We have put together the following summary of the financial and commercial assistance announced in recent days in order to assist our clients who may be experiencing severe disruption and difficulties to business at this time. The information is changing daily and if you have any questions, please do not hesitate to contact our Commercial Department by phone on the usual numbers or by email.
CORONAVIRUS JOB RETENTION SCHEME
To assist employers who would otherwise be forced to make redundancies, all UK employers will be able to access support to continue paying part of their employees’ salaries. HMRC will reimburse 80% of the furloughed workers’ salaries, up to a maximum of £2,500 per employee per month. Employers may, but are not obliged, to top up the remainder should they so wish.
The Scheme will be backdated to 1st March and is available for an initial 3 month period.
In order to qualify the scheme, employers will have to designate employees as ‘furloughed’ (i.e. those retained as employees but on temporary leave of absence) and employees will have to be notified. This will be subject to the employee’s employment contract or negotiation.
It is intended that access to the Scheme will be via a HMRC portal and for payments to begin at the end of April.
Employers will be entitled to two weeks statutory sick pay (‘SSP’) for employees who are absent due to Covid-19.
Employers will need to retain records and a GP fit note is not required from the employee.
Entitlement to SSP arises where an employee has average weekly earnings in excess of £118 per week and is payable at a rate of £94.25 a week.
DEFERMENT OF VAT AND INCOME TAX
The Government has deferred VAT for three months. Businesses have until the end of tax year 20/21 to pay any liabilities arising during this deferment period.
The relief arises automatically and no application is required.
For those self-employed, Income Tax payments due in July 2020 have been deferred to January 2021. Again, this will be automatically applied and no penalties or late payment interest will apply.
BUSINESS RATES RELIEF
A 3 month rates holiday will apply to all businesses in Northern. This was extended to 12 months in England but this is not the case in Northern Ireland.
Further guidance is awaited.
CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME
The Government will make available loans to SMEs, for terms for up to 6 years for term loans/asset finance and up to 3 years for revolving facilities and invoice finance. Loans are up to a value of £5million and the first 12 months are interest free. The Loan Scheme will provide the lender with a government (partial) guarantee of 80% against the outstanding balance and the Scheme has gone live as of today, Monday 23rd March. Businesses will have no upfront costs in accessing the Scheme. Primary residential property cannot be taken as security against the loan so your family home will not be at risk.
The NI Executive will make available grants of up to £10,000 for small businesses who are eligible for the Small Business Rates Relief Scheme and £25,000 for companies in the NI hospitality, tourism and retail sectors with a rateable value of £15,000 to £51,000.
While announcements have been made in relation to mortgage holidays and rent reliefs for individuals, to date there have been no confirmed positions regarding commercial rents. Industry bodies are lobbying major landlords and we would advise you to begin the conversation with your landlord as soon as possible.
These are unprecedented times and we would strongly encourage you to speak to your professional advisors regarding any key business decision so that when this is all over, your business is in the strongest possible position to get back on its feet.