The following summarises some of the business guidance at the time of writing which is relevant to startups and their employees, and links to the official wording are provided for ease of reference. You can see the full text as well as finding a list of links to other useful websites by below.
All UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salaries for those that would otherwise have been laid off during this crisis. It is initially for a 3 month period but may be extended if necessary. It can be backdated to 1st March.
The scheme applies to employees who are kept on the payroll but have been asked to stop working (furloughed workers). HMRC will reimburse 80% of their wages, up to £2,500 per month. This is to safeguard workers from being made redundant.
You will need to notify your employees (furloughed workers) of this change. Changing the status of employees remain subject to existing employment law and, depending on the employment contract, may be subject to negotiation. Most employers make up for the additional 20% as changing a major term of employment contracts (such as salary reduction) requires the employees’ consent.
Are you covered by the Coronavirus Job Retention Scheme? Check it here:
Valued Added Tax (VAT) payments will be deferred for 3 months until 30th June 2020. If you are due a VAT refund it will be paid as normal. No application is needed to make use of this offer, but please bear in mind that you will need to cancel your direct debit if applicable.
For the self-employed, income tax payments due on the 31st July 2020 under the Self- Assessment system can be deferred until 31st January 2021.
The government will bring forward legislation to allow small and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19.
The government is allowing workers to carry over up to four weeks (not 5.6 weeks) annual leave into the next two leave years, where it is not reasonably practicable for them to take some, or all, of the holiday they are entitled to due to coronavirus. The balance of 1.6 weeks’ statutory leave will not be affected (although it can be carried over for up to a year by agreement under existing law).
The change is aimed at allowing businesses under particular pressure from the impacts of COVID-19 the flexibility to better manage their workforce while protecting workers’ right to paid holiday.
HMRC will introduce a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.
Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.
This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge.
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.
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 (SBRR), 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.
The temporary Coronavirus Business Interruption Loan Scheme supports SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5M and for up to 6 years.
The government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.
The government will provide lenders with a guarantee of 80% on each loan (subject to pre- lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The scheme will be delivered through commercial lenders, backed by the government-owned British Business Bank. There are 40 accredited lenders able to offer the scheme, including all the major banks.
Under the new COVID-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies.
This will support your company if it has been affected by a short-term funding squeeze, and allow you to finance your short-term liabilities.
All businesses and 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.
If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559.
Self-employed workers can apply for a grant worth 80% of their average monthly profits. The money – up to £2,500 a month – will be paid in a single lump sum. This can be back-dated to March but will not begin to arrive until June at the earliest. The grant is taxable and will not be available if taxable profits exceed £50,000. Unlike the employee scheme, the self-employed can continue to work as they receive support.
This does not apply to contractors, personal service companies or business owners who take their remuneration through dividends.
Most commercial insurance policies are unlikely to cover pandemics or unspecified notifiable diseases, such as COVID-19.
However, those businesses which have an insurance policy that covers government ordered closure and pandemics or government ordered closure and unspecified notifiable disease should be able to make a claim (subject to the terms and conditions of their policy).
Commercial tenants who cannot pay their rent because of COVID-19 will be protected from eviction.
These measures will mean no business will automatically forfeit their lease and be forced out of their premises if they miss a payment up until 30 June.
The material contained in this article is provided for general purposes only and does not constitute professional advice specific to your situation, and should not be relied upon. Appropriate advice should be sought for your specific circumstances and before any action is taken.
Euri is a multi-disciplined tax lawyer at Spencer West with a wide variety of legal and commercial experience. Having qualified as an English law solicitor, a Chartered Tax Advisor (CTA), a Chartered Management Accountant (ACMA) and with an MBA degree, Euri has gained depth and breadth of legal and business acumen, working at various organisations including a City law firm, Laytons LLP, Samsung and British Airways.