On Friday 20 March, the Government announced a further package of measures to help businesses deal with the Coronavirus. These include:
- A Coronavirus Job Retention Scheme
- Deferring VAT payments
- Deferring Income Tax payments
Maintaining cashflow is probably the most important issue for a business at the moment.
Support for businesses who are considering making staff redundant
The Government has announced a new scheme called “Coronavirus Job Retention Scheme”. Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees salary for those employees that would otherwise have been made redundant during this crisis. To access the scheme employers will have to do the following:
- Designate affected employees as ‘furloughed workers,’ and notify your 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.
- Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required).
HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. However, the furloughed worker must not carry out any work for their employee during this time but they will remain an employee.
Existing systems are not set up to facilitate payments to employers. We will keep you informed of these developments as and when they happen.
Support for businesses by deferring VAT Payments
There will be a VAT payment deferral for 3 months, the deferral will apply to VAT payments due from 20 March 2020 to 30 June 2020. This will apply to all UK businesses.
This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 20/2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.
No penalties or interest for late payment will be charged in the deferral period.
Support for Self Employed by deferring Income Tax payments
If you are self-employed, Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.
This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period.
On Tuesday 17 March, the Government announced a first packages of measures to support businesses including extending sick pay and allowing employers to reclaim it, reductions in business rates and help with business loans.
As part of the UK200Group we have access to up-to-the-minute information and can help you get access to the support you need.