COVID-19 SUPPORT MEASURES
UPDATED MONDAY 23 MARCH 2020
WE'RE HERE FOR YOU
The ongoing outbreak has introduced some unexpected changes and uncertainty into everyone’s life. In order to limit the spread of the virus, we have taken the advice set out by the UK Government, CDC and WHO and are now operating remotely for the safety and well being of our clients, colleagues and society at large.
Our entire team here at Ross Bennet Smith would like to reassure all our clients, their partners and our colleagues in the UK and around the world, that we are here for you during these difficult times, having made a significant investment in technological infrastructure and security to be able to continue operating as normal and servicing you without interruption.
Given the disruption the outbreak has caused and will likely cause to the majority of businesses, it is understandable that HMRC and Companies House deadlines may not be at the forefront of planning, whereas in some cases cashflow issues, as a result of the virus, may put into doubt for some the ability to meet their liabilities.
BUSINESS LOAN GUARANTEE AND WORKER SUPPORT
The UK government announced on 17 March 2020 a business loan guarantee and worker support package amounting to £350 billion. Included within this are the following measures:
Coronavirus Job Retention Scheme
Deferring VAT and Income Tax payments
Statutory Sick Pay relief package for small and medium sized businesses (SMEs)
Twelve business rates holiday for all retail, hospitality, leisure and nursery businesses in England
Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
New lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
Extension of HMRC Time To Pay Scheme
Should you require assistance with regard to any of these measures and to check as to whether or not they might be applicable to you or your business, please contact our tax team on +44 (0) 20 7930 6000.
HMRC has announced a deferral of VAT payments for 3 months. It should be noted that is automatic with no applications required. During this time VAT registered companies and individuals will not need to make a VAT payment during this period. In this instance, such companies and individuals will be given until the 5 April 2021 to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.
It should be noted that VAT returns still need to be filed and this scheme is only a deferral and the actual VAT will need to be paid.
HMRC have announced that in respect of self-assessment income tax, payments on account that would ordinarily be due on the 31 July 2020 will automatically be deferred until the 31 January 2021, with no penalties or interest for late payment charged in the deferral period.
In addition to this, as detailed further below, HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.
IMMINENT HMRC DEADLINES
The most immediate of HMRC deadlines are in connection with PAYE, National Insurance and student loan liabilities for the month ending 5 March 2020 due to be filed and paid by 19 March 2020 (or 22 March 2020 if paying electronically). For those struggling to file their returns or make payments, the HMRC have set up a dedicated helpline for this purpose, which can be accessed by calling 0800 0159 559.
Generally, arrangements are agreed on a case-by-case basis, and HMRC are open to discussing:
agreeing an instalment arrangement
suspending debt collection proceedings
cancelling penalties and interest where there are administrative difficulties contacting or paying HMRC immediately
No VAT measures have been detailed yet, however, discussing any issues with HMRC well in advance of the 5 April 2020 filing deadline for the VAT quarter ended 28 February 2020 is advisable.
If you have any questions about forthcoming tax liabilities and the upcoming deadlines, particularly during this uncertain time, please get in contact with our tax team on +44 (0) 20 7930 6000 who will be able to assist you.
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 by designating them as ‘Furloughed’. At present HMRC have stated that all businesses will be eligible for the scheme.
Furloughed workers are typically those who have been given a leave of absence. For furloughed workers HMRC have said that they will reimburse 80% an employee’s wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement as existing systems are not set up to facilitate payments to employers.
In order to access the scheme companies will need to i) designate affected employees as ‘furloughed workers,’ and notify employees of this change in status and ii) submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal
HMRC will set out further details on the portal and the information required in due course, which we are monitoring on behalf of our clients.
It should be noted that changing the status of employees would be by reference to existing employment law and, depending on the employment contract, may be subject to negotiation.
LOAN INTERRUPTION SCHEME – FOR SMALL AND MEDIUM ENTERPRISES (SMES)
A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch the week commencing 23 March 2020 to support primarily small and medium-sized 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 £5 million in value.
While this support will be too late to meet the PAYE liabilities deadline in March, it might be something to consider in the event that settling PAYE liabilities is likely to cause cashflow issues in the coming weeks or months.
To discuss eligibility and access to the scheme please contact our corporate finance team on +44 (0) 20 7930 6000.
COMPANIES HOUSE FILING DEADLINES
All companies must send their accounts, reports and confirmation statements to Companies House every year. If a company’s accounts are filed late, the law imposes instant automatic penalties.
In order to avoid such penalties, Companies House have stated that if immediately before the filing deadline, it becomes apparent that accounts will not be filed on time due to a company being affected by Covid-19, an application may be made to extend the period allowed for filing.
If an application is made then Companies House will review and make a decision about the extension request. Guidance hasn’t been specifically provided as to the length of extensions, but extensions due to acceptable extenuating circumstances normally receive an extension of 30 days.
For further assistance in connection with filing deadlines please contact our Accounts and Audit team on +44 (0) 20 7930 6000.
Should you have any other questions or concerns then please get in touch.