VAT Deferral – VAT payments from 20 March 2020 until 30 June 2020
Any businesses that wish to defer their VAT payments are automatically eligible to do so. VAT payments due on 7th April, 7th May or 7th June 2020 can be deferred until 31 st March 2021.
Businesses that have a direct debit mandate in place to pay their VAT and wish to defer payment will need to contact their bank to cancel that mandate.
Businesses should continue to file their VAT returns by the due date.
As this is a scheme which you are automatically eligible for, you do not need to inform HMRC if you chose not to pay.
Self-Assessment Payment on Account Deferral
Any taxpayer (not just the Self-Employed) that want to defer their second payment on account for 2019/2020 due on 31 st July 2020 are automatically eligible to do so. This payment can be deferred until 31 st January 2021.
You must still file the Self-Assessment Tax Return for 2019/2020 on or before 31 st January 2021.
Business Rates and Grants for the Hospitality, Leisure and Retail Sectors
Any businesses in the hospitality and leisure sector will pay no rates for the 2020 to 2021 tax year.
Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.
A £25,000 grant will be provided to retail, hospitality and leisure businesses operating from premises with a rateable value between £15,000 and £51,000.
Business Rates and Grants for Small Businesses
Any businesses that already pays little or no business rates because of small business rate relief (SBBR can apply for a one-off grant of £10,000. This applies to all businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs.
Grants can be applied for now by visiting your local authority websites, here are two local (to us) links that are live so far:-
South Lakeland District Council
The Coronavirus Job Retention Scheme
This scheme allows all employers who can no longer offer their current employees any work the opportunity to agree changing their employment status to that of a Furloughed Worker. A furloughed worker must be furloughed for a minimum of three weeks at a time and the Government scheme is in place for a period of three months, backdated to 1 st March 2020.
Each employee that is included must have agreed to be furloughed with their employer and they must not work for the employer during this period.
All businesses with a PAYE Reference Number including charities and not-for-profit organisations and single director companies, based in the UK are eligible.
Owner managed company director/shareholders who pay a small salary and a dividend can currently only apply the salary element of their pay to the scheme.
The employer will pay the contractually agreed amounts as required by the employment contract in the usual way. This will involve paying the employee, and HMRC the PAYE and both primary and secondary National Insurance Contributions. The grant will be paid directly to the employer.
The grant paid will cover 80% of the agreed employees pay, employers National Insurance Contributions and Pension Contributions and the employer can choose whether or not to pay the employee more than the 80% recoverable.
HMRC are currently working on an online system to operate the scheme and once this is ready, employees who have agreed to be furloughed can be uploaded on to the system and a claim for wages can be requested once every three weeks.
As of writing this document (01.04.2020 the Scheme is notup and running)
Claiming Statutory Sick Pay
Small and medium sized businesses and employers can reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:
The refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19.
Employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020
Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note
Eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to those staying at home comes into force
The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible
Employees Eligible for Sick Pay
So, if you are self-isolating, you’ll be able to get SSP from the first day. This will begin from 13 March 2020.
To qualify for Statutory Sick Pay (SSP) you must:
Be classed as an employee
and have done some work for your employer
Have been ill for at least 4 days in a row (including non-working days)
Earn an average of at least £118 per week
Tell your employer you’re sick before their deadline – or within 7 days if they do not have one
Employees Not Eligible for Sick Pay
You will not qualify if you:
Are self-employed
Have already had SSP for 28 weeks (and the 28 weeks ended within the last 8 weeks)
Had Employment and Support Allowance (ESA) in the last 12 weeks
Are getting statutory maternity pay or Maternity Allowance
Are pregnant, your baby is due in 4 weeks or less and your illness is pregnancy-related
Had a baby in the last 14 weeks (or the last 18 weeks if your baby was born over 4 weeks early)
Are in the armed forces
Are in legal custody (detained either by the police or in prison)
If you’re not eligible or your SSP ends
You may be able to apply for Universal Credit or Employment and Support Allowance (ESA) . You can use form SSP1 to support your application.
If your SSP is ending your employer must send you form SSP1 either:
within 7 days of your SSP ending, if it ends unexpectedly while you’re still sick
on or before the beginning of the 23rd week, if your SSP is expected to end before your sickness does
If you do not qualify for SSP your employer must send you form SSP1 within 7 days of you going off sick.
Self-employment Income Support Scheme
The Self-employment Income Support Scheme (SEISS) will support self-employed individuals (including members of partnerships) whose income has been negatively impacted by COVID-19. The scheme will provide a grant to self-employed individuals or partnerships, worth 80% of their profits up to a cap of £2,500 per month.
In order to apply for the scheme you must meet all of the following criteria:
be self-employed or a member of a partnership
have submitted your Self-Assessment tax return for the tax year 2018-19
traded in the tax year 2019-20
are trading when you apply, or would be except for COVID-19
intend to continue to trade in the tax year 2020-21
have lost trading/partnership trading profits due to COVID-19
Your self-employed trading profits must be less than £50,000 and more than half of your income must come from self-employment. In order to determine this at least one of the following conditions being true:
have trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
have average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period
If you have not submitted your Self-Assessment Tax Return for the tax year 2018-19, you must do this by 23 April 2020 in order to be considered for the SEISS scheme.
Individuals should notcontact HMRC now. HMRC will use existing information to check eligibility and invite eligible applicants to apply once the scheme is operational.
Grants are expected to start being paid by the beginning of June 2020. Once HMRC have invited you to apply for the scheme, received your application and confirmed your eligibility they will then pay the grant directly into your bank account.
Mortgage Holidays
The government has introduced a new policy during the Coronavirus outbreak whereby homeowners and landlords can apply for a three-month mortgage holiday. This must be agreed with your mortgage lender and will mean you do not have to make mortgage payments for three months however interest will still be charged during the period of the mortgage holiday and these payments must be made up either with additional time added to the end of your mortgage or increased future payments. Please contact your mortgage lender for more details. Taking a mortgage holiday will not affect your credit rating.
Rent for Landlords and Tenants
As of 26 th March 2020 landlords will be required to give all tenants a 3 month notice period if they wish to end the tenancy, this extended period will apply until 30 th September 2020.
Tenants should continue to make rent payments as usual and landlords are still legally obligated to keep the property in a good state of repair.
If a tenant faces financial hardship and is struggling with rent payments, the first step should be to have a discussion with the landlord to try to agree a plan moving forward, this could include deferred or reduced rent payments, however there is no legal obligation for the landlord to accept any changes.
If you require any further information, please email our accounts contact or info@bfmsltd.co.uk
BFMS Accountants
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