The Chancellor of the Exchequer, Rishi Sunak, has set out a package of measures to support public services, people and businesses through the disruption caused by the COVID-19 virus.
I am sure most people are already aware, but the government has advised anybody with symptoms of coronavirus infection (COVID-19), however mild, stay at home for 7 days from when symptoms started. And if you live with others and you are the first in the household to have symptoms of coronavirus, then you must stay at home for 7 days, but all other household members who remain well must stay at home and not leave the house for 14 days. The 14-day period starts from the day when the first person in the house became ill.
Statutory Sick pay
From 13th March 2020 Statutory Sick Pay (SSP) at £94.25 per week will be paid from day 1, rather than day 4, of your absence from work if you are absent from work due to sickness or need to stay at home due to COVID-19. This includes people who are absent due to symptoms of COVID-19 as well as others who live in the same household and therefore have been advised to do a household quarantine.
Small-and medium-sized businesses (with fewer than 250 employees) will be able to reclaim SSP paid for sickness absence due to COVID-19, up to 2 weeks per eligible employee.
The mechanism for SSP to be reclaimed does not yet exist, the government has stated that further details will be provided in due course once the legislation has passed.
Business rates holiday
The government will introduce a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.
The business rate holiday should be applied automatically by your local authority, there is no need to apply for this. The local authority may need to re-issue your business rates bill and have committed to do this as soon as possible.
You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator.
Cash grants for retail, hospitality and leisure businesses
The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.
For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000. For businesses in these sectors with a rateable value of between £15,001 and £51,000, they will receive a grant of £25,000.
There is no need to apply for these grants, your local authority will write to you if are eligible to receive this grant.
Support for businesses that pay little or no business rates
The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.
Coronavirus Job Retention Scheme
The government has introduced a Coronavirus Job Retention Scheme. Under this scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off.
In order to access this funding, you will need to:
- designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
- submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)
HMRC will then reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.
VAT and Income Tax payment deferral
HMRC will defer VAT payments for 3 months; starting from 20 March 2020 and running until 30 June 2020.
All VAT registered businesses are eligible to this; and it is not necessary to apply to take advantage of this. You will be given until the end of 2020/21 tax year to settle the VAT liability that accumulates during the deferral period. VAT refunds will be processed in the normal timeframes.
If you’re self-employed (as-in an unincorporated business owner), income tax payments on account due on 31st July 2020 under the Self-Assessment system will be deferred until 31st January 2021.
It is not necessary to apply to take advantage of this; HMRC will not apply any interest or penalties to payments during the deferral period.
Time to Pay service
Any other businesses owner or self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.
These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
Coronavirus Business Interruption Loan Scheme
A new temporary Coronavirus Business Interruption Loan Scheme will launch this week to help SMEs access debt finance. These loans will be arranged directly with a bank, but the government will provide lenders with a guarantee of 80% on each loan.
Additionally, the government will cover the interest accrued for the first 12 months of the loan, making it interest-free to the borrower for that period.
The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website. In spite of the government backing, these are commercial loans – applications will be made directly to your chosen lender and will likely require a detailed business plan and access to historical financial information.
If you’re self-employed
If you are not eligible for SSP (such as if you are self-employed) – and you have COVID-19 or are advised to stay at home, you can make a claim for Universal Credit or new style Employment and Support Allowance.
If you are eligible for new style Employment and Support Allowance, it will now be payable from day 1 of sickness, rather than day 8, if you have COVID-19 or are advised to stay at home. You are able to claim Universal Credit, providing you meet the usual eligibility criteria.
To support you with the economic impact of the outbreak, and allow you to follow government guidance on self-isolation and social distancing, from 6 April the requirements of the Minimum Income Floor will be temporarily relaxed. This change will apply to all Universal Credit claimants and will last for the duration of the outbreak.
New claimants will not need to attend the jobcentre to demonstrate gainful self-employment.