COVID-19: HMRC support for businessesMarch 23 2020, 0 Comments
In these uncertain and unprecedented times, Rishi Sunak, the Chancellor of the Exchequer has announced help for businesses and individuals to try to financially support everyone affected by the global pandemic of Coronavirus (COVID-19).
This is an ever changing and evolving set of plans announced by the government and we can only all try to keep our eye on the news and read the email help guides sent to us by the authorities.
As an accounting software supplier, we will keep abreast of developments and if updates are required to the software to comply with MTD changes, these will be implemented for you in our supported programs.
At this time, we know the following:
Coronavirus Job Retention Scheme
Employers will be able to contact HMRC for a grant to cover most of the wages of people who are not working but are furloughed and kept on payroll, rather than being laid off.
Government grants will cover 80% of the salary of retained workers up to a total of £2,500 a month – that’s above the median income.
And, of course, employers can top up salaries further if they choose to.
That means workers in any part of the UK can retain their job, even if their employer cannot afford to pay them, and be paid at least 80% of their salary.
The Coronavirus Job Retention Scheme will cover the cost of wages backdated to 1st March and will be open initially for at least three months - and will be extended longer if necessary.
Coronavirus Business Interruption Loan Scheme
This will now not be interest free, as previously planned, for 6 months – it will now be interest free for twelve months. These are available from today, Monday 23rd March 2020. Grants can be applied for up to a value of £25,000 depending on industry and rateable value of the business.
To help businesses pay people and keep them in work, the next quarter of VAT payments has been deferred.
That means no business will pay any from now until the end of June; and you will have until the end of the financial year to repay those bills.
Businesses do not need to inform HMRC if they wish to defer payment. They can opt in to the deferral simply by not making VAT payments due in this period
Businesses who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay. This can be done online if they’re registered for online banking. They should do so in sufficient time so that HMRC does not attempt to automatically collect on receipt of their VAT return.
Business Rates Abolished
If you’re in the hospitality, retail or leisure industry, business rate have been abolished for the year.
Universal Credit and Working Tax Credit
The Universal Credit standard allowance has been increased with immediate effect, for the next 12 months, by £1,000 a year. Working Tax Credit basic element to be increased by the same amount as well.
The minimum income floor has been suspended for everyone affected by the economic impacts of coronavirus.
That means every self-employed person can now access, in full, Universal Credit at a rate equivalent to Statutory Sick Pay for employees.
And to support the self-employed through the tax system, the next self-assessment payments will be deferred until January 2021. This is automatic, you do not need to apply with HMRC.
Support for businesses who are paying sick pay to employees
Small and medium sized businesses 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:
- this 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 will be eligible
- employers will be able 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 and payments of SSP, 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 SSP to those staying at home 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
For a full transcript and outline of the announcement on Friday 20th March, please see the following link:
For guidance published by HMRC for employers on Friday 20th March 2020:
For guidance published by HMRC for employees on Friday 20th March 2020: