Coronavirus - COVID-19. What support is available to businesses from the government?

The Coronavirus (COVID-19) pandemic has had an enormous impact on everybody in the UK. Whether you’re self-employed, a business owner, employee, contractor, or freelancer, you’ll be facing a whole range of personal and business challenges.

The government has announced unprecedented support to protect the UK economy as well as everyone’s health. We’ve put together this COVID-19 Hub to try to make it easier to navigate the constantly changing support available.

What COVID-19 support is available?

The situation is evolving rapidly and it can be hard to keep on top of everything, so we’ve arranged the support available into three main areas. The government have also published an online Coronavirus Business Support Finder tool.

  • Self-employed

    The Chancellor announced a range of measures to support the self-employed including the Self Employed Income Support Scheme (SEISS), which provides a taxable grant for many sole traders and partnerships. The grant was paid in a lump sum of up to £7,500 covering three months, with the first payments under the scheme being made in May 2020.

    An extension to the scheme has been announced with a second and final payment of up to £6,750 due to be made in August. We've published our Crunch guide to making a claim on the Self-Employed Income Support Scheme.

    Other, previously announced support includes deferral of Income Tax payments on account and VAT, changes in the eligibility criteria for Universal Credit and Employment Support Allowance, Coronavirus Bounce Back Loans as well as support for renters and delays to mortgage payments. See our article:

    How is the government supporting the UK’s self-employed through COVID-19?
  • Business

    There are a range of measures intended to support businesses including the Coronavirus Job Retention Scheme (CJRS), which has been open for online claims since Monday 20th April 2020, we've written a CJRS guide for employers and step-by-step walkthrough of the HMRC CJRS portal that explains how to get the information you need to make a claim.

    The CJRS is due to run until October 2020. However, important changes have been made to the scheme which means businesses will need to contribute towards CJRS payments from 1st August 2020, and the closure of the scheme to new entrants from 30th June 2020. Any new entrants to the scheme must be furloughed by 10th June 2020 to qualify for their first payment covering the three weeks to 30th June. Businesses will then have until 31st J‌ul‌y to make a claim for any periods of furlough between 1st March and 30th J‌un‌e – this applies to both employees furloughed for the first time and those previously furloughed and claimed for under the CJRS.

    The government has also introduced other measures including: Deferring VAT payments due between 20th March and 30th June 2020 until the end of the tax year, Business Rates relief, a three-month extension on filing Company Accounts, Business Interruption Loans, and Bounce Back Loans, as well as grant funding for many smaller businesses. We explain these further in our article:

    COVID-19 business support.
  • Employee

    The government has published advice on staying at home and which workers should continue to travel for ‘essential’ roles. Enhanced Statutory Sick Pay has been announced for those who are ill or self-isolating. It’s hoped that the announced Coronavirus Job Retention Scheme (CJRS) will mean that job losses are minimised as the government will cover 80% of employees wages up to £2,500 per month if employees are ‘furloughed’ to preserve jobs. The CJRS is also available to limited company directors who are paid a PAYE salary through their limited company. There has also been support announced for homeowners and renters.

    Read more about support if you’re an employee.

Your COVID-19 Questions answered

What support is available for limited company directors?

The two main government schemes are the Coronavirus Job Retention Scheme (CJRS), and the Self-employment Income Support Scheme (SEISS). The SEISS is not available to directors of companies.

Your business may be able to access a loan through either the Coronavirus Bounce Back Loan Scheme or the Coronavirus Business Interruption Loan Scheme.

HMRC has said owner-managed businesses can make a claim from the Coronavirus Job Retention Scheme (CJRS), effectively they will be furloughing themselves. The employee (director) cannot undertake any income generating work for their business but can continue to run the business from a statutory perspective, for example preparing its accounts and returns.

The scheme covers 80% of the PAYE salary of a limited company director up to a maximum of £2,500 but does not cover any dividends that may usually be taken. The government is urging employers to make up the residual 20% PAYE amount. In addition, the government will pay Employers National Insurance and the minimum pension amount for a furloughed employee.

The scheme will cover claims for wages (salary) from 1st March 2020 until at least the end of October 2020. From August onwards some furloughed employees will be able to go back to work part time, the government will expect employers to share some of the costs once this happens. Details will be announced on these changes by the end of May.

We have prepared a guide for employers to help you submit a CJRS claim along with a step-by-step walkthrough of the HMRC CJRS portal Coronavirus Job Retention Scheme - Guide for employers.

HMRC’s online portal to accept claims opened on Monday 20th April 2020. HMRC has also published an online calculator to help you with your claim.

If you need Crunch to submit your claim, we won’t be able to submit a claim as quickly as you can yourself. If you’re a Crunch client and you want us to submit a CJRS claim for you, we can send you details on the service, please contact your client managers. Our fees are among the lowest across UK Accountancy Practices.

The government have also published an online Coronavirus Business Support Finder tool.

How does the Self Employed Income Support Scheme work?

The online service went live on Wednesday 13th May 2020, with payments due to reach bank accounts by 25th May, or six working days after the claim is made.

There’s an online checker now available which will let taxpayers check their eligibility for themselves, as well as giving them a date on which they can apply. You will need your unique taxpayer reference (UTR) and National Insurance number and should ensure these details are up-to-date in your government gateway account.

Please note, tax agents or advisors such as Crunch cannot make a claim on your behalf. We have prepared this guide to the SEISS to help you understand whether you may be eligible for a payment from the scheme and to help you through the application process based on guidance published by HMRC.

How does the Coronavirus Bounce Back Loan Scheme work?

We have information available in our Crunch Guide to the Coronavirus Bounce Back Loan Scheme article.

On 27th April the Chancellor announced a new Coronavirus Bounce Back Loan Scheme. The scheme is targeted at small and medium-sized UK Businesses who have been negatively affected by the coronavirus pandemic. The scheme should make it easier for smaller businesses to access a loan of between £2,000 and £50,000 to be paid back over up to six years.

The scheme is open to Sole Traders and Limited Companies who will need to apply for the loan themselves. Crunch cannot apply for a loan on a business’s behalf.

The Government will guarantee 100% of the loans and there will be no fees or interest in the first 12 months, and have an interest rate of just 2.5% for the remaining period of the loan. The loans should be easier to access for many smaller businesses who were struggling to get a loan under the Coronavirus Business Interruption Loan Scheme (CBILS).

Businesses cannot apply if they are already claiming under CBILS, but up to 4th November 2020 they can transfer CBILS loans of up to £50,000 to this new scheme if they would prefer. If a business was classed as an “undertaking in difficulty” as of 31st December 2019 then they will not be eligible for a Bounce Back Loan.

How can I make a claim on CJRS for myself as a director or my employees?

HMRC launched its online claim service and portal for the Coronavirus Job Retention Scheme on 20th April 2020. At launch, it was planned to run for four months from 1st March to 30th June 2020. On 12th May the Chancellor Rishi Sunak announced a four-month extension to the 31st October 2020.

Details around the extension and the proposed increased flexibility that would allow furloughed employers to return to work part-time from August 2020 onwards, whilst seeing their employers share the costs of the scheme, will be announced before the end of May. We will update our CJRS guide as soon as further detail is available.

Please note, the only way to make a claim is online using HMRC’s portal. To avoid delays we strongly recommend you submit claims yourself.

We recommend you refer to HMRC’s guidance on how to work out 80% of your employees' wages to claim and its online calculator to help calculate your claim amount.

We recommend you make a claim every month the scheme is operational. The minimum furlough period is three weeks and you can only make one claim every three weeks.

HMRC has published a step by step guide which we have used as part of our Coronavirus Job Retention Scheme - Guide for employers and CJRS guide for employers and step-by-step walkthrough of the HMRC CJRS portal.

The service is simple to use and any support you need is available on GOV.UK - this includes help with calculating the amount you can claim (see above links).

The service is designed to be 'self-serve’ and HMRC has said claims will be paid within six working days. If you need Crunch to submit your claim, we won’t be able to submit a claim as quickly as you can yourself.

If you would like to Crunch to make a submission on your behalf, we are able to do this. While you will need to pay for the service, we can assure you our fees are among the lowest across UK accountancy Practices. Contact your client managers for more information about the service.

To avoid delays, we strongly recommend you submit your claims yourself.

HMRC cannot answer any queries from your employees – they will need to raise these with you, as their employer, directly.

Our CJRS guide for employers provides all the information you will need and instructions on how to make a claim. Please note the guide will be updated as more information is published by HMRC.

I have been taking PAYE salary as a director and want to know if my business can place me on furlough?

HMRC have confirmed that the Coronavirus Job Retention Scheme (CJRS) does cover ‘office holders’ including salaried limited company directors and salaried individuals who are directors of their own personal service company. It covers up to 80% of PAYE salary up to a maximum of £2,500 per month - there is no cover for any income from dividends.

The furloughed employee (director) cannot undertake any income-generating work for their business but can continue to run the business from a statutory perspective, for example preparing its accounts and returns.

We have produced a Coronavirus Job Retention Scheme Guide For Employers with detailed information on how to access the scheme, calculate and submit a claim, this includes a screen-by-screen walkthrough of the steps involved in using the HMRC CJRS system.

What grants and protection do I have as a Director and Employee?

Businesses may be entitled to access the Business Interruption Loan Scheme or the Cornavirus Bounce Back Loans Scheme which may be easier to access for smaller businesses.

Limited company directors who are paid a PAYE salary are able to access the Coronavirus Job Retention Scheme, we've written a guide for employers making a claim on the CJRS scheme.

We have a table with details of the other support available in our Coronavirus Knowledge article and you can also use the government’s online Coronavirus Business Support Finder tool.

What should I do if I have employees?

If you are not able to keep paying them you should be able to get support from the government through the Coronavirus Job Retention Scheme (CJRS), which will mean that if you make them a ‘furloughed employee’ the government will cover up to 80% of their salary up to a maximum of £2,500 per month.

The government is urging employers to make up the residual 20% PAYE amount. In addition, the government will pay Employers National Insurance and the minimum pension amount for a furloughed employee.

The Coronavirus Job Retention Scheme (CJRS) service launched on Monday 20th April 2020, we've written a CJRS guide for employers that explains how to get the information you need to make a claim.

What should I do about my VAT bill?

The government has announced that VAT Bills are being deferred. You should continue to file your VAT return, but you do not need to make a payment. If you’re a Crunch client we have further information on how to manage the new VAT process in your Crunch account.

Is there a deferral period for Income Tax payments?

Yes, the government has announced that the Payment on Account Income Tax payment (due on the 31st July 2020 for most people who complete a Self Assessment) will be deferred to 31st January 2021.

Can we defer Corporation Tax payments?

There’s been no specific announcement from the government relating to the deferral of Corporation Tax payments. However you may be able to enter into a ‘Time to Pay’ agreement with HMRC. You can find out more about this service on the government’s Business Support website.

What support is there for sole traders?

The government announced a Self-employment Income Support Scheme (SEISS), which means that for sole traders who have submitted at least their Self Assessment for the tax year 2018/19, should receive support from the government. This would be a taxable grant of up to 80% of trading profits where these profits are less than £50,000 in 2018/19 or less than £50,000 averaged over the last three tax years. Further details in our COVID-19 support for sole traders article.

A maximum of £2,500 per month will be paid for three months initially. A lump sum payment is expected to be made and the scheme opened for claims on 13th May 2020. HMRC will contact those eligible directly and invite them to apply online, or you can go online to check your eligibility and see when you can claim.

We've published our Crunch guide to making a claim on the Self-Employed Income Support Scheme, this includes information on how to check if you're eligible.

You may also may be entitled to access the Business Interruption Loan Scheme or the Cornavirus Bounce Back Loans Scheme which may be easier to access for smaller businesses.

Is there any support for new sole traders?

The government has said that the Self-employment Income Support Scheme (SEISS) will not cover people who have not yet submitted their first Self Assessment. If you’re not eligible for support under SEISS, there may still be other support available to you such as Universal Credit and other benefits. You may also be eligible for help with rent or mortgage payments, and possibly support for your Council Tax.

You may be able to apply for the Coronavirus Bounce Back Loan Scheme – you can use the government’s Business Support Finder to check what support is available to you.

If you are based in Scotland and you are newly self-employed meaning you don’t qualify for the SEISS you may be eligible for a grant under the Newly Self-Employed Hardship Fund there are also two other schemes run by the Scottish government, the Pivotal Enterprise Resilience Fund and the Creative or Tourism and Hospitality Enterprises Hardship Fund. There is a Scottish government business support website with all the information on funding sources available.

If I have a contract postponed or cancelled, what support is there?

If you’re a limited company director, you can access the Coronavirus Job Retention Scheme (CJRS), however, the support is restricted to just the PAYE salary of directors of limited companies and not any dividends they have taken.

If your business claims on this scheme, its employees, including you, will be ‘furloughed’ and will not be able to carry out any work for the company. We’ve written a guide to making a claim on the Coronavirus Job Retention Scheme.

If possible, it would be best to try to find a new contract.

Your Business may also be entitled to access the Business Interruption Loan Scheme if you believe your business meets the government’s criteria. The Cornavirus Bounce Back Loans Scheme may be easier to access for smaller businesses or sole traders.

You can use the government’s Business Support Finder to check what support is available to you.

If you’re an agency worker or work through an umbrella company you can be furloughed - these workers should contact the agency (or umbrella company) who should be able to help.

What business expenses can I claim whilst from working from home? Are items like food and additional equipment still ok?

The government has not announced any changes to allowable expenses.

It’s unlikely that food will be allowable while you are working from home.

There are a number of items you are able to claim - we have a Knowledge article on What you can claim when working from home.

If you’re furloughed as a limited company director it is unlikely you could continue to claim many expenses other than accountancy or statutory filing fees as you are not allowed to carry out any income generating work for your limited company whilst furloughed.

Is there any compensation scheme for employees that cannot come to work because of travel restrictions, flight cancellations, or not being able to travel?

There’s nothing specifically mentioned about overseas flight cancellations.

If an employee cannot travel to work because they are ill or self-isolating then the government will cover Statutory Sick Pay for employees for up to two weeks, starting on the first day of sickness.

If you have employees who are unable to work due to the COVID-19 crisis, you may be able to put them ‘on furlough’ and have up to 80% of their wages covered by the government through the Coronavirus Job Retention Scheme.

They will not be able to carry out any work for the company while on furlough. We’ve written a guide to making a claim on the Coronavirus Job Retention Scheme.

Can someone currently under private or public IR35 be furloughed? Who would be doing the furloughing, and what would the 80% be based on?

There is an important distinction between public sector and private sector IR35.

For public sector IR35, the word ‘furlough’ is not used. If contractors are working in the public sector on an assignment which is inside IR35, the end-client is responsible for employment taxes and the following applies:

  • If contractors are absent from work due to COVID-19, they are to be paid 80% (maximum £2500) of their gross pay per month for at least 3 months, backdated to 1 March 2020.

If contractors cannot attend work because they need to arrange childcare while schools are closed, they are entitled to be paid up to 7 working days whilst they make arrangements for childcare.

For private sector IR35, different rules apply. It is the PSC which remains responsible for assessing the IR35 status of an assignment and employment taxes. It will be for the PSC to furlough their own director/worker on the basis as agreed for sole directors at 80% of the salary taken from their PSC.

Is there any support for agency workers or contractors working through an Umbrella Company?

The government has confirmed that if you’re an agency worker or work through an umbrella company you are also able to be furloughed on the Coronavirus Job Retention Scheme - these workers should contact the agency (or umbrella company) who should be able to help.

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Need support with your business through COVID-19?

If you’re a Crunch client already then please speak with your client managers. If not then call us on 0333 311 0800 or complete the form to find out more about how we can help you through the COVID-19 crisis.