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What help is available for small businesses, gig workers, and the self-employed affected by coronavirus (COVID-19)?

Posted by Jake Smith on Jun 15th, 2020 | Running a business

Covid-10 | What help is there for small businesses, gig workers, and the self-employed with coronavirus (COVID-19)? | Crunch

Announcements by the government (jump to the relevant section)

HMRC advice about scams

With the wide range of support available from the government, HMRC is asking everyone to be vigilant about potential scams. HMRC is aware many scams can appear to be authentic.

If you’re unsure whether any contact you receive from HMRC is genuine, please go to the government’s website GOV.UK and search ‘scams’.  You’ll find information on how to recognise genuine HMRC contact. You can also forward suspicious emails claiming to be from HMRC to phishing@hmrc.gov.uk and texts to 60599.

  • 17th June The government’s scheme to defer VAT payments ends on 30th June. You will need to restart your direct debit to pay VAT due
  • 12th June Updated guidance to claim for wages through the Coronavirus Job Retention Scheme
  • 12th June How to claim a further grant under the Self-Employed Income Support Scheme (SEISS)
  • 29th May Important changes to the Coronavirus Job Retention Scheme (CJRS) – including closure of the scheme to new entrants from 30th June
  • 29th May Extension of the Self-Employment Income Support Scheme (SEISS) including closing date of 13th July for applications for initial grants
  • 26th May 2020 Claim back Statutory Sick Pay scheme goes live.
  • 19th May 2020 Coronavirus Statutory Sick Pay Rebate Scheme scheme for small and medium-sized businesses to launch 26th May
  • 12th May 2020 Coronavirus Job Retention Scheme extended for a further 4 months, with new flexibility promised from August onwards
  • 6th May 2020 Newly Self-Employed Hardship Fund for Scottish residents and Crunch guide to the UK’s Self-Employment Income Support Scheme
  • 4th May 2020 Self-employment Income Support Scheme eligibility checker launched
  • 27th April 2020 Coronavirus Bounce Back Loan scheme launched – loans of up to £50,000 to small and medium-sized UK businesses,  interest and fee-free for the first 12-months applications accepted from 4th May.
  • 20th April 2020 Coronavirus Job Retention Scheme (CJRS) opens for first claims. We’ve produced a CJRS guide for employers. The government has also launched an online business coronavirus support finder tool to find all the support available to your business
  • 17th April 2020 Coronavirus Job Retention Scheme to be extended by a month so it will now run from 1st March to at least the end of June 2020
  • 16th April 2020 Additional Companies House support for businesses hit by COVID-19
  • 15th April 2020 Important change to the Coronavirus Job Retention Scheme for eligibility
  • 8th April 2020 Coronavirus Job Retention Scheme to be launched 20th April
  • 4th April 2020 Confirmation that the Coronavirus Job Retention Scheme is available to limited company directors, including sole director,s to cover their PAYE salary
  • 28th March 2020 – Changes to insolvency rules to help companies trade
  • 26th March 2020  – Support for self-employed announced – taxable grant of up to 80% of trading profits capped at £2,500 per month
  • 25th March 2020 – three-month extension period to file company accounts, confirmation on some details of VAT deferral
  • 23rd March 2020 – Lockdown – details on how businesses are affected
  • 20th March 2020: (Job retention scheme, 80% employee wages promise, deferral of income tax and VAT payments, SSP relief and update to loan scheme)
  • 17th March 2020: (£330bn support package, Mortgage payment holiday, help for renters and Buy-to-Let landlords, changes to Statutory Sick Pay (SSP) for employees, and Employment Support Allowance and Universal credit changes)

You can use the government’s online coronavirus business support finder tool to find all the support available to your business. We’ve also produced the table below to summarise the support available.

 

Measure Targeted at: How to apply Status
Coronavirus Job Retention Scheme Employers.

Also covers PAYE earnings of limited company directors including sole directors of personal service companies, agency workers and agency workers working through an umbrella company.

Self-serve through HMRC online – see our CJRS guide for employers for details of how to prepare and submit your application. Online service available from 20th April 2020
Self-employment Income Support Scheme Self-employed (sole traders or partnerships only – not directors of limited companies) We have a Crunch guide to the SEISS explaining how it works and what you need to make a claim. You’re able to check your eligibility and make a claim onllne at Gov.uk. Online service launched 13th May 2020
Deferral of Self Assessment payment on account due on 31st July to 31st January 2021 Anyone with a self-assessment payment on account due on 31st July 2020 Applies automatically Live
VAT deferral until 30th June All UK businesses who are VAT registered Deferral applies between 20th March and 30th June – applies automatically Live
Additional time to pay your tax bills All UK businesses Contact HMRC Live
Suspension of wrongful trading rules to help companies trade All UK businesses TBC TBC
Small Business Grant Scheme £10,000 one-off grant Small businesses paying little or no business rates in England No application needed – eligible businesses to be contacted by their local authorities Live
Statutory Sick Pay Rebate UK small or medium-sized businesses employing fewer than 250 employees as of 28 February 2020. Check eligibility and apply online at gov.uk Scheme launched 26th May
Lending facility for larger firms Large UK businesses Apply via company banks Live
Business Interruption Loan Scheme UK businesses with turnover less than £45 million per year Apply via company bank or one of the 40 accredited finance providers Live
Coronavirus Bounce Back Loan Scheme This scheme will help small and medium-sized businesses affected by coronavirus (COVID-19) to apply for loans of up to £50,000. We have a Crunch guide to the Bounce Back Loan Scheme explaining how it works and what you need to apply. Scheme launched 4th May 2020
Support for retail, hospitality and leisure businesses that pay business rates Businesses based in England

in the retail, hospitality and/or leisure sector

Applies automatically for the 2020/21 tax year Live
Cash Grant for Retail, Hospitality and Leisure Property that has a rateable value of:

– up to £15,000 may be eligible for a grant of £10,000

– over £15,000 and less than £51,000 may be eligible for a grant of £25,000.

No application needed – eligible businesses in the retail, hospitality or leisure sector to be contacted by their local authorities Live
Support for nursery businesses that pay business rates Business rates holiday for nurseries in England for the 2020/21 tax year. No application needed – eligible nursery businesses to be contacted by their local authorities Live
Support for businesses in Scotland Measures specific to Scottish businesses Various in additional to UK wide measures Live
Support for businesses in Wales Measures specific to Welsh businesses Various in additional to UK wide measures Live
Support for businesses in Northern Ireland Measures specific to Northern Irish businesses Various in additional to UK wide measures Live
Three month extension period to file accounts with Companies House All UK companies Online – must apply before company statutory filing deadline for accounts Live

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The temporary changes made by the government to allow the deferral of VAT payments due between 20th March 2020 and 30th June 2020 are due to end on 30th June. This means you will need to restart your VAT direct debit and pay any VAT due from 1st July 2020 as normal. You have until 31st March 2021 to pay the amount of VAT you deferred.

Where a business paid its VAT liability to HMRC using a direct debit, we advised these should be stopped to ensure HMRC didn’t try to take a payment if you wished to defer.

We recommend you take action now to allow sufficient time to restart your  direct debit, you should do this at least three working days before you submit your VAT return. The Direct Debit payments are then usually collected 10 days after your VAT filing date.

You can only restart your direct debit for VAT Payments using your business Government Gateway account. Crunch cannot restart your direct debit on your behalf.

We have details on how to set up a VAT Direct Debit instruction in your HMRC VAT account.

Once your Direct Debit is set up , you’ll be able to pay VAT when it is due and settle any deferred amount by 31st March 2021.

If you’re struggling to pay your VAT bill on time, or you’re experiencing financial difficulties you can contact HMRC’s Time to Pay service.

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The government announced important changes to the CJRS on 29th May. The updated guidance, which was published by the government on 12th June, provides details on how the changes will affect any CJRS claim you make from 1st July. Importantly, from 1st August 2020, you will be asked to contribute towards the cost of your furloughed employees’ wages.

We provided information about these changes in an update we published on 29th May. We recommend you refer to this information before reading the following update.

What you need to do now:

  • read the information below to see how changes to the scheme impact you, using HMRC’s calculator to understand how much you’ll be able to claim
  • consider which employees you want to keep on full-time furlough and which employees will come back to work – on what hours – to agree arrangements with them as needed for your business.

What you need to do from July:

  • start your flexible furloughing of employees from 1‌‌st July onwards. You can decide the hours and shift patterns they work to suit the needs of your business – you’ll pay their wages for the time they’re in work and can apply for a CJRS grant to cover any of their usual hours they are still furloughed for. You can still keep employees on full furlough if you need to
  • claim for periods ending on or before 30‌‌th June, by 31‌‌st J‌ul‌y – this is the last date you can make those claims
  • claim for further furlough periods as needed – the first time you will be able to make a claim for days in July will be 1‌‌st July.

Summary of updated HMRC guidance for CJRS as at 12th June 2020

HMRC published information on 12th June to help you make a claim under the new rules. If you’ve previously used the scheme or already worked out how much you can claim, you can continue to claim for wages online.

The steps you will need to take to make a claim under the new rules are shown below.

Step 1: Check if you can claim on CJRS

You can claim for any employees you have furloughed if you have:

  • furloughed that employee for at least three consecutive weeks between 1st March and 30th June 2020
  • a UK PAYE scheme which started on or before 19th March 2020
    enrolled for PAYE online
  • submitted a report under HMRC’s Real Time Information (RTI) reporting system for that employee on or before 19th March 2020
  • a UK bank account.

For employees that meet the criteria above, the number of employees you claim for in any single claim period starting from 1st July cannot exceed the maximum number of employees you claimed for under any claim ending by 30th June.

For example, if you previously submitted three claims between 1st March and 30th June, in which the total number of employees furloughed in each respective claim was 3, 1 and 5 employees, then the maximum number of employees the employer could furlough in any single claim starting on or after 1st July would be 5 employees.

There are some exceptions explained in further guidance for employees returning from parental leave where this cap may not apply.

Step 2: Check which employees you can put on furlough

HMRC have published detailed guidance on how to check which employees you can put on furlough to use the CJRS.

You can only claim for furloughed employees that were employed on 19th March 2020 and who were on your PAYE payroll on or before 19th March 2020. This means a Real-Time Information (RTI) submission notifying payment in respect of that employee to HMRC must have been made on or before 19th March 2020.

From 1st July, employers can bring furloughed employees back to work for any amount of time and any work pattern, while still being able to claim CJRS grant for the hours not worked. From 1st July, only employees that you have successfully claimed a previous grant for will be eligible for more grants under the scheme. This means they must have previously been furloughed for at least three consecutive weeks taking place any time between 1st March and 30th June 2020.

For the minimum three consecutive week period to be completed by 30th June, the last day an employee could have started furlough for the first time was 10th June. This may differ if you have an employee returning from statutory parental leave.

If you made employees redundant or they stopped working for you on or after 28th February 2020

If you made employees redundant, or they stopped working for you on or after 28th February 2020, you would have been eligible to re-employ them and put them on furlough as long as you did this by 10th June. You can claim for their wages from the date on which you furloughed them, even if you did not re-employ them until after 19th March 2020. This applies as long as the employee was on your PAYE payroll as at 28th February 2020, which means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 28th February 2020.

If you made employees redundant or they stopped working for you on or after 19th March 2020

If you made employees redundant, or they stopped working for you on or after 19th March 2020, you would have been eligible to re-employ them and put them on furlough as long as you did this by 10th June. You can claim for their wages through the scheme from the date on which you furloughed them.

This applies as long as the employee was on your PAYE payroll on or before 19th March 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19th March 2020.

Step 3: Before calculating your claim

Before you calculate your claim, you will need to:

  • Decide the length of your claim period
  • Know what to include when calculating wages
  • Work out your employee’s usual hours and furloughed hours
  • Based on the above, calculate your claim.

This is a complex calculation and HMRC has published detailed guidance on the steps to take before calculating your claim using the CJRS.

Please also refer to the Crunch Coronavirus Job Retention Scheme – Guide for Employers on how to make a claim. Our guide includes some worked examples.

Step 4: Calculate how much you can claim

Before 1st July 2020, employees on furlough cannot undertake any work other than training. From 1st July, employers will:

  • only be able to claim for employees who have previously been furloughed for at least three consecutive weeks taking place any time between 1st March 2020 and 30th June
  • be able to flexibly furlough employees – this means you can bring your employees back to work for any amount of time, and any work pattern
  • still be able to claim the furlough grant for the hours your flexibly furloughed employees do not work, compared to the hours they would normally have worked in that period.

From 1st July, furloughed employees should continue to receive 80% of their wages up to £2,500 per month. However, the amount of grant paid by the government is gradually being reduced, with the employer paying Employer National Insurance Contributions (NICs), auto-enrolment pension contributions and part of the employees’ wages, as shown in the following table.

 

July August September October
Government pays
Employer NICs and pension contributions Yes No No No
Wages 80% up tp £2,500 80% up tp £2,500 70% up tp £2,500 60% up tp £2,500
Employer pays
Employer NICs and pension contributions No Yes Yes Yes
Wages Nil Nil 10% up to £312.50 20% up to £625
Employee receives 80% per month up to £2,500 per month

Employers can continue to top up employees’ wages above the minimum furlough pay amount but this is not mandatory. Employees must not work or provide any services for the business during hours which they are recorded as being on furlough, even if they receive a top-up wage.

HMRC CJRS calculator

HMRC’s CJRS calculator can currently be used to work out what you can claim for in a claim ending on or before 30th June. It can be used for most employees who are paid either regular or variable amounts each pay period (for example, weekly or monthly).

If you are claiming for an employee who is flexibly furloughed, you will need to work out their usual hours before you use the calculator.

Examples of how to calculate your employees’ wages, National Insurance contributions and pension contributions

HMRC has published examples of how to calculate your employees’ wages, National Insurance contributions and pension contributions. We recommend you review HMRC’s guidance to find an example which meets your company’s situation.

Step 5: Claim for your employees’ wages

You’ll need the Government Gateway user ID and password you got when you registered for PAYE online. If you do not finish your claim in one session, you can save a draft. You must complete your claim within seven days of starting it.

Use this link to the HMRC online system to make a claim.

Step 6: Reporting employees’ wages to HMRC when you’ve claimed

If you’ve claimed a grant through CJRS, you should check if you need to report payments on the PAYE Real Time Information system, as this will depend on whether you are using the grant to:

  • pay wages
  • reimburse wages that you’ve already paid.

HMRC has published guidance to follow on reporting employees’ wages to HMRC depending on your situation.

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Claim a further grant through the Self-Employment Income Support Scheme (SEISS)

The SEISS currently allows you to claim a taxable grant worth 80% of your average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total. Please read our previous article about making a claim on the SEISS.

If you’re eligible and your business has been adversely affected you must make your claim for the first grant on or before 13th July 2020.

The SEISS scheme is being extended. If you’re eligible for the second and final grant, and your business has been adversely affected on or after 14th July 2020 you’ll be able to make a claim in August 2020. The second grant is also a taxable grant and worth 70% of your average monthly trading profits, paid out in a single instalment covering a further 3 months’ worth of profits, and capped at £6,570 in total.

You can claim for the second grant even if you did not make a claim for the first grant. Find out more about the extension to the scheme.

You can check online to find out if you’re eligible to make a claim for the first grant. Your tax agent or adviser can also check your eligibility on your behalf. You’ll need your:

You can use HMRC’s online tool to check your eligibility for SEISS.

If you’re eligible

If you want to claim the first grant you must make your claim on or before 13th July 2020. To claim you’ll need your:

  • Government Gateway user ID and password – if you do not have a user ID, you can create one when you check your eligibility or make your claim
  • UK bank details (only provide bank account details where a Bacs payment can be accepted) including:
  • bank account number
  • sort code
  • name on the account
  • your address linked to your bank account

You’ll have to confirm to HMRC that your business has been adversely affected by coronavirus.

How to claim for SEISS

You must make the claim yourself. Your tax agent or adviser must not claim on your behalf as this will trigger a fraud alert, and you will have to contact HMRC. This will cause a significant delay to you receiving your payment.

You can start your SEISS claim using HMRC’s online system.

On 29th May the government announced the following important changes to CJRS:

  • from 1‌‌st July, the CJRS will be made more flexible to enable employers to bring previously furloughed employees back to work part-time and still receive a grant for the time when they are not working. This is known as ‘part-time furloughing’.
  • from 1‌‌st August, employers will have to start contributing to the wage costs of paying their furloughed staff. The amount of employer contribution will increase in September and October
  • the scheme will close to new entrants from 30‌‌th June. This means that the final date by which an employer needs to agree with their employee and ensure they place them on furlough is 10th June. Employers will have until 31st July to make any claims in respect of the period 1st March to 30th June.

Further details are provided below.

Part-time or flexible furloughing

From 1‌‌st July 2020, businesses using the scheme can decide to bring previously furloughed employees back to work part-time – with the government continuing to pay 80% of wages for any of their normal hours they do not work until 31st August 2020.

Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, they will need to report and claim for a minimum period of a week.

Employers can make claims for longer periods such as monthly or two weekly cycles if preferred. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

If employees are unable to return to work, or employers do not have work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules.

Employer contribution towards furlough pay

The following changes are being made to the amount of government grant available under CJRS from 1st August 2020. The changes mean a gradual reduction in the amount of government available and an increase in the amount employers must contribute.

June and July – no changes The government will continue to pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work – employers will have to pay employees for the hours they work
August The government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed
September The government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500.
October The government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500.

Throughout the above periods, the cap on the furlough grant will be proportional to the hours an employee does not work.

Closure of CJRS to new entrants from 30th June

The CJRS will close to new entrants from 30‌‌th June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30‌‌th June.

So, if you intend to furlough an employee who hasn’t been furloughed before, you will need to agree that with them and start their period of furlough on or before 10th J‌un‌e – this is the last day on which someone who has never been furloughed before can start a period of furlough and qualify for the scheme – this ensures the minimum three-week period is complete by 30th J‌un‌e

You will then have until 31 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 you have previously furloughed and claimed for under the CJRS.

Next steps on CJRS

The government expects to publish detailed guidance to use the revised scheme by 12th June. We will update our online guidance and tools at that time.

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The Self-Employment Income Support Scheme (SEISS) is being extended for those people whose trade continues to be, or is newly, adversely affected by COVID-19 (coronavirus).

Eligible self-employed people will be able to claim a second and final SEISS grant in August; this will be a taxable grant worth 70% of their average monthly trading profits for three months, paid out in a single instalment and capped at £6,570 in total.

The eligibility criteria for the second grant will be the same as for the first grant. You do not need to have claimed the first grant to claim the second grant: for example, their business may have been adversely affected by COVID-19 more recently.

Claims for the first SEISS grant, which opened on 13‌‌th May, must be made no later than 13‌‌th July. Eligible self-employed people must make a claim before that date to receive the first SEISS grant (a taxable grant of 80% of their average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total).

Next steps on SEISS

The government expects to publish detailed guidance to use the revised scheme by 12th June. We will update our online guidance and tools at that time.

HMRC does not allow agents such as Crunch to make an application for SEISS on your behalf. You must apply yourself.

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The Coronavirus Sick Pay Rebate Scheme for small and medium-sized businesses launched on 26th May. The scheme allows employers with fewer than 250 employees to claim coronavirus-related Statutory Sick Pay (SSP).

There’s further information on eligibility for the SSP rebate scheme and making a claim on the Gov.uk website.

The Chancellor announced that the Coronavirus Job Retention Scheme will be extended by a further four months to the end of October 2020. The scheme, which opened for claims on the 20th April, will continue unchanged through to the end of July, at which point the Chancellor has said that the scheme will become more flexible. Details are to be announced by the end of May.

The government will cover the lower of 80% of an employee’s regular wage or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage. However, the chancellor also said companies will need to ‘start sharing’ the cost of this from August (more details on this will be published in due course). Fees, commission and bonuses should not be included.

Employee’s will still have 80% of their regular wage guaranteed, but the flexibility could include allowing furloughed workers to return to work part-time, whilst expecting employers to share some of the costs of the scheme.

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The Scottish government has established a ‘Newly Self-Employed Hardship Fund’. This is for people who are resident in Scotland and who became self-employed after 6th April 2019. The Fund is not available to anyone living outside of Scotland.

The scheme is administered by local authorities in Scotland and you apply using your local authority website.

You can find more information about the Fund including how to check your eligibility and how to apply on the Scottish Government Website.

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Crunch guide to the Self-Employment Income Support Scheme

We’ve published a guide to making a claim on the SEISS if you’re a sole trader. The scheme could give grants of up to £2,500 to eligible claimants.

The Self-Employment Income Support Scheme (SEISS) is designed to support self-employed individuals. This usually means you operated as a sole trader during your period of eligibility for the scheme. If you were employed by your business, or you’re a limited company director, you may be eligible for the Coronavirus Job Retention Scheme. We have prepared a separate Crunch CJRS guide for employers to assist you if this is the case.

HMRC started contacting people it believes are eligible to use the SEISS from the 4th May 2020. The scheme provides a taxable grant worth 80% of the self-employed individuals’ trading profits up to a maximum of £7,500.

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

An online checker is 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 are preparing a guide 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.

You can claim SEISS grant if you’re a self-employed individual and:

  • you carry on a trade which has been adversely affected by coronavirus
  • you traded in the 2018/19 tax year and submitted your Self-Assessment tax return on or before 23rd April 2020 for that year
  • you traded in the 2019/20 tax year
  • you intend to continue to trade in the 2020/21 tax year.

If you’re not eligible for support under the SEISS, there may still be other support available to you – you can use the government’s Business Support Finder to check.

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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 Government will guarantee 100% of the loans and there are no fees or interest to pay in the first 12 months, with no repayments due in this period. The government has also agreed with lenders that an affordable flat rate of 2.5% interest will be charged on these loans. 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 will be able to apply online through a short and simple seven-question standardised application form.

The scheme will launch for applications on Monday 4th May and the cash should be in business accounts within days of an application being accepted. Businesses will be able to access these loans through a network of accredited lenders. Businesses won’t need to pass any viability tests or eligibility criteria for the finance.

Guidance on how to apply is provided on the British Business Bank website.

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.

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On 20th April the Coronavirus Job Retention Scheme (CJRS) opened for employers to make claims for their furloughed employees. The scheme can also cover the PAYE salaries of sole directors of limited companies who decide to furlough themselves. We’ve produced a CJRS guide for employers.

The government has also launched an online business coronavirus support finder tool to find all the support available to your business. Answer some questions and the tool provides a summary of all the government support available including links to the relevant websites.

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The Chancellor announced that the Coronavirus Job Retention Scheme will be extended by a month so it will now run from 1st March to at least the end of June 2020.

Chancellor of the Exchequer, Rishi Sunak, said:

“We’ve taken unprecedented action to support jobs and businesses through this period of uncertainty, including the UK-wide Job Retention Scheme. With the extension of the coronavirus lockdown measures yesterday, it is the right decision to extend the furlough scheme for a month to the end of June to provide clarity.”

“It is vital for people’s livelihoods that the UK economy gets up and running again when it is safe to do so, and I will continue to review the scheme so it is supporting our recovery.”

The scheme is due to be launched for online applications on 20th April 2020. Crunch will be publishing a guide on how businesses can access the scheme.

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Companies House has announced from 16th April 2020 a temporary pause in the strike-off process to prevent companies being dissolved. Companies House believes this support will give businesses affected by the coronavirus outbreak the time they need to update their records and help them avoid being struck off the register. This is in addition to treating appeals from companies issued with a late filing penalty due to COVID-19 sympathetically.

Companies will also temporarily be extended greater flexibilities, including holding AGMs online or postponing the meetings.

As previously announced, Companies can apply for a three-month extension to file their statutory accounts if they are affected by COVID-19. The extension will be automatically and immediately granted. The extension is not available if you have already missed the deadline for filing.

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HMRC has updated its guidance to confirm businesses can claim for employees employed as of 19th March 2020, and who were on a company’s PAYE payroll on or before that date. To qualify, the company must have made an RTI submission notifying HMRC of payments to those employees on or before 19th March 2020.

Businesses can also claim for employees employed between 28th February 2020 and 19th March 2020 who were on the company’s payroll (i.e. notified to HMRC on an RTI submission on or before 28th February) if between 28th February and 19th March 2020 the company:

  • made them redundant or they stopped working for the company
  • re-employs them and put them on furlough.

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The government has announced the Coronavirus Job Retention Scheme (CJRS) will be ready to launch on 20th April 2020. The government will contact businesses on what they need to do to access the scheme. While further details are awaited, we understand businesses will need the following information about each furloughed employee:

  • National Insurance number
  • Salary, National Insurance and pension contribution information that allows businesses to calculate the claim amount.

At the moment, we understand the following:

  • The scheme is due to go live on 20th April
  • HMRC expects a high number of requests to be made immediately after 20th April and it may take longer for the first payments to be paid
  • The online CJRS service is now undergoing beta testing with a group of selected employers
  • Applicants will access the system using their current government gateway login
  • Further guidance will be issued by HMRC in the week commencing 13th April explaining on how to use the system
  • Following the initial backdated claims, claims can be made no more than 14 days before payrolls are run but will be accepted for the different pay periods
  • Tax agents like Crunch who are authorised to act for PAYE matters will be able to assist with the claims
  • File-only agents and payroll bureaus will not be able to access the service “due to data protection reasons”.
  • The government will contact businesses on what they need to do to access the scheme.

The scheme will be self-serve and Crunch will be here to help our clients through the process with our own ‘how to’ guides and advice when HMRC publishes more details.

The government announced further details about the Coronavirus Job Retention Scheme (CJRS) of particular interest to limited company directors, office holders and directors of personal service companies (PSCs). The CJRS is available to salaried company directors and also to salaried individuals who are directors of their own personal service company. Directors will be able to furlough themselves and claim support through the CJRS.

The guidance also states that “they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provide services to or on behalf of their company.” Directors will be able to fulfill their legal duties such as preparing company accounts.

The support is limited to 80% of PAYE salary, there is no financial support for dividends usually taken from the limited company. This is likely to mean that many company directors will face a considerable drop in income if they have to furlough themselves.

Members of Limited Liability Partnerships (LLP’s) who are salaried are also covered.

The government also announced that the CJRS will offer support to Agency Workers, including those employed through Umbrella Companies.

We are still awaiting details on how a claim can be made – this is expected by the end of April.

Full details are available on the Coronavirus Job Retention Scheme page on the gov.uk website.

You can also download our guide to the scheme to read at your own pace and keep for reference.

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Business Secretary, Alok Sharma MP, announced changes to the insolvency rules enabling businesses going through a restructure to continue trading and avoid insolvency. The new rules are backdated to 1st March 2020 and means that businesses seeking a rescue package cannot be put into administration by creditors and can continue to trade without the threat of personal liability to company directors.

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The Chancellor Rishi Sunak announced a further package of support targeted at the self-employed.

We’ll bring you more detail as it emerges but the highlights were:

  • Measures expected to support 95% of self-employed people (also partnerships)
  • A new self-employed taxable grant of up to 80% of trading profits up to a maximum of £2,500 per month for at least three months
  • You’ll be able to claim these grants and continue to do business
  • Trading profits to be averaged over up to last three years
  • The scheme will be open for at least three months
  • HMRC will contact eligible businesses

Eligibility for the Self-Employment Income Support Scheme.

HMRC have said that to be eligible for the scheme you must meet all the criteria below:

  • Be self-employed or a member of partnership;
  • Have lost trading/partnership trading profits due to COVID-19;
  • File a tax return for the 2018/19 tax year as self-employed or a member of a trading partnership. Those who have not yet filed for 2018/19 will have an additional 4 weeks from 27th March 2020 to do so;
  • Have traded in the 2019/20 tax year; be currently trading at the point of application (or would be except for COVID 19) and intend to continue to trade in the tax year 2020/21
  • Have trading profits of less than £50,000 and more than half of your total income come from self-employment.
    This can be with reference to at least one of the following conditions:
  • Your trading profits and total income in the 2018/19 tax year
  • Your average trading profits and total income across up to the three years between 2016/17, 2017/18, and 2018/19

The scheme should be set up and making payments by early June 2020, HMRC will make payments directly into bank accounts. This is expected to be a lump sum payment covering the three applicable months.

For those who do not meet the eligibility criteria, there is still support available in the form of Universal Credit and other measures announced previously.

Importantly the scheme does not cover limited company directors who pay themselves through a combination of salary and dividends. The government has said these people may be covered through the Coronavirus Job Retention Scheme.

There are some further details on the government’s Business Support website.

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Further details on how and when to claim available in our Knowledge article.

On Monday 23rd March the Prime Minister, Boris Johnson announced that the government was introducing further restrictions on the movement of people – urging people to stay at home, except for very limited purposes, and away from others, and ordering more businesses to close.

The moves are intended to curb the spread of the COVID-19. All ‘non-essential’ businesses and premises must shut and gatherings of more than two people have been banned. The government has said it will review these measures in three weeks.

The full government guidance is on gov.uk

The government has also published a list of businesses that it classes as essential.

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On Friday 20th March the Chancellor set out a package of measures to support public services, people and businesses through the COVID-19 emergency.

Crunch has reviewed the measures as published by HMRC and we have reproduced the following information which we believe directly affects our freelancer, contractor, and small business customers:

Crunch will provide updates on these, and any other measures announced by the government over the coming weeks.

The government also announced:

  • A 12-month business rates holiday for all retail, hospitality and leisure businesses in England
  • Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
  • Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
  • A new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans

The full list of measures is available on the gov.uk website:

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The government has announced a new ‘Coronavirus Job Retention Scheme’, available for at least three months, starting from 1st March 2020. All UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. All UK businesses are eligible.

To be eligible for the support businesses will need to:

  • have had a PAYE payroll scheme operating on 19th March 2020 (this date was updated from the 28th February 2020 to allow claims to be made for more workers)
  • designate affected employees as ‘furloughed workers,’ and notify each employee about 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 has said it will publish details on the information required in due course).

The government also stated the following:

  • A ‘furloughed worker’ is one who has been granted leave of absence or laid off for usually a brief or temporary period
  • Employers can top up salaries if they choose to
  • The scheme will be open initially for at least 3 months, but the Chancellor said that it would be extended if necessary

The government will cover the lower of 80% of an employee’s regular wage or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage. Fees, commission and bonuses should not be included.

As a minimum, employers must pay their employees the lower of 80% of their regular wage or £2,500 per month. An employer can also choose to top up an employee’s salary beyond this but is not obliged to under this scheme.

HMRC are still working to implement a system for reimbursement. This is expected to happen by the end of April 2020.  We’ll publish more details as these become available.

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The Government announced it is deferring Valued Added Tax (VAT) payments for 3 months. If you’re self-employed, Income Tax payments on account due in July 2020 under the Self Assessment system will be deferred to January 2021.

For VAT, the deferral will apply from 20th March 2020 until 30th June 2020. All UK businesses are eligible. Helpfully, the deferral is automatic. Businesses will not need to make a VAT payment until after 30th June 2020.

Businesses will be given until the end of the 2020/21 tax year (5th April 2021) to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.

Until further details of the scheme are published by the government, including a full list of the VAT periods covered, there is no official guidance on how HMRC will manage this, currently, our advice to our customers is:

  • continue to submit your VAT returns on time – HMRC’s regime for late submission will likely still apply
  • plan to have sufficient cash available in your business to settle any deferred payments by the end of the tax year (or whichever future date HMRC specifies when the detailed guidance is published)
  • if you are due a refund, you don’t need to do anything, this should be provided in the normal way
  • If you pay by direct debit, and you wish to defer your VAT payment, you should cancel your direct debit and reinstate it after 30th June 2020
  • if you wish to keep paying VAT during the deferral period, it’s likely HMRC will allow you to do so. You can pay using HMRC VAT payment systems
  • If you are a Crunch client we’ve got further detail on how to manage you VAT reporting and deferring payments in our Crunch VAT deferral Helpcentre article.

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For Income Tax Self Assessment, payments on account due on 31st July 2020 will be deferred until 31st January 2021. The deferral is automatic. You do not need to be self-employed to be eligible for the deferment. No penalties or interest for late payments will be charged in the deferral period.

The deferment is optional. You can still pay your payment on account on 31st July you’re able to do so.

Our advice to our customers is to submit your Self Assessment by the deadline date. If you haven’t yet submitted for the 2018/19 tax year (due on 31st January 2020) you are already incurring fines and penalties – do not let these mount up. Ensure you submit your Self Assessment for the 2019/20 tax year (due on 31st January 2021) in the usual way.

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The Government announced it will introduce 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 eligibility criteria for the scheme is as follows:

  • the refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
  • employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as at 28th February 2020
  • employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
  • employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website
  • the eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force
  • the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.

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The government announced a new temporary Coronavirus Business Interruption Loan Scheme (CBILS), delivered by the British Business Bank, launched on 23rd March 2020  to support primarily small and medium-sized businesses to access bank lending and overdrafts.

The scheme is for businesses with viable borrowing proposals, up to £5 million in value, that the COVID-19 outbreak has ‘interrupted’. Businesses can access the first 12 months of that finance interest-free, as the government will cover the first 12 months of interest payments. Businesses are eligible for the scheme if they:

  • are UK based, with a turnover of no more than £45 million per year
  • meet the other British Business Bank eligibility criteria.

When the scheme was announced it was not open to businesses who could access loans on commercial terms. However, the government agreed these businesses can access the scheme if they self-certify the impact coronavirus has had on them and they have a viable borrowing proposal. Another change to the scheme means lenders cannot ask directors for personal guarantees on any loans under £250,000. Businesses with loans over £250,000 will have recoveries capped at 20 percent of the outstanding CBILS facility amount.

The changes are backdated to 23rd March 2020.

How to access the scheme
The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website:  https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

The scheme will be available from 23rd March 2020.

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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. You are eligible if your business pays tax to the UK government and has outstanding tax liabilities.

Our advice to any of our costumes who have missed a tax payment, or who believe they are at risk of missing the next payment due to COVID-19, is to call HMRC’s dedicated helpline on 0800 0159 559. If you’re worried about a future payment, call HMRC nearer the time.

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You can see tweets from the Chancellor Rishi Sunak announcing these measures by clicking on the tweet below.

If the COVID-19 outbreak has taught us anything, it’s that all those unexpected eventualities which we thought would never happen to us can happen to us after all, and we should all be prepared for any eventuality.

Crunch offers a free Business Continuity Plan template, which you can find out more about in our “Save your bacon with our free business continuity plan template” article.

Business Continuity Template banner

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The government has announced financial measures amounting to £330bn to support businesses through the COVID-19 emergency from 16th March 2020. This is in addition to a package of measures announced in the 11th March 2020 Budget.

Chancellor Rishi Sunak announced the huge package of measures on 17th March 2020 and said that the UK had “never, in peacetime, faced an economic fight like this one” adding that we faced an “economic emergency” in the face of the coronavirus pandemic.

The government have already announced support by way of loans, cash grants, business rates holiday and other measures, targeted at the retail, leisure and hospitality sectors.

Mortgage holiday announced for some homeowners – help for renters and buy-to-let landlords also announced

The government announced a three-month mortgage payment ‘holiday’  to help those in difficulty as a result of COVID-19. Personal credit ratings for delaying payments for up to three months will not be affected. The repayments would still need to be made in the future and interest would still be payable.

On 18th March 2020, the government announced emergency legislation to suspend new evictions from social or private rented accommodation while this national emergency is taking place.

No new possession proceedings will commence during the crisis. Landlords will also be protected as the three-month mortgage payment holiday includes Buy to Let mortgages.

Read more on Gov.uk site.

Additional measures to support jobs and incomes are expected.

If you qualify for Statutory Sick Pay (SSP)

If you have employees, they should be covered by Statutory Sick Pay (SSP). There have been a number of immediate changes to Statutory Sick Pay for coronavirus (COVID-19) self-isolation:

  • you can now claim SSP from the first day you’re self-isolating and cannot work.
  • the government will cover the SSP payments of all businesses with under 250 employees for up to 14 days per employee
  • employees who need to be off work to care for those within the same household who have been told to self-isolate will also be eligible for SSP. In these circumstances, the normal ‘fit’ note will not be required by a GP – there will be a temporary alternative available from NHS111.

ACAS have released advice for employers and employees when it comes to sick pay.

The government also has a COVID-19 section on Gov.uk with guidance for employees, employers and businesses.

If you don’t qualify for SSP

If you’re self-employed you will not usually be covered by SSP. You should be able to claim either Employment and Support Allowance (ESA) or Universal Credit.

The Chancellor announced “quicker and easier” access to Universal Credit for the self-employed and those working in the gig economy, as well as to ‘new style’ ESA. The government will also be temporarily relaxing the requirements of the minimum income floor in Universal Credit for those directly affected or self-isolating according to government advice for the duration of the outbreak.

Government-backed loans for small businesses

The government has also announced a new coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank. The scheme will enable businesses to apply for a loan of up to £5 million, with the government covering up to 80% of any losses with no fees. Businesses can access the first six months of that finance interest-free, as the government will cover the first six months of interest payments.

Cash grants for small businesses

The government has announced that there will be a £10,000 cash grant to around 700,000 of the UK’s smallest businesses, delivered by local authorities. This was initially announced as a £3,000 grant in the Budget, but was increased in the Chancellor’s 17th March announcement.

Small businesses that pay little or no business rates and are eligible for small business rate relief (SBBR) or rural rate relief will be contacted by their local authority – they do not need to apply. The funding will be made available to local authorities in early April. Guidance for local authorities on the scheme will be provided shortly.

Delaying tax bill payments

A dedicated government helpline has been set up to help businesses and self-employed individuals in financial distress, and with outstanding tax liabilities, to receive support with their tax bills.

Through this, businesses may be able to agree a ‘Time to Pay’ arrangement with HMRC. During the coronavirus outbreak, the usual 3.5% annual interest on deferred tax payments should be waived. If you’re concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.

Other measures announced include:

  • giving all retail, hospitality and leisure businesses in England a 100% business rates holiday for the next 12 months
  • providing a further £25,000 in direct grants to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value over £15,000 and below £51,000
  • Ensuring pre-payment and pay-as-you-go customers remain supported with energy through challenging times and supporting all customers in financial distress. An industry-wide agreementwas signed by all UK domestic suppliers and will come into force immediately.

We’ll be keeping this article up to date with new information as it becomes available. You can also follow us on Twitter @TeamCrunch for the latest updates.

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