Today we’re featuring a guest blog by James O’Sullivan, ADPR’s Finance Director and Chartered Accountant with his own practice, O’Sullivan’s.
As we now head into ‘Phase 2’ of the UK Government’s action plan to combat the coronavirus, I thought it would be a good time to summarise the financial support measures that have been put in place so far to help businesses navigate their way through these difficult times.
Coronavirus Job Retention Scheme (CJRS) – More commonly known as the ‘furlough scheme’, this is the one that has certainly had the most press attention and it is estimated that 7.5 million people in the UK are currently on ‘furlough leave’. Employers who would otherwise have to lay off employees due to the Coronavirus now have the option to ‘furlough’ them instead, whereby on the condition that the employee does not undertake any work for that employer, the government will cover 80% of their salaries (subject to a monthly cap of £2,500, plus Employer’s National Insurance + pension contributions). Originally available from 1st March – 31st May, this has now been extended until at least the end of October 2020, although it is likely that the scheme may be tweaked before then, such that employers will be expected to cover an element of these salaries themselves.
Statutory Sick Pay (SSP) – As well as the CJRS, statutory sick pay can be claimed for up to two weeks for any employee or director who develops coronavirus symptoms and has to self isolate as a result. This is available to all employers with fewer than 250 employees.
Self Employment Income Support Scheme (SEISS) – The ‘little brother’ of CJRS, the SEISS was announced several weeks ago and is just going live now with eligible taxpayers being able to submit their claims online from this week. This scheme is open to the majority of owners of sole trader and partnership businesses with taxable trading profits of up to £50k, and will pay out a one-off grant equal to 80% of three month’s average profits based on the individual’s past three years’ submitted tax returns (subject to a monthly cap of £2,500).
Business Rates – On top of the support measures set out above, business rates have been waived in full for all businesses in the retail, hospitality and leisure sectors throughout 2020/21. Furthermore, an unprecedented number of flat rate grants are being paid out to businesses with commercial premises:
- Those in the retail, hospitality and leisure sector with smaller premises (rateable value of £15k-£51k), will be eligible for a grant of £25,000 per property.
- Any business with premises that pay little or no business rates (as claiming Small Business Rates Relief or Rural Rate Relief), will be eligible for a grant of £10,000 per property.
Tax Payments – As well as making various grants and other payments, HM Revenue & Customs have also confirmed that certain tax liabilities falling due in the next few months may be optionally deferred without incurring any penalties or late payment interest:
- All VAT payments that would normally be due between 20th March – 30th June 2020 can be deferred, as long as they are paid in full by 31st March 2021.
- All income tax payments that would normally be due on or before 31st July 2020 can be deferred, as long as they are paid in full by 31st January 2021.
- In addition, a dedicated helpline has been set up by HM Revenue & Customs to help anyone struggling to make any other tax payments (as a direct result of COVID-19) on 0800 0159 559.