Taxes and business rates to pay? read on
We’re all going to need a bit of a hand up in this rapidly evolving situation so we wanted to let you know that the government appears to be responding quickly in terms of reassuring businesses. Small businesses in particular, which are the majority of our clients, are intended to be the beneficiary of a range of measures which are going to be put in place. We believe these measures will be clarified this week and as soon as they are, will update you with details about how to apply.
But for now, here’s what they are telling us
The package of measures to support businesses include:
- a statutory sick pay relief package for SMEs
- Business Rate Relief for small businesses and pubs up to twelve months
- grant funding of up to £25,000 for retail, hospitality and leisure businesses not covered by insurance
- loans of up to £10,000 for limited companies with turn over up to £51,000
- the Coronavirus Business Interruption Loan Scheme to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance
- the HMRC Time To Pay Scheme
Here’s the detail as it stands (16th March)
Support for businesses who are paying sick pay to employees
We will bring forward legislation to allow small- and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:
- this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
- employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020
- employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
- employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note
- eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to those staying at home comes into force
- the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible
Support for businesses who pay business rates
We will increase the Business Rates retail discount in England to 100% for the 2020 to 2021 tax year for properties below £51,000 rateable value.
The relief will also be expanded to the leisure and hospitality sectors in response to COVID-19.
Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.
Those businesses eligible for the newly expanded retail discount and/or the new pubs discount may need to apply to their local authority to receive the discount.
Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority. Guidance for local authorities on the application of the expanded retail discount will be published by 20 March
Support for businesses who pay little or no business rates
The government will provide an additional £2.2 billion funding for local authorities to support small businesses that already pay little or no business rates because of Small Business Rate Relief (SBBR). This will provide a one-off grant of £3,000 to business currently eligible for SBRR or Rural Rate Relief, to help meet their ongoing business costs.
Support for businesses through the Coronavirus Business Interruption Loan Scheme
A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch in a matter of weeks to support businesses to access bank lending and overdrafts. The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £1.2 million in value. This new guarantee will initially support up to £1 billion of lending on top of current support offered through the British Business Bank.
Support for businesses paying tax
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.
UPDATE : uninsured businesses will be able to apply for up to £25,000 according to announcement on 17th March 2020. Businesses should check with their insurance provider if they are covered. Many businesses are unlikely to be covered as most business interruption insurance policies are dependent on damage to property, which will exclude pandemics. Some businesses may have purchased a specific add on relating to notifiable diseases, but some of these will still specify damage to the building. Some businesses may have purchased supply chain or denial of access cover which may meet their needs in this case.
Here’s the source document on the HMRC website for reference. But this was last updated 10th March at time of writing so bear that in mind. It does however, as you will have seen, offer some reassurance that the usual rules are being loosened to accommodate this extraordinary situation we all find ourselves in.
We hope this is helpful. This article is created to provide some guidance but please don’t take action til you’ve spoken to us or a professional advisor. If you’d like to talk to us about any of these, please give us a call on 01763 257882