COVID-19 Funding and Support

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With the Coronavirus pandemic impacting businesses and our lives on such a huge scale, we recognise that it’s not always to understand what help is available to contractors and the self-employed.

We’ve put together a list of all the support schemes announced by the Government over the last few weeks, and we will update this page when any new information is announced.

Job Retention Scheme

A Job Retention Scheme was announced to help those whose work has been severely affected due to the Coronavirus pandemic. It allows employers to retain employees who have had to stop working but are kept on the payroll (otherwise described as ‘furloughed’).

The scheme is open to UK employers that has created and started a payroll scheme by 19th March 2020 and have a UK bank account. It is currently in place from 1st March 2020 to 31st October 2020.

Employers can claim up to 80% of furloughed employees usual monthly salary costs, up to a maximum of £2,500 per month. Employers can choose to top up an employee’s salary but do not have to under the scheme.

The claim will be based on the last pay period prior to 19th March 2020. If the employee has been employed for less than 12 months, the employer can claim the higher of:

  • Average monthly earnings for 2019/20
  • Same month’s earnings for the previous year

It is important to note that when an employee is on furlough, they cannot undertake work on behalf of the company. This includes providing services or generating income.

The scheme is also accessible for company directors, who receive a salary from their own Personal Service Company (PSC). Payments made via dividends are excluded in the calculation for the grant.

What you need to do: To access the scheme, employers will need to submit information to a HMRC online portal, which HMRC expects to be available by the end of April 2020. Once HMRC receive the claim and you are eligible for the grant, HMRC will pay it by BACS to the company bank account. HMRC have confirmed that agents who authorised for PAYE for the company, can make the claim on behalf of the employer.

 

Bounce Back Loan

This loan scheme has been designed to help small and medium-sized businesses, who can borrow between £2,000 and £50,000. It will be launched on 4th May 2020.

Loans will be delivered through a network of accredited lenders and the government will guarantee 100% of the loan. Repayments can be made for up to 6 years and no interest will be payable for the first 12 months.

A business can apply for the loan if the following criteria is met:

  • Based in the UK

  • Has been negatively affected by coronavirus

  • Was not undertaking a difficulty on 31st December 2019

  • Not claiming under the Coronavirus Business Interruption Loan Scheme (CBILS)

HMRC will shortly publish information on how to apply for the scheme.

 

Statutory Sick Pay (SSP)

If you are absent from work due to Covid-19, employees are entitled to SSP for two weeks and the government will refund the cost to small and medium companies. 

SSP is currently £94.25 per week and this would be included in your monthly payroll submissions.

What you need to do: The government has not yet confirmed how SSP will be repaid to employers, but we will be monitoring this for further announcements.

 

Self-Employment Income Support Scheme

The Self-Employment Income Support Scheme (SEIS) is available to those earning less than £50,000 a year and promises a maximum of £2,500 per month for 3 months. Payments will be back dated to March, and payments are expected to come through in June.

To be eligible for the scheme the majority of your income must be from self-employment and you must have filed a 2018/19 tax return. The government has also given late filers until 23rd April to submit their tax return.

The government has made clear that this scheme will not be available to those working through their own limited company. Instead those contractors should look to use the Job Retention Scheme.

What you need to do: HMRC have said that they are working as quickly as possible to set up this scheme. If you are eligible, they will contact you so at present there is nothing you need to do.

 

VAT Payments

Businesses will be supported by VAT payments being deferred for over 3 months, from 20th March 2020 to 30th June 2020. No VAT payments need to be made during this period and businesses will have until the end of the 2020/21 tax year (31st March 2021) to settle any liabilities.

What you need to do: There is no application process for this measure and could help businesses improve cash flow. Businesses can still choose to make the VAT payment as normal.

VAT refunds will still be paid by HMRC as normal.

  

Self-Assessment Payment 

Payments due on 31st July 2020 have been deferred until 31st January 2021.

The payment due by 31st July 2020 is the second payment on account that would be due for the 2019/20 tax year. This deferral means you will now have until 31st January 2021 to make this payment. 

What you need to do: No applications are required, and no penalties or late payment interest will be applied to the deferral period.

 

Interruption Loan Scheme  

A temporary business Interruption Loan Scheme has been launched and is aimed at small and medium businesses to access bank lending and overdrafts.

No interest will be charged for the first 12 months as this will be covered by the government.

Further updates to the scheme (Thursday, 2nd April 2020):

  • Applications will not be limited to businesses that have been refused a loan on commercial terms, extending the number who benefit. However, the Treasury has not capped the interest rates banks can charge.
  • Banks will be banned from asking company owners to guarantee loans with their own savings or property when borrowing up to £250,000
  • Larger firms with a turnover of up to £500m will also be eligible for more help - with state-backed loans of up to £25m available to firms with revenues of between £45m-500m.

What you need to do: There are 40 accredited lenders able to offer the scheme, including all the major banks. Find out if you’re eligible and how to apply.

 

 

Mortgage Holidays 

A mortgage holiday will allow you to reduce or put your mortgage payments on hold for up to 3 months so will help with cashflow.

What you need to do: Contact your lender and explain that you are having financial difficulties due to Covid-19.

 

Gorilla Accounting are on hand to help

As always Gorilla are on hand to discuss any of the schemes above. If you’re a client of ours you can get in touch with your dedicated accountant who will be working from home during this time.

For all other queries, please call 0330 024 0406 or email us on: info@gorillaaccounting.com

 

Guidance from HMRC can be found here: 

Businesses:       COVID-19: support for businesses

Employees:       COVID-19: guidance for employees

 

Home Working

In line with the advice from Government, all our people are now working from home.  With the full support of our technology partners we already have secure and robust contingency plans in place for remote working scenarios, so there will be no drop in service levels. 

Office hours will be amended to 9am – 5pm until further notice.

Communication is key

Our service commitment of responding to our clients queries (if made before 3pm) the same day will still continue to be met.  

We have suspended face to face external meetings but as always, we are more than happy to arrange alternatives such as video calls or telephone conferences.  You’ll still be able to contact us on our direct dials and all post is being dealt with centrally.

Service as usual

We expect no significant interruptions in our service. Our team are fully committed to continue providing the market leading service that you have come to expect and will continue to provide support by phone, email, video conference or any other suitable method of communication. We are very confident that we will continue to support you through these challenging times.

Wishing you all health and continued prosperity.

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