GUIDANCE FOR OUR CLIENTS – CORONAVIRUS (COVID-19) – UPDATED 4 MAY 2020

As Marvin Gaye once asked: “What’s going on?”

Well, here is our latest news covering all of the measures in place so far, but we would like to highlight three important updates:

  • Employer support: the CJRS claims portal is now open, and we are able to deal with this for you.
  • Self-employed: The SEISS portal opens on 15 May, but you need to register for an online account.
  • Business loans: There is a new scheme open with 100% government backing for loans up to £50k.

Full details are given below. Note that all grants are taxable.

  • Self-employed (and members of partnerships)
    • In mid-May, HMRC will to invite claims from those deemed eligible, and they aim to make payments in early June. Full details are here: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme#claim
    • You will need to register for a Personal Tax Account and online login (which should take 5-10 minutes): https://www.gov.uk/personal-tax-account
    • Agents are (currently) excluded from the online service, but we can check the claim figures, and talk you through the process over the phone.
    • If you can’t use the online route, HMRC will advise an alternative claim method in due course, but it will take longer to get your grant.
    • HMRC will not contact via email or text. Beware of scams!
    • You must have been self-employed in 2018/19 (and filed your tax return by 23 April 2020), remain so now, and intend to continue into 2020/21. You must have been adversely affected by Covid-19.
    • Self-employed with profits under £50k will qualify, as long as self-employment income is more than half of your total income in either: (a) 2018/19 year, or (b) on average for the three years to 2018/19. This may be useful if you had fluctuating profits.
    • For self-employment starting after 6 April 2016, there will be a pro-rata adjustment.
    • The grants are similar to the Job Retention Scheme (see below) for those on PAYE, i.e. 80% of profits, with a maximum of £2500.
  • Employment Support (Job Retention Scheme)
    • The claim portal is open, and we are processing client claims. If you would like us to deal with this for you, let us know. Claims are being paid within about a week.
    • You can pay staff, and reclaim, 80% of their normal wages, to a maximum of £2500, whilst furloughing them (essentially just telling them not to work).
    • This applies to all staff, including part-time, zero hours, casual workers and directors (as long as they do no revenue generating work) who were employed as at 29 February. The later date announced (19 March) is a red-herring as most employers would not have filed their March returns online with HMRC at that point.
    • The grants include employer national insurance and basic 3% auto-enrolment pension contributions.
    • Minimum furlough period is three weeks.
    • If you decide to pay some staff, but not all, more than 80% you need to be able to justify this. Use the same criteria as you would for any standard lay-offs or redundancies.
    • You should obtain employee agreement to furloughing, ideally in writing or via email, and may wish to obtain legal advice. For directors, a board minute is required, which we can draft.
    • You should probably hold off any possible redundancies, as you would not get any financial support for those payments.
    • The current scheme runs until 30 June, but we expect an amended version to be announced in due course, perhaps allowing some workers to return part-time, while still getting support.
  • Loan schemes
    • There is a new Bounce Back Loan scheme, offering loans up to £50k, with 100% government backing. All major lenders should offer these, so contact your bank for information.
    • https://www.gov.uk/government/news/new-bounce-back-loans-to-launch-today
    • The new loans are self-certifiable and, once agreed, funds should be available next day.
    • The earlier scheme (CBILS), with 80% government guarantee, remains open for larger sums.
    • Mortgage lenders have been told to view requests for three month repayment holidays sympathetically.
  • VAT
    • HMRC has agreed to defer VAT for one quarter (anything due between 20 March 2020 and 30 June 2020) until March 2021.
    • HMRC cannot stop direct debits so you need to contact your bank to cancel them.
    • VAT repayments will be made in the usual manner.
    • You must still submit VAT returns on time, or the usual penalties will apply.
  • Corporation Tax
    • This isn’t due until nine months after the last accounts year-end, but you may wish to would consider not paying it for now.
    • You would need to contact the Time To Pay helpline.
  • Personal income tax
    • The 31 July 2020 instalment may be deferred, without interest or penalty, until 31 January 2021.
  • Rates
    • Grants are now being paid out so, if you have not heard from the local authority already, you need to set up your online account with them and make an application.
    • If you pay little or no rates, due to Small Business Rate Relief (SBRR), there is a £10k grant available.
    • Those in retail, hospitality and leisure will have to pay no rates, and may be able to claim a £25k grant for larger premises (rateable value £15k to £51k).
  • Rent
    • You should contact your landlord to discuss a rent holiday.
    • Eviction of non-paying tenants is not really an option for most landlords, as they wouldn’t be able to re-let the premises anyway, and would probably rather have a reliable tenant at the end of this.
    • For landlords on the receiving end of requests, you may be able to obtain mortgage repayment holidays for three months.
  • Discretionary spending
    • This could be the time to think about stopping your own pension payments, but you should discuss this with your financial advisers.
  • Insurance
    • Unfortunately, most policies simply do not cover pandemics, but you should check the policy wording.
    • Travel insurance policies are unlikely to cover Covid19 for the foreseeable future, even for “essential” trips. 

Best wishes, and stay safe and healthy

Andy, Simon, Jo, Hannah and the team

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