Covid 19 financial support update, above all it’s vital to know if you run a business, whatever shape or form that is.
Most importantly, look at your numbers. Certainly numbers are your business best friend; they won’t lie to you. Do your cash flow first, this will help you decide what financial support you need and want. Above all you will make better decisions, that help your business continuity.
For that reason you may decide to delay payments, access loan facilities, keep staff on the payroll. Your decisions will be driven by how your business future presents itself.
Looking at the COVID 19 Financial Support Update, it can be broken down into cash support, debt delay, Business Rates Relief and Loans. Some of the COVID 19 Financial Support won’t be available until the required legislation has been passed. The new tax year 6th April 2020 will see the introduction of other parts of the Financial Support Package.
Cash support
Coronavirus job retention scheme
Most noteworthy the objective is to encourage your business not to lay off staff. You can reclaim 80% of a ‘furloughed’ workers’ wages, up to three months. A furloughed worker is one still on your payroll but isn’t currently doing any work for you.
The first eligible month is March 2020, with claims submitted online; the system has not been fully set up.
Grants
These are automatically provided by your Local Authority; no claim needs to be made if your business occupies a property. Home based businesses are unlikely to be eligible
Cash grants of £25,000 for those in the retail, hospitality & and leisure businesses, with a rateable value between £15,001 and £51,000. This sector includes
- shops, restaurants, cafes, drinking establishments, cinemas and live music venues
- for assembly and leisure – typically museums and galleries
- as hotels, guest and boarding premises and self-catering accommodation
Also cash grants of £10,000 will be provided if your businesses pays little, or no business rates -typically rateable values below £15,000.
Business rates holiday
Furthermore there will be a rates holiday in the 2020-21 tax year for retail, hospitality, leisure businesses, and OFSTED registered nurseries in England
Delayed payments
VAT
Likewise for VAT, the deferral will apply from 20 March 2020 until 30 June 2020. VAT return still must be filed. Payments made by end of March 2021. Automatic, you can still pay, make repayment claims
Self assessment
July 2020 payment on account delayed until 31-Jan-2021, no need to claim It’s an automatic offer to self-employed, and other taxpayers.
Time to Pay
Outstanding tax liabilities, such as Corporation Tax and PAYE, plus VAT and Income Tax not covered by the above, may be eligible to get support through HMRC’s Time To Pay service.
Time to pay is at the discretion of HMRC and is dealt with on a case-by-case basis. Contact 0800 0159 559
SSP
Also employers can claim 2 weeks SSP per each employee who has been off sick due to COVID-19. A rebate scheme will be implemented, with details to follow on how to claim. Make sure your business keeps appropriate records.
Directors, if they meet the SSP criteria are eligible to claim.
Self employed
Freelancers and the self-employed will be eligible for self employed cash grants. However, claiming SSP, Rates Grant and some of the deferral schemes may not be available. This may because your business may not be VAT registered , property based or an employer.
If you are self-employed, or unable to claim SSP (minimum earnings £118 per week) you may be able to claim Universal Credit, or ESA. The minimum income limit will not apply for the duration of the outbreak. Therefore if you are a new claimant, you will not need to attend the job centre, and there will be support for rent costs
Business interruption loan scheme
Backed by the British Bank (BB) who will guarantee lenders 80% of the loan value. The loans and overdraft facilities will be offered by 40 accredited lenders, As a result each bank will have its own loan application and risk assessment process. As a result the risk threshold for banks will be lower, because of the BB guarantee. Hence the lender may still want to see business plans, and management accounts.
Conclusion
In times of uncertainty, calm and prosperity you need your Numbers. You can figure out what financial support your business needs
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