Coronavirus Weekly Update 03.04

Coronavirus Government Measures to help business – what do I qualify for? 

You will have heard the many updates from the Government regarding the measures they’ve put in place to help businesses get through this pandemic, but do you know what exactly your business qualifies for?  

Furlough of Staff

If your business has a PAYE payroll in place you will qualify to furlough those on it and claim 80% of their salary costs, if your work dries up, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.  

All you need to do is ask your employees to complete a contract variation agreement to allow for the furlough to take place, and return this to us so we can apply for the grants once HMRC have their new portal in place.  This includes director-only payrolls. The same terms apply, so you are not able to do any work in your business that would bring in revenue, but you can continue with administration work.  Contact us if you are no longer working in your business and so think you qualify for this. 

The scheme is open to all UK employers that had created and started a PAYE payroll scheme on 28 February 2020. 

 

Rates Grants 

If you rent or own a business property and claim small business rates relief (SBRR)then you automatically qualify for a grant of £10,000.  You will be contacted directly by your local council to arrange to pay you this grant.  There are no applications to be completed. Just a short form that councils have started to post out to businesses. 

 There are other grants for larger premises and again, the council will be using their ratepayer records to automatically contact those who qualify. 

 

VAT
If you’re a UK VAT registered business and have a VAT payment due between 20 March 2020 and 30 June 2020, you have the option to: 

• defer the payment until a later date
• pay the VAT due as normal

You will still need to submit your VAT in the normal way. 

 This doesn’t need to be applied for, it’s an automatic deferral and no amounts owed will accrue interest during this period. The VAT will need to be paid in full before 31^st March 2021. 

  

Coronavirus Business Interruption Loans
A number of banks are a part of this scheme where loans from £25,000 to £5million can be obtained and no interest is paid for 12 months.  The Government is guaranteeing 80% of the loan so businesses are more likely to be accepted…apparently!!!
To apply you need to contact your bank directly.  There is massive demand for this scheme right now, so telephone waiting times can be hours, although some banks are offering a call-back service, which can be 7-10 days.  I tested the scheme myself and have so far been waiting 10 days for a call back.
The banks are also being accused of using unfair tactics as they are asking business owners to put themselves as personal guarantors, which the government agrees is unfair.   

  

Time to Pay for HMRC taxes
Any business can contact HMRC to put in place a payment plan for any outstanding taxes (VAT, PAYE, Corporation tax) which you cannot afford to pay during this time.  You need to call their helpline on 0300 200 3835 and have details of your tax ready, including reference numbers and the amount you want to spread. 

 

 

July 2020 Self-Assessment Payment on Account delayed
If your tax bill for 2018-19 was more than £1,000 you will have an amount to pay to HMRC [the remaining 50% of your bill] towards your 2019-20 tax bill by 31^st July 2020.  
This payment has been delayed and will now be due to HMRC by 31^st January 2021. 

Self-employed help
This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed. 

Who can apply
You can apply if you’re a self-employed individual or a member of a partnership and you: 

• have submitted your Income Tax Self Assessmenttax return for the tax year 2018-19 
• traded in the tax year 2019-20
• are trading when you apply, or would be except for COVID-19
• intend to continue to trade in the tax year 2020-21
• have lost trading/partnership trading profits due to COVID-19

Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment. This is determined by at least one of the following conditions being true: 

• having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
• having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period

 If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return. 

 

If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020. 

 HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way. 

 

How much you’ll get
You’ll get a taxable grant which will be 80% of the average profits from the tax years (where applicable): 

• 2016 to 2017
• 2017 to 2018
• 2018 to 2019

 

To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.
It will be up to a maximum of £2,500 per month for 3 months.
We’ll pay the grant directly into your bank account, in one instalment. 

 PLEASE NOTE: You cannot apply for this scheme yet. HMRC will write to you if you are eligible and invite you to apply online. 

  

Zoo Accounting Daily Tip 

Start thinking about what you’ll do with your business when we get through this ‘storm’!  These storms will continue to test us in business, in one way or another.  The idea is to start planning for these events, as you never know what lies ahead… 

 

Q&A Section 

Below are a couple of questions we’ve been asked, that we feel may help; 

Q. When is the earliest I can submit a self-assessment tax return for tax year ending 5^thApril 2020?
A.  HMRC will not accept tax returns for this year before 6^thApril 2020.

Q.  Will we have to pay the business rates grant back?
A.  No, this is a grant, to help get you through th

Q.  HMRC are texting me telling me I’m due a refund, how do I apply for it?
A.  You can’t. These are scams!  Please check with us before clicking on any links in these messages.  If you are due a refund, we would have told you.