As all of us will be trying to absorb the dramatic events of the last week here is a summary of the support now available for businesses and their employees following further announcements made by the Chancellor on Friday 20 March 2020.
Increased Government Support
The Chancellor has set out a package of temporary, timely and targeted measures to support public services, people and businesses through this period of disruption caused by COVID-19.
The package of measures to support businesses now include:
- a Coronavirus Job Retention Scheme – Huge support package announced on 20 March. See ‘Furloughed Workers’ below
- deferring all VAT return payments falling due for payment between 20 March and 30 June 2020 until the year end
- deferring Income Tax self-assessment payments due on 31 July 2020 to 31 January 2021
- a Statutory Sick Pay relief package for SMEs
- a 12-month business rates holiday for all retail, hospitality and leisure businesses in England
- small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
- grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
- the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
- a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
- the HMRC Time To Pay Scheme so in addition to the VAT deferment scheme above – PAYE and corporation tax payments can be deferred by arrangement
This is the Coronavirus Job Retention Scheme which deals with the vital relief for employees who have or were set to lose their jobs in droves.
HMRC guidance to employees is reproduced below and I’ve highlighted an important clause:
- If your employer cannot cover staff costs due to COVID-19, they may be able to access support to continue paying part of your wage, to avoid redundancies.
- If your employer intends to access the Coronavirus Job Retention Scheme, they will discuss with you becoming classified as a furloughed worker. This would mean that you are kept on your employer’s payroll, rather than being laid off.
- To qualify for this scheme, you should not undertake work for them while you are furloughed. This will allow your employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month.
- You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to.
- If your salary is reduced as a result of these changes, you may be eligible for support through the welfare system, including Universal Credit.
- We intend for the Coronavirus Job Retention Scheme to run for at least 3 months from 1 March 2020, but will extend if necessary.
Haleys here to support you
We are all in this crisis together and we’re dedicated to help and provide as much support and advice for you as is required.
Our priority is to determine the small print and understand exactly what you are entitled to and how these measures will be implemented by HMRC and Local Authorities.
We can then help you review your trading circumstances and how you can shepherd your vital cash flow.