Firstly, all my thoughts and well wishes are with you all, and hope you all keep safe and be sensible to avoid catching the Coronavirus. We have been taking a number of calls with regards to the current situation and apologises for not being able to get round to all of our clients. As a result, we have drafted the following brief note to keep you updated.
Since last week the Chancellor made announcements to help small and medium sized businesses. Many of these announcements have been extremely encouraging, however, the way to get help is still somewhat unclear.
On 20 March 2020, Boris Johnson took the extraordinary step of ordering pubs, clubs and restaurants across the UK to close that night. This has affected a large number of our clients who operate as restaurants and take-aways but also shop-keepers and those supplying to the retail industry.
Please note, restaurants and take-aways can, for now, can remain open only if they are providing take-out food.
The Chancellor’s speech of 20 March 2020 announced an unprecedented wage-support scheme to try to prevent thousands or millions of job losses.
WHAT CAN WE DO
I am here to assist and help you to access what ever grants and loans there are available under the various Government Schemes and together we can get through these very troubling and difficult times for all our businesses.
At this moment in time, the various schemes are not accessible and when these various portals to access the schemes are available, I will contact you at that stage.
SCHEMES AND GRANTS AVAILABLE
The following is a summary of what is the current position based on the Chancellors speech on 20 March 2020 and information on the GOV.UK webpages on 20 March and this includes a package of measures to support businesses including:
- Coronavirus Job Retention Scheme (CJRS)
- Deferring VAT and Income Tax payments
- HMRC Time To Pay Scheme
- Statutory Sick Pay relief package for SMEs
- 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
- the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank – https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/
CORONAVIRUS JOB RETENTION SCHEME (CJRS)
The Coronavirus Job Retention Scheme will be a government grant – employers can claim for 80% of furloughed workers wage costs, up to a cap of £2,500 per month.
The scheme will be:
- Backdated to March 1st March 2020
- Claimed initially for at least three months but could be extended ‘for longer if necessary’
Who is eligible for the CJRS scheme?
All UK businesses are eligible (or in the Chancellor’s words “Any employer in the country – small or large, charitable or non-profit – will be eligible for the scheme.”)
When will you be able to make a claim under the CJRS scheme?
No date has been set as yet, but the following are indications it will not be immediate:
- “HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.”
- “HMRC are working night and day to get the unprecedented Coronavirus Job Retention Scheme up and running and we expect the first grants to be paid within weeks.”
- “If your business needs short term cash flow support, you may be eligible for the Coronavirus Business Interruption Loan Scheme”
What is a furloughed worker?
We understand that a furloughed workers are “workforce who remain on payroll but are temporarily not working during the coronavirus outbreak” per GOV.UK news story.
It is noted that employers will need to notify employees of this change in employment status to furloughed, but that changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
OTHER GOVERNMENT ASSISTANCE
On 18 March 2020, the Scottish Government (https://www.gov.scot/news/gbp-2-2-billion-for-business/) support relating to business rate.
Economy Secretary Fiona Hyslop has addressed the Scottish Parliament on the economic impact of COVID-19 in Scotland.
In her statement she warned that as a result of coronavirus, the Scottish economy is facing an immediate collapse in demand.
She outlined the actions being taken by the Scottish Government to support businesses including a package of measures worth £2.2 billion from 1 April:
- a full year’s 100% non-domestic rates relief for retail, hospitality and tourism
- £10,000 grants for small businesses in receipt of the Small Business Bonus Scheme or Rural Relief
- £25,000 grants for hospitality, leisure and retail properties with a rateable value between £18,000 and £51,000
Sadly, with the exception of the VAT and 31 Jul income tax deferral payments and applying for Universal credit there is currently no income support as is the case for employees. The Government has stated that it is looking into the position with regards to the Self Employed and will make further announcements in due course.
Sources of further information
I would expect HMRC’s and the gov.uk websites will be updated to provide additional information on the CJRS scheme, Small Business Interruption Loans and grant claims for rates relief.
Once more information is available, I will contact you at that time. But for now please keep safe and follow all the Government guidance on social distancing.