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Jefferies Support Guide for Employers and Businesses Affected by COVID-19

Posted on March 26, 2020
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What measures has the Government introduced to help your business?

From the financial strain on your business’s cash flow to the uncertainty surrounding protecting your staff during this time – not to mention the unfamiliarity of working from home if this is new for you and your team – it’s clear that businesses, the self-employed and landlords are greatly affected by the coronavirus outbreak.

At Jefferies, we are committed to helping the local business community understand the guidance and new measures put in place by the Government, how they will impact you, and how you can make the most of relevant schemes, extensions and delays.

As you will be aware, the Prime Minister, the Chancellor of the Exchequer and the Housing Secretary are frequently making announcements of further support available during these ‘unprecedented times’, so our first recommendation will be to keep following the press releases and publications made available here.

Here, we outline what has been announced to support businesses during the next few months, to help you navigate through all the Government advice so far:

Coronavirus Job Retention Scheme

As announced by Rishi Sunak on 20th March, the Coronavirus Job Retention Scheme has been established to help businesses retain as many of their employees as possible instead of making them redundant, by changing employees’ job status to ‘furloughed workers’. This means that those designated as a furloughed worker cannot carry out any work for their employee during this time, although they will remain an employee at the company.

HMRC will reimburse 80% of furloughed workers’ wage costs, up to £2,500 per month, and are currently working on setting up the system to have this reimbursement in place.

To access the Coronavirus Job Retention scheme, you will need to do the following:

• Designate affected employees as ‘furloughed workers’ and notify them of this change, as this change of employment status remains subject to existing employment law and could be subject to negotiation
• Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal, which is to be finalised

Deferring VAT and Income Tax payments

VAT and Income Tax payments have also been deferred for businesses and the self-employed. You will not need to request a deferral, as these offers will be automatically applied.

VAT payments due between 20th March 2020 and 30th June 2020 will be automatically deferred, with taxpayers given until 5th April 2021 to pay any amounts due during this period without incurring any penalties.

Income Tax Self-Assessment payments due on 31st July 2020 will be deferred until 31st January 2021. No penalties or interest for late payment will be charged in the deferral period.

Minimum income floor for Universal Credit removed

The Government has suspended the minimum income floor, which is the amount the DWP uses to set your Universal Credit payment each month. This means that, if you’re self-employed, you will get this Universal Credit at the statutory sick pay level.

Statutory Sick Pay relief package for SMEs

Statutory Sick Pay (SSP) will now be paid from day one of illness rather than on the fourth day. SSP will be paid to all those who choose to self-isolate, even if they don’t have any symptoms. Rather than requiring a sick note from a doctor, those in self-isolation will be able to get a sick note by calling 111. Plus, those on employment contributory Support Allowance can claim from day one rather than after a week.

To ease the burden on small businesses, the cost of providing SSP for up to 14 days will be refunded in full by the Government for businesses with fewer than 250 employees. A rebate scheme is being developed and further details will be provided once the legalisation has passed.

12-month business rates holiday

A business rates holiday has been introduced for retail, hospitality, leisure and nursery businesses in England for the 2020 to 2021 tax year, helping these in an attempt to help these more vulnerable businesses – who have now had to close due to lockdown – manage their cash flow during this period.

This is on top of measures introduced in the Spring Budget, where the Chancellor stated that businesses within the hospitality, retail and theatre sectors with a rateable value of less than £51,000 will pay no business rates.

Plus, as of 25th March, the business rates holiday has been extended to cover estate agents, lettings agencies and bingo halls.

Eligible businesses won’t need to do anything to access this, as the business rates holiday will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge.

Small business grant funding

For businesses that receive Small Business Rate Relief or Rural Rate Relief, the Government will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs. Your local authority will write to you if you are eligible for this grant.

Similarly, grant funding has been available for retail, hospitality and leisure businesses. Businesses in these sectors with a property that has a rateable value of between £15,000 and £51,000 will receive a grant of £25,000, while those with a rateable value of £15,000 and under will receive a grant of £10,000. Again, your local authority will write to you if you are eligible.

Coronavirus Business Interruption Loan Scheme

Aiming to help businesses manage their cash flow, this new scheme offers loans of up to £5 million for SMEs through the British Business Bank. These loans are interest-free for 12-months, rather than the 6 months previously announced.
As long as your business is UK-based, with a turnover of no more than £45 million per year, and meets the other British Business Bank eligibility criteria, you are eligible to apply for a loan. Speak to your bank online or over the phone or get in touch with an accredited finance provider to find out more as applications are now open.

HMRC Time To Pay Helpline and Scheme

HMRC has set up a dedicated helpline to support businesses and self-employed with any concerns regarding paying your tax on time due to coronavirus. You can call 0800 024 1222 from Monday to Friday between 8am and 4pm.

3-month extension period to file accounts with Companies House

As of 25th March, businesses have been offered an additional 3 months to file accounts with Companies House to help them avoid penalties. Companies need to cite COVID-19 or Health matters as the grounds for their application for an extension.

IR35 Reforms delayed until 2021

On 17th March, the Chief Secretary to the Treasury announced a delay to the extension of IR35 into the private sector. These reforms were initially due to begin next month but they have now been delayed until 6th April 2021.

Changes for residential and commercial landlords

For many landlords, renting out property is their main business venture and primary source of income and will, therefore, need to be aware of new Government updates. The Housing Secretary, Robert Jenrick, has introduced a series of measures to protect renters and landlords affected by coronavirus.

During this time, no renter in either social or private accommodation will be forced out of their home and landlords will not be able to start proceedings to evict tenants for at least a 3-month period.

The 3-month private mortgage holiday previously announced by Rishi Sunak has been extended to buy to let mortgages for landlords whose tenants are experiencing financial difficulties due to coronavirus.

How Jefferies can help

If you have any issues relating to any aspect of employment law during this time, then please don’t hesitate to get in touch with our team. We are currently following Government guidelines and working remotely, but still fully dedicated to helping you navigate through these new measures.

You can follow our updates here and get in touch with our specialist Employment Law team here.

Speak to an expert today

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