cancel this at your earliest opportunity if you plan to take advantage of what is effectively a 12-month interest-free loan.

HMRC Time to Pay

Any individual (not just those who are self-employed) with a tax payment due on 31st July 2020 can now put that back to 31st January 2021. It is automatic, and there is no need to tell HMRC. No interest will be added either.

Across all taxes though, if you are struggling, you can call HMRC on their new Time To Pay line on 0800 0159 559.

Payment on Mortgages & Rent

If you own your business premises then lenders are offering a three-month mortgage payment holiday which may be worth exploring in order to manage cashflow. Again, remember that interest will accrue on the outstanding debt.

If you rent your commercial premises, it is worth discussing commercial terms with your landlord as they may be in a position to help.

If you are a Kirklees Council tenant, they have already announced a three month deferral on rent payments to support their tenants and are encouraging commercial landlords to follow suit.

Business Interruption Loan Scheme

For those who require additional financial support during this period, the government has also announced the Coronavirus Business Interruption Loan Scheme (CBILS). At present, more than 40 accredited lenders are offering the scheme.

Loans of up to £5m, over a term of between one and six years, are available for companies with a turnover of less than £45m. It is interest-free for a period of 12 months, and the government will secure 80% of the loan, although the borrower is 100% liable for the borrowing.

There are some limitations around being eligible for the loans which include you having to apply via your business bank initially, and being able to provide a variety of financial information and projections.

More is expected to be announced on this in the coming days.

If you are still unsure how your business might be affected, please contact us to discuss in more detail.

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