Things are changing fast with schools and most leisure facilities being told to close. Yesterday’s statement from the Chancellor is very welcome news for businesses. We will have to wait a while for the detail on how the scheme will be administered.

Coronavirus Job Retention Scheme

All UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. To access the scheme, you will need to:

• designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation;

• submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required).

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

This is a grant scheme and the pay will be backdated to 1^st March 2020. The first grants should be paid within weeks and the scheme should be fully in place before the end of April. It will initially run for 3 months but may be extended.

If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.

Other measures

The following bullet points are a brief synopsis of the current government measures. The main articles can be found here and here.

• Coronavirus Business Interruption Loan Scheme. From 23^rd March the government will provide lenders with a no charge guarantee of 80% on each loan up to £5 million. This is to give lenders confidence to continue to provide finance to SMEs. The government will cover the first 12 months of interest payments, up from 6 months. Your business needs to meet the British Business Bank eligibility criteria.

• Deferral of VAT payments. For VAT the deferral will apply from 20^th March to 30^th June 2020. Businesses will have until 5^th April 2021 to pay this back. All UK companies are eligible.

• For Income Tax Self-Assessment, payments due on 31^st July 2020 will be deferred until 31^st January 2021. This is automatic -no application is required.

• Those businesses and self-employed that are in financial distress with outstanding tax liabilities may be eligible for support through the Time To Pay service. If Coronavirus might make you miss a payment call the helpline 0800 0159 559.

• Statutory Sick Pay (SSP). This allows SME’s to reclaim SSP for up to 2 weeks per eligible employee who has been off work due to COVID-19. See also my last blog.

• Business rates holiday. Businesses may be eligible in the retail, hospitality and/or leisure sector for a holiday for the 2020 to 2021 tax year. No action is required, this will apply to your next council tax bill in April 2020.

• Retail & Hospitality Grant Scheme. Businesses in the retail, hospitality and leisure sectors with a rateable value of less than £15,000 will receive a grant of £10,000. For those with a rateable value of between £15,001 and £51,000 will receive £25,000. Your local authority will write to you if you are eligible.

• Small Business Grant Scheme. If you pay little or no business rates because small business rate relief, rural rate relief or tapered relief you may be eligible for a one-off £10,000 grant. Your local authority will write to you if you are eligible.

• Insurance. Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim as long as all other terms and conditions are met. You should check your insurance policy for specifics.

• Universal Credit. The standard allowance will be increased by £1,000 per year. The Working Tax Credit basic element will also increase by £1,000. The minimum income floor will be suspended which means that the self-employed can now access Universal Credit at a rate equivalent to Statutory Sick Pay for employees.

• Renters. An increase in housing benefit and Universal Credit means that the Local Housing Allowance will cover at least 30% of market rents in your area.

Greater detail on how the various schemes are to be implemented and what companies need to do in practical terms should be coming from government/ HMRC in the near future.