It felt a little strange packing up my office to relocate at home this week. It was important though to relocate at home before schools close. I am now set up to support my clients.
The impact of the Coronavirus is far reaching. Most important of all, it is affecting people’s health and sadly taking far too many lives. We are very fortunate that we have the wonderful frontline workers in the NHS and organisations who are working hard to help us all. I am so grateful to them all.
I cannot help to save lives medically, but I can help my clients who are facing a stressful time financially. Some of my clients have already felt the financial impact of this virus and are struggling to pay their bills. Others will start to feel the impact fairly soon, if they don’t plan. I have already started keeping clients informed of financial measures to help them.
I have worked as an accountant and tax specialist for about 27 years now, maybe more and these are definitely unchartered waters. The majority of my clients will be affected in some way during the coming months and I shall try to assist you, wherever I can.
It is important that all my clients keep in touch with me at this time, so I can do my best to guide you. Financial measures are changing regularly at the moment and I shall keep updating this page as soon as I am aware of changes.
Self Employed workers with no business premises
I have put this section first, as these are the workers who have already started to lose jobs and are making no money. So today, 20 March 2020, Rishi Sunak announced he is suspending the minimum income floor so self-employed people can access in full Universal Credit at a rate equivalent to SSP for employees. So get back on that phone as things have changed. It may be from 6th April though, but get that claim in as soon as you can.
What I would say is that if you have a mortgage they are offering 3 month mortgage breaks. Instead of trying to manage for now, consider taking the break to protect any money you still have in the bank.
Renters you cannot be evicted during this time and it has just been announced that to help you pay your rent the Local Housing Allowance will cover 30% of market rent in your area (that is not the same thing as 30% of your actual rent).
That still may not be enough for many. I have attached a link here to the Citizen’s Advice website re struggling to pay rent which may help.https://www.citizensadvice.org.uk/housing/renting-privately/private-renting/get-help-with-renting-costs/
Now is the time to cancel any unnecessary expenditure or direct debits. Be brutal with it. If you have any bills coming up try to spread the cost monthly, even if that will cost you more in the long term. At the moment cashflow is vital.
If you do get COVID 19 or have to self isolate, you can claim ESA for 14 days. It is less than SSP, but it is there. That does not cover your loss of earnings.
If you have been working within the last 2 to 3 years and have paid and/or been credited with enough National Insurance contributions, you may be able to claim New Style Jobseeker’s Allowance (JSA)
New Style JSA can be claimed on its own or at the same time as Universal Credit. Your savings and capital (or your partner’s savings, capital and income) are not taken into account when claiming New Style JSA.
It has also been announced that the July payment on account will be deferred until January 2021.
It is not ideal I know, but if you can, you need to flexible for now. There are new job opportunities opening up temporarily for drivers and at supermarkets.
Grants for Businesses with Premises
All businesses with business premises, who benefit from small business rate relief or rural rate relief, will receive a cash grant of £10,000.
I understand that you do not need to do anything, the local council’s will be in touch early April, when they should have the funding.
I know many people are closing their doors this week and will still have overheads to pay till the money comes in. It is important that, where possible, you collect any money you are owed from people, review your expenditure, cancel any unneccesary expenditure and spread payments.
Cashflow is vital to business survival.
Businesses in the retail, leisure and hospitality sectors with business premises, with rateable value between £15,000 and £51,000, will receive a grant of £25,000 and a 12 month business rate holiday.
If you need short term cashflow you may need to consider whether you want to make use of the Coronavirus Business Interruption Loan Scheme to keep your cash flowing till you can claim the monies back.
A Coronavirus Business Interruption Loan Scheme will offer loans of upto £5million to SMEs through the British Business Bank. These should be available Monday 23 March 2020. It will now be interest free for 12 months and 80% backed by the government.
We don’t yet know how banks will assess the criteria for this as they still take a risk of 20%. If the banks require accounts and tax returns or any other information get in touch. We are able to email them to you as we have access to our software from home. Keep in touch if you need help.
Just remember though that this is a loan and will need to be repaid at some point.
Everyone should check their business insurance policy. Many won’t cover this scenario, but you may just have a policy that does.
Government confirmed that businesses with insurance, which covers pandemics and government ordered closures, will be covered if their business is affected by government advice telling people to avoid their premises.
So do check.
This is probably the last thing on everyone’s minds but I do need to advise that HMRC have a Time to Pay Scheme, for anyone struggling to pay their tax bill due to Coronavirus.
HMRC have a dedicated helpline 0800 0159 559.
For anyone struggling to pay their tax bill generally there are other phone numbers. See this link https://www.gov.uk/difficulties-paying-hmrc
July payments on account will be deferred until 31 January 2021. So that gives everyone a breathing space and by then you will know your actual tax liability rather than it being based on 50% of last year’s tax liability.
VAT payments in the next quarter i.e. payments due to be made from 20 March 2020 to 30 June 2020 will be deferred. Those bills will be deferred until the end of the financial year.
You do not need to apply for these deferrals, they are automatic.
SSP is available from the first day of sickness or having to self isolate. If you are following government guidance to stay at home, or are looking after someone else who is sick, you should be entitled to SSP.
UK employers that are small or medium sized businesses and employe fewer than 250 employees as at 28 February 2020 (which are my clients!) need to keep a record of SSP paid and will be able to claim it back from the Government.
The facility to reclaim SSP paid has not been set up yet, but we shall keep you informed. It will cover employer’s SSP payments for 14 days of sickness leave, as a result of COVID 19.
Some people may need to be off for longer though. Family members may get it at different times and then there is a longer self isolation period. So we may find the measures do not go far enough.
The British government is going to help pay people’s wages.
If you want to keep employees, but they are not working for you at this time, perhaps because you are shut or there is not enough work, you can claim a grant from HMRC. It will cover 80% of the salary of workers that you want to retain.
They will be designated as “furloughed workers”. Furloughed workers for anyone who is interested means “grant leave of absence to”. Changing the status of employees remains subject to existing employment law. There will be a new online portal where you can submit information about furloughed employees.
HMRC will pay up to a total of £2,500 a month per employee. This will cover wages backdated to 1st March 2020 and will be open before the end of April for at least 3 months.
As the system to obtain a refund is not yet set up, you may need to obtain short term cash flow from the Coronavirus Business Interruption Loan to assist you temporarily. The loans will be available from banks from Monday 23 March 2020.
There is no limit on the funding available for furloughed workers as the government wants to support as many jobs as needed.
If your workers are still working this does not apply to you, it only applies if you need to lay staff off. Furloughed workers must not undertake work for you, whilst they are furloughed.
Instead of making staff redundant this enables employers to keep them on and the government will pay at least 80% of their salary. You can choose to pay the additional 20%, if you feel you can afford to but you are not obliged to do so.
Mortgage payment holidays of upto three months will be offered.
They will not affect your credit rating, but the interest will be recovered later.
We do not really know how long this could continue so if you think you may need all your money to survive the next few months, you may want to consider taking the holiday as early as possible, rather than trying to struggle through this.
If you are not struggling to pay your mortgage then there may be good deals for remortgaging to reduce your overheads.
This crisis will eventually end and things may change. That means there will be new opportunities. Businesses need to be ready to continue and take advantage of opportunities in the future.
Know your supply change so you can anticipate any knock on effect there could be to your business. Not just your supplier, but their supplier. Look after your staff and also your own finances.
Finally, bookmark the Government coronavirus page for businesses, which offers details of financial measures and advice to employers. Here is the link https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19
There is also the general site which gives guidance on Coronavirus generally which you may want to look at https://www.gov.uk/government/topical-events/coronavirus-covid-19-uk-government-response