Regular readers of my Blogs will be aware that during the ongoing coronavirus crisis, I have been publishing two Blogs a week as and when I find any additional information or just to put a Government announcement in plain English together with some practicable advice.
Not everything comes out in the daily briefings, especially the how and the when questions, that most of you want answering. So, for the last couple of days, I have been scouring the various press releases, government websites, financial press and I’ve also spoken with a knowledgeable tax official who has helped fill in many of the blanks in official policy documents.
So here is what I’ve found:
Tax helpline to support businesses affected by the coronavirus
After much prodding, HMRC has a set up a phone helpline to support businesses and self-employed people concerned about not being able to pay their tax due to coronavirus. The helpline allows any business or self-employed individual who is worried about how and when to pay any tax due to coronavirus to get practical help and advice.
Allegedly, you won’t get the YTS trainee when you call this helpline. Instead, they have allocated around 2,000 experienced call handlers to answer your questions and hopefully help with what help or advice that you need.
So, if you run a business or are self-employed and are concerned about paying your tax due to coronavirus, you can call HMRC’s helpline for help and advice: 0800 024 1222.
If you don’t have the money to pay due to coronavirus, HMRC will discuss your specific circumstances and will be able to:
- Agree an instalment arrangement with the payment start deferred
- Suspend all debt collection proceedings
- Potentially cancel any penalties and interest
But before you call, make sure that you have any relevant paperwork that you may have to refer to, in front of you before picking up the phone.
Grants for the self-employed
The original scheme to make grants available to the self-employed, including members of partnerships, who have lost income due to coronavirus, was first announced on 26th March. Still, it’s now been updated, together with some much-needed clarification.
The online service that you’ll use to claim is surprise surprise, still not available yet. In fairness to HMRC, they did not promise that it would before the end of May, however, today they announced the scheme would now start at the beginning of May 2020. Now with all eligible self-employed individuals contacted by mid-May.
Originally payments (grants) were only promised for early to mid-June 2020. Still, there is now the likelihood that the first recipients will start receiving their grants two weeks earlier than initially predicted.
Statutory Sick Pay
On 21st March, Rishi Sunak announced that Statutory Sick Pay would be paid from the first day and that the first 14 days would be reclaimable from HMRC by employers. Unfortunately, Rishi was a tad light on the details of how this would be done and especially the rules on eligibility, which I have set out below:
- Employees do not have to give you a doctor’s fit note for you to make a claim
- Employees must have appeared on your PAYE payroll scheme no later than 28th February 2020
- Your business must have fewer than 250 employees
- The plan covers all types of employment contracts, including full-time employees, part-time employees, employees on flexible/zero-hour contracts or agency contracts
To calculate how much you’ll get back, use your payroll software and to reclaim the payments. Include them in an Employer Payment Summary, and they’ll be offset against PAYE payments due.
If because of furloughing it isn’t possible to set off the payments against the current year’s liabilities, contact HMRC at your PAYE Employer Office to ask for a repayment.
Small Business Grant Fund
Under the Small Business Grant Fund (SBGF) all businesses in England in receipt of either Small Business Rates Relief (SBRR) or Rural Rates Relief (RRR) in the business rates system will be eligible for a payment of £10,000. £10,000 is also the sum payable under the Retail, Hospitality and Leisure Grant (RHLG), for cafes, pubs, restaurants etcetera.
Eligible businesses in these sectors with a property that has a rateable value of up to and including £15,000 will receive a grant of £10,000. Firms with a property that has a rateable value of over £15,000 and less than £51,000 will receive a grant of £25,000.
Your local authority has this week received the grant money, and some authorities have already started to pay out the grants. You do not have to claim, and it will be based automatically on the information held by your authority’s business rates records.
The only reason why you won’t receive the grants is if, as at 11th March 2020, your business was not on the Local Authority’s rating list. If this happens, i.e. a change in a tenancy agreement, and you can prove that you should be on the list, contact your Local Authority immediately.
Government Guaranteed bank loans
Many businesses have been clamouring for help and have become exasperated at the tally of crisis loans that banks have succeeded in giving out. As at today’s date little more than 6,000 have been approved which is way short of the number of applications and a tiny fraction of those who face a cash flow crunch.
The Chancellor brought in the Coronavirus Business Interruption Loan Scheme with promises that they would do whatever it took to support firms hit by the shutdown. Government-backed loans were to be available to all firms that were solvent and trading when the shutdown began.
When problems started to surface two weeks ago, the Treasury revamped the scheme’s criteria to make the eligibility rules less demanding and making it simpler to apply. Changes to eligibility did help unblock the logjam, but only a bit as banking bureaucracy is much harder to overcome.
But even after the government overhaul, the FSB (Federation of Small Businesses) said it was still taking far too long to apply. FSB members feedback showed than on average, each application took more than five hours to get through the necessary paperwork.
So, come on you bankers, taxpayers saved you from going broke in 2008, it’s now your turn to do the same for your customers.
Coronavirus Business Update Summary
Overall, I’m awarding Rishi Sunak 7½ out of 10 on his help for the self-employed and small businesses. Most of the systems needed to pay out the cash had to be designed from scratch, and the government is probably doing as well as it can in the circumstances. However, clearly, more flexibility is needed, such as those unfortunate few that have slipped between the cracks, such as small businesses starting after the 5th April 2019.
Which brings me back to the banks; the government-backed loan scheme was specifically brought in to provide businesses with financial help to tide them over until the various government schemes had kicked in and the cash flowing into business bank accounts.
So, if any of you out there are having problems accessing a loan from your bank, please send me the details, and I’ll name and shame.
If you would like more detailed information on some aspect of UK Tax, send me an e-mail and I’ll be pleased to advise further.
(All urgent updates will be immediately posted on our website, as well as my regular bi-weekly Blogs)