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. They can also help you apply for a three-month extension to your company accounts filing deadline if you need the extra time to focus on your immediate situation. 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
- Job Support Scheme: A much less generous scheme than the Coronavirus Job Retention Scheme. It opens on 1 November 2020, runs till April 2021 and is designed to support viable jobs only, with government paying up to 1/3. See the policy paper at gov.uk.
- Coronavirus Job Retention Scheme: closing 31 October: All UK businesses are eligible, and the scheme applies to employees notified to HMRC on or before 19 March who have completed an initial period of furlough by 30 June. HMRC will initially reimburse 80% of furloughed workers wage costs, up to £2,500 per month. However, from August employers will pay Employers National Insurance and Pension costs, and from September they will pay 10% of wages (with government contribution of of 70%), increasing to 20% in October (with government contribution of 60%). The scheme will close at the end of October. Check if your employees can be covered, work out how much you can claim, and make a claim. A step by step guide is available at gov.uk. ‘Flexible furloughing‘ is allowed from 1 July, which may enable you to bring employees back on reduced hours.
- Job Retention Bonus: Employers who have used the Coronavirus Job Retention Scheme can receive a £1000 bonus for each furloughed employee who remains continuously employed until 31 January 2021. The bonus is subject to minimum average earnings in the three months following closure of the scheme (November to January). You can claim the bonus in February 2021.
For employers: Sick pay, holidays and PAYE
- What help is there with Sick Pay? For businesses employing fewer than 250 people, you will receive reimbursement for up to two weeks Statutory Sick Pay for staff who are off due to COVID-19. The rebate scheme opens on 26 May, and you won’t need GP fit notes. If you require evidence, employees can obtain an isolation note from NHS 111 online if they have symptoms or from the NHS website if they live with people with symptoms. 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 you are receiving funds through the Coronavirus Job Retention 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 the New Payment Scheme you can apply to make monthly instalments up to 31 March 2020. See the Chancellor’s Winter Economy Plan for details.
- 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 is available from all the major banks. It is interest free for 12 months, and self employed people can also apply. Rachael’s LinkedIn article provides further details. While you may require management information an forecasts to support your application, banks may be able to make a decision based on the information they have regarding your past performance.
- Can I claim a ‘Bounce Back’ loan? The scheme enables SMEs to borrow between £2,000 and £50,000, provided they are based in the UK, have been negatively affected by coronavirus and weren’t an ‘undertaking in difficulty’ on 31 December 2019. Loans will be interest free for 12 months. (Loans can be for up to 6 years). The government guarantee 100% of the loan, so you won’t need to provide 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.
Businesses with Property
- 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 will receive a £25,000 grant. Please check the grant process 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). You may be asked to provide the following details:
- VAT Registration Number
- Company Name (As registered with Companies House).
- Business Name (As registered with Companies House).
- Title of recipient (Liable Person)
- Surname and Forename of recipient (Liable Person).
- Method of Payment
- Bank Account Details (Sort Code and Account Number).
- Business Address(es)
- What if I’m in a different sector or a bigger business? Consider asking your landlord for a rent holiday. In any case, commercial tenants will be protected from eviction if they miss a payment until 30 June. Lettings agents, estate agents and bingo halls have been added to the list of businesses which won’t pay business rates in 2020-21. 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’ll receive a one-off grant of £10,000. You may need to provide the details above.
For the self employed
- What help is there if I’m self employed? Claim a grant through the Self Employed Income Support Scheme. You can claim 80% of your trading profits up to a maximum of £7500 for three months, then a further 70% up to a maximum of £6,570. You must meet these eligibility criteria. HMRC will contact you if you are eligible and invite you to apply online. You have until 13 July to claim the first grant.
- What if I have have been trading for less than a year? Unfortunately it seems that you’re not eligible if you began trading in 2019-20. In this case you may apply for Universal Credit. The government have suspended the minimum income floor for the self-employed. (This is the amount the DWP ‘expect’ you to earn).
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 would be due by 31 July 2020 will automatically be deferred until 31 January 2021. For debts of up to £30,000 you will be able to apply online for a 12-month payment plan, meaning your deferred tax won’t need to be paid in full till 31 January 2022. See the Chancellor’s Winter Economy Plan for details of the announcement.
- 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 and ask for a three month mortgage holiday.
- What help is there for renters? The prime minister says that renters will be protected from eviction. Guidance is available at gov.uk.
- Am I a ‘key worker’? The list of key workers are available at gov.uk. The government are encouraging key workers to send their children to school, even if you have alternative childcare.
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: https://www.mind.org.uk/information-support/coronavirus-and-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.