Coronavirus Job Retention Scheme
HMRC will reimburse 80% of furloughed (basically another word for redundant) workers wage costs, up to a cap of £2,500 per person per month. HMRC are working urgently to set up a system for reimbursement as currently their systems are not able to facilitate payments to employers.
We haven’t noted any detail in the announcement as to whether this reimbursement will apply to company directors in owner managed businesses. There is an argument that a company with no directors working in the business is no longer a trading business. We should get more detail from HMRC next week, and we will advise further as soon as we can on this.
While HMRC is working urgently to set up a system for reimbursement, we understand the existing system is not set up to facilitate payments to employers.
Business that need short-term cash flow support, may benefit from the VAT deferral announced below and may also be eligible to apply for a Coronavirus Business Interruption Loan.
You will not have to pay any VAT payments due between the 20th March until at least the 30 June 2020, and then any unpaid VAT must be paid by 5 April 2021.
You can of course make VAT payments to HMRC as normal should you wish.
The VAT deferral applies automatically and businesses do not need to apply for it. VAT refunds and reclaims will be paid by the government as normal. If you have a DD in place it should be cancelled automatically by HMRC, but it may be wise to cancel this via your bank if you don’t want to make the VAT payment.
Income Tax Deferral
The self-assessment tax payment due on the 31 July 2020 has been deferred until 31 January 2021. To reiterate these are deferrals not write offs, so both the tax and the VAT will still be payable. This is an automatic offer with no applications required.
Support for businesses through the Coronavirus Business Interruption Loan Scheme
The interest free period on loans under this scheme was extended from 6 to 12 months.
Universal credit for the self-employed
Self-employed people can now access full universal credit at a rate equivalent to statutory sick pay.
HMRC Time to Pay
HMRC’s Time to Pay scheme can enable firms and individuals in temporary financial distress as a result of Covid-19 to delay payment of outstanding tax liabilities. HMRC’s dedicated Covid-19 helpline provides practical help and advice on 0800 0159 559.
We have noted from conversations with clients that the Time to Pay helpline has fallen over a number of times this week and has been unable to cope, so this relief is something that was already happening in practice anyway.
As far as we can see all the rest of the reliefs have stayed the same.
You can get full details of everything that is currently available to small businesses (basically loads of loans!) here…
Please let me know if you need any support and we can chat it through.
Steven Hillman ACA