Covid 19 Business Support Updates
From Mark Coleman, Tax Director
The Government have made various announcements concerning the support available for businesses in light of the coronavirus pandemic. The position is changing regularly and, therefore, affected businesses should regularly check the Government’s website here for updates on the support available for businesses . All the measures outlined at the attached apply for Northern Ireland with the exception of business rates and business support grants.
The support available for Northern Ireland business rates and business support grants is is outlined here.
To date the Government have announced support for businesses as follows:
- Coronavirus Job Retention Scheme – 80% subsidy (max. £2,500 per month) for the employment costs of retained workers who are furloughed, i.e. given a leave of absence from work, up to 31 July 2020. The support has now been extended beyond 31 July 2020 until 31 October 2020, albeit, employers will no longer be able to claim for Employer National Insurance Contributions or employer pension contributions on furloughed employees’ salaries/wages from 1 August 2020. Employers will also be required to contribute at least 10% and 20% of furloughed employees’ salaries/wages for September 2020 and October 2020 respectively. From 1 July 2020 businesses have the flexibility to bring furloughed employees back part time. Further details concerning this scheme are available here and claims can be made as outlined here.
- Coronavirus Business Interruption Loan Scheme (CBILS) – a Government backed guarantee of 80% of borrowing by small and medium sized enterprises of up to £5m with the first 12 months interest being covered by the Government. Further details are available here. Large enterprises with turnover in excess of £45m may apply for finance under the Coronavirus Large Business Interruption Loan Scheme, details available here.
- Coronavirus Bounce Back Loan – a 100% Government guaranteed loan of between £2,000 and £50,000 for terms of up to 6 years available for small and medium sized enterprises. No interest or fees will be charged in the first 12 months nor will any repayments be required during the first 12 months. Loans cannot be received under this scheme and the under the CBILS above. Further details are available here.
- Self-employment Income Support Scheme – a taxable grant of 80% of trading profits up to a maximum of £2,500 per month for 3 months for claims made by 13 July 2020. A second claim can be made in August 2020 covering 70% of trading profits for a further 3 months (the maximum second claim is £6,570). It applies to self employed individuals or members of a partnership provided that self-employed profits are less than £50,000 and are more than half of total taxable income. The threshold of £50,000 is determined by reference to the 2018/19 tax year or an average of profits for 2016/17, 2017/18 and 2018/19. Further details are available here. Guidance on how HMRC will calculate total income and trading profits is at this link.
- VAT – a deferral of VAT liabilities due for payment in the period from 20 March 2020 to 30 June 2020. VAT registered businesses who pay by direct debit must contact their bank to ensure this is cancelled before the due date of collection by HMRC. VAT repayments will, however, still be repaid. VAT returns should be submitted as normal.
- Income tax – payments on account for self-employed individuals due on 31 July 2020 will be deferred until 31 January 2021.
- A business rates holiday for 4 months, proposals for a reduction in the regional business rate TO 31 July 2020 for all businesses. This is extended to 31 March 2021 for businesses within the hospitality, tourism, leisure, childcare and retail (excluding certain supermarkets and off-licences) sectors
- Time to pay arrangement facilities may also be arranged with HMRC for businesses and self-employed individuals in financial distress due to the coronavirus pandemic.
- Coronavirus Future Fund – convertible loans between £125,000 and £5m for innovative companies adversely affected by the coronavirus outbreak. The loans are subject to equal funding being provided by private investors and applies to companies which have raised at least £250,000 in equity investment from third party investors in the last 5 years. Further details are available at https://www.gov.uk/guidance/future-fund
We are constantly reviewing the support and guidance issued by the Government and, therefore, please contact us if you have any queries concerning the support available and we will endeavour to assist you.
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