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Find out more about deferring your VAT payments here.
The Chancellor has announced a new loans measure, known as the Bounce Back Loans Scheme (BBLS), which will allow small businesses to borrow up to 25 per cent of their turnover, up to a maximum of £50,000.
The BBLS will be 100% backed by a Government guarantee, unlike the Coronavirus Business Interruption Loan scheme (CBILS) and will offer an interest-free period for 12 months.
Businesses will be able to apply online via a short and simple two-page self-certification form and because the loan is entirely Government-backed it is hoped that lenders will have the confidence to offer finance without the lengthy and complex red tape associated with CBILS and other loan schemes.
Importantly, firms applying for the new loans will only have to prove that they were viable in the past before the crisis, not that they will remain viable after the crisis. This future viability criteria has been a major issue with CBILS.
There remains some concern that banks will still wish to assess the latest financials through a ‘cash available to service debt’ calculation. Where there isn’t sufficient cash to service the debt then there are fears that the loan may still not be granted despite the Government guarantee. Further clarification is expected soon.
The scheme has been designed specifically for small firms, including sole traders, that require ‘vital cash injections’ to help them operate during these challenging times. It will launch for applications from 9am on Monday 4 May and the loans will be provided through a network of accredited lenders.
The Government said that loans will be “advanced as quickly as possible” and that they will “agree a low standardised level of interest for the remaining period of the loan.”
We will keep you up to date on the application process once more is known.
A range of organisations, including the Institute of Chartered Accountants in England and Wales (ICAEW), have released fresh warnings about the risk of cyber-attacks during this already challenging period.
Reports are being released that suggest that cybercriminals are targeting businesses via the use of phishing emails that seem to be from HMRevenue &Customs (HMRC) offering support to businesses.
According to the ICAEW, one such email, proclaiming to be from HMRC chief executive, Jim Harra read: “Dear customer, we wrote to you last week to help you prepare to make a claim through the Coronavirus Job Retention Scheme. We are now writing to tell you how to access the COVID-19 relief.
“You will need to tell us which UK bank account you want the grant to be paid into, in order to ensure funds are paid as quickly as possible to you.”
The rise in fraud and scams as a result of COVID-19 has been dramatic. The National Cyber Security Centre (NCSC) is understood to have already removed more than 2,000 online coronavirus scams over the last month, including 471 fake online shops selling fraudulent coronavirus-related items, 555 malware distribution sites set up to inflict significant damage to visitors and 832 advance-fee frauds.
Fraud is of considerable concern to HMRC and it has asked that people forward suspicious emails claiming to be from HMRC to email@example.com or by texting 60599.
The impact of the coronavirus outbreak on incomes in the most affected sectors has the potential to have a knock-on effecton eligibility for Child Benefit and the High-Income Child Benefit Charge.
The High Income Child Benefit Charge was introduced by the Government to recoup some or all of the Child Benefit received by households in which at least one person earns more than £50,000 a year and either they or their partner or spouse receives Child Benefit.
The charge is set so that Child Benefit is gradually cancelled out between £50,000 and £60,000, with people earning above this rate effectively having their child benefit negated entirely.
However, it has been possible to opt-out of Child Benefit in order not to pay the High Income Child Benefit Charge.
Anyone in this position, whose income has fallen below £50,000 may wish to apply for Child Benefit.
However, people who have opted to pay the High-Income Child Benefit Charge, while still receiving Child Benefit, face a more complicated situation. In these circumstances, their income must fall below £50,000 for a whole tax year before they can stop paying the charge.
HMRevenue &Customs (HMRC) is expected to release a new online service to help companies reclaim Statutory Sick Pay (SSP) that has been paid as a result of COVID—19.
As such, it has updated its guidance on its website to help businesses prepare to reclaim SSP.
The Coronavirus Statutory Sick Pay Rebate Scheme will repay employers the current rate of SSP (£95.85 per week) that they have paid to current or former employees for periods of sickness starting on or after 13 March 2020.
Some employers may be contractually obliged to pay more than the current rate of SSP through top-up payments, but HMRC has confirmed that the scheme will only cover the current statutory rate.
The reimbursement scheme covers up to two-weeks of SSP starting from the first day of sickness if an employee is/was unable to work because they either have/had coronavirus, are shielding in line with guidance or are self-isolating at home. Employees do not have to have provided a doctor’s fit note for you to make a claim.
To be eligible for a repayment of SSP, an employer has to:
The scheme covers all types of employment, including agency workers and those on flexible or zero-hour contracts.
Connected companies and charities can also use the scheme if their total combined number of PAYE employees was fewer than 250 on or before 28 February 2020.
To make a claim an employer must keep a record of:
Businesses must keep these records for at least three years following their claim.
In response to the COVID-19 outbreak, the Government is making temporary changes to customs policy and authorisations.
These amendments to existing policies are most likely to affect businesses authorised, or applying to be authorised by customs,thatuse temporary storage or customs special procedures such as inward processing or customs warehousing, operate using simplified declarations such as an entry in your records or if you have a guarantee.
The rules change will also affect those operating as, or who are reliant, on an Authorised Economic Operator.
Businesses that are no longer able to comply with the conditions of their customs authorisations because of measures to combat the pandemic must seek permission from their supervising office within HM Revenue & Customs (HMRC) or the Border Force to temporarily vary the conditions of their authorisation.
You can apply to temporarily vary the following conditions of your customs approvals:
These conditions can be varied by emailing your supervising office with the subject ‘COVID-19 customs easement request’.
HMRC has said that applications will be looked at on a case by case basis and may be declined if there are concerns about the impact on customs controls.
If you are applying for customs authorisations HMRC has confirmed that you can temporarily send your postal customs authorisation application by email here. However, you must send a postal application form with an original signature once the coronavirus (COVID-19) controls are lifted.
Customs authorisations used to bring supplies of food, medical and pharmaceutical goods will be given priority during this period and fast-tracked wherever possible.
If we are unable to renew your customs authorisation that is due to expire, HMRC will automatically extend your authorisation to ensure you have continuity and let you know that the extension has been granted.
Book your free coronavirus test online
For the Government to begin the process of lifting the lockdown they need to undertake more tests to understand what proportion of the UK public is immune and to ensure those most at risk can be protected.
As such, the Health Secretary Matt Hancock has announced that from 24 April 2020 essential workers, such as those in the food distribution chain and care workers, can apply to be tested online. Those who qualify as essential workers will be based on criteria similar to those used for deciding whose children can still attend school.
A scheme for employers to register for tests to ensure their staff are safe went live as of the 23 April, but essential workers and their relatives will be able to apply themselves as well from Friday.
The entire process will be free and results will be delivered via text. Those workers who cannot go online will be able to apply through their employer.
The tests will be conducted at more than 30 test sites across the UK and the Government hopes to soon be conducting 100,000 tests a day. Home testing kits will also be introduced, as well as mobile testing sites.
Details of how testing can be booked can be found by clicking here.
It is common for directors of limited companies, who are also shareholders, to receive much of their income in the form of dividends instead of through a salary, owing to the tax benefits this can entail.
However, there are strict rules governing the circumstances in which a company may pay a dividend to its shareholders, some of which could affect directors’ income.
Companies must have sufficient profits to pay the dividend at the time it is paid, so directors must be confident that the firm is currently in profit and that these profits are equal to or greater than the amount of the payment.
Directors should also ensure that provisions for future tax liabilities have been considered.
Another issue that could arise in relation to dividends during the Coronavirus outbreak is that of whether a previously agreed dividend payment can be cancelled owing to any change in a company’s financial position.
Whether a board can do this with ease will depend on the type of dividend agreed upon. An interim dividend is decided on and announced by directors, which only becomes a binding obligation to shareholders of a company once it is paid.
A final dividend is one which is recommended by directors to shareholders that is approved by shareholders via an ordinary resolution and which is binding at the point of approval.
This latter classification of dividend may be more difficult to cancel and could be more likely to lead to action through the courts or other legal disputes, which is something businesses should be aware of.
Contact us for advice on dividend payments during the Coronavirus outbreak, please contact us today.
Some sectors that receive payments from the Government as well as from private sources have seen their access to the Coronavirus Job Retention Scheme (CJRS) restricted.
The CJRS allows employers to retain employees on the PAYE Payroll who are not carrying out work for them by placing them on furlough and to claim a grant of 80 per cent of a furloughed employee’s usual pay up to a limit of £2,500 a month.
Employers can also claim for employer National Insurance Contributions (NICS) and minimum employer auto-enrolment pension contributions.
Furloughed workers must not carry out any work for their employers or for connected organisations.
However, the Department for Education (DfE) has now issued guidance to education providers, including private day nurseries, informing them that they should take into account any public funding they are still receiving when working out how much to claim from the CJRS.
The guidance states that private nurseries can only apply to the scheme where it meets a number of specific conditions, including that “the grant from the Coronavirus Job Retention Scheme would not duplicate other public grants received, and would not lead to financial reserves being created.”
It adds: “…an early years provider can access the CJRS to cover up to the proportion of its paybill which could be considered to have been paid for from that provider’s private income. This would typically be income received from ‘parent-paid’ hours, and excludes all income from the government’s free entitlements (or ‘DSG income’) for all age groups.”
Meanwhile, the Department for Culture, Media and Sport (DCMS), has been told by the Treasury that organisations in the heritage sector that receive public funding and which access the CJRS should not top-up the salaries of furloughed employees.
Find out if you are eligible and how to obtain the taxable grant worth 80 per cent of your taxable trading profits.
Click here to download our PDF guidance.