As more information becomes available from the government, we will be publishing this on our website and Twitter feed.
We fully expect that time to pay arrangements along with all other grants/loans and other reliefs will be conditional but will be aimed at helping businesses to survive these uncertain times.
We would expect that the conditions will include the need for Company Directors/Owners of businesses to continue to complete all returns for VAT, PAYE, CIS, tax, accounts etc on time.
Further details of the mechanisms for claiming and applying are expected to be published in the coming days.
If you have any other issues or concerns please do contact us direct.
Government-backed Loans to Businesses
A new, temporary Coronavirus Business Interruption Loan Scheme, delivered via the British Business Bank, will support SME businesses to access lending and overdrafts. The government will provide lenders with a guarantee of 80% on each loan (subject to a per lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value.
All SME businesses can apply for the loans from 23 March 2020.
The terms of the loans will be ‘attractive’ and the Chancellor has stated no interest will be charged for the first six months of the loan period. The British Business Bank will be working with its current Enterprise Finance Guarantee delivery partners and the government to make the new scheme available and to implement the package of enhancements.
Business Rates relief
Retail businesses in England with a rateable value below £51,000 will pay no business rates for the year to 31 March 2021. This is expected to apply to up to 90% of independent shops, pubs, restaurants and other qualifying businesses.
For businesses in the hospitality, leisure and retail sectors who use premises with a higher rateable value, there will be full business rate exemption for the year to 31 March 2021.
Guidance for local authorities is expected to be published by 20 March 2020.
To support the many small businesses that pay little or no business rates because of Small Business Rate relief (SBRR), the government will provide funding for local authorities in England, who will provide the business grants. This will provide up to £10,000 each to businesses currently eligible for SBRR or Rural Rate.
Businesses that use premises with a rateable value of up to £51,000, and will therefore pay no business rates for the current year, will receive grants of up to £25,000 from their Local Authority. These grants will only apply to the retail, leisure and hospitality sector. Businesses should contact their local authority for further details of eligibility and payment arrangements.
Tax - improved time to pay arrangements
The government has announced extra resources to assist those struggling to pay their tax liabilities and in financial distress.
The helpline number is 0800 0159 559. Opening hours are Monday to Friday 8am to 8pm, and Saturday 8am to 4pm.
Support will include agreeing a bespoke Time To Pay arrangement with HMRC. This will help those struggling with cash flow and allow those who enter into arrangements to spread liabilities owed over a pre-agreed period. In addition, HMRC will waive late payment penalties and interest where businesses experience administrative difficulties contacting HMRC or paying taxes due to COVID-19.
As always, it will be important to get upfront agreement from HMRC before a payment deadline. There is also a commitment to suspend debt collection proceedings.
Paying Statutory Sick Pay (SSP)
All employees who self-isolate will be able to claim SSP and, as a temporary measure, SSP claims can be made from Day 1 rather than Day 4 of illness. Employees who are caring for someone who is self-isolating will also be able to claim SSP on this basis.
Businesses with fewer than 250 employees as at 28 February 2020 will be able to reclaim SSP expenditure up to a maximum of two weeks per employee from the government. Details of the reclaim method have not been announced, but it is expected that the government will confirm that employers will claim by offsetting any amount of reclaim for a period against the amount of PAYE payable to HMRC for the period.
Off-payroll working rules
The government has delayed the introduction of the off-payroll labour/IR35 reforms for private sector businesses until 6 April 2021. Self-employed individuals will still need to consider their existing IR35 obligations when accepting work but a delay in placing new obligations onto engagers will prevent further disruption to the contractor market for the 2020/21 tax year.
The Bank of England has cut interest rates from 0.25% 0.1%.