Coronavirus_ update_ Government_ support_ for_ individuals_ and_ businesses
- Share_
We are here to help you through these difficult and uncertain times.
The main area of concern is maintaining cashflow; how to deal with staff issues, tax payments, business rates, to name a few.
The Government has promised “to do whatever it takes to support the economy” from the impact of the coronavirus outbreak. While we expect the package of help for business will evolve over time, the current key elements are summarised below.
The Government is almost on a daily basis issuing new guidelines and we will be updating you as we know more.
Employees
The UK is in the early stages of the coronavirus outbreak and many small and medium-sized businesses are already feeling its effects. Employers can take immediate measures to reduce staffing costs on a temporary or more permanent basis to stay viable.
We have a team of HR Specialists who would be happy to offer further advice and guidance. In the first instance please email Cordia Ezekiel directly at cordia.ezekiel@
Reduce working hours
Consult with your staff to collectively elect to cut hours for a temporary period of 1-2months. For example, reducing each employee’s hours/days per week, job sharing or dropping a certain percentage of hours right across the board.
We have a team of HR Specialists who would be happy to offer further advice and guidance. In the first instance please email Cordia Ezekiel directly at cordia.ezekiel@
Reduce all zero-hour employees to minimum hours and all other categories of staff to their basis contractual hours
This measure can be taken safely and with immediate effect as you will not be changing your employees’ contractual terms of employment.
Short term layoff of employees
Ask employees to stay at home on unpaid leave temporarily. This option is viable if you have a lay-off clause in your employment contracts.
If staffing cuts are absolutely necessary, consider redundancies for employees with less than 2 years of service.
Employees with less that 2 years of service are not entitled to redundancy payment and do not have unfair dismissal rights. However, you must ensure you follow correct legal procedure of consulting with your staff and giving appropriate notice.
Cutting costs by making staff in certain departments or categories redundant.
Due to the current climate, employers can justify making staff redundancies in certain areas of the business where there is a reduction in workload or due to closure of the workplace, it’s not feasible for them to work from home. Correct legal procedure must be followed.
Individuals
Those struggling to pay mortgages will be given payment holidays of up to three months. There is expected to be future guidance on those who rent.
Government-backed loans to businesses
A new temporary ‘Coronavirus Business Interruption Loan Scheme’ is designed to support SME businesses to access lending and overdrafts. The government will provide lenders with a guarantee of 80% on each loan, subject to a per lender cap on claims, to give the lenders confidence in providing finance to SMEs. The government will not charge businesses or banks for this guarantee, and the scheme will support loans of up to £5m in value. SME’s can apply for the loans from 23rd March 2020. No interest will be charged for the first six months of the loan period.
Business Rates holiday
Retail businesses in England with a rateable value below £51,000 will pay no business rates for the year ended 31st March 2021. This is expected to apply to up to 90% of independent shops, pubs, restaurants and other qualifying businesses.
For businesses in the hospitality, leisure and retail sectors who use premises with a higher rateable value, there will be full business rate exemption for the year ended 31st March 2021.
Businesses should also check their insurance policies to see the extent of their cover. It is intended that Local authorities will be fully compensated for these business rates measures.
Direct business grants
About 700,000 of the UK’s smaller companies will get a £10,000 grant. This applies to companies that can claim ‘small business rate relief’ i.e. your property’s rateable value is less than £15,000.
Businesses that use premises with a rateable value of up to £51,000, and pay no business rates for the current year, will receive grants of up to £25,000 from their Local Authority. Businesses should contact their local authority for further details of eligibility and payment arrangements.
Supporting the self employed
Those not able to work as a result of the coronavirus crisis can claim state benefits. For those who are sick or required to self-isolate, the Employment Support Allowance will be paid from Day 1 of the sickness period. In addition, the requirements of the Universal Credit Minimum Income Floor will be temporarily relaxed for those who have COVID-19 or are self-isolating in line with official guidance. This means that all self-employed individuals should be able to make a claim.
Local Authorities will also operate a Hardship Fund for families and businesses in financial difficulties: support for individuals is expected to take the form of Council Tax relief.
In addition, the government has delayed the introduction of the IR35 reforms for private sector businesses until 6th April 2021. Self-employed individuals should still need to consider their existing IR35 obligations when accepting work but a delay in placing new obligations will prevent further disruption to the contractor market for the year ended 5th April 2021 tax year.
Tax – Improved Time to Pay arrangements
The government has announced extra resources to assist those struggling to pay their tax liabilities and in financial distress. HMRC will be committing 2,000 experienced call handlers to support taxpayers.
This includes a dedicated HMRC coronavirus helpline (t) 0800 0159 559. Hours: Monday to Friday 8am to 8pm and Saturday 8am to 4pm.
Support will include agreeing a bespoke Time to Pay arrangement with HMRC. This will help those struggling with cash flow and allow those who enter into arrangements to spread liabilities owed over a pre-agreed period. In addition, HMRC will waive late payment penalties and interest where businesses experience administrative difficulties contacting HMRC or paying taxes due to the coronavirus.
As always, it is important to get an upfront agreement from HMRC before a payment deadline.
Paying Statutory Sick Pay (SSP)
Several measures have been announced. All employees who self-isolate will be able to claim SSP and, as a temporary measure, SSP claims can be made from day 1 rather than day 4 of illness. Employees who are caring for someone who is self-isolating will also be able to claim SSP on this basis.
Businesses with fewer than 250 employees as at 28th February 2020 will be able to reclaim SSP expenditure up to a maximum of two weeks per employee from the government. Details of the reclaim method is yet to be announced.
Personal tax residence – days in the UK
The rules for establishing whether or not individuals are tax-resident in the UK (the statutory residence test) depend, amongst other factors, on the number of days spent in the UK in a tax year (6th April to 5th April). In special circumstances if linked to the coronavirus this may be reviewed by HMRC due to exceptional circumstances.
Wills, LPAs (Lasting Powers of Attorney)
Not just because of the coronavirus situation:
- Ensure you and your loved ones have valid wills.
- For your parents and yourselves ensure you have LPAs (Lasting Powers of Attorney) in place. A lasting power of attorney (LPA) is a legal document that allows someone to give another person(s) the legal authority to make decisions on their behalf, if, at sometime in the future they are unable to make decisions themselves.
We have a team of specialists who would be happy to offer further advice and guidance. In the first instance please contact:
Mark Gold
(e) mark.gold@silverlevene.co.uk
(t) 020 7383 3200 or
- Share_
