Coronavirus: Chancellors announcement 20/3/20

Coronavirus: Chancellors announcement 20/3/20

By Ryan Meredith

There are not many conversations taking place in the UK that don’t involve the far-reaching impact of the Coronavirus. There will not be anyone in this country that will not be affected by this epidemic and all will face very different challenges.

From businesses closing in the retail, hospitality and leisure sectors to businesses cutting unnecessary spending, parents juggling the commitments of working from home whilst looking after the kids and those that are self-isolating due to presenting symptoms. We will all be affected.

At de Jong Phillips our primary focus at this time is supporting our clients as they face some of their toughest decisions. Those that are adopting new remote working practices, different routes to market, pivoting their product offering and potentially laying off staff. We are here to support you all.

The Chancellor's message

Anxious about the days ahead, the Chancellor’s message was that you will not face this alone. This is a collective effort that is placed upon all of us.

The chancellor laid out his plan to support businesses and workers, again making the statement that he is willing to do more, repeating that the actions he is taking are “unprecedented” and again committing to do “whatever it takes”.

In his latest statement, the following new announcements were made.

Coronavirus job retention scheme

A new Coronavirus Job Retention Scheme was announced. A scheme in which all businesses are eligible. The government will pay 80% of the workers' wages capped at £2,500 per month, backdated to 1st March 2020.

HMRC is working urgently to set up a system for reimbursement and the following guidance has been given:

  • The employer must designated employees as “furloughed workers”, notifying them of this designation. Changing the status of these employees is subject to existing employment law and depending on the contract may be subject to negotiation.
  • Information on the furloughed workers, including salaries, will then be submitted to HMRC through a new online portal.

Future published guidance will be released to cover those on zero-hours contracts.

Deferral of tax payments

  • VAT payments that fall due between 20th March – 30th June will be deferred with businesses given until the end of the 2020/21 tax year to settle these liabilities.
  • Income tax payments on account, normally due 31 July 2020 will be deferred to 31st January 2021, consistent with the deadline for filing your self-assessment tax return.
  • Time to pay arrangements are also available for upcoming Corporation Tax commitments, although it is understood that interest will be charged on the deferred payments currently.

Recap of previously announced measures

These measures were in addition to the previous announcements made which are detailed below:

  • Statutory sick pay (SSP) can be claimed from day 1 if an employee is self-isolating due to the coronavirus. Sick pay will be refunded to businesses for 14 days of self-isolation. The weekly SSP amount is £94.25.
  • Cash grants of £25,000 have been made available to businesses in the retail, hospitality and leisure sectorswith a rateable value of under £51,000. These grants are not repayable.
  • The 700,000 smallest businesses across all sectors will be entitled to a grant totaling £10,000 per business and is also not repayable.
  • Business rates for the retail, hospitality, and leisure sectors are to be suspended for 12 months commencing 6th April. This will mean that every shop, pub, theatre, music venue, and restaurant will pay no business rates until April 2021.
  • A clarification statement was made regarding business in the retail, hospitality and leisure sectors to reassure them that the government advice for people to avoid cinema’s, pubs, theatres, and other leisure sites would allow for them to claim on any insurance policies they have in place. The government has also committed to assisting those that do not have these insurances in place.
  • Starting next week loans for small businesses will be made available up to £5m, with an interest-free period extended to 12 months for small businesses. This is to ensure that fixed costs can be met with the biggest of these being rent and staff costs. We are still waiting on details regarding individual eligibility and the application process which will be available from next week. Also take a look at Bounce Back loans, introduced on 27 April 2020.
  • On a personal note, mortgage lenders can approve “mortgage holidays” which means that mortgage payments can be suspended, without penalty, for three months.

Get in touch

We are Epsom based Accountants and business advisors. If you want our support in accessing any of these measures, please get in touch.

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