You’ll have heard the word ‘furloughing’ countless times on the news over the past few weeks, but the Government’s economic support for businesses doesn’t stop there.
There’s a range of different procedures in place to help SMEs through this difficult time. So once again, we’ve teamed up with our friends at Exchequer Accountancy to take us through these different measures.
Supporting your employees
For anyone that employs people as part of a business, there’s plenty of support available to ensure you can look after them at this time. For a start, the coronavirus job retention scheme allows you to ‘furlough’ employees, essentially put them on temporary leave, with the Government covering 80 per cent of their wage up to £2,500 a month.
Also, for any employees who were ill as of 13th March 2020, the coronavirus statutory sick pay rebate scheme will reimburse employers the current rate of SSP for a maximum of two weeks. This covers illnesses relating to coronavirus, or people who cannot work because they are self-isolating or shielding in line with public health guidance. To find out more information on how to claim the payments, eligibility and information needed, visit the Government page.
Alternatively, if you’re a sole trader the Government has also offered support for self-employed workers which we talked about in our previous blog – which you can read here.
Deferring VAT payments
To help manage a healthy cashflow for your business, the Government is offering some handy short-term measures. Any UK VAT registered business can defer their VAT payments – which are due between 20th March and 30th June 2020 – to a later date. Any payments due after this date will need to be paid as usual.
The support is interest free, which means you won’t receive any extra charges on the total amount deferred. The only limits are that it doesn’t cover payments due for VAT MOSS or import VAT and the delayed payment will need to be paid on or before 31st March 2021.
So, how do you go about deferring your VAT payments? There’s no need to update HMRC, but if you normally pay by Direct Debit, make sure you contact your bank to cancel any automated payments as soon as possible. This can also be done online if your bank offers online banking.
You’ll still need to continue to submit your VAT returns to HMRC on time by the usual methods, as they are continuing to process VAT reclaims and refunds as additional business assistance.
Delaying Self-Assessment payments
Another payment that can be deferred is your Self-Assessment tax bill. By now you should have already paid your first payment as well as anything outstanding from last year. What the Government is offering is the ability to delay your second payment – due by the 31st July – until 31st January 2021.
However, if you’d prefer to keep things as they are and pay in regular installments, you can still use the budget payment plan.
If you’re struggling to pay your tax bill, call the Self-Assessment Payment Helpline on 0300 200 3822.
Business support grants
Another option available for smaller companies is the Small Business Grant Fund (SBGF) – one of two grant schemes offered by the Government for businesses with a rateable value of less than £51,000. They are controlled by local authorities who will get in touch if your business has been chosen to receive the funding of up to £10,000.
Business support loans
The alternative of the SBGF is the Coronavirus Business Interruption Loan Scheme (CBILS). The loan aims to support small and medium-sized businesses through a range of financial aid. If your company has an annual turnover less than £45 million, you can get access to loans, overdrafts, invoice finance and asset finance up to £5 million for a maximum of six years.
The Government has also offered to make a Business Interruption Payment which covers the first 12 months of interest and will upfront 80 per cent of the loan to guarantee the financial aid.
To be eligible, your business must:
- Be based in the UK
- Have an annual turnover of up to £45 million
- A valid borrowing proposal
- Supply proof that your business has been affected by coronavirus
To start the process of obtaining funding from the CBILS, you can contact one of the 40 accredited lenders, which includes all major banks.
For the full list of Government support and more information, visit: https://www.businesssupport.gov.uk/. For more financial support and business advice, contact https://www.exchequeraccountancy.co.uk/.
