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Government Assistance Being Provided to UK Businesses During the Covid-19 Pandemic

UK

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 1stMarch 2020 and will be open initially for a three month period.
  • It was originally announced that ‘Employees taken on after 1st March 2020, are excluded from the scheme’, but on the 15th April this was changed to the 19th March. As long as the employee was on the payroll as at 19th 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 23rdMarch 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 25thMarch 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.

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