This week has seen refinements of Government measures as well as additional guidance on the practical implementation of some of the schemes.

Although the Government is trying to help there are gaps between the intention and the practical reality. That is to be expected for novel schemes such as this but examples include:

• problems with sourcing interruption loans from banks;
• employees not qualifying for furlough payments; and
• Self-employed people not qualifying for payments.

Commentators also highlight the length of time it is taking to get payments through to applicants.

Round Up:

The latest full list of assistance available can be found here:

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

Interruption Loans:

We have been assisting clients with their applications for interruption loans. You may need some input with the questions being raised by lenders together with the cash flow forecasts that are required in support of any borrowings.

The Government has today instructed banks to make the loans more accessible. Some banks were only offering these loans after traditional commercial borrowing had been explored – this should now not be the case.

The government is also stopping lenders from requesting personal guarantees for loans under £250,000 and making operational changes to speed up lending approvals. The government will continue to cover the first twelve months of interest and fees. The latest figures from UK finance show that there has been over 130,000 enquiries from business across the country for the loans

If you need assistance please let us know.

VAT deferment:

Most VAT registered clients are deciding to take the automatic VAT deferment.

This means that any VAT normally due between 20^th March 2020 and 30^th June 2020 will be deferred until 31^st March 2021.  VAT returns must still be filed as normal and so if you do wish to use the deferral you must cancel your direct debit or otherwise HMRC will assume you wish to pay and take the funds.

We are recommending that clients (where possible) set aside this deferred amount from regular operative cash flow and dip into  it as required so that come 31^st March 2021 and the due date some part of  the funds might be separately allocated.

Self-employed subsidy:

Many self-employed clients are asking if there is anything that they should be doing in order to accelerate a claim, the government advice remains:

You cannot apply for this scheme yet

HMRC will contact you if you are eligible for the scheme and invite you to apply online.

We still understand the timing of this to be June.

Second payments on account can be deferred for the self-employed and will not be due at 31^st July.

 

Job retention scheme:

We still await details of the online portal from HMRC in respect of requesting the subsidy for furloughed employees and will send separate updates on this process.

The latest guidance can be found here:

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/guidance-for-employers-and-businesses-on-coronavirus-covid-19

It is now widely agreed that directors should be able to furlough themselves and obtain a subsidy against the PAYE element of their remuneration – dividends still do not qualify.

Please do note that care does need to be taken if director’s are to furlough in respect of the activities that are to be engaged in during this period – if you would like any specific advice please just ask. You must be careful as we suspect that some claims for furlough will be challenged.

Time to pay:

We are helping clients to establish possible cash flow planning and budgeting around all aspects of business costs, one central theme is the use of the time to pay arrangements around COVID-19.

Even where clients have existing time to pay schemes these have been successfully renegotiated.  The dedicated phone line is 0800 024 1222

Further financial relief:

The Financial Conduct Authority (FCA) has today announced a series of proposals to assist

• Set out the FCA’s expectations on firms to offer a temporary payment freeze on loans and credit cards where consumers face difficulties with their finances as a result of coronavirus, for up to three months.
• Ensure that for customers who have been hit financially by the coronavirus and already have an arranged overdraft on their main personal current account, up to £500 will be charged at zero interest for up to three months.
• Require firms to make sure that all overdraft customers are no worse off on price when compared to the prices they were charged before the recent overdraft changes came into force.
• Ensure consumers using any of these temporary measures should not have their credit rating affected because of this.

We hope that these will feed into the other elements of support.

Statutory sick pay:

HMRC have just released new guidance on the processing of statutory sick pay in terms of eligibility and record keeping:

https://www.gov.uk/guidance/claim-back-statutory-sick-pay-paid-to-employees-due-to-coronavirus-covid-19

 

The support for the self-employed should be automatic. The furlough support is expected to be ready by the end of this month

Clients should make sure they cancel all direct debits for PAYE and VAT if they want to take advantage of the tax deferment scheme – there is no indication of how the Government proposes to get these debts repaid if businesses continue to suffer and built up very large liabilities.

If you have any other queries or questions which are not answered above – please contact us for help

Wishing you a healthy and safe weekend

Ben