In the wake of the COVID-19 pandemic the Government has announced unprecedented measures to enable individuals and businesses to cope financially and stay afloat whilst the country defends itself against the widespread impact of the pandemic.”
We outline below a summary of the announcements from the Chancellor in light of the current COVID-19 pandemic crisis.
- Government will provide grants to businesses in order to cover salaries of employees who would have otherwise been laid off. The grant will cover 80% of wage costs up to £2,500 per employee, per month (gross), plus employers NIC and minimum auto-enrolled pension contributions on wages. Employers can choose to top up to 100% but no obligation to.
- Can be backdated from 1 March 2020, and available for 3 months to 31 May 2020, and extended if necessary.
- Grants likely to be available from end of April.
- Open to all UK employers that had a PAYE scheme in place on 28 February 2020.
- Employers can claim SSP where employees are affected by COVID-19 virus and will qualify from first day of sickness, HMRC will pay up to 2 weeks per employee.
- Can apply for a grant worth 80% of their average monthly profits, up to a maximum of £2,500 per month. This will be backdated to March, and will be paid directly to the individual’s bank account from HMRC, most likely from June.
- This grant will be taxable and will need to be declared on 2020/21 Tax Returns in due course.
- To qualify, you must have traded in 2019/20, and looking to continue to trade into 2020/21, and at least 50% of your income will need to be from self-employment, as shown on your 2018/19 Tax Return.
- Available to the self-employed who earn up to £50k (net) per year. However, this scheme is not available for company Directors, who pay themselves dividends.
- Grants will be based on 2018/19 earnings or an average of earnings over the last 3 tax years. HMRC will contact you directly to apply.
- If you have not yet completed and filed your 2018/19 Tax Return, you have until 23 April to get this submitted and still qualify.
- If you are self-employed, you may be able to claim Universal Credit, the Minimum Income Floor will not be applied for a period of time whilst you are affected.
- Government have agreed with mortgage lenders that they will offer repayment holidays of 3 months to households in financial difficulty, whether you are employed or self-employed.
- Coronavirus Business Interruption Loan Scheme – Loan of up to £5 million for small businesses experiencing loss or deferred revenues, with interest free period of 12 months.
- Bank of England Lending Facility (COVID-19 Corporate Financing Facility) – For medium to large businesses, the Bank of England lending facility is intended to offer short term (up to 12 months) finance, through the issue of special corporate bonds, purchased via the Bank of England
- Business rates holiday for 2020/21 for retail, hospitality and leisure, including, pubs, restaurants, cafes, hotels, nightclubs etc. effective from April 2020.
- Grants for retail, hospitality and leisure who operate from small premises, where rateable value between 15k-21k can receive a ‘one off’ grant of up to £25k.
- Businesses who qualify for Smaller Business Rate Relief (SBRR) and who do not pay rates, can qualify for a one-off grant of up to £10k.
- Next quarter of VAT payments are to be deferred, ie specifically from 20 March 2020 to 30 June 2020.
- Any deferred VAT will not be payable until end of the financial year (31 March 2021).
- VAT Returns are still required to be completed and submitted by their original due dates.
- This is automatic, no applications required.
- 31 July 2020 payments on account have all been deferred for six months.
- The next tax payments will be due on 31 January 2021, and will take into account any payment made in January 2020
- This is automatic, no applications required.
- No interest or late payment penalties will be charged in the deferral period.
The 60-day annual limit as set out in the 2013 Statutory Residence Test is still in place and relevant, however, it is possible that days spent in the UK may be disregarded due to exceptional circumstances, but will always depend on the facts and circumstances of each individual case. However, these circumstances are considered as exceptional, if you:
- are quarantined or advised by a health professional or public health guidance to self-isolate in the UK as a result of the virus
- find yourself advised by official Government advice not to travel from the UK as a result of the virus
- are unable to leave the UK as a result of the closure of international borders, or
- are asked by your employer to return to the UK temporarily as a result of the virus
Please contact your Saffron representative if you would like any further information on any of the points raised above.
We wish all our clients and their families well and a safe passage through this very unsettling time.