As we come to terms with the lockdown, we are all now trying to figure out the economic reliefs announced by the Chancellor Rishi Sunak. Are we eligible for and, most importantly, how can we access them? This is what we look to tackle here by giving you a summary on each scheme based on what we know – as these are totally new schemes there are still many unanswered questions, for which we are awaiting further guidance from the government.
Help for employers
Government retention scheme
The Chancellor has set out plans for a Coronavirus Job Retention Scheme to underwrite 80% of the salaries of workers furloughed.
For who?
- All UK businesses are eligible.
- Can be applied on all employees that were on your PAYE payroll on February 28, 2020.
Process
- Designate and notify affected employees.
- Submit information to HMRC about the employees that have been furloughed and their earnings through an online portal, which is still being set up.
- Grant will start on the day the employee is furloughed and can be backdated to March 1.
- Runs for a minimum of three weeks and for up to three months (can be extended on further review).
How much?
- HMRC will reimburse 80% of furloughed workers’ salaries, capped at £2.5k per month, per employee.
- As this is a grant and not a loan, this does not need to be repaid.
Other
- You may choose to fund the difference between the 80% and the normal wage. If you decide to the contrary, ensure you have a contract with the employee stating the revised terms.
- You can rotate the employee being furloughed.
- Furloughed staff are not able to carry out any work for the business during this period.
Insurance
If your business has cover for pandemics and/or a government-ordered closure, you should be able to make a claim.
VAT deferral
You can now defer your next quarter’s VAT payment. No applications are required and businesses will not need to make a VAT payment during this period.
Statutory Sick Pay (SSP)
- If you are a small to medium-sized business (less than 250 staff as of February 2020), you can claim refunds for sick pay payments made to staff for two weeks.
- A GP note is not required but all records of staff absences are to be kept.
- HMRC are developing a portal to accommodate this type of refund.
Coronavirus Interruption Loan Scheme
- The Coronvirus Business Interruption Loan Scheme (CBILS) is for all businesses and sole traders.
- Loans are on favourable terms; no interest payable in the first 12 months and repayment due within six years.
- Apply through your local banks.
Small business grant funding
- If you qualify for the small business rates relief or rural rate relief then you may be applicable to apply for a one-off £10k grant.
- Businesses that operate in the leisure, hospitality and retail sectors and have a rateable value between £15k and £51k are eligible to apply for a grant of up to £25k.
- Check with your own local authority for the process as some of them will contact you if you are eligible and others you have to contact yourselves.
HMRC’s Time to Pay
- HMRC has expanded its existing Time to Pay arrangements in order to assist businesses affected by Covid-19. You can now defer your tax payments (including PAYE and VAT) and agree to pay by instalments.
- HMRC has set up a helpline to specifically to deal with this: 0800 0159 559.
Rates abolished
- All small businesses will no longer have to pay rates for the next 12 months.
- Automatically addressed by your local authority.
Help for employees/locums
Self Employed Income Scheme
The Chancellor has announced there is help for some locums. It is still newly announced so finer details are currently outstanding.
For who?
- For all self-employed (locums) whose income has been impacted due to Covid-19.
- This scheme is not for directors of limited companies who trade as locums.
Conditions
- You must be trading as self-employed in 2019/20 and intend to continue to work in 2020 to 2021 tax years.
- More than 50% of your total income must come from self-employment.
- Trading profits are no higher than £50k in 2018/19 or an average up to £50k for the past three tax years.
- You can continuing locuming and get this grant at the same time.
How much?
- You will receive a taxable grant of 80% of your average monthly profit (capped at £2,500) based on the past three years (2016/17, 2017/18 and 2018/19) tax returns.
- If you do not have three years’ tax returns, then they will use whatever you have, even if it is one year’s return.
- If you still have not submitted your latest tax return then you have another four weeks (from March 26, 2020) to submit, so it can be taken into consideration.
How to apply
- If you are eligible, HMRC will automatically pay into your bank account.
- The scheme will be active for a period of three months after which they will review it and determine if there is a need to extend it.
What if I have recently started locuming and have not submitted a single tax return?
- The Chancellor said they cannot cover everyone and if there are no tax returns to work with then the chances of fraud are higher.
- So for locums in this position, it seems that your best option will be Universal Credit (discussed later).
What if I am a resident for part of the tax year and a locum for the other half
- We do not know for certain but it seems as if they will work with whatever information is supplied. So even if it is a few months, they will calculate based on that as long as records have been submitted.
Statutory Sick Pay (SSP)
Residents
- SSP will be paid from the first day of sickness, rather than the fourth day for affected individuals and will include those infected and those self-isolating (even if they do not have the symptoms of the disease).
Self-assessments
- All self-assessment payments are now deferred until January 2021.
- This means the usual payment on account in July will no longer be applicable.
Help for all
IR35 reform delayed
- Controversial IR35 tax reforms in the UK are now delayed until April 2021.
Mortgages
- A three-month mortgage holiday to help with your cash flow.
Companies House
- Companies can apply for an extension if they are unable to file their accounts on time due to coronavirus.
MOT
- From March 30, 2020, MOT can be delayed by up to six months, until further notice.
Returns
- Some retailers offering extended returns period of 120 days.
Rent
- For those claiming Universal Credit, from April, 30% of market rent can be claimed via your local authority.
Universal Credit
- Everyone can apply if impacted from this as long as they are not eligible to any other scheme.
- However, if you have savings of £16k and above then you will not be eligible.
- Balance has been increased to match SSP (£94.25 per week).
- Apply online though HMRC.
Author’s note
This publication has been carefully prepared, but it has been written in general terms and should be seen as containing broad statements only. This publication should not be used or relied on to cover specific situations and you should not act, or refrain from acting, on the information contained in this publication without obtaining specific professional advice. •
Mo Chaudhry is a dual qualified optometrist and chartered accountant at Locumkit, a company that provides locum management tools and specialises in optometry.
• For more information, visit www.locumkit.com.