This update is written and posted on 21 May 2020 and is likely to quickly become out of date. We will endeavour to update information as it becomes available.
Previous updates and other useful information can be found at our WEBSITE.
Per our May newsletter last week, businesses are starting to move away from concentrating solely on survival and are now shifting their focus towards recovery, which is going to take some time. Most businesses are working through how they will operate, moving to what a new normal will be for a period of time and deciding how to implement social distancing whilst achieving maximum capacity and productivity in this new world.
As ever, matters are still developing and we will endeavour to keep you up to date, flag to you opportunities and signpost to the key details as best we can via our weekly updates. In this update, we provide some more detail and links to Government funding assistance which was announced a few weeks ago with the usual headline “grab,” however the detail has only been released recently.
To give you an idea of the level of uptake of Government support schemes, statistics released on 19 May by the Government show the following:
- 8 million jobs have now been furloughed with £11.1 billion claimed so far through the Job Retention Scheme;
- 2 million Self-employment Income Support Scheme (SEISS) claims have been submitted worth £6.1 billion. (This only went live on Tuesday last week, with the first payments being received this week);
- Bounce Back Loan Scheme (BBLS) has seen 464,393 loans approved so far worth £14.18 billion;
- Coronavirus Business Interruption Loan Scheme (CBILS) has seen 40,564 loans worth £7.25 billion approved so far.
Local Authority Discretionary Grant Fund
The Government announced at the end of April that they were setting up a Local Authority Discretionary Grant Fund targeting small businesses with fixed property-related costs which were not eligible for the business rate grants announced at the end of March because they do not pay business rates or are not exempt under the small business rates scheme. For example, this includes businesses who pay a rent for serviced offices, part of which includes a contribution to the landlord’s business rates.
Guidance was issued at the end of last week, which specifically states that councils are being asked to prioritise, as one of the eligible groups, small businesses in shared offices or other flexible work spaces. Examples include industrial units, science parks and incubators which do not have their own business rates assessment.
The grants "are primarily and predominantly" aimed at:
- small and micro businesses;
- businesses with relatively high ongoing fixed property-related costs;
- businesses which can demonstrate that they have suffered a significant fall in income due to the COVID-19 crisis;
- businesses which occupy property, or part of a property, with a rateable value or annual rent or annual mortgage payments below £51,000.
The guidance says the grant funding is for "businesses that are not eligible for other support schemes" and "businesses which have received cash grants from any central government COVID-related scheme are ineligible for funding". Such schemes include the Self Employment Income Support Scheme (SEISS), Small Business Grant Fund and Retail, Hospitality and Leisure Grant (The Job Retention Scheme is excluded). Basically, the discretionary funding is intended to support businesses that are not able to access other support.
Councils are only just getting up to speed with this fund and will be setting up an application process for businesses to apply for the grants. The Government are looking for the first payments to be made by June. It is down to the local council to prioritise who should receive the grants in line with the guidance.
We have contacted our clients directly where we believe they could be eligible, but if we have missed anyone, the guidance can be found at HERE
In mid-April, the Government announced support for start-ups and early stage businesses, known as the Future Fund. The fund opened for applications on Wednesday 20th May. Applications can be made via an online platform and the Government has published a set of standard terms and eligibility criteria for borrowers, investors and their advisers to view in advance of making applications.
The fund was established to support companies that have been unable to access other government business support programmes because they are either pre-revenue or pre-profit.
Eligibility criteria for the fund can be summarised as:
- Companies must be UK-incorporated and if part of a corporate group, only the parent company is eligible;
- Companies in receipt of the loans will be required to have previously raised at least £250k in equity investment from third party investors in the last five years;
- Only eligible companies that can attract at least 50% via third-party investment will receive funding;
- The company must have been incorporated on or before 31st December 2019;
- At least one of the following must be true for the company:
Half or more of the employees are UK based;
Half or more of the company’s revenues are from UK sales.
More information and how to make an application can be found at The British Business website at HERE
Reclaim Statutory Sick Pay
Back in March at the start of the pandemic, the Government announced the Coronavirus Statutory Sick Pay (SSP) Rebate Scheme, enabling employers to claim the SSP paid to current or former employees. The online service to reclaim SSP will open on 26 May 2020 and we will post the link, once it is released.
The repayment covers up to two weeks starting from the first qualifying day of sickness, if an employee is unable to work because they either:
- have coronavirus (COVID-19) symptoms;
- cannot work because they are self-isolating because someone they live with has symptoms;
- are shielding and have a letter from the NHS or a GP telling them to stay at home for at least 12 weeks.
Claims can be made for periods of sickness starting on or after:
- 13 March 2020 - if your employee had coronavirus or the symptoms or is self-isolating because someone they live with has symptoms;
- 16 April 2020 - if your employee was shielding because of coronavirus.
The weekly rate was £94.25 before 6 April 2020 and is now £95.85. If you pay more than the weekly rate of SSP you can only claim up to the weekly rate paid.
To use the online service, you will need your Government Gateway user ID for PAYE Online. If you use an agent who is authorised to do PAYE online for you, they will be able to claim on your behalf.
Job Retention Scheme
This is the most well received and used of the Government schemes, based on feedback from our clients.
HMRC have been working on feedback received from users of the scheme and have made some updates to the system and issued some tips and guidance via YouTube.
- A 'save and return'option has been added. This means that you can now return to a partially completed claim, rather than having to do it all in one go (which many were finding frustrating);
- To avoid common mistakes HMRC are recommending the following:
- Funds claimed under the scheme are generally paid within six working days after you apply, provided your claim matches records that HMRC hold for your PAYE scheme and the claim is complete.
- A common error is missing NI numbers off. Making sure that you submit your claim correctly will reduce the chance of delayed or incorrect payments.
- Use HMRC’s step-by-step guide and its calculator when applying (and, per our advice, keep a record of your workings each time you make a claim).
- Check your calculations each time you submit a claim in case any details have changed.
- Only submit one claim per pay period – you cannot submit another claim for overlapping periods; this means that in each claim you should include all furloughed employees paid during that period.
If you have claimed a grant through the Scheme, you need check if you need to report payments on the PAYE Real Time Information system. This will depend on whether you are using the grant to pay wages or to reimburse wages that you’ve already paid.
Two HMRC webinars about the Scheme can be found on the HMRC YouTube channel 'HMRCgovuk'
- Salesforce small business grants - Salesforce is partnering with Enterprise Nation to offer eligible small businesses the opportunity to receive a £5,000 grant to help them through the COVID-19 outbreak. Details of eligibility and how to apply can be found at HERE
Details of other grants and support can be found at link to our factsheet
- Holiday entitlement and pay – The Government has provided an explanation of how holiday entitlement and pay will operate during the coronavirus pandemic where it differs from the standard holiday entitlement and pay guidance. This guidance applies to those that have continued to work as well as those that have been furloughed. The guidance can be found at HERE
- eBay- More than 50,000 new sellers joined the online marketplace in April, many of them small or independent retailers. eBay is allowing new businesses registering to pay no fees until the end of July. Tthe daily rate of new sellers joining the site has doubled since lockdown restrictions were introduced.
- Home office equipment – The Government announced details of a temporary tax and national insurance exemption to ensure that home office equipment purchased by employees as a result of the Covid19 outbreak, will not attract tax and NIC liabilities where the cost is reimbursed by the employer. This measure will apply for 2019–20 from 16 March 2020 only, and 2020–21. To be eligible for the exemption the expenditure must meet the following two conditions:
- The equipment is obtained for the sole purpose of enabling the employee to work from home as a result of the coronavirus outbreak; and
- The provision of the equipment would have been exempt from income tax if it had been provided directly to the employee by or on behalf of the employer.
Further details can be found at HERE
We know that this is a very difficult time for all businesses and some difficult decisions are having to be made. We have spoken to hopefully all of you and if not, we would like you to know that we are here ready to help if you need us to provide advice, deal with queries, or just be a business sounding board.