“COVID-19” – Small Business Support

We have summarised a few business tips for you to help you understand the government support for small businesses during this difficult time.

Support for businesses through the 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 laid off during this crisis.

The Chancellor was specific that the Coronavirus Job Retention scheme is meant to cover wages of employees “who are not working but are furloughed and kept on payroll, rather than being laid off”.

One Man Band Ltd Company Directors are maybe entitled to claim 80% of their salary, however dividends will not be included in calculating the amount they will pay.

This means that a director who has chosen to take only £8,628 per year as a salary will be entitled to claim 80% of 1/12 of this.

Those who take a higher salary will be capped at £2,500 to bring it inline with PAYE.

So directors will only be allowed to claim, if they really do have to close their business down, simply being unable to afford to pay a wage.

Statutory Sick Pay (SSP)

The Government has announced that SSP will be available from day 1 instead of day 4 for affected individuals i.e. they will not have to serve the three waiting days. The refund will cover upto two weeks.

Grants 

There are grants available for small businesses based on the rateable value:

£10,000 for small businesses with a rateable value below £14,999.

£25,000 for small businesses with a rateable value between £15,000 – £51,000.

You do not have to do anything to apply. Your local authority will contact you. 

Bank loans 

A new lending facility from the Bank of England to help support liquidity via Business Interruption Loan Scheme for upto £5m. Contact your business banking provider to apply.

Tax liabilities

VAT liability will be deferred from 20 March 2020 until 30 June 2020.

Self-assessment second payment on account will be deferred to 31 Jan 2021.

PAYE liability has not been confirmed but it is assumed to be treated as the VAT. 

IR35

The off-payroll reforms will be delayed until 6 April 2021, this means contracts outside IR35 still have the chance to take advantage of the regem in the next 12 months. 

Sole Trader (Unincorporated business)

Self-employed workers hit by coronavirus shutdown will be offered 80% of their average income earned over the previous three years under an emergency package.

It is always important to seek a specific advice particularly at this present time.