As we learn and understand more about the financial aid available for your businesses, we endeavour to summarise it for you.
Furloughed Employees
You can furlough any employees that would otherwise have been made redundant. If there is no work for the employee, then the option is to furlough them. But – they cannot work in any way shape or form for your business. You are essentially paying them to not work. HMRC will refund up to 80% of their usual monthly salary PLUS Employer National Insurance (Once the employers allowance has been used up) PLUS employers Pension contributions. You can choose to top up the additional 20% of their salary.
Employees do accrue holiday when on furlough but holiday can be carried over to subsequent years to ensure that there is not a bottleneck of holiday requests once your business is up and running again and the staff un-furloughed.
HMRC will create a portal for a claim for the grant to be processed. As yet we do not know if this portal will be made available to the employer or the agent (us) – either way we will help you all to claim the grant and we are not charging any additional fees for this – you will all receive our assistance to get access to these funds as soon as we have the ability to. I would suspect this will be late April.
Furloughed Directors
This is a grey area. It is suggested that a Director can furlough themselves but they cannot work on any revenue building exercises or tasks for the business. Most Directors pay themselves the most tax efficient salary of £719 so it needs to be carefully weighed up if it is really worth furloughing the Director for £575.20 per month. We are advising against this option.
Statutory Sick Pay
Employees can claim SSP from day 1 of their illness or self isolation. This can be claimed for up to 14 days and HMRC will refund this to the employers. HMRC are building a system to enable this refund.
VAT Deferrals
All VAT payments due from 20th March to June 2020 are deferred until March 2021. You can choose to pay your VAT if you so wish. This is an automatic deferral and you do not need to contact HMRC – BUT – you do need to cancel your direct debit with HMRC. Otherwise your payment will automatically be taken.
Time to pay – Corporation Tax and PAYE
If you are unable to pay your Corporation Tax or PAYE monthly payments due to difficulties related to Coronavirus, HMRC will discuss payment options with you under the Time To Pay Scheme. They will discuss payment by instalments, suspending debt collection proceedings and cancelling penalties and interest where you have administrative difficulties contacting and paying HMRC immediately. For this you need to contact HMRC directly to discuss – this is not something we can do on your behalf.
Coronavirus Business Interruption Loan Scheme (CBILS)
It was announced last week that the application process for CBILS was unfair and the banks were setting their own rules and stipulations. Banks have now been advised not to ask for a personal guarantee on loans under £250,000. The government have offered to pay all interest for 12 months and the loans are supposed to be capital repayment free for 12 months. To date 130,000 businesses have applied for a CBILS but only 968 have been successful in receiving the funding. I hope that this will change. I myself have applied for one so that I can see what the process is and shall update as I know anything. Originally my bank advised that they had to offer me a standard bank loan before they would put me forward for a CBILS. You are supposed to only be able to apply for a CBILS through your main business bank. More to follow as we know more. Here is a link to the official webpage.
Local Authority SBRR Grant
You need to apply for a SBRR (Small Business Rates Relief) grant directly through your local authority – most have online forms which are easy to complete. I know that Hereford and Bedfordshire council have already started payout of these grants. Wealden (my local authority) have said they are starting to make the payouts from 6th April.
As always if you do have any specific questions or are still confused on any of the above (or anything else) please do get in touch – We are here to help and assist you!