COVID-19 Support Available for Businesses

With the ongoing coronavirus pandemic these are extremely uncertain and unprecedented circumstances for the business community in Northern Ireland. A number of measures have been announced to provide support to businesses during this period.

Support for businesses

GMcG SUPPORT 

GMcG remains open for business and we will endeavour to support your business in whatever way we can through this difficult and uncertain time. 

Some of the main ways that we can support you include:

  •          Preparation or review of projections for funding applications under the Coronavirus Business Interruption Loan Scheme;
  •          Payroll processing;
  •          Bookkeeping and accounting support.

To discuss how the measures that the government has introduced apply to your business and how we can help you to access support please get in touch with your usual GMcG contact.

The key measures and announcements that have been revealed are explained below.

SUPPORT FOR SELF-EMPLOYED

 

Self-Employment Support Scheme

On 26 March 2020 the government announced this scheme to support those who are self-employed or members of a partnership and have lost income due to coronavirus. HMRC have now begun to contact taxpayers who may be eligible for the scheme.

Eligibility

To avail of this support you must:

  •          Be a self-employed individual or a member of a partnership;
  •          Have submitted your 2018-19 self-assessment income tax return;
  •          Have traded in the 2019-20 tax year;
  •          Be trading at the time of applying (or you would have been except for coronavirus);
  •          Intend to continue trading in the 2020-21 tax year; and
  •          Have lost trading profits due to coronavirus.

 In addition, you must satisfy one of the following conditions:

  •          You have trading profits in 2018-19 of less than £50k and these profits constitute more than half of your total taxable income; or
  •          You have average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50k and these profits constitute more than half of your average taxable income in the same period.

If you commenced trading in the period 2016-19, only those years for which you filed a Self-Assessment tax return will be used to determine your income levels..

Check if you’re eligible

You can HMRC’s online tool at https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference find out if you’re eligible to make a claim. If you are a personal tax client we can also use the online tool on your behalf.  However, the current position is that agents cannot make the claim on behalf of the taxpayer so you will need your own Government Gateway access to claim.

You’ll need your Self Assessment Unique Taxpayer Reference (UTR) number and National Insurance number to use the tool.

If you are eligible HMRC will tell you the date you’ll be able to make a claim from and ask you to add your contact details, which will be used to remind you when the online service will be available.

If you’re not eligible, you can ask HMRC to review this after you’ve used the online tool.

The claims service opened on Wednesday 13 May 2020 and those eligible will have the money paid into their bank account within six working days of completing a claim.

Amount of Support Available

The amount of support that is available is a grant of 80% of your average profits from the previous three tax years (or the average from commencement of trade where trading commenced in the period 2016-19).

The average profits will be used to calculate a monthly amount.

The grant will be up to a maximum of £2,500 per month for three months and will be paid directly in one instalment.

The grant is taxable.

 

Universal Credit for Self-employed

 

The minimum income floor for self-employed has been suspended meaning that self-employed can access Universal Credit at a rate equivalent to Statutory Sick Pay for employees.

Deferred Self-Assessment Payments

Self-assessment payments due on 31 July 2020 have been deferred until 31 January 2021. No interest or penalties will be charged in the deferral period.

 

SUPPORT FOR ALL BUSINESSES

 

Coronavirus Job Retention Scheme

Under this scheme employers will be able to access support to continue paying part of the salary of those employees that they would otherwise have to layoff due to the crisis.

The key points are:

  • Employers will have to designate affected employees as ‘furloughed workers,’ and notify the employees of this change. It should be borne in mind that changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
  • The furloughed employees must have been on your payroll on or before 19 March 2020. This is an extension to the originally announced cut-off date of 28 February 2020. The employees must also have been notified to HMRC on an RTI submission on or before 19 March 2020.
  • The portal through which information about furloughed employees will be submitted is expected to be available on Monday 20 April 2020. Payments are expected to be made within six days of a claim being submitted.
  • HMRC will reimburse 80% of the relevant workers’ wage costs, up to a cap of £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage. They are currently working to set up a system for reimbursement as existing systems are not set up to facilitate payments to employers
  • The Job Retention Scheme is open to all employers in the United Kingdom and will cover the cost of wages back dated to 1 March 2020; it will be open for at least 3 months.
  • Employees on flexible or zero hours contracts are eligible for the scheme. Where an employee’s wage varies the claim is based on the higher of either: the same month’s earnings from the previous year; or their average monthly earnings in 2019-20.
  • Three weeks is the minimum length of time an employee can be furloughed.
  • You can only submit one claim every 3 weeks.

The nature of this scheme is such that the employer must still make the payments to employees and subsequently claim the reimbursements from HMRC. This will have cash flow implications for many businesses who may require additional support through the Business Interruption Loan Scheme, which is explained in more detail below.

The Chancellor has stated that there is no limit on the funding available and the government will support as many jobs as needed.

Full details of the scheme can be found at:

https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

Making a claim

Claims are made through the Government Gateway.

To make a claim you will need:

  • to be registered for PAYE online;
  • your UK bank details;
  • your PAYE reference number;
  • the number of employees being furloughed;
  • each employee’s National Insurance number and payroll number;
  • the start date and end date of the claim;
  • the full amount you’re claiming for, including employer NIC and employer minimum pension contributions;
  • your phone number;
  • either your corporation tax unique taxpayer reference, self-assessment UTR or company registration number.

If your claim is in relation to more than 100 furloughed employees you will need to upload a file in either .xls, .xlsx, .csv or .ods format. The full must contain the following information for each furloughed employee:

  • full name;
  • National Insurance number;
  • furlough start date;
  • furlough end date (if known);
  • full amount claimed.

After you have submitted a claim you will get a claim reference number. HMRC will check that your claim is correct and pay the claim amount into your bank account within 6 working days.

You must:

  • keep a copy of the claim reference number for your records;
  • keep a copy of your calculations in case HMRC need more information about your claim;
  • tell your employees that you have made a claim and that they do not need to take any more action;
  • pay your employee their wages, if you have not already done so.

Full details on how the make a claim and a link to the Government Gateway can be found at https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme and further details on how much you can claim are at https://www.tax.service.gov.uk/job-retention-scheme-calculator

Irish Employers – Wage Subsidy Scheme

On 24 March 2020 the Irish Government announced a Temporary Wage Subsidy Scheme to provide support to workers affected by the crisis. The scheme enables employees, whose employers are affected by the pandemic, to receive support of up to €410 per week directly from their employer through the payroll system.

The scheme began on 26 March 2020 and is expected to remain open for 12 weeks. Further changes to the scheme were announced on 15 April 2020 and these changes took effect from 4 May 2020.

Further details on the operation of the scheme can be found at:

https://www.revenue.ie/en/corporate/communications/covid19/temporary-covid-19-wage-subsidy-scheme.aspx

Frequently asked questions can be found at:-

https://www.revenue.ie/en/employing-people/documents/pmod-topics/guidance-on-operation-of-temporary-covid-wage-subsidy-scheme.pdf

Deferred VAT Payments

Businesses will not need to make any VAT payments in the period 20 March 2020 to 30 June 2020, with payment of VAT falling due during the period not required until 31 March 2021.

Businesses must continue to submit their VAT returns by the due date as normal. Those businesses that normally pay their VAT liability by direct debit and are unable to pay their VAT liability, should cancel the VAT direct debit with their bank in sufficient time so that HMRC does not attempt to automatically collect the payment following submission of the VAT return.

Refunds and reclaims will be paid by HMRC as normal.

Small Business Grants

On 18 March 2020 the Northern Ireland Executive announced that £370m is being provided to help the most vulnerable businesses in Northern Ireland during the pandemic.

£10,000 Small Business Grant Scheme

Small businesses with a Net Annual Value (i.e. rateable value) of up to £15,000 will receive a grant of £10,000.

Registration is now open for businesses to apply for the £10,000 Small Business Grant Scheme.

Automatic payments will be made to those eligible businesses whose bank account details are held for the purposes of paying rates by Direct Debit. The first payments in the Small Business Support Grant Scheme have already been made.

Eligible businesses that don't currently pay business rates by Direct Debit can register for the scheme and provide their bank details by completing an online registration form at:

https://www.covid-19smallbusinessgrants.economy-ni.gov.uk/

Business with multiple premises will only be eligible for one grant of £10,000 in total and vacant properties are not eligible.

Grant payments are not being automatically issued to landlords of properties with a rateable value of £1,590 or less. Arrangements are being put in place to contact the landlord and small businesses concerned.

£25,000 Retail, Hospitality, Tourism and Leisure Grant

Larger, medium-sized firms in the retail, hospitality, tourism and leisure sectors can apply up until 20 May 2020 to receive a grant of £25,000.

Businesses must have a rateable value of between £15,000 and £51,000 to qualify for the £25,000 grant.

The following exclusions and conditions apply:

  • Vacant properties are not eligible;
  • Premises used for manufacturing purposes are not eligible;
  • Businesses with multiple premises meeting the rateable value criteria outlined will only be eligible for one grant of £25,000;
  • Businesses who have already received a £10,000 grant under the Small Business Grant Scheme, and who have an additional property that meets the eligibility criteria for the £25,000 Business Grant Scheme, are eligible to apply;
  • Businesses that have already received the £10,000 grant and because of a revision of rateable valuation are now eligible for the £25,000 grant for this property will only be entitled to receive the balance of £15,000;
  • For rental properties, the scheme is being designed to benefit the businesses and not the landlord or managing agent who is responsible for paying the rates. Landlords, managing agents and small businesses in this situation should not use the Business Grant Support online form to register for the scheme but should wait until a new online form for rental properties is made available.

Full details can be found at https://www.nibusinessinfo.co.uk/content/coronavirus-%C2%A325000-retail-hospitality-tourism-and-leisure-grant

Applications for the grant can be made at https://www.covid-19smallbusinessgrants.economy-ni.gov.uk/BusinessGrant25K/

NI Micro-Business Hardship Fund

On 15 May 2020 it was announced that Department for the Economy (DfE) are making £40 million available through a fund, which is being administered by Invest Northern Ireland on behalf of the Department for the Economy.

The level of Hardship Fund grant will be up to £10,000 for businesses which pay business rates on premises and up to £5,000 for those that do not pay business rates. Businesses within each category will receive the same amount. The final amounts awarded will depend on the number of successful applicants.

Eligibility

To be eligible businesses must:

  • Be based in Northern Ireland;
  • Have employed between one and nine employees (based on headcount) at 29 February 2020; and
  • Have experienced a reduction in turnover of at least 40% since 1 March 2020, as a result of the pandemic.

Exclusions 

 

The hardship fund is open to all micro-businesses and social enterprises, although the following exclusions apply:

 

  • Businesses where the sole employee is the business owner or company director;
  • Primary agricultural producers;
  • Businesses eligible for the small business grants;
  • Organisations with charitable status;
  • Social enterprises that earn less than 60% of their turnover from trade in goods or services.

 

What to do now

 

Applications can be made online through the Invest NI website from 6 pm on 20 May and will close on 12 June at 6 pm.

 

You will need to gather some information before starting your application, including:

 

  • PAYE employer reference number and evidence of employee numbers;
  • A scanned copy of your PAYE RTI return for the period ended 29 February 2020;
  • Ratepayer ID if applicable;
  • VAT number if applicable;
  • Bank account details;
  • A scanned cope of photographic ID;
  • A scanned copy of a bank statement from within the past 3 months.

Full details can be found at https://www.nibusinessinfo.co.uk/content/coronavirus-ni-micro-business-hardship-fund

Statutory Sick Pay Rebate for SMEs

Employers will be able to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19.

The key points are: 

  • the refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19;
  • employers with fewer than 250 employees will be eligible - the size of an employer will be determined by the number of people they employed as of 28 February 2020;
  • Connected companies and charities can also use the scheme if their total combined number of PAYE employees are fewer than 250 on or before 28 February 2020;
  • employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19;
  • employers should maintain records of staff absences, but employees will not need to provide a GP fit note.

To be eligible for the scheme a business must be based in the United Kingdom, it must be classed as small or medium sized, and it must have had fewer than 250 employees on 28 February 2020.

A rebate scheme is currently being developed and further details will be provided in due course.

Further details can be found at https://www.gov.uk/guidance/claim-back-statutory-sick-pay-paid-to-employees-due-to-coronavirus-covid-19

 

Bounce Back Loans

On 27 April 2020 the Government announced the Bounce Back Loan scheme, which will help small and medium-sized businesses to borrow between £2,000 and £50,000 for terms of up to 6 years.

Loans are capped at 25% of 2019 turnover.

The loans will be guaranteed 100% by the government and there will be no fees or interest to pay for the first 12 months. In addition, no repayments will be due during the first 12 months of the loan.

The government will work with lenders to agree a low rate of interest for the remaining period of the loan.

Eligibility

To apply, a business must be able to self declare that it:

  • is engaged in trading activity in the UK and was established by 1 March 2020;
  • derives more than 50% of its income from its trading activity;
  • has been negatively affected by the coronavirus;
  • was not an ‘undertaking in difficulty’ on 31 December 2019.

You cannot apply if you are already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS). However, if you have already received a loan of up to £50,000 under CBILS you can transfer it into the Bounce Back Loan scheme. This can be arranged with your lender until 4 November 2020.

How to apply

The Bounce Back Loan scheme launched on 4 May 2020.

Applications are through a short, standardised online application and the loan should reach the business within days. Business plans and projections will not be required as part of the application process.

Full details can be found at https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/for-businesses-and-advisors/

Coronavirus Business Interruption Loan Scheme

The Coronavirus Business Interruption Loan Scheme went live on 23 March 2020 and is initially expected to remain open for six months.

On 2 April the scheme was expanded and the scheme’s features and eligibility criteria were changed. The changes mean even more smaller businesses across the UK impacted by the coronavirus crisis can access the funding they need.

Access to the scheme has been extended to those smaller businesses who would have previously met the requirements for a commercial facility but would not have been eligible for the scheme.

Insufficient security is no longer a condition to access the scheme, which significantly increases the number of businesses eligible for the scheme.

Key Features:

  • Term loans and asset finance facilities up to £5m are available on repayment terms of up to six years.
  • Overdraft and invoice finance facilities are available on terms of up to three years.
  • The scheme provides the lender with a government backed partial (80%) guarantee against the outstanding facility balance.
  • There is no guarantee fee for SMEs to access the scheme.
  • The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees. Some lenders have indicated that they will not charge arrangement fees or early repayment charges.
  • The scheme may be used for unsecured lending for facilities of £250,000 and under. No personal guarantees will be taken for facilities below £250,000.
  • For facilities of more than £250,000, insufficient security is no longer a condition to access the scheme. Personal Guarantees may still be required but recoveries under these are capped at a maximum of 20% of the outstanding balance of the facility after the proceeds of business assets have been applied.
  • Principal Private Residence (PPR) cannot be taken as security under the scheme.
  • The borrower remains liable for 100% of the facility.

 Eligibility:         

  •         SMEs with business activity based in the United Kingdom and turnover of no more that £45m can apply.
  •         A small number of industrial sectors and businesses will not be eligible.
  •         The business must have a borrowing proposal that would be considered viable by the lender were it not for the pandemic, and for which the lender believes the provision of finance will enable the business to trade out of any short-to-medium term difficulty.

A number of lenders have already registered to provide access this scheme, including most of the main Northern Ireland banks.

Applications should be made as early as possible through your bank or finance provider and a business plan will be required, so please speak to us to assist with this.

Full details, including a list of the lenders that have registered for the scheme, are available at:

https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

For larger businesses the Coronavirus Large Business Interruption Loan Scheme (CLBLS) was launched on 20 April 2020. This will support large businesses, with an annual turnover of over £45 million.

All viable businesses with a turnover of more than £45 million per year will be able to apply for up to £25 million of finance. Firms with a turnover of more than £250 million will be able to apply for up to £50 million of finance.

https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/clbils/

Rates holiday for businesses

There will be a three month rates holiday for most business ratepayers; public sector and utilities are excluded. The effect of this is that no rates will be charged for April, May and June 2020. This will be shown as a 25 per cent discount on the annual rate bill for business ratepayers.

Company Accounts Filing Extension

From 25 March 2020 companies have been able to apply for a three month extension for filing their accounts with Companies House.

The extension is not automatic so companies must apply before their existing filing deadline.

Support for businesses paying tax

All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

HMRC have setup a dedicated helpline on 0800 024 1222 for any businesses concerned about their ability to pay their tax due to Covid-19.

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