Latest Announcement from the Government on Friday 20th March to help businesses and individuals

The latest package of measures to be announced by the Chancellor on Friday to support business and individuals through the disruption caused by COVID-19 include:

• A Coronavirus Job Retention Scheme
• Deferring VAT payments
• Deferring Income Tax Payments

All of the above measures help ease the financial commitments and cash flow issues facing both business and individuals currently.

Support for Business through the Coronavirus Job Retention Scheme

Under the 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.

Eligibility

All UK businesses are eligible.

How 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. The furloughed worker must not continue to work for the employer during this time, but they will remain employee of the company.

HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

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

Support for businesses through deferring VAT payments

There is support for all UK businesses by deferring Valued Added Tax (VAT) payments for 3 months.

The deferral for VAT payments will apply from 20 March 2020 until 30 June 2020.

Eligibility

All UK businesses are eligible.

How to access the scheme

This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.

Support for individuals through deferring Income Tax payments

If you are self-employed, Income Tax Self-Assessment payments due on the 31 July 2020 will be deferred until the 31 January 2021.

Eligibility

If you are self-employed you are eligible.

How to access the scheme

This is an automatic offer with no applications required.

No penalties or interest for late payment will be charged in the deferral period.

Further to the above, HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.

Please do not hesitate to contact us if you have any queries or concerns.