News

Coronavirus/COVID-19: Update 30 March 2020

As we move into the first full week of the ‘stay at home regime’ we are continuing to update you with the latest information concerning COVID-19 business support measures. All those measures announced to date are outlined below. We know we have mentioned some of these before. However, it has been suggested that having a Monday summary, bringing everything together in one place, would be helpful.

If you want to refer back to any previous information, you will find all of our updates in the News section of the GWA website.

As ever, traumatic times bring out the best in people but also in some cases the worst. Therefore, we must remind you of the need to remain vigilant of fraudulent activities including scams. The National Fraud Intelligence Bureau and HMRC have issued warnings for everyone to be aware of COVID-19 related scams both online and by phone and also emails purportedly from HMRC offering tax refunds.

COVID-19 Job Retention Scheme

The government has stepped in to help employers continue to pay part of the salaries of those employees who have been laid off due to the COVID-19 pandemic.

Open to all UK businesses the scheme will initially be in place for three months. HMRC will reimburse 80% of the wages costs relating to ‘furloughed’ employees up to a maximum of £2,500 a month. The scheme is backdated to 1 March 2020.

What does furloughed mean? A furlough is “a temporary layoff from work”. People who get furloughed usually get to return to their job after a furlough. In today’s situation this means anyone asked to stop working during the COVID-19 pandemic but not made redundant.

Employees should not undertake work for their employer whilst on furloughed leave. Therefore, the option to work less hours is not available to furloughed employees, even though this may be an employers’ preference.

To implement these payments, HMRC need to update their IT systems as existing systems are unable to make payments to employers. This will take until some time in April to complete.

PAYE software also will require updating before employers can automatically add ‘furloughed’ employees to their payroll systems.

In order to access this scheme, an employer will need to do the following:

  1. Employees will need to be officially designated as ‘furloughed’ employees and those employees will need to be notified of this change. Don’t forget that changing the status of an employee is subject to existing employment law and any employment contracts in place.
  2. When available, employers will need to submit information in relation to their ‘furloughed’ employees through a new HMRC online portal. As soon as we have details of this portal we will let you know.

Further guidance can be found here on the HMRC website and here on the ICAEW website (Institute of Chartered Accountants in England & Wales).

We also found this article in Business Matters magazine helpful. It provides a practical step by step guide and outlines some complications of the scheme.

Support for the Self-employed – UK Wide

In a previous update we outlined the government’s plans for support for the self-employed. Full details can be found here on the GOV.UK website.

Self-assessment tax payments due on 31 July 2020 by self-employed individuals will be deferred until 31 January 2021. You do not need to apply to claim this deferral, it will be automatically applied. In addition, no penalties or interest for late payment will be due in the deferral period.

Self-employed people can also access full universal credit at a rate equivalent to statutory sick pay.

The planned changes to the IR35 off-payroll working rules have been deferred by a year to April 2021. Existing off-payroll working rules will continue for a further year.

COVID-19 Government Statutory Sick Pay and How to Apply for it

The government will meet the cost of COVID-19 statutory sick pay (SSP) for small businesses with up to 250 employees (as at 28 February 2020) for 14 days.

SSP will now be available for eligible individuals diagnosed with COVID-19 or those who are unable to work because they are self-isolating in line with government advice. SSP will also be payable from day one instead of day four for affected individuals.

The weekly allowance for SSP will increase from £94.25 to £95.85 on 6 April.

Individuals displaying symptoms of coronavirus or living with someone symptomatic of COVID-19 can get an isolation note from the NHS website. These can be used by employees where their employers require evidence.

COVID-19 statutory sick pay is expected to be in the form of a refund. The Treasury says that it is “working with employers over the coming months to set up a repayment mechanism as soon as possible for employers reclaiming statutory sick pay”.

Carrying over annual leave

Employees who have not taken all of their statutory annual leave entitlement due to COVID-19 will now be able to carry up to a maximum of four weeks into the next two leave years. More details can be found on here on the GOV.UK website.

Emergency Volunteer Leave

Employees will be entitled to take emergency volunteer leave to help support essential health and social care services.

An outline of the conditions for emergency volunteer leave include:

  • it will only be available to workers who have been certified by their local authority, the NHS Commissioning Board or Department of Health to act as an emergency volunteer
  • emergency volunteer leave can be in blocks of two, three or four weeks. Workers can take only one period of leave in each “volunteering period”, which is, at present, a 16-week volunteering period
  • employees will need to give three working days’ notice and provide their employer with a certificate confirming their approval as an emergency volunteer
  • there is no provision for employers to refuse leave with the following exemptions: workers employed or engaged by businesses with fewer than ten staff, Crown employees, parliamentary staff and employees in police service
  • any volunteer leave will be unpaid but a compensation fund may offset volunteers for loss of earnings, travel and subsistence (details of this are still to be announced)
  • employees will remain bound by their existing terms of employment (other than those relating to pay) and will have a statutory right to return to the same job on the same terms.
Business Rates Holidays and Cash Grants

Any business within the retail, hospitality and leisure sectors will not have to pay business rates for the 2020/21 tax year.

In addition, for all businesses in England and Scotland in receipt of small business rate relief or rural rate relief, a one-off small business grant of £10,000 is available.

Within the retail, hospitality and leisure sectors in England, there is also grant funding of up to £25,000 per property for businesses with a rateable value between £15,000 and £51,000.

In Scotland businesses with a rateable value between £18,000 and up to and including £51,000 will be able to apply for a one-off grant of £25,000.

You need to apply to your local authority for the cash grants. The links you need are:

Access to these grants within Scotland initially excluded self-catering.  Following intervention by the Association of Scotland’s Self-Caterers (ASSC), last Friday the Cabinet Secretary for Finance, Kate Forbes MSP, announced that ratepayers for self-catering accommodation and caravans will be eligible for both the small business grant and the retail, hospitality and leisure sector grant.

There will be a restriction of one grant per ratepayer and applicants will have to provide evidence that:

  • the property is each ratepayer’s primary source of earnings; and
  • the property is let for 140 days or more in the financial year 2019-20

Further details can be found on the ASSC website.

More details on the eligibility for these grants can be found here on the GOV.UK website and here on the mygov.scot website.

Business Rates Holidays – Nurseries (England only)

Nurseries in England will not have to pay business rates for the 2020/21 tax year. Properties that will benefit from the relief will be those that are:

  • occupied by providers on Ofsted’s Early Years Register
  • wholly or mainly used for the provision of the Early Years Foundation Stage.

No applications are required and the rate holiday will be automatic and administered by your local authority.

Coronavirus support for seafood fishing industry – (Scotland only)

The Scottish seafood sector is to receive a package of more than £5 million in financial support during the COVID-19 outbreak.

An initial payment of 50% of two months’ average earnings will be made to owners of all full time Scottish registered fishing vessels of 12 metres length and under. Support is also being developed for the onshore processing industry and others in the shellfish growing sector.

Marine Scotland will be writing to all vessels and relevant representative Associations with more details. If you have any immediate queries you can email seafisheriesintervention@gov.scot.

Further clarification of the scheme is as follows:

  • full time is defined as where a vessel has recorded landings of £20,000 or more. This is the same limit that has been applied in previous schemesvessels that are under 12 metres in length and were registered in Scotland on the 18 March 2020
  • earnings are defined as recorded landing income from sales notes from 2019. This data is submitted to Marine Scotland by buyers
  • monthly payments are based on monthly average 2019 sales income
  • wrasse catching vessels will not be included in this initial scheme.
1.6% Non-Domestic rates relief – (Scotland only)

From 1 April 2020, a 1.6% non-domestic rates relief will apply for all properties across Scotland (this effectively reverses the planned inflationary increase for the year). This will automatically be applied on your council tax bill.

Business Interruption Loans (CBILS) – for SME’s

The Coronavirus Business Interruption Loan Scheme (CBILS) will be delivered by the British Business Bank, allowing SMEs to access bank lending and overdrafts, with interest rates similar to current bank lending.

The government will provide lenders with a guarantee of 80% on each loan.

CBILS is available to all UK-based business with a turnover up to £45 million and will support loans of up to £5m per business. No interest will be charged for the first 12 months as government will cover the first 12 months of interest payments.

It should be noted that the business borrower will always remain 100% liable for the debt. More details can be found on the British Business Bank website.

Our understanding from discussions with banks is that all other sources of lending must be explored with them before you will be able to access this special business interruption loan.

Business Interruption Loans (CCFF)

The Covid Corporate Financing Facility (CCFF), which is co-ordinated by HM Treasury and Bank of England, will provide funding to all UK businesses by purchasing commercial paper of up to one-year maturity, issued by firms that make a material contribution to the UK economy.

Commercial paper, also called CP, is an instrument used for obtaining short-term funding.
This should help businesses across a range of sectors pay wages and suppliers, whilst they are experiencing disruption to their cash flows.

Further details can be found on the Bank of England website.

VAT Deferral

There will be an automatic deferral of VAT payments due in the period from 20 March 2020 until 30 June 2020. The deferral is available to all VAT registered UK businesses. The deferral will be automatic – you do not need to apply for it.

IMPORTANT: if you pay your VAT by Direct Debit you must contact your bank to cancel that Direct Debit to avoid the payments being taken. This needs to be done before the Direct Debit is due to be collected.

The following conditions apply:

  • VAT returns must still be submitted as normal
  • VAT repayments and refunds will be made as normal
  • the VAT deferred must be paid by the end of the 20/21 tax year, which will be 31 March 2021, 30 April 2021, or 31 May 2021 depending on the VAT periods used by your business.
Renters and Landlords Protection

Under new laws, landlords will not be able to start new possession proceedings to evict tenants for at least three months.

In addition, mortgage borrowers can apply for a three-month payment holiday from their lender. This applies to both residential and buy to let mortgages, providing relief to landlords whose tenants are experiencing difficulties due to the ongoing COVID-19 situation.

It will be expected that landlords and tenants will work together to establish affordable repayment plans, taking into consideration tenants’ individual circumstances, at the end of the period.

Protection from Eviction for Commercial Tenants – (England only – Scotland to be confirmed)

Within England, there are also measures that apply to commercial tenants. No business will automatically forfeit their lease and be forced out of their premises if they miss a rental payment up until 30 June 2020. As such, commercial tenants who cannot pay their rent because of COVID-19 will be protected from eviction. The government have indicated that they may extend this period if needed.

It is important to highlight that this measure is not the same as a rental holiday. Commercial tenants are being protected from eviction if they are unable to pay rent but will still be liable for their rent.

Insurance

If you have not already done so, you should check your business insurance policies to see if business interruption cover for pandemics is in place.

Confirmation has been provided that government advice to avoid pubs, clubs and theatres etc. is sufficient for businesses to claim on their insurance should they have appropriate business interruption cover for pandemics. Full details can be found in our previous update.

The Third Sector Resilience Fund (TSRF) – (Scotland only)

The Scottish Government has announced a £20m Third Sector Resilience Fund (TSRF) for charities, community groups, social enterprises and voluntary organisations.

The Fund will be delivered by Firstport, Social Investment Scotland and the Corra Foundation and will provide grants between £5,000-£100,000. In addition, there will be up to a further £5m available in fully flexible, 0% interest loans starting at £50,000.

There will also be additional specialist business advice from Just Enterprise to help grant recipients maximise the impact of the financial support.

To be eligible, interested organisations must be:

  • a charity, social enterprise or voluntary organisation based in Scotland and/or primarily delivering services/activities in Scottish communities
  • already delivering those products or services prior to March 2020
  • and needing funding to stabilise cashflows directly as a result of the impact of COVID-19, as opposed to pre-existing financial difficulties.

The scheme is open and details can be found here on the Scottish Council for Voluntary Organisations (SCVO) website.

Arts Council England (England only)

The Arts Council England will be making £90 million available to National Portfolio Organisations (NPOs) to help alleviate the financial pressures for these organisations. Details of the announcement and the full list of NPOs can be found on the Arts Council England website.

Provision of food takeaway service

To support the food industry and help provide meals for people who need to self-isolate, the government has relaxed planning regulations to allow pubs and restaurants to start providing takeaways without a planning application.

School Closures/Key Workers

Schools are only open to vulnerable children and those with a parent identified as being critical to the Covid-19 response ie. a key worker.

If your work or an employee’s work is critical to the COVID-19 response, and the child or children cannot be kept at home then they will be prioritised for education provision. Guidance outlining the definition of a ‘Key Worker’ can be found on the Department of Education’s webpage.

It is worth noting that your employees may not fall into the key worker category, but they may have partners who do. Therefore, your employees may still be able to access schools or nurseries which could enable them to continue to work until further guidance is provided.

HMRC and Scottish Government Helplines

HMRC has a set up helplines providing practical help and advice to support businesses and self-employed people concerned about not being able to pay their tax as a result of COVID-19.

The main helpline number is 0800 0159 559.
Opening hours are Monday to Friday 8am to 8pm, and Saturday 8am to 4pm.
The helpline will not be available on Bank Holidays.

To increase capacity there is now an additional dedicated phone number 0800 024 1222.
Opening hours for the helpline will be 8am to 4pm Monday to Friday only.

The Scottish business helpline specific to COVID-19 is based at the existing Scottish Enterprise call centre in Clydebank.

The business helpline number is 0300 303 0660.
Opening hours are Monday to Friday 8.30am to 5.30pm.

Guidance for employees, employers and businesses

Government guidance on healthcare advice for employers and support for businesses can be found here on the GOV.UK website.

We know there are many challenges to face and we encourage you to contact us if you need support. Our phone numbers and email addresses remain as they were. For our latest business and office operations please read our previous update.  We cannot say too many times that we are here to help.

 

Information correct as of 30 March 2020

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