We are back but not in great circumstances.
Further to the Chancellor announcing a package of further help totalling more than £330bn. The key details are listed below. We are keeping a close eye on how the government will ensure the measures announced will be rolled out quickly, and what further measures will be needed.
Business Rates and Cash Grants
In England
• Expanding the 100% business rates holiday for the next 12 months to cover all retail, hospitality and
leisure businesses in England – not just those up to £51k Rateable Value.
• Providing a £25,000 cash grant to retail, hospitality and leisure businesses only, with a Rateable Value below £51k.
• Increasing the proposed £3,000 cash grant to 700,000 small businesses (those eligible for Small Business Rate Relief) to a £10,000 cash grant. We think this will also apply for those eligible for rural rates relief.
Cashflow and Lending
• Supporting liquidity amongst large firms, so they can pay their small suppliers, salaries and rents
• Supporting SMEs via banks to underwrite loans of up to £5m (formerly this was up to £1.2m); and with the first 6 months of that finance interest free (i.e. that the Government will pay for)
• The Development Bank of Wales has loan and equity funding available immediately to Welsh businesses. The Welsh Government is working closely with the Development Bank of Wales to consider additional support to help businesses through the Covid-19 impact.
• Confirming with lenders to provide mortgage payment holidays of at least 3 months for those facing finance issues as a result of coronavirus (there was later confirmation of future help for those that rent; but that remains unclear)
• Monday 23 March 2020.Timing-wise, the Government promises this will be available from
The UK government has advised there will be more help as the situation intensifies. Within draft emergency legislation now being published, the government is taking new legal powers to enable it to offer whatever further financial support is necessary to back business. We are awaiting further guidance and help for the self-employed and for those outside of the leisure, hospitality and retail sectors. As the virus accelerates we want to look at larger, more radical measures such as 3-6 month holidays on National Insurance Contributions, VAT, PAYE; changes to insolvency; and the suspension of paying rent, tax and utilities for the same time.
Statutory Sick Pay costs for your employees
The UK Government has agreed to cover the costs of 14 days of Statutory Sick Pay (SSP) per employee, for those off work due to coronavirus, in small and medium-sized firms. This may well come via HMRC BUT this is not yet confirmed. However, we do know:
• This will cover all companies up to 250 employees as at 28 February 2020
• This will come into effect from day one of sickness, rather than day four
• Employers will be able to reclaim this expenditure; this is a rebate – they are still working on the most appropriate repayment mechanism
• Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note
• This will kick in the day after the regulations on the extension of Statutory Sick Pay to those staying at home comes into force (This is expected to be announced soon)
Talk to Jobcentre Plus about benefits for the self-employed
The Government has suspended the ‘minimum income floor’ from Universal Credit (UC) for the self-
employed, so if you are in the system due to low income there is no longer an assumption you earn the equivalent of the living wage (which from next month this is £8.72 an hour, so for 35 hours a week that’s £305.20). UC is administered through Jobcentre Plus, which like the NHS is likely to switch to online/phone for consultations.
If you do not currently receive Universal Credit you can apply to do so. If you need income fast, you can apply for an advance on your first scheduled universal credit payment. You can apply for universal credit even if you are working – it is designed for people who are either out of work or on a low income. This includes someone who is self-employed and whose income has dropped as a result of this disruption. If you are self-employed and claiming Employment Support Allowance (ESA), and test positive for coronavirus or are in self-isolation, you will be able to claim from day one of a claim instead of waiting the usual seven days. You will also be able to apply for ESA if you have a disability or health condition that affects how much you can work.
More to follow…
info@acuaccounts.com or 02039079027
www.acuaccounts.com
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