On Friday, 20th March, the Chancellor announced unprecedented levels of support for the British economy. The measures announced provided much need relief to employers, employees and businesses, we details those below. However, a big omission was the self-employed, freelancers and those in the Gig economy. At the time of writing, the Chancellor was preparing to announce further measures to address the demands from those who missed out last week. We will cover those measures in a separate blog.
In the meantime, please find below the measures that have already been announced:
Sick Pay (SSP)
Statutory Sick Pay (SSP) is applicable to those who employ or those who are employees. The rules have been relaxed and SSP is available as follows:
- SSP up to £94.25 per week for 28 weeks is available if you’re too ill to work;
- SSP can be claimed if you are self-isolating due to Covid-19, caring for others at home or are quarantined;
- Employers can claim a refund of SSP paid to Covid-19 affected employees. Refund will cover up to 2 weeks SSP;
- It will be available from day 1 of your illness and is available retrospectively from 13th March 2020, if you were ill from that date onwards;
- Proof of Covid-19 illness is required and can be obtained online by visiting NHS 11 Online
- If we operate your payroll, please let us know which employee needs to claim SSP due to Covid-19 and we will take care of the rest.
If you employ staff who you cannot keep on because of Covid-19, then instead of laying them off, the Government has provided help to enable you to keep them on at 80% of their wages up to £2,500 per month. The Government calls these workers “furloughed workers”. This scheme will run for at least 3 months and longer if deemed necessary by the Government.
We understand that all UK businesses are eligible for this relief. If we operate your payroll scheme, please let us know which employees are going to be “furloughed”. HM Revenue & Customs will be opening a new portal to enable employers to register furloughed employees.
Employees that are likely to be affected must be informed that their status is changing but their employment rights should remain as before. If employees are “furloughed”, you cannot ask them to undertake any further work, otherwise you could lose the relief available.
You can find out more details here.
Self-Employed and those not eligible for SSP
If you are self-employed or partners in a partnership or earn below £118 per week, you can claim:
The Universal credit can be claimed online by going here; or
This allowance can be claimed on its own or with the Universal Credit and is available if you have paid enough NI in the last 2 full tax years. Follow this link to find out more.
Within last Fridays’ announcements, there is not much for the self-employed who have been prevented from working because of Covid-19. We hope that there will be further announcements this week and we’ll relay details of those measures once guidance has been issued.
VAT and Income Tax Deferral
The Government has set out support for businesses to defer their VAT and income tax payments:
- VAT – The period of deferral relates to VAT payable in the period 20th March 2020 to 30th June 2020 and is available to all UK businesses. The deferred VAT can be paid by the end of the financial year (note: the guidance appears to be unclear as to what that means – we will find out more in due course).
- Income Tax – If you are due to pay the second instalment of your income tax by 31st July 2020, then this payment can be deferred until 31st January 2021.
Business rates relief will be administered by your local authority. The reliefs available are as follows:
- Business rates holiday – If you have a business that is a retail, hospitality or leisure business in the UK, you will be notified by your local authority who will recalculate your 2020/21 bill automatically.
- Cash grants – Businesses based in England that are within the retail, hospitality and leisure sectors will also be eligible for cash grant of up to £25,000:
o Rateable value less than £15,000 will receive a grant of £10,000; and
o Rateable value between £15,001 to £50,000 will receive a grant of £25,000.
- Small business cash grant – Small businesses based in England with a business property that pay little or no business rates due to small business rate relief will receive a one-off cash grant of £10,000.
Where you qualify for a cash grant, your local authority will contact you about this grant shortly.
Covid-19 Business Interruption Loan Scheme
Businesses that are struggling from the Covid-19 virus could apply for some business interruption loans from their local bank. The loans will be covered by an 80% guarantee from the Government and the first 12 months will be interest free.
To be eligible for this loan, the business must be UK based and you may still need to meet the lending criteria outlined by the British Business Bank. The details of this scheme will be announced later this week and we will know more when those are available.
Time to pay
Over the last week, the Government has been asking many businesses to close to reduce the spread of the virus and as a result this is going to affect a significant part of the British economy.
We believe that most of our clients will be affected by these closures so in additional to the reliefs outlined above, the Government and asked HM Revenue & Customs to relax the tax payments due by giving longer time to pay taxes due.
The Government have put all the above together here.