Between Spring Budget 2020 on 11 March and Friday 20 March the Government announced a series of measures designed to counter the threat posed to the UK economy by the outbreak of the coronavirus that causes the respiratory disease COVID-19.

This post summarises all measures so far announced and provides up-to-date information on how you can:

find out more about each measure from reliable sources and
help your UK business clients access the support on offer.

It will be updated at least daily as new information emerges on eligibility and how businesses can access each service or fund.

Updates from 3 April

The coronavirus business interruption loan scheme for struggling businesses has been revamped.

In addition to the previous offering, it will offer state-backed loans of up to £25 million for larger firms with turnover of between £45m and £500m.

UK Finance said more than 130,000 loan enquiries had been made since the scheme opened, but less than 1,000 had been approved by banks.

In response, the Government will underwrite 80% of these loans to nudge banks into speeding up the provision of these emergency funds.

Banks will also be banned from asking company owners to underwrite loans of up to £250,000 with their own assets, such as property or savings.

Updates from 2 April

The coronavirus job retention scheme now applies to off-payroll contractors working for public-sector organisations.

Furlough can be offered to all public-sector workers, including those paid under PAYE, through an umbrella or their own personal service company.

Updates from 1 April

The second phase of Making Tax Digital for VAT, which introduces more complex technology and stringent rules, has been deferred for 12 months.

New rules around the way digital firms link their MTD software and how they upload their VAT returns will now kick in on 1 April 2021.

27 March: Coronavirus job retention scheme

How will claims be assessed and processed?

Under the Coronavirus Job Retention Scheme, all employers in the UK will be able to access support to continue paying part of employees’ salaries who would otherwise have been laid off during the ongoing crisis. Furloughed workers are employees whose employers cannot cover staff costs due to coronavirus, and as such they have been asked to stop working but have not been made redundant.
The employer should discuss with affected employees and notify them (preferably in writing) that they have become ‘furloughed workers’.
The employer will need to submit information to HMRC about the employees that have been furloughed and their earnings via a new online portal.
To avoid fraud, there are expected to be cross-checks between the applications for grants against PAYE records for each employer.
Employers will be required to make one claim for the entire workforce, record how many workers are covered and will need to keep records.

Will employers still have to pay Employers NIC?

HMRC has said it will clarify in due course whether employer NICs will be payable on these grants. Employees remain on the payroll deducting tax and employee national insurance under the pay as you earn (PAYE) system.

Self-employment Income Support Scheme

Updated: 27 March 2020

This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month and is available for the next 3 months. This may be extended if needed. The grants can be claimed and the self-employed person can continue to do business.

Below is the compiled list of frequently asked questions from ACCA members.

1. What is the support available due to the Covid-19 impact to those who are self-employed?

Those who are self-employed will get:
A taxable grant worth 80% of average monthly profits over the past three years, up to £2500 per month. It is the same amount of income as has been announced last week for furloughed employees.

HMRC guidance states:

Your self-employed trading profits must also be less than £50,000 and more than half of your income must come from self-employment. This is determined by at least one of the following conditions being true:

having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period

If you started trading between 2016 and 2019, HMRC will only use those years for which you filed a Self-Assessment tax return.

2. Are there any conditions to claim this support scheme?

Yes, there are conditions to apply for this support. The self-employed can apply for the scheme if they:

have submitted their Income Tax Self Assessment tax return for the tax year 2018-19
traded in the tax year 2019-20
are trading when they apply, or would be except for Covid-19
intend to continue to trade in the tax year 2020-21
have lost trading/partnership trading profits due to Covid-19

In addition to above, this is also determined by at least one of the following conditions being true:

having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of their total taxable income
having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of their average taxable income in the same period.

If the business started trading between 2016 and 2019, HMRC will only use those years for which they filed a Self-Assessment tax return.

3. When will the announced support be provided to self-employed?

It is expected that the grant will be released no later than June 2020, but it will be backdated from 1 March 2020 as incomparable to employees’ support.

HMRC will contact the business if they are eligible for the scheme and invite them to apply online. Once HMRC has received the claim and checked the eligibility for the grant, they will contact the applicant to tell them how much they will get and the payment details.

4. Are the recently registered self-employed who have not filed any tax return yet (i.e. 2019-20 being first return) eligible for this support?

According to the Treasury, it is very difficult to assess the amount of the benefit for recently registered self-employed people. They may have to look at the alternative financial support i.e. Universal Credit or Employment and Support Allowance.

5. Is there any extension on filing of 2018-19 if the taxpayer has missed the deadline?

Yes, if the tax return for 2018-19 has not been filed yet, the deadline is 4 weeks from 26 March 2020 i.e. 23 April 2020.

6. Can a taxpayer amend the already submitted returns?

To avoid the abuse of the scheme, HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way.

7. Can a director of a company claim this grant?

A director of their own company who are paid through PAYE may be eligible to get support using the Job Retention Scheme.

8. What should the self-employed do if somebody contacts them for the scheme?

The self-employed should access this scheme only through GOV.UK. If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.

9. Does this grant need to be included in the existing tax credit claims in July 2020 declaration?

Yes, this is taxable grant hence it will need to be included as income for the existing tax credit claim.

26 March: Support for self-employed people, at last

Having been under pressure for the past week, Chancellor Rishi Sunak has announced measures to support self-employed people whose earnings have been affected by the coronavirus outbreak.

Self-employed income support scheme (SEISS)

Those who are already self-employed and facing financial difficulties are asked to apply.
The scheme will cover up to 80% of average profits over the past three years, up to £2,500 per month, for at least three months.
Those with trading profits of more than £50,000 are not eligible.
Eligibility is determined with reference to earnings in 2018/19 as reported on tax returns filed this year.
What next? Application will be to HMRC via an online platform, yet to launch. The grants probably won’t be available until June 2020, backdated to 1 March. In the meantime, self-employed people who can’t work are expected to claim universal credit, access to which was broadened in the Spring Budget.

Updates from Wednesday 25 March

Further to the news below that Companies House would automatically be giving those who need it a two-month extension on filing their accounts, the Government has now confirmed an automatic three-month extension for businesses that need it:

As part of the agreed measures, while companies will still have to apply for the 3-month extension to be granted, those citing issues around COVID-19 will be automatically and immediately granted an extension. Applications can be made through a fast-tracked online system which will take just 15 minutes to complete.

A new note has been added to the guidance on deferral of VAT payments reminding businesses that pay by direct debit to cancel if they want to defer payment:

Customers who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay. Please do so in sufficient time so that HMRC do not attempt to automatically collect on receipt of your VAT return

The Scottish Government has published guidance on its support for businesses in Scotland, with some specific differences:

The threshold for £25,000 grants for small business is £18,000 rather than £15k, as in England.
All non-domestic properties in Scotland will get 1.6% rates relief, applied automatically.
Retail, hospitality and leisure businesses will get 100% rates relief, as in England, also applied automatically.

Guidance from the Welsh Government is also now available. One notable difference is that the threshold for the £25,000 grant payment for retail, leisure and hospitality businesses is £12,000 – lower than in England or Scotland.

Businesses in Wales can also access loan and equity funding via the Development Bank of Wales.

Updates from Tuesday 24 March

Fuller detail of the retail, hospitality and leisure grant (RHLG) fund has been published by the Department of Business, Energy and Industrial Strategy (BEIS). The guidance document, intended to help local authorities administer the scheme, is available on the Government website.

Payments will be made to the person listed in local authority’s records as the ratepayer for the business premises on 11 March 2020.
There is a strong warning against fraudulent claims with a promise of prosecution and clawback for any such payments.
Certain premises are excluded on the grounds of private use, such as private stables and beach huts. Car parks and parking spaces are also ineligible.
Businesses in liquidation or dissolved as of 11 March aren’t eligible either.

The Coronavirus Bill currently before Parliament now includes an amendment calling for support for the self-employed and freelancers in line with that being provided for employees under PAYE via the coronavirus job protection scheme. It was passed by the House of Commons last night and will now go the House of Lords for scrutiny. The Chancellor is expected to announce provision for the self-employed tomorrow, 25 March.

Updates from Monday 23 March

The scheduled 5pm press conference was cancelled and the Prime Minister instead addressed the nation at 20:30 announcing, to all intents and purposes, a total lockdown of the UK. Movements are to be restricted and non-essential shops are to close.

This means expected clarifications on how businesses can access support are likely to be delayed until later in the week.

As scheduled, however, the British Business Bank has published comprehensive details of how the coronavirus business interruption loan scheme (CBILS) can be accessed:

Eligibility: an SME must be UK-based with annual turnover of less than £45m and have a proposal which would be considered viable by the lender under normal circumstances.
Types of finance available: Term loans, overdrafts, asset finance, invoice finance.
How to apply: via one of the accredited lenders on this list. In the first instance, the British Business Bank is urging businesses to apply online and asking those who don’t need emergency finance to ‘consider the urgency of your need’. More detail is available here.

In other news, Companies House has confirmed that, in line with it’s existing rules, firms that were unable to file accounts on time can apply for a deadline extension, with an automatic two-month extension for those in isolation.

Measures announced on 20 March

On the evening of 20.03.2020 the Prime Minister announced further restrictions on the compulsory closure of bars, cafes, pubs and restaurants.

Alongside these new measures, the Chancellor announced a further package of support for businesses facing the prospect of having to reduce staff numbers.

Coronavirus job retention scheme

Grants of up to £2,500 per employee where those employees are unable to work (are ‘furloughed’) because of coronavirus, covering 80% of salary costs.
Intended to run for three months in the first instance with the first payments expected in early April and the scheme fully up and running by the end of that month.
The grants will be paid via HMRC.
All UK employers will be eligible.
What next? At present, no information has been provided on how to apply. Though it is generally understood to mean ‘stood down but still employed’, there is as yet no official definition of ‘furloughed’. It is unclear whether employers will be expected to make up the remaining 20% of salary.

Extension of the coronavirus business interruption loan scheme (CBIL)

Maximum turnover for eligible businesses was previously set at £41 million per year; it has now been increased to £45m.
The interest-free period has been increased from six months to twelve.
The scheme is being managed by the British Business Bank but businesses will access them via one of 40 accredited lending providers, including most major banks.
The maximum value of a facility provided under the scheme will be £5 million – higher than the £1.2m announced initially.
What next? Discuss business plans with existing lending providers. Loans will be available from Monday 23 March 2020.

Deferral of tax and VAT payments currently due

VAT payments from UK-based VAT registered businesses due between 20 March and 30 June 2020 won’t need to be paid to the usual deadlines, with payment deferred until the end of the tax year.
Self-assessment income tax payments for the self employed which were due on 31 July 2020 can now be deferred until 31 January 2021.
What next? Both deferral schemes apply automatically with no application required.

Access to welfare for the self-employed

The minimum income floor for access to universal credit has been suspended for self-employed people affected by the economic impact of coronavirus.

Measures announced on 17 March

At a press conference on 17 March, the Chancellor announced a package of support worth £350 billion – around 15% of the value of the entire UK economy.

It came upon the heels of a statement from the Prime Minister on 16 March which urged people to stop visiting cafes, pubs and restaurants.

It was intended to send a strong signal to British businesses not to act hastily in downsizing because support would be forthcoming.

Extension of business rate discount

All hospitality, leisure and retail venues in England, regardless of rateable value, can now claim a 100% discount on business rates for 12 months from 1 April 2020 to 31 March 2021.
Unoccupied properties that become vacant in the next 12 months will be charged 100% full rates from three months after they become empty.
What next? The discount will be applied automatically to the next council tax bill, due in April 2020.

Cash grants for very small businesses

Hospitality, leisure and retail businesses operating from units with rateable values between £15,000 and £51,000 will receive a grant of £25,000.
Businesses in these sectors with a rateable value of less than £15,000 will receive a grant of £10,000.
Those with a rateable value of more than £15,000 will receive £25,000.
Your local authority will contact you if you are eligible for this grant.
What next? Await notification from local authorities.

Measures announced in Spring Budget 2020

In what the Office for Budget Responsibility called the “largest Budget giveaway since 1992”, Rishi Sunak announced business support measures worth billions. Events have moved quickly, though, and many of the specific measures announced have now been superceded or further extended.

Grants for businesses receiving SBRR or RRR

Businesses in England eligible for small business rate relief (SBRR) or rural rate relief (RRR) will receive a one-off cash grant of £10,000.
What next? This will be processed automatically by local authorities.

Statutory sick pay reclaim scheme for SMEs

Small-and medium-sized businesses and employers will be able to reclaim statutory sick pay (SSP) paid for sickness absence due to COVID-19.
The refund will cover up to two weeks’ SSP for each member of staff off work because of COVID-19.
It applies to all UK businesses that employed fewer than 250 employees as of 28 February 2020.
What next? Legislation needs to pass before details of how to apply can be published.

Interest rates

On 19 March 2020 the Bank of England cut interest rates to a historic low of 0.1%, having previously reduced them to 0.25% on the day of the Spring Budget.

Further information

COVID-19: support for businesses | HM Government
Coronavirus Business Interruption Loan Scheme (CBILS) | British Business Bank

For support with helping your business during this busy time, get in touch.