Updated Fri 27 March 2020
Following the rapid spread of Coronavirus (COVID-19) throughout the UK & the world, people are understandably concerned about the health and wellbeing of their loved ones. The latest guidance on Coronavirus from the NHS can be found at https://www.nhs.uk/conditions/coronavirus-covid-19/ and we would like to wish you, your family and friends the best of health in facing this illness.
The UK Government has introduced, and will continue to, a wide range of measures to help tackle the spread of the illness, which will also have a profound effect on the way we live our lives for the immediate future.
As a result, individuals and businesses are rightly concerned as to the potential impact upon their finances and livelihoods. These are uncertain times and as such, we would recommend that businesses operate within their means and exercise prudence and careful judgment.
The government has promised £300 billion or whatever it takes to help deal with the impact of the measures introduced, and we have outlined below how these resources and support can be accessed, as well as other relevant information. We will do our best to keep you as up to date as possible, but please note that a lot of the information provided is constantly changing.
We hope that this guide helps provide you with some comfort of the options available, but please contact our dedicated Corona Virus Business Support team on 01226 213131 or firstname.lastname@example.org if you require any assistance.
Gibson Booth Limited
Job Retention Scheme
This major announcement made on 20 March promises to pay up to 80% of staff costs that employers would otherwise have had to lay off during this period, up till a cap of £2,500 (plus employers’ NIC and minimum pension costs) per employee per month. This will run for at least 3 months from 1 March 2020, although could be extended and, as always, the devil is in the detail.
Firstly, it will be necessary for the relevant affected employees to be designated as ‘furloughed workers’ and they should not undertake any work for the employer whilst furloughed.
Employers need to:
- select and tell (‘designate’) the employees affected that they’re furloughed
- keep employees on the employer’s payroll
The employer needs to get agreement from the employee to do this, unless it’s covered by a clause in the employment contract. They also need to select employees in a fair way to avoid any discrimination.
If an employee disagrees with their employer's decision, they'll need to talk to their employer and try to come to an agreement.
Any furlough agreements should be in writing. It's a good idea to include:
- the date furlough starts
- when it will be reviewed
- how to keep in contact during furlough
If the workplace needs to close temporarily further guidance can also be found via the ACA website https://www.acas.org.uk/coronavirus/if-the-employer-needs-to-close-the-workplace
Please note that changing the status of employees remains a matter of employment law and accordingly, should be done with the agreement of the relevant employees or an employment law specialist.
The business will need to pay the employee initially, who will usually be contractually entitled to their normal wage. However, it can be agreed in conjunction with the employees that a reduced amount could be paid (potentially down to the 80% that would be reimbursed). HM Revenue & Customs must then be informed of the employees that have been furloughed and their earnings through a new online portal (which has yet to be set up). HMRC would then arrange for the 80% to reimbursed in due course, but do not currently have systems in place to do so. They are working on this urgently and will advise when it is available, although are targeting the end of April.
Additional guidance has now been issued by HMRC, which can be seen at the links below. Main points to note include:
- Employees need to have been employed as at 28 February 2020
- If made redundant after 28 February 2020, the employer can re-employ employees and place on furlough instead
- Any type of contract including zero hours or temporary contract is allowable
- Directors are eligible for their salary, but not dividends (please remember that furloughed workers can’t work for the company)
- The furlough period is a minimum of 3 weeks and maximum of 3 months (although may be extended)
- Where earnings are consistent, the employees’ actual pay as at 28 February 2020 before tax will be used to calculate the 80% reimbursed.
- If it varies, it will instead be based on the higher of the earnings in the same month in the previous year or the average monthly earnings over the last year (or from when the employee started work)
- Bonuses & commissions are not included in the above
Assistance with Business Funding
If you have any concerns regarding your existing business finance, please speak to your bank relationship manager in the first instance. All the major banks have promised to give support to affected businesses through a range of measures, which include repayment holidays, reviewing overdrafts & loans or considering trade finance solutions. Gibson Booth Limited have a number of contacts at the local and regional branches and will be happy to assist where we can.
In addition to normal borrowings, the government has introduced the Coronavirus Business Interruption Loan Scheme (CBILS). The scheme will provide lenders with a government backed guarantee, with the aim to reducing ‘no’ credit decisions, where businesses have sound borrowing proposals, but have insufficient security to meet lender’s requirements. Businesses will benefit from the government covering the first 12 months of interest payments, although they will remain 100% liable for the debt & capital- although a capital holiday of up to 12 months is available.
The scheme supports a wide range of business finance (including term facilities, overdrafts, invoice & asset finance) with borrowings of up to £5m, depending upon qualifying criteria. The scheme is now up and running and will be available through 40+ accredited lenders (see link below for full list):
From our discussion with the banks, we understand that loans from circa £10,000 to £5m are available depending on the lender, but that they are often looking to put personal guarantees in place on other assets owned by the individual. The banks generally require a detailed business proposal and typically a 12-month cashflow projection, which we will be happy to assist with if required.
Finally, we can also put you in touch with specialist funding providers should you have any particular or unusual funding requirements which can’t be met through the normal commercial options- please do not hesitate to contact us for more information.
Assistance with Tax Liabilities
HM Revenue & Customs (HMRC) have acknowledged that businesses or self-employed individuals may need support in respect of any outstanding taxes due, as a result of current or expected financial difficulties arising. They have therefore set up a dedicated Coronavirus Time-to-Pay helpline which will look to assist on a case-by-case basis for Corporation tax, VAT, PAYE and Self-Assessment.
They have a range of options available to them which include providing tax payment delays (typically to 3 months), arranging instalment plans, suspending debt collection proceedings and cancelling penalties & interest where you have administrative difficulties contacting or paying HMRC immediately.
The number is 0800 0159 559 and lines are open Monday to Friday 8am to 8pm and Saturday 8am to 4pm (not available on bank holidays). Although HMRC currently have significant waiting times on this line, we have found them very helpful when answered and have been happy to agree to the deferrals we have requested without queries. Please do not hesitate to contact us should you need any assistance regarding this.
HM Revenue & Customs have also announced two automatic tax deferral schemes to help further support businesses, for which no applications will be required.
Firstly, VAT payments becoming due will not need to be made from 20 March 2020 until 30 June 2020. Any liability becoming due during this period will instead need to be paid by the end of the 2020/21 tax year i.e. 31 March 2021. Any VAT refunds due will be processed and paid by HMRC as normal.
Please note that the VAT returns still need to completed & submitted by the usual due date. It’s important to also ensure that you cancel any Direct Debit set up as HMRC may still take payment if not cancelled.
In addition, any taxpayers paying income tax under Self-Assessment will not be required to make any 2nd payment on accounts, which would be normally be due for payment by 31 July 2020. Any liability will be deferred until 31 January 2021, with confirmation being provided that no interest or late payment penalties will apply.
Assistance with Business Rates
Businesses who are sustaining financial difficulties due to Coronavirus can apply to their local council for support in respect the payment of business rates. Barnsley Metropolitan Borough Council (BMBC) can be contacted on 01226 787787 and selecting option 5 (lines are open Monday to Friday 9am to 4pm), who will arrange for a business rates manager to call back & discuss any support available.
A 12-month business rates holiday has extended the 50% reduction previously announced in the 2020 Budget for shops, restaurants, cafes and bars with a rateable value less than £51,000, and has been widened to all retail, hospitality and leisure businesses sectors. Businesses who met the original Budget criteria will automatically receive a new 2020/21 bill (sent 18 March) with the full 100% reductions.
Further guidance has now been published detailing the other businesses to which the business rate holiday applies, which includes (but is not limited to): Nurseries, Opticians, Carpets warehouses, Hair salons, Travel agents, Funeral directors, Car hire, Coffee shops, Gyms, Clubs, Hotels and Holiday homes.
Your local authority should automatically review businesses and issue amended 2020/21 bill shortly and before the first payment is due. However, we would suggest contacting them directly if you believe you should be eligible for the holiday, but have not received any correspondence- Barnsley MBC can be contacted by filling in the following form:
A £25,000 grant will be made available to all retail, hospitality and leisure businesses operating from smaller premises (with a rateable value of between £15,000 and £51,000), whilst a similar grant of upto £10,000 will be available to small businesses eligible for either Small Business Rate Relief (SBRR) or Rural Rate Relief.
We can confirm that Barnsley MBC are now starting to automatically issue these grants (although it may be a few weeks for other local councils), but would suggest that you contact your council if you think you qualify, as payments can be made within 3 working days. You can contact BMBC via the link below or on 01226 787787:
Advice for Employers
The government’s current advice is that any employee who develops Coronavirus symptoms at work, should be sent home, where they should self-isolate for a period of 7 days. Likewise, if a member of their household has symptoms, then they should self-isolate for a period of 14 days. Full details of the guidance can be found
If ill or self-isolating, the employee should be entitled to Statutory Sick Pay (SSP) of £94.25 per week (rising to £95.85 from 6 April) from day 1 for upto 28 weeks. They may also be entitled to contractual sick pay as agreed in their contract/terms of employment.
From 13 March 2020, employers will be able to reclaim up to two weeks of SSP per employee who are off as a result of coronavirus (assuming they have less than 250 employees as at 28 February 2020).
The government will make further announcements relating to how the repayment mechanism for employers will work as soon as they are able. In the meantime, employers should keep a record of staff absences and payment of SSP, but do not need to provide a doctors’ note.
In terms of working from home, the current government guidance is that this should be encouraged where possible, if the employees’ job role allows it. However, if this is not practical and an employee does not want to come to work (because they are afraid of catching coronavirus for example), then they should discuss with the employer whether they can take time off as holiday or unpaid leave, although this would be at the employer’s discretion.
Temporary closure of the workplace
If an employee has been in the workplace with coronavirus, it is not necessary to close the workplace although it will be significantly safer if the area can be kept closed for a period of 72 hours prior to cleaning. In this event, any employees would be entitled to SSP, with the employer following the government’s cleaning advice, which can be found at:
However, if an employer does need to close their business due to commercial reasons, or ask staff to temporarily reduce their hours, employers will still need to pay their employees for this time unless it states in their employment contract (in which case they would be entitled to a statutory guarantee payment of up to £29 per day for a maximum of 5 days) or is otherwise agreed. It is very important to take professional advice from an Employment Law Solicitor in this regard, who we can put you in touch with.
Employers do have the right to tell employees and workers when to take holiday if they need to, for example if the workplaces needs to close for a week. The employer is required to give staff twice as much notice before the amount of days people need to take, for example if the office closed for a week and staff had to use 5 holiday days, the employer must notify staff at least 10 days before.
The government have announced on 26 March the Coronavirus Self-employment Income Support Scheme to provide a one-off grant for self-employed individuals, either in a partnership or as a sole trader. This is not available in respect of income arising in on income taken from your own limited company (where the job retention scheme applies).
The scheme will pay a grant for the equivalent of 3 months to qualifying taxpayers based on the lower of £2,500 per month or 80% of their average trading profits as declared on their Self-Assessment tax returns (covering the 3 tax years from 2016-17 to 2018-19).
Individuals qualifying will need to have submitted their 2018/19 Self-Assessment tax return (with an extension to 23 April being granted if not yet being filed), have been trading during 2019/20 and intend to continue trading in 2020/21.
In addition, the self-employment trading profits need to be less than £50,000 and account for more than 50% of the total taxable income for the same period (so other income such as salaries, rental income & pensions need to be considered). This test needs to be met either in 2018/19 or across the average of the 3 years.
Unfortunately, these grants will not be available until early June, where the full 3-month equivalent grant will be paid to qualifying taxpayers. HM Revenue & Customs have advised that you can’t apply for the scheme at present, but that they will contact affected individuals and apply them to apply online in due course.
In the meantime, if you are self-employed, you can apply for Universal Credit or contributory Employment and Support Allowance (as you would not be eligible for SSP). You can look to make a claim for these if you are self-isolating or being prevented from working due to a risk to public health, as well as being ill.
The government are making the process easier to apply for and have advised that from 6 April, the standard allowance in Universal Credit and the basic element in Working Tax Credit will increase by £20 per week for 1 year.
Further details of these benefits and links to the relevant applications can be found at the following link https://www.understandinguniversalcredit.gov.uk/coronavirus/ or by calling the Universal Benefits helpline on 0800 328 5644 (Monday to Friday 8am to 6pm)
As with business borrowings, mortgage lenders are willing to offer payment holidays where required, and we would recommend contacting your bank or mortgage broker if this is something that you would require for either personal or investment properties.
The government has also advised that landlords will not be able to evict tenants for a period of at least 3 months due to Coronavirus and are encouraging tenants and landlords to work together to agree sensible repayment plans.
The proposed rules impacting upon contractors working for large private companies caught under the intermediaries legislation (IR35) has been delayed for 12 months. It will now not be introduced until April 2021
Company accounts filing
Companies House have confirmed that companies can now apply for a 3-month extension to the filing of their annual accounts so they can focus on dealing with the impacts of the Coronavirus. It will be necessary to apply for the extension (not granted automatically), but ensure late filing penalties are not issued. See:
Other Areas of Business Support for companies
If your business is based in Barnsley and you require other areas of business support please contact the following:
Barnsley based businesses: The Enterprising Barnsley business support team on 01226 787535 or email@example.com See: https://www.enterprisingbarnsley.co.uk/
Sheffield based businesses: The Sheffield City Region Growth Hub on 03330 00 00 39 or firstname.lastname@example.org See: https://www.scrgrowthhub.co.uk/
West Yorkshire based businesses: The Leeds City Region business support team on 0113 348 18181 or businessgrowth@the-LEP.com See: https://www.the-lep.com/business-support/covid-19-support-for-businesses/