The Chancellor has set out a package of temporary, timely and targeted measures to support public services, people and businesses through this period of disruption caused by COVID-19. Please see up to date details here.
The package includes:
Coronavirus Job Retention Scheme/Furlough Scheme
**UPDATE: From 1 July, employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS grant for the hours not worked.
From 1 August 2020, the level of grant will be reduced each month. To be eligible for the grant employers must pay furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they are being furloughed.
The timetable for changes to the scheme can be found here. N.B. wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours.
Employers will continue to able to choose to top up employee wages above the 80% total and £2,500 cap for the hours not worked at their own expense if they wish. Employers will have to pay their employees for the hours worked.
It’s likely that HMRC will run a comprehensive investigation operation, and have the ability to claw back payments and issue penalties – if you have any concerns about how you’ve carried out furloughing then there’s still time to put this right – get in touch if you’d like to talk this through.
In the absence of an official HMRC publication to the contrary, you can claim furlough payments back for your employees who are working out their notice periods. If this means you think you’ll need to make redundancies, or more redundancies, make sure you’ve considered your other legal obligations, particularly if it affects 20 or more of your staff.
Deferring VAT and Income Tax payments
- These will apply from 20 March 2020 until 30 June 2020, and no application is required. Businesses will not need to make a VAT payment during this period. Businesses will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal. For more info click here
Statutory Sick Pay Relief Packages for SMEs
- This includes up to 2 weeks of SSP for employers with less than 250 employees. For more info click here
12-Month Business Rates Holiday for all retail, hospitality and leisure businesses in England. For more info click here
Small Business Grant Funding of £10,000 for all business in receipt of small business rate relief or rural rate relief. For more info click here
Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
- The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website
- For more info click here
HMRC Time To Pay Scheme
- This is operated on a case by case basis and you should contact HMRC to apply for this. For more info click here
Convertible Loans/The Future Fund
- The Government has announced a new scheme to issue Convertible Loans of £125k to £5m to innovative companies which are facing financing difficulties due to the Coronavirus outbreak: the Future Fund (from May 2020). More detailed guidance is available on the British Business Bank website.
- Eligibility includes (1) must be UK company (2) must get match-funding from private investors (3) must have previously raised equity investment of at least £500k in last 5 years
- The £500 million Future Fund has been designed to ensure high-growth companies across the UK receive the investment they need to continue during the crisis (click here for more detail).
- Click here for the application form
Enterprise Management Incentives (EMI) update: on 26 June 2020, a new clause was published in the Finance Bill to ensure that individuals who are furloughed or who have their working hours reduced below the current statutory working time requirement for EMI as a result of COVID-19 will retain the tax advantages of the scheme.
HMRC will accept that as long as the share options were granted before 19th March 2020 and the EMI participants would have otherwise met the scheme requirements they can maintain the tax reliefs as if they had continued to work for their employer as per their employment contract during the COVID-19 pandemic. Click here for more information on this update.
New Insolvency Legislation: on 20th May the government introduced the Corporate Insolvency and Governance Bill in Parliament, putting in place a series of measures to amend insolvency and company law to support business and to address the challenges resulting from the impact of Coronavirus.
The Bill consists of 6 insolvency measures and 2 corporate governance measures. These changes hope to give businesses some breathing space especially those facing cash flow issues. Find out how the bill can help your business here. More information is available also here.
Click this link for a factsheet on each of the measures in the Corporate Insolvency and Governance Bill 2020.
Companies House has announced they will be supporting businesses affected by the Coronavirus outbreak by temporarily pausing the strike off process to prevent companies being dissolved. This will give businesses the time they need to update their records and help them avoid being struck off the register. In addition, companies issued with a late filing penalty due to COVID-19 will have appeals treated sympathetically. You can see full details here.
Please click here for more details on how you can access government financial support if you or your business has been affected by COVID-19.