The Government announces further support for businesses
The Government has today announced further support for businesses together with additional details to those announced on 18 March.
Support for businesses through deferring VAT and Income Tax payments
- Self-employed individuals - Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
- This is an automatic offer and no penalties or late payment interest will be charged in the deferral period.
- The deferral will apply from 20 March 2020 until 30 June 2020. Businesses will not need to make a VAT payment during this period
- Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period.
- This is an automatic offer with no applications required.
- VAT refunds and reclaims will be paid by the government as normal.
Coronavirus Job Retention Scheme
- This is to be a grant to provide support to all UK employers to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis
- HMRC will set up a new online portal through which employers will provide details to include:
- A list of affected employees, to be classified as ‘furloughed workers,’
- The employees details and earnings
- HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.
- The grants will initially be for 3 months to be back dated to 1 March 2020.
- HMRC are working urgently to set up a system for reimbursement.
- Employers will need to notify the employees of this change.
The Coronavirus Business Interruption Loan Scheme
- A change was announced to increase the interest free period from the first 6 months to the first 12 months.
- The guidance now includes further details on how to access the scheme
- The scheme will be available from early in the week commencing 23 March.
- The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website. All the major banks will offer the Scheme once it has launched. There are 40 accredited providers in all.
- The Government says that you should talk to your bank or finance provider (not the British Business Bank) as soon as possible and discuss your business plan with them. This will help your finance provider to act quickly once the Scheme has launched. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.
- This scheme will be available to all UK based businesses with turnover of no more than £45 million per year.
- Support for larger companies is being offered under a new Covid-19 Corporate Financing Facility, where the Bank of England will buy short term debt.
We will continue to monitor Government announcements. Please contact your BGM advisor if you would like any assistance.