Covid 19: Update 2020-03-23

The biggest update of Friday's press conference was the announcement that the government would pay 80% of the wages of employees who are designated as "furloughed workers", AKA the "Coronavirus Job Retention Scheme".

HMRC will need to be notified of workers designated as 'furloughed' through a new online portal. This system is being implemented as we speak but is not yet ready to be used by the general public.

HMRC will reimburse 80% of an employees wages up to a cap of £2,500 per month per employee. Crucially (in our opinion), the remaining 20% does not have to be met by the employer. This will allow employers in the midst of cash flow and profitability issues to keep staff on their payroll without costing them any money.

The mechanics and timing of these "reimbursements" are not yet known. As more details become public we will share them with you. Expect this to take some time though as HMRC are creating this system from scratch.

The government says this scheme will run for at least 3 months starting the 1st of March 2020, but they will extend if necessary.

Coronavirus Business Interruption Loan Scheme update:

The biggest update with regard to loans is that the interest free period will be extended from 6 months to 12 months. This means you will be able to borrow money at no interest for a full 12 months.

I spoke to Barclays on the phone last week and they said that the loans will be available sometime this week. There is no new information on the Barclays website as of this morning, but those awaiting further details should keep an eye on their own business bank account provider's website as that is where details will be shared.

Be aware that you may be asked to sign personal guarantees to get these loans and the risks that that would entail.

Grants:

The same remains true for grants, details are still to be announced and will they be provided by your local authority. We've been told the details should be announced early this week and it's our understanding that all those that are entitled to a grant will be notified. If you don't hear anything by the end of this week from your local authority please contact the authority that sends you your rates bill, even if it's a nil invoice.

Once more information becomes available with regard to this we will send out another quick update as it's a hot topic.

The Self-Employed:

The only thing announced so far for the self-employed and those in partnerships is that you can now access full universal credit at a rate equivalent to statutory sick pay if you have to stop working. This is a fairly measly amount and the government is under a lot of pressure from all quarters to add more to their support package for the self-employed. However, there are no further details as yet... watch this space.

Deferral of VAT:

Those businesses that have a VAT payment to make between 20th March 2020 and 30th June 2020 will automatically be allowed to defer their liability until 5th April 2021.

Deferral of income tax:

If you are due to make a payment on account for income tax by 31st July 2020 you will no longer have to make this payment until 31st January 2021.

Rates payment holiday:

Nurseries have been added to the rates payment holiday.

That's it for now