COVID-19 is affecting every business, and will soon affect every family. On the one hand, at WCS we’re continuing to operate our normal business processes (remote working, paperless environment, working with the latest technology). On the other hand the world around us is changing on a daily basis.
Here we’re aiming to do what we do best, and bring you all of the practical advice we can to help you mitigate the impact of COVID-19 and get through a very difficult time.
We will try update this page as soon as new advice is available, however you should check gov.uk/coronavirus for the latest details.
Practical steps you can take
To protect everyone’s health
Keep in touch with your accountant
Your accountant will be able to help you keep on top of cashflow and access some of the support available to you. You’ll automatically receive a three-month extension to your company accounts filing deadline, which may give you extra time to focus on other priorities. Rachael looks at some other ways accountants can help, for instance by looking at tax refunds or credits you can claim.
It’s vital to get your financial management information up-to-date. This will help you to provide any data required by your bank, for instance:
- last 3 years financial accounts
- latest management accounts to show recent business performance
- actions you’ve already taken / plan to take
- cashflow forecast: what you expected to happen this year / your revised plans
- finance required
- security available
- your personal financial situation.
For employers: Job Creation
- Kickstart Scheme: Funding to create job placements for 16-24 year olds. It will cover 100% of National Minimum Wage for 25 hours per week, employers National Insurance and employer minimum automatic enrolment (pension) contributions. Roles must be new and last 6 months. Read more at gov.uk. Employers taking on fewer than 30 placements must apply through a ‘Kickstart gateway’. Locally, you can apply through Devon & Plymouth Chamber or Somerset Chamber of Commerce.
For employers: Job Retention / Support
- Coronavirus Job Retention Scheme EXTENDED: From November, government will once again contribute 80% of wages for hours not worked through the Coronavirus Job Retention Scheme, up to a maximum £2,500 per month. Employers must pay Employer National Insurance Contributions and pension contributions. The scheme has been extended to March, but in January employers may be asked to ‘contribute more’. HMRC intend to publish details of employers using the scheme for claim periods from December. If you are claiming from 1 November 2020, you do not need to have used the scheme before, but employees must have been notified to HMRC by through a RTI submission 30 October 2020. Claims must normally be made by 14th of the following month (with shortfalls normally corrected by 28th). You should:
- Agree which employees you will furlough (for a minimum of 7 days). (This can include employees who are clinically extremely vulnerable, and some who have recently been made redundant. There are specific rules for people returning from parental leave).
- Remember that equality and discrimination laws apply to these decisions.
- Keep a written record of the agreement for 5 years (although you don’t need a written response from your employees).
- Record how many hours your employees work / are furloughed.
- Be aware that employees are encouraged to take part in training while furloughed (but check their furlough pay will still cover the minimum wage).
- Job Retention Bonus DELAYED: The £1000 bonus for furloughed employees who remained continuously employed until 31 January 2021 won’t go ahead. The Chancellor says “we will redeploy a retention incentive at the appropriate time”.
For employers: Sick pay, holidays and PAYE
- What help is there with Sick Pay? If you employ fewer than 250 people you can be reimbursed through the Coronavirus Statutory Sick Pay Rebate Scheme. It covers up to two weeks SSP for people with coronavirus symptoms and those told to isolate by NHS Test and Trace. If you require evidence, employees can obtain an isolation note. Xero have updated payroll settings to ensure SSP can be paid from the first day of self-isolation.
- How should I manage holidays? If it’s not reasonably practicable for your employees to take all of their statutory leave, they may be able to carry over up to 4 weeks to be taken in the following two leave years.
- What happens if I am struggling to pay my PAYE bill? Call HMRC on 0800 0159 559 and ask for time to pay. Read more on Rachael’s LinkedIn article, which explains what you can expect at this stage. Do be aware that if have received funds through the Coronavirus Job Retention Scheme or Job Support Scheme, HMRC will expect at least that element of your payments to be up-to-date.
- What happens if I am struggling to pay my VAT bill? VAT payments due between 20 March and 30 June 2020 have been automatically deferred, and are now due by 31 March 2021. However under a New Payment Scheme you can apply to make monthly instalments up to 31 March 2020. Details of the scheme have not yet been published, but the announcement was made in the Chancellor’s Winter Economy Plan.
- How should I handle suppliers? We recommend you review and reduce costs. Ask your suppliers for a extended payment terms or reduced rates.
- What is the Coronavirus Business Interruption Loan Scheme? This government backed lending for UK businesses with annual turnover of up to £45m. It is interest free for the first 12 months, but you may have had to offer personal guarantees. If you are eligible and want to convert your CBIL to a BBL, you must do this by 4 November.
- Can I claim a ‘Bounce Back’ loan? The scheme enables SMEs to borrow between £2,000 and £50,000. They must be based in the UK, have been negatively affected by coronavirus and not an ‘undertaking in difficulty’ on 31 December 2019. You do not need to make any repayments in the first 12 months. There is no interest for the first 12 months. After 12 months the interest rate is 2.5% a year. It is government guaranteed, so you don’t need to give a personal guarantee. Contact your existing bank in the first instance. as most are not yet dealing with enquiries from new customers. Some useful FAQs on the British Business Bank website. The scheme closes on 30 November.
Businesses with Property
- What if my business has to close due to National restrictions? The Chancellor has announced that these businesses will be eligible for grants based on the rateable value of their property:
- £15k or under: £1,334 per month, or £667 per two weeks.
- £15k-£51k: £2,000 per month, or £1,000 per two weeks.
- £51k or over: £3,000 per month, or £1,500 per two weeks.
- What if my business is affected by Local Restrictions? You may be eligible for the Local Restrictions Support Grant. The grants are currently:
- £1,000 per 3-week closure (for rateable values of less than £51,000) and
- £1,500 (for rateable values of £51,000 or above).
- If you do not pay rates, you may be eligible for a discretionary grant of up to £1,500.
- I run a retail, hospitality or leisure businesses. What help is there? In 2020-21 you’ll pay no business rates. If you operate from small premises (with a rateable value between £15,000 and £51,000) you should have received a £25,000 grant. Please check with your local council (Somerset West & Taunton, South Somerset, North Somerset, Mid Devon, Teignbridge, Torridge, Mendip, Sedgemoor, East Devon, Exeter City Council, South Hams, West Devon, North Devon).
- What if I’m in a different sector or a bigger business? Consider asking your landlord for a rent holiday. The government have announced that a Code of Practice to prevent evictions will continue to apply until 31 December 2020. If your premises have a rateable value over £51,000, and part of your property is now unoccupied, you may be able to apply for temporary rate relief on the unoccupied part.
- My business receives Small Business Rates Relief. What help is there? You should have received a one-off grant of £10,000.
For the self employed
- What help is there if for self employed people? The initial Self Employed Income Support Scheme had ended, but a Grant Extension has been announced. You must have been eligible for the initial scheme (even if you did not claim), and must still be adversely affected. However the scheme is now less generous. The first and second payments covered 80% and 70% of trading profits (capped). The first payment under the Grant Extension (November – January) will cover up to 40% of trading profits, capped at £3,750. (Terms for February – April have not yet been announced).
- What if I have have been trading for less than a year? Unfortunately you’re not eligible if you began trading in 2019-20. In this case you may apply for Universal Credit.
Steps to consider personally
- What happens if I am struggling to pay my Self Assessment taxes? Call HMRC on 0800 0159 559 and ask for time to pay. Read more on Rachael’s LinkedIn article. Self assessment payments which were due by 31 July 2020 have been automatically be deferred until 31 January 2021. For debts of up to £30,000 you can apply online for a 12-month payment plan. This means your deferred tax won’t need to be paid in full till 31 January 2022.
- If I enter into a payment arrangement for Self Assessment taxes with HMRC, will it affect my credit rating? No, because you haven’t entered a credit agreement with HMRC.
- If I can’t pay my mortgage, what can I do? Call your bank to discuss your options, which may include a ‘mortgage holiday’.
- What help is there for renters? Guidance is available from Shelter.
- Am I a ‘key worker’? A list of critical workers is available at gov.uk.
Remember, most business owners are in a similar position, so expect it to take some time to receive the financial help you’re eligible for.
Talk through your situation
Please consider your physical and mental health during this time. Mind have some really good advice to help support your wellbeing. If you’re interested in learning more about how to support your mental health or improve your work-life balance, you’ll find a wide range of courses at FutureLearn.
We have always provided free initial consultations to businesses and business owners in Devon and Somerset, and will continue to do so during the COVID-19 pandemic. You can chat with us during the day here on our website. We are happy to talk through:
- your cashflow
- business advice
- remote bookkeeping
- dealing with tax and HMRC
Our team can set up new packages of support at this time. Let us know if we can help in any way to keep your business running.
We also offer a Business & Xero Review for £195 + VAT, which is designed to help uncover the key issues affecting your business and help you prioritise and address these during 2020-21.