Month: April 2020

The UK Government has introduced a far-reaching package of assistance for UK businesses and the self-employed. This package has been enhanced whilst the pandemic is evolving.

This package of assistance for UK businesses, is applicable even if the business is owned from abroad.

The UK Government assistance, outlined below, is a summary and reflects the measures in place as of: 07.04.2020. Please contact the Dixcart office in the UK for more detailed information and for advice as to how to claim the available assistance: advice.uk@dixcart.com.

Coronavirus Job Retention Scheme

• Available to any size of business (including charities), in any sector.
• A grant to cover 80% of wages (up to £2,500 per month), for employees who are not working due to the impact of Coronavirus but are retained on the payroll.
• For full time and part time salaried employees, the employee’s actual salary before tax, as of 28 February should be used to calculate the 80%.
• It must be a UK employer with a UK bank account.
• The employer can also claim Employer’s National Insurance and Employer’s Auto Enrolment, minimum contributions, on the furloughed salary up to the maximum of £2,500 per month.
• Should businesses wish to top up the salaries they can.
• This will be backdated to 1^stMarch 2020 and will be open initially for a three month period.
• It was originally announced that ‘Employees taken on after 1^st March 2020, are excluded from the scheme’, but on the 15^th April this was changed to the 19^th March. As long as the employee was on the payroll as at 19^th March, that individual can be furloughed and included in the claim.
• There is no limit on the funding available to the scheme.
• To claim the grant businesses should designate affected employees as ‘furloughed workers’ and notify employees of this change. Changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
• To qualify for the payment, an employee must be furloughed for a minimum of three weeks.  They can then come off furlough.  This means that employers cannot rotate staff weekly between furlough and non-furlough.

VAT

• No business will have to pay any VAT from the third week in March 2020, until mid-June.
• The payment will be deferred, and businesses will have until the end of the 2020-21 tax year to settle any liabilities that have accumulated during the deferral period.
• The deferral applies automatically and businesses do not need to apply for it.
• If a business pays by Direct Debit then it is their responsibility to cancel the direct debit  with HMRC to prevent payment being taken.

Coronavirus Business Interruption Loan Scheme (CBILS)

• This scheme was launched on Monday 23^rdMarch 2020.
• Loans will be delivered by lenders that partner with the British Business Bank, including all of the major banks. The lender will receive a guarantee of 80% of the loan amount from the government. The loan will be interest free for the first 12 months.
• These loans are intended to support cash strapped small and medium sized business during the crisis. They are available for UK-based businesses with turnover of no more than £45 million and can provide for a facility up to £5 million.
• The borrower remains liable for 100% of the debt.

Coronavirus Corporate Finance Facility

• The Bank of England has set up a scheme to finance working capital by purchasing debt from larger business ‘making a material contribution to the UK economy’.
• Businesses do not need to have previously issued debt in order to participate.
• The scheme will operate for at least 12 months.

Help for Self-Employed Individuals

Dixcart have drafted a separate Article specifically for the self-employed, if you would like this information please email: advice.uk@dixcart.com

HMRC Time to Pay

• HMRC’s ‘Time to Pay’ scheme can enable firms and individuals in temporary financial distress, as a result of Covid-19, to delay payment of outstanding tax liabilities.
• If there is PAYE to pay, this can be deferred.  There does not seem to be a consistent message from HMRC, but they seem to be accepting deferral for the next 3 months. To be certain, call them to agree this quoting your PAYE reference number.

Business Rates Holidays and Cash Grants

• No rates payable for the 2020-2021 tax year, for any business in the retail, hospitality or leisure sectors.
• The list of businesses eligible for relief was expanded on the 25^thMarch 2020.  Retail, leisure, and hospitality properties, that will have been forced to close, as a result of the COVID-19 restriction measures, are eligible for the relief.
• In those sectors, if your rateable value is between £15K and £51k, you will also receive a cash grant of up to £25,000 per property.
• Any business which receives small business rates relief, including those in the retail, hospitality or leisure sectors, will receive a cash grant of £10,000 (increased from the £3,000, announced in the 11 March 2020 Budget).

Assistance

The Dixcart office in the UK has accountants, tax advisers and lawyers that can assist your business to apply for financial assistance, at this challenging time. Please phone speak to your usual Dixcart contact or to the Dixcart office in the UK: advice.uk@dixcart.com.

Dixcart Malta has prepared a summary of the assistance that the government has made available to Maltese businesses, at this challenging time. It is split into several categories to make it as easy as possible to follow. 

Prohibition of Non-essential Retail, Services, and Mass Gatherings

One of the measures introduced by the Maltese government to avoid the spread of Coronavirus, was the prohibition of people working together to supply non-essential retail and other services, as well as any mass gatherings. 

Deferral of Tax Payments

• A two-month deferral for businesses, including the self-employed, to pay: Provisional Tax, VAT and National Insurance Contribution on salaries.
• This applies to taxes owed, until the end of April 2020. All tax forms must be submitted to meet normal deadlines. The incentive is primarily aimed, but not limited to, the tourism and hospitality, entertainment, transport, and manufacturing sectors.  Businesses will still collect National Insurance on their employees’ wages, but will retain these, for the duration of the deferral.
• These deferrals are estimated to improve the liquidity of businesses by €700 million. At the end of April 2020, the government will review a possible extension of these tax deferral measures, depending on the prevailing economic conditions.

Banking and Further Liquidity Measures

• €900 million has provided in bank guarantees, for companies requesting operational loans. These loans will enjoy low interest rates and longer repayment periods. This will be financed by grants from the National Development and Social Fund, and a number of EU funds.
• A three month moratorium from banks, for the repayment of business and personal loans. This will alleviate the burden of bank loans for ALL individuals and businesses in this challenging period.

Facilitating ‘Teleworking’ Activities

• Employers and self-employed individuals investing in technology that enables working from home, can claim to partially cover the costs of this investment.
• Claims are limited to a maximum of €500 per individual being enabled to work from home, or €4,000 for the total project. The grant will cover 45% of the eligible cost. To be eligible, costs have to be incurred between 15th of February and 8th May 2020.
• In order to be eligible, the employee should not have had a means of working from home, prior to the 15th of February 2020. All of the costs must have been incurred after this date. These measure only apply to full-time employees. 

Covid-19 Wage Supplement

• Full-time employees of businesses and self-employed individuals, operating in sectors that have suffered drastically due to the COVID-19 pandemic, or have had to temporarily suspend operations on the order of the Superintendent of Public Health, as listed on Malta Enterprise’s website, will be entitled to up to five days’ salary a month, equivalent to a maximum €800 per month, to be financed by the Maltese Government. Part-time employees will be eligible to a maximum €500 per month.
• Full-time employees of businesses in other adversely affected sectors, will be entitled to one days’ salary per week, up to a maximum of €160 per month, or a maximum of €100 per month for part-time employees. For businesses located in Gozo, this increases to two days’ salary per week, equivalent to a maximum €320 per month for full-time employees, and €200 per month for part-time employees.
• Self-employed individuals in adversely affected sectors who have employees, will be entitled to two days’ salary per week, equivalent to a maximum €320 per month.
• Self-employed individuals located in Gozo, in adversely affected sectors, will be entitled to 2 days’ salary per week equivalent to a maximum €320 per month. This increases to 3 days’ salary, equivalent to a maximum €480 per month, for self-employed individuals who employ staff. The relevant employees will be entitled to two days’ salary per week.

Social Measures

• Parents who both work in the private sector, where there is a need for one of the parents to stay at home to take care of school-aged children, will receive a direct payment of €166.15 per week if working full-time, or €103.85 per week if working part-time, provided that they cannot carry out their job responsibilities by working from home. This measure also applies to single parent families who have school-aged children.
• Individuals classified as disabled, who work in the private sector and are registered with Jobsplus, may opt to stay home for health and safety reasons and will receive a direct payment of €166.15 per week if working full-time, or €103.85 per week if working part-time.
• Employees who have had their full-time employment terminated as of 9th March 2020, as a result of the COVID-19 pandemic, will be eligible for Contributory Unemployment Benefit, and will receive a direct payment of €166.15 per week, if work was full-time, or €103.85 per week if work was part-time.
• The government will increase rent subsidies for individuals whose jobs have been terminated.

Quarantine Leave

• A grant of €350 per employee to businesses (including the self-employed) that have full-time employees on mandatory quarantine leave, is available.  The grant is also available to full time self-employed persons who have to undergo mandatory quarantine.
• This grant is also available to members of staff who have had to quarantine themselves, due to contact with individuals who may have contracted Covid-19, and they either live in the same household or working in the same place of work as the potentially infected individuals.
• This grant is only available for full-time employees. 

Employment of Third Country Nationals

• National Agency Jobsplus, will assist third country nationals living in Malta to find an alternative job, if their job has been terminated, as a result of Covid-19.
• Only applications from highly skilled, new third country nationals will be accepted.
• Companies who terminate an active employment contract for a third country national, will not be able to recruit other third country nationals, in the future. 

Assistance

The Dixcart office in Malta has professionals that can assist your business to apply for appropriate financial assistance, at this challenging time.  If you are already a client, please speak to your usual Dixcart contact, or alternatively, please email: advice.malta@dixcart.com.