* Coronavirus Covid-19 Update *
25TH March 2020
BBAT are committed to the health, safety and well-being of our clients, delegates and collaborators. We will continue to follow Government guidelines.
We are expecting an announcement regarding support for the self-employed workers on Wednesday 25th March 2020.
Our business partners are our priority and we would like to help all small businesses survive this pandemic. We advise all small businesses to move all as much as possible into the cloud. We have a close working relationship with Intuit QuickBooks’s who advanced their cloud technology within easy reach and most importantly affordable. Most business functions can now be performed remotely.
We are continuing as usual. We mainly operate in the cloud and have done so for past four years. We are prepared for this pandemic and would like to assist your business in preparation for what’s to come.
The Government have pledged their support to businesses during this difficult time. If you would like to know how we can help you, please do get in contact with us.
If you have employees, the Government will pay up to 14 days SSP and will apply from day one of illness. Employers must maintain records. The repayment mechanism is yet to be put in place.
If employees have been asked to stay home, and you wish to claim under the Coronavirus Job Retention Scheme you must designate your employees as ‘furloughed workers’ and submit this information to HMRC through the new online portal. You must notify your employees of this change. HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. We are expecting details of this to be finalised in April 2020.
If you are self-employed, Universal Credit will be made easier for those with fluctuation incomes. For those who fall through the net of these criteria, there is a £500 million hardship fund. There are no plans yet for the self-employed to be included in the SSP scheme, but there is an online petition gathering speed. We are expecting an announcement on Wednesday 25th March 2020.
There is a one-year business rate holiday on premises with a rateable value of up to £51,000. There will also be a one-year business rate holiday for nurseries based in England, registered with OFSTED and wholly or mainly used for Early Years provision. Your April 2020 rates bill will be amended. You do not have to do anything.
Cash grants are available for retail, hospitality and leisure businesses. This will be up to a maximum of £25,000 per property. Your local authority will write to you to let you know if you are eligible for the scheme. You do not need to apply.
A one-off grant of £10,000 is available for small business in England who already receive SBBR and/or RRR.
HMRC has a Time to Pay Arrangement to help with cashflow issues. This will be decided on a case by case basis. If you have missed a payment, please call HMRC’s dedicated helpline: 0800 0159 559. Please contact us if you need some advice.
VAT payments will be deferred for 3 months until 30th June 2020. If you are due a VAT refund, you will still receive it in the normal way. If you are self-employed and have a tax payment due by July 2020, it will be deferred to January 2021. You do not need to apply for this arrangement, it will be automatic.
There will be a new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank. 40 banks have signed up to the scheme including Barclays, HSBC, Lloyds Bank, Natwest Bank and Royal Bank of Scotland. The effective start date is 23rd March 2020. The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders confidence in continuing to provide finance.
Full eligibility criteria will be published on 23rd March 2020.
The Bank of England will buy short term debt from larger companies under the new Covid-19 Corporate Financing Facility. Information on how to access the scheme will be published shortly.
The Government will continue to monitor the situation and make changes as necessary. There is a definite need for clarification on how businesses will receive the funds and rebates. Cashflow is the major issue for small businesses.
For those who are new to working from home, there is some relief already available.
There is tax relief available if employees are asked by their employer to work from home. Otherwise, employers can currently pay employees up to £4 a week, rising to £6 a week from 6 April 2020.
The self-employed can either claim the costs of working from home directly or they can use the simplified scheme.
The IR35 scheme for off-payroll working has been delayed by one year until 6th April 2021. We hope that the Government can remain lenient on this. We anticipate businesses will still be recovering from the effects of COVID-19 in a year’s time.
In addition to the above, business owners can also do their part.
Stay in contact with family and friends, schedule video meetings and telephone calls. Check in on anyone who seems quieter than usual, it is a trying time for us all.
If we can all look out for one another, there is no doubt we will keep going once it’s all over. Get out and about, remembering to comply with government guidelines. Go for an early morning jog or walk. Keep windows open a little for ventilation and resist the urge to eat your quarantine snacks! Look after your physical health and emotional well-being. Check reputable news sites for updates.
Identify any risk factors to yourself or your business and take steps immediately to mitigate the impact. If your cashflow forecasting is up to date, you can identify when your shortfall in cash will be and how long your business can be sustainable.
This will help while waiting for any Government support and when talking with your creditors. If you find yourself struggling to pay your creditors, speak to them as early as possible to let them know. You may be able to negotiate more lenient payment terms. They will still want your business once the pandemic is over.
If you are going for funding, ensure that your reporting is complete, accurate and timely. Using finance tools such as budgeting, forecasting and reporting can add value to your reporting. If you do not have these in place, please do contact us to assist you in this.
We are all in this together and we will survive this pandemic one way or another. Let’s support and continue to help each other to grow.
Bridget Adade BSc, BPs, FMAAT
B’s Bookkeeping, Accounts & Tax