Coronavirus: 2nd update on Government support

We would like to let you know about the latest financial support available for businesses and individuals affected by the Coronavirus.

Please do call or email us if you’d like to discuss anything further.

JOB RETENTION SCHEME FOR 80% OF SALARIES

This was first announced a while ago but the full details were only released in the last day or so:

directors and staff who are NOT working are eligible to be “furloughed”
the company has to process the salaries first and HMRC will then re-imburse 80% of wages upto £2,500 per month (tax/nic has to be deducted)
directors/staff must have been on the payroll in February 2020
the claim will need to made on a new HMRC portal, this is expected to open at the end of April
directors who normally take a small salary may be able to file a higher salary for Mar’20 to boost the average wage eligible for re-imbursement
we will not file any claims for any directors/staff who are working as normal. HMRC have reserved the right to audit claims in future
we will email clients directly with our interpretation of the rules and whether we think they can claim or not (there are some technical issues)
Full details about the scheme are here:
https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

SELF EMPLOYMENT GRANT SCHEME

Self emplyment support scheme for sole traders to claim a grant for 80% of trading profits, capped at £2,500 per month for the next 3 months:

The scheme doe NOT apply to directors of limited companies or dividends
Only applies to sole traders
Cannot claim if profits exceed £50,000 per year
At least half of total income should come from self employment
HMRC will calculate average monthly trading profits for previously submitted tax returns from 2016-17, 2017-18, 2018-19
HMRC will contact you in June in order to claim it and will pay 1 lump sum into your bank account
It will be taxable and will need to be declared in the 2020-21 tax return

TAX BILLS HAVE BEEN DEFERRED

Self assessment payment which is due in July 2020 has been pushed back to January 2021 (automatic, don’t need to call HMRC)
VAT bills which are due by 30 June 2020 have been deferred until March 2021 (automatic, don’t need to call HMRC)
PAYE & Corporation tax: HMRC have setup a Coronavirus helpline for time to pay. You would need to call them and explain you’re unable to pay right now due to cashflow / business difficulties caused by the Coronavirus. We have heard that HMRC have deferred payments completely for 3 months for some clients, other clients have agreed a payment plan for the next 6 months.
HMRC: 0800 0159 559

PROTECTION FOR TENANTS

Commercial tenants cannot be evicted for late payments until 30 June 2020. If you don’t pay your rent your landlord could potentially evict you later. You should contact your landlord about deferring the rent or requesting a rent free period. For example, our landlord has given us a rent free period and we have heard others have received a payment holiday.
Residential tenants also cannot be evicted for at least 3 months (ie around end of June). But again you should contact your landlord to try and negotiate a rent free period, deduction or to agree a payment plan.

MORTGAGE HOLIDAY FOR 3 MONTHS

Homeowners: In our previous update we advised clients to contact banks about deferring payment. The Government and FCA have now given guidance that the banks should grant borrowers a payment holiday for an initial period of 3 months and that there should not be any additional fees for this, other than interest and that it shouldn’t have a negative impact on the credit score. Please do phone your bank or check their website, there may be an online application. In addition, banks have been advised not consider repossession unless a customer agrees to it.
Buy to let: the above scheme has now also been extended to landords

OTHER SCHEMES / SUPPORT

Please refer back to our original update and also the Government’s own website for details of other Government schemes and support:

By Mohammed Haque