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COVID-19 SUPPORT FOR BUSINESSES - LATEST UPDATE 24/3/2020

Whilst lockdown is now upon us Afford Bond continues to be open for business, with most of us working from home. In the intervening period we intend to have a small skeleton staff at both offices and all telephone calls will be logged and returned as soon as possible. Please do not to hesitate to contact us on NANTWICH 01270 623731 or WILMSLOW 01625 416380. In this period, emails will be our main source of communication so please continue to use this source for all ongoing traffic. This communication follows on from our first COVID-19 Help sheet (released 18th March 2020).

This document outlines what the Chancellor has set out as further measures to support businesses throughout this period of disruption. The following pages outline the current support options that the government will make available in the coming days/weeks. We should highlight that more information and guidance is to be released by the government that sets out how to apply for and/or access the various support options, and we will of course update these as soon as they are available.

HOW WE CAN SUPPORT YOU AND YOUR BUSINESS

• We can offer practical and professional advice to help you and your business effectively navigate these unprecedented times and build a robust contingency plan.

• We can help you understand the options available to your business and how you can access the following government support.

• We can assist you in forecasting your cash requirements for the foreseeable period ahead.

• We can liaise directly with your finance providers and government agencies directly in support of your applications on the following initiatives.

• We can advise you how government assistance can be utilised on a personal level for the benefit of directors and employees.

• We can provide extensive and tailored guidance based on the experiences of many other businesses both within and outside your own sector. We are monitoring all government announcements on a daily basis and we will endeavour to provide relevant updates as soon as they are made available

1. CORONAVIRUS JOB RETENTION SCHEME (CJRS)

Under this scheme the government have confirmed that they will offer grants that will cover 80% of the salary of PAYE employees who would otherwise have been laid off. The scheme is open to all UK employers and will cover the cost of wages backdated to 1st March 2020. The scheme will be open for a minimum period of 3 months it is anticipated that the grants will be made available before the end of April. There is currently no information to suggest that this scheme won’t apply to directors on minimum salaries.

How to claim under the scheme

• Employers must designate affected employees as furloughed workers and notify employees of this change. It should be noted that changing the status of an employee remains subject to existing employment law, and depending on the employment contract may be subject to negotiation.

• Employers must submit information to HMRC about the employees who have been furloughed and their earnings through a new online portal. HMRC have confirmed that they will provide further guidance on what information is required and how this is to be reported in due course.

• HMRC will then reimburse 80% of the furloughed workers wage costs up to a cap of £2,500pm per employee. It should be noted that whilst HMRC are working urgently to set up a system to facilitate the above, we understand that existing infrastructure is not yet set up to facilitate payments to employers. Therefore, businesses may wish to consider applying for the new Coronavirus Business Interruption loan and/or benefit from the VAT deferral announcement. These points are discussed in more detail below. There have been no announcements in respect of self-employed individuals as yet, but we will of course release further updates as soon as available.

NOTE: We can liaise with HMRC and apply for the scheme on your behalf if you would like to send us a list of furloughed workers and copies of their employment contracts.

2. CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME (CBILS)

This new scheme will be delivered by your current bankers/lenders in partnership with The British Business Bank. The lender will receive a guarantee of 80% of the loan amount from the government.

• It is anticipated that these loans will be available from week commencing Monday 23rd March 2020.

• The loans are available to UK based businesses with a turnover of no more than £45m and will be for a short to medium term.

• Loan facilities of up to £5m can be provided for but it is important to note that the borrower remains liable for 100% of the debt.

• No interest will be charged on the loans for the first 12 months and there is expected to a short term capital repayment holiday.

• We anticipate that, in addition to the normal standing data, a twelve month forecast will be required along with the resulting projected balance sheet and profit and loss account.

HOW TO APPLY FOR A LOAN

It is important that you speak to your bank as soon as possible and potentially discuss your outline business plan and needs with them. This will ensure that they are able to act quickly. If you have any existing finance facilities with your bank, you may wish to discuss payment holidays to assist with cashflow. We understand the requirements for this funding and can provide cash flows, projections and historical data that will be needed for access to these funds. Get in touch with your Afford Bond contact immediately to start the process and prepare the required forecasts and supplementary financial information.

3. DEFERRING VAT PAYMENTS

The Chancellor has announced that he will defer VAT payments for 3 months. This means that businesses will not be required to make any VAT payments until the end of June 2020. Businesses will then have until 5th April 2021 to settle any liabilities they have accumulated during the deferral period.

HOW TO APPLY FOR THE VAT DEFERRAL

The VAT deferral applies automatically and businesses do not need to apply for it. Please note that you should continue to prepare and submit your VAT returns on a timely basis. Failure to do so could involve interest and penalties.

NOTE: We can continue to prepare your VAT returns as normal and submit them to HMRC on your behalf.

4. DEFERRING INCOME TAX FOR THE SELF-EMPLOYED

• If you have an income tax payment due on 31st July 2020 under self-assessment, this will be deferred until 31st January 2021.

• Again, this is an automatic offer. No application is required. No penalties or interest will be charged during the deferral period.

• Self-employed people can also now access full universal credit at an equivalent rate to statutory sick pay. We can advise you how much the amount is that you should have paid on 31st July 2020 and accordingly the total amount that will become due on 31st January 2021. We will continue to provide support on the above as requested from time to time.

5. SICK PAY SUPPORT

The government have announced that employers with fewer than 250 employees will be able to reclaim Statutory Sick Pay (SSP) for absences due to COVID-19. The following points should be considered:

• The refund will cover up to 2 weeks SSP per eligible employee off work due to COVID-19.

• Employers must maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note.

• If evidence is required by an employer, those with symptoms can get an isolation note from NHS 111 online. Those who live with someone who has symptoms can get a note from the NHS website. The repayment mechanism between employers and HMRC has not yet been set up, but it is hoped that this will be in place shortly. Our payroll department is fully conversant with the sick pay regulations and will provide guidance and assistance for all Afford Bond payroll clients.

6. BUSINESS RATES HOLIDAY FOR RETAIL, HOSPITALITY AND LEISURE BUSINESSES

Your business will be eligible for a business rates holiday for the 2020/21 tax year if you are based in England and your business is in the retail, hospitality or leisure sector.

HOW TO ACCESS THIS SCHEME

It is automatic and there is no action required. This payment holiday will be automatically applied to your next council tax bill in April 2020. If you have already received a bill, this will be reissued in due course. If you think this applies to you and you have not received a communication from your local authority by April 2020 please let us know in order that we may assist further.

7. CASH GRANTS FOR SMALL BUSINESSES AND RETAIL, HOSPITALITY AND LEISURE BUSINESSES

Any business which receives small business rates relief, including those in the retail, hospitality and leisure sectors, will receive a cash grant of £10,000 (increased from £3,000 announced in the 11 March Budget). The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sector with a cash grant of up to £25,000 per property.

• For businesses in these sectors, your rateable value needs to be between £15,000 and £51,000.

HOW TO APPLY

As with the business rates holiday, the cash grants will be administered by local authorities and should be delivered automatically, without businesses needing to claim.

8. SUPPORT FOR BUSINESSES PAYING TAX - TIME TO PAY SERVICE

HMRC's Time to Pay scheme can enable firms and individuals in temporary financial distress as a result of COVID-19 to delay payment of outstanding tax liabilities. The advice line is 0800 0159 559.

If your business is finding difficulty in paying any government taxes or duties please make sure that you contact them in advance of the liability being payable to advise them of your position. Failure to do this could end with unfortunate action being taken against you and an adverse credit rating being incurred by your business.