Following on from our previous update on 30th March, please see below for some updated guidance where further details have been released. This includes a summary of previously announced measures.
Please note that the Government’s announcements in response to the Coronavirus pandemic are moving at unprecedented speed, so please do check official resources such as this source for the most up to date guidance. Please also refer to any more up to date guidance from CRM on the news section of our website, since information contained herein may be superseded.
Since our last updates, the main points of interest have been the release of further details on the processing of claims under the Coronavirus job retention scheme (”furlough scheme”) and the availability of functionality on many local authority websites to claim the various grants available which relate to business rates. There has also been a recent announcement that Import VAT and deferred duty accounts may, by application, benefit from extended payment terms. This will be welcome news for many importers.
Coronavirus job retention scheme (“furlough scheme”)
HMRC have recently announced that the portal to claim payments made to furloughed employees is expected to open on 20th April, and will be accessed through your Government Gateway login. According to current guidance, you will need the following information in order to make a claim:
- your employer PAYE reference number
- the number of employees being furloughed
- National Insurance Numbers for the employees you want to furlough
- Names of the employees you want to furlough
- Payroll/works number for the employees you want to furlough
- your Self Assessment Unique Taxpayer Reference or Corporation Tax Unique Taxpayer Reference or Company Registration Number
- the claim period (start and end date)
- amount claimed (per the minimum length of furloughing of 3 consecutive weeks)
- your bank account number and sort code
- your contact name
- your phone number
If appropriate, worker’s wages should be reduced to 80% of their salary within your payroll before they are paid. This adjustment will not be made by HMRC.
Payments are expected 10 days after application initially, with this reducing to 4-6 days from April payroll submissions.
Importantly, it has been confirmed that company directors can be furloughed, and may still perform “statutory duties” without being disqualified from the scheme. For clarity, it has been further confirmed that this relates only to PAYE income, not dividends.
Please see here for the official guidance on the .gov website.
Coronavirus Business Interruption Loans (CBILs).
Since our last update, we have received information that CBILs will be available without personal guarantee for loans of up to £250,000, and lenders have been barred from asking for guarantees up to this limit. Furthermore, any personal guarantee for facilities over £250,000 will exclude the main residence and also will only apply to the 20% not covered by the Government guarantee.
Lenders will only provide finance where the business is deemed viable notwithstanding the current and unanticipated impact of COVID-19.
The details which lenders are expected to ask for are:
- Last 3 years full accounts with detailed P&L
- Last 12 months business bank statements (Lloyds Bank usually need 6 months personal as well)
- Up to date management accounts
- Aged debtor and creditor lists
- Confirmation of any outstanding debt (provider, term, repayment)
- Statement of personal assets, liabilities, income and expenditure from all Directors
- Home addresses of all directors/ shareholders
- Paragraph on how Covid-19 has affected the business and what the funds will specifically be used for
Further details are available here on the British Business Bank website.
Fees and 12 months’ interest will be covered by the Government as a Business Interruption Payment
We have also had many clients successfully negotiate payment holidays with finance companies where they have asset finance outside of this scheme.
Business rates relief and related grants
The grants previously announced are now available for claiming from many local authorities. Process differs between authorities, with some sending a letter to business which they believe are affected with others just waiting for businesses to be pro-active and make a claim.
A reminder that the grants are: Firstly for any business which is eligible for small business rate relief in England (irrespective of sector), a one-off cash grant of £10,000, and secondly a cash grant of £25,000 if your business is in the retail, hospitality or leisure sector in England with a rateable value of between £14,999 and £51,000.
To find if your business is classified as in the retail sector, please review official guidance available here it is worth noting that “retail” business should have enjoyed a rate reduction of a third for 2019/20 where rateable value is under £51,000. This definition is wider than you may expect, so it is worth checking. It is worth reviewing last year’s rates bill to ensure that, where due, this relief was in fact given. If not, this should be applied for and a rebate sought.
Remember as well that businesses in various sectors including retail/leisure, (see above) Estate agents/letting agents, and Ofsted registered Early years education providers should benefit from zero business rates (referred to as a business rates holiday) for 2020/21. If you are in one of these sectors, please make sure that you take action to claim this where relevant. It may be wise to stop any direct debit, making sure that you restart this at the appropriate time to pay your 2021/22 bill.
Import VAT and Duty deferment payment extensions
Import VAT and Duty deferment accounts have been extended after discussions with HMRC where difficulties have arisen due to Covid-19. Account balances are payable on 15th of each month, so immediate action is required.
Rather like the VAT payment extension, relevant direct debits must be cancelled in order to benefit, and prior approval is required from HMRC to use the payment extension and the account holder should contact the Duty Deferment Office by telephone on 03000 594243 or by email firstname.lastname@example.org or call HMRC’s Covid-19 helpline on 0800 024 1222.
Importers who do not use an Import VAT and Duty deferment account but are experiencing financial difficulties as a result of Covid-19 should also contact HMRC to request a time to pay extension to the payment deadline at the time the payment is due (please see below)
PAYE / NI support – “Time to Pay”
A reminder that Time to Pay is available for PAYE/NIC and other taxes, but these must be agreed with HMRC. HMRC has established a Coronavirus Helpline. It can be reached on 0800 015 9559 (//www.gov.uk/difficulties-paying-hmrc).
Please make sure you are following us on our social media platforms (Twitter @OxfordAccounts, LinkedIn and Facebook) and checking the news section of our website //crmoxford.co.uk/news/ for updates as we have them.
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