We are in some very uncertain times and we know that there are a lot of questions out there. We can’t guarantee that we can answer all of your questions (for some there simply aren’t any answers yet!). But we will do our best to keep you as updated as possible as soon as we have the information. Here’s what we know at the moment:
Statutory Sick Pay
Legislation will allow SME’S and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:
- The refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
- Employers with fewer than 250 employees (as of 28 February 2020) will be eligible to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
- Employers should maintain records of staff absences, but employees will not need to provide a GP fit note
- Eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to self-isolators comes into force
- The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible (possibly via the RTI system). Existing systems are not designed to facilitate employer refunds for SSP
- Temporarily, the employers (company) can pay the SSP to the director/ directors from the day they have to go to self-isolate themselves
Not eligible for SSP?
Those who are not eligible for SSP, for example the self-employed or people earning below the Lower Earnings Limit of £118 per week, can now more easily make a claim for Universal Credit or Contributory Employment and Support Allowance:
- For the duration of the outbreak, the requirements of the Universal Credit Minimum Income Floor will be temporarily relaxed for those who have COVID-19 or are self-isolating according to government advice, ensuring self-employed claimants will receive support.
- People will be able to claim Universal Credit and access advance payments upfront without the current requirement to attend a jobcentre if they are advised to self-isolate.
- Contributory Employment and Support Allowance will be payable, at a rate of £73.10 a week if you are over 25 for eligible people affected by COVID-19 or self-isolating in line with advice from Day 1 of sickness, rather than Day 8.
If we do not do your payroll and you are struggling let us know… we can help! If we do your payroll, don’t worry, Helen is on it!!!
Business Rates Relief
Yesterday the Chancellor announced a raft of new changes to business rates relief designed to support businesses dealing with hardship and disruption as a result Covid-19. These changes come alongside recent announcements for further support in devolved UK authorities.
Retail, hospitality and Leisure Businesses
There will be a business rates holiday for retail, hospitality and leisure businesses for the 2020/2021 tax year. Businesses that received the retail discount in the 2019/2020 tax year will be rebilled by their local authority ASAP.
A £25,000 grant will be provided to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value between £15,000 and £51,000.
Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority.
The government will provide additional funding for local authorities to support small businesses that already pay little or no business rates. This will provide a one-off grant of £10,000 to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs.
All other Small Businesses
If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority. You do not need to apply.
Funding for the scheme will be provided to local authorities by government in early April.
Covid-19: Time to pay arrangement for outstanding tax liabilities
HMRC has a set up a phone helpline to support businesses and self-employed people concerned about not being able to pay their tax due to COVID-19. Since then SME businesses have started getting support to delay payment of their VAT and PAYE liabilities. Some have reported that HMRC is not asking for much detail or only requiring minimal evidence. For many they are extending their payment deadlines for the foreseeable future.
For those who are unable to pay due to coronavirus, HMRC will discuss your specific circumstances to explore:
- agreeing an instalment arrangement
- suspending debt collection proceedings
- cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately
The helpline number is 0800 0159 559 – and is an addition to other HMRC phone contact numbers. The helpline is open from Monday to Friday 8am to 8pm, and Saturday 8am to 4pm (excluding bank holidays).
We should stress that you MUST call this helpline if you can’t pay your tax or liabilities. If you do not have a plan in place HMRC can and will still issue fines/penalties etc. for non payment.
A new temporary Coronavirus Business Interruption Loan Scheme (CBILS), delivered by the British Business Bank, will launch in a matter of weeks to support businesses to access bank 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. The Scheme will support loans of up to £5m (previously announced at £1.2m in the budget).
This new guarantee will initially support up to £330 billion of lending on top of current support offered through the British Business Bank. The new CBILS scheme will offer interest holidays of 6 months. It is intended to be up and running in 5 weeks’ time. It will temporarily replace the Enterprise Finance Guarantee (EFG), and operate in a similar way to EFG. But it will offer more attractive terms for both businesses and lenders. The aim will be to support the continued provision of finance to UK businesses during the Covid-19 outbreak.
To be eligible for support via CBILS, the small business must:
- Be based in the UK based, with annual turnover not exceeding £41 million
- Operate within an eligible industrial sector
- Have a sound borrowing proposal, but insufficient security to meet a lender’s normal requirements
- Be able to confirm that they have not received de minimis State aid beyond €200,000 equivalent over the current and previous two fiscal years.
The Chancellor has further announced that individuals (households) facing financial difficulties due to Covid-19 will be supported with at least a 3-month mortgage payments holiday.
Official guidance for employers
For HMRC’s guidance for employers, please follow the link below:-
Review your overheads
If you are predicting cashflow difficulties it is sensible to review your overheads and pause any unnecessary spending. The first thing to do is categorise expenditure (both personal and business) into “essential” and “nice to have”. Once you have those numbers you can better appraise your situation. And we can support you further with short term cash flow forecasts.
These are unprecedented and challenging times to be in business and we all face a period of uncertainty. No one can predict the future but we believe we can all pull together as businesses and support each other.
Hopefully this blog has answered some questions. Please know that the Cedar + Co. team are here to help you. If you need a sounding board, some advice or a steer in the right direction, then don’t hesitate to get in touch.