A raft of business support has been introduced to keep firms afloat during coronavirus disruption and support workers who may have to be laid off. Cedric Porter reports.
Farmers who have diversified were expected to be hit hardest by the coronavirus outbreak and the business disruption it has brought.
Martyn Dobinson, partner at accountant Saffery Champness, said his firm had been supporting clients who had ’de-risked’ or diversified into the hospitality and leisure sectors.
He compiled a list of support as of March 24.
In England there is a business rates holiday for 2020-21 for retail, hospitality and leisure businesses, including eligible farm holiday and retail units. Any rates already paid in 2020 will be reimbursed.
Those businesses who pay between £15,00 and £51,000 in rates qualify for a one-off grant of £25,000, while those who qualify for Small Business Rates Relief or Rural Rate Relief qualify for a one-off £10,000 grant. Schemes in Scotland and Wales may be a little different.
Extra time to pay income tax, corporation tax, VAT and PAYE/NI can be negotiated with HMRC but taxpayers should not just withhold tax. VAT payments due between 20 March and 30 June can be deferred until the end of the 2020/21 tax year in April 2021.
Income tax payments on account due by 31 July have been deferred to 31 January 2021. New rules tightening up contractor tax rules have been deferred for a year. There is an automatic two-month extension to account filing at Companies house.
A Coronavirus Business Interruption Loan Scheme is being offered by the British Business Bank. The government is giving an 80 per cent guarantee for loans of up to £5 million to businesses with a sound borrowing proposal to trade out of current difficulties in the short and medium term.
The Government will reimburse businesses with fewer than 250 employees for the payment of up to 14 days of Statutory Sick Pay. The pay starts on the first day of sickness and includes anyone who has to self-isolate, with support also widened to the self-employed.
Nigel Morris, tax director at MHA MacIntyre Hudson, explained the scheme is an incentive for companies to keep employees on their payroll even if they cannot afford to keep them on and will also give workers a guaranteed income to help pay routine bills.
He said: “To access the support companies need to classify employees as a furloughed worker [granted a leave of absence], which means they should not undertake any work for the company while furloughed. In exchange employers can claim a grant of up to 80 per cent of each employee’s wage for all employment costs, up to a cap of £2,500 per month.”
Although not carrying out any tasks for the business, the employee remains employed so their continuity of service is not interrupted. Annual leave will also continue to accrue. No PAYE tax or national insurance contributions are due.
A new HMRC web portal will allow businesses to submit information about who has been furloughed and for claims to be made and reimbursed. Because the scheme is retrospective it may cause cashflow issues.