Information correct as of June 15, 2020
Future Fund
UK-based companies can apply for government loans through the Future Fund until the end of September, delivered through the British Business Bank. Loans ranging from £125k to £5m are available, but companies must secure at least equal match funding from private investors.
Eligible businesses must be UK-incorporated, although only the parent company of corporate groups can receive assistance. Additionally, the business must have raised a minimum £250k in equity investment in the last five years from third-party investors.
Companies cannot be trading shares on any listing venue, including regulated markets or multilateral trading facilities, and must have become incorporated on or before December 31, 2019. Finally, businesses must prove that either half or more of their employees are UK-based, or half or more of their revenue comes from UK sales.
Bounce Back Loan Scheme
On May 4, a government-backed loan scheme designed for small businesses was introduced. SMEs can borrow between £2k and £50k at a 2.5 percent interest rate.
Any business that had previously taken out a Coronavirus Business Interruption Loan of £50k or less can switch over to the Bounce Back scheme.
Under the scheme, lenders will receive a 100 percent guarantee from the Government, who will also cover any fees and interest for the borrower for the first 12 months. Additionally, no repayments will be due during these 12 months.
Companies applying for the scheme will be subject to anti-money laundering (AML), Know Your Customer (KYC) and customer fraud checks.
Paternity and maternity leave
Following CJRS’ extension into October, HMRC will allow parents on both statutory maternity and paternity leave to be furloughed. However, this is only applicable to employers who have previously furloughed employees.
These new rules also include workers on adoption leave, shared parental leave and parental bereavement leave.
Reservists returning to civilian work
On June 15, the Chancellor announced that servicemen and women returning from a period of active duty can be furloughed by their ‘day job’ employer. They are also exempt from the CJRS July deadlines, allowing reservists who were on active duty during the pandemic to receive grants.
More guidance will be published by HMRC during the week commencing June 22.
Coronavirus Job Retention Scheme (CJRS)
From July 1, furloughed employees can return to work on a part-time basis, with no restrictions on hours or work pattern while still receiving CJRS grants.
Employees can no longer be added to the scheme, and only employees who had previously claimed a grant under CJRS will be eligible for future pay-outs. Additionally, employers can only claim up the maximum amount, or below, of employees claimed by June 30.
July 31 is the last day that HMRC will receive claims for periods ending on, or before, June 30.
From August 1, the CJRS grant will begin being reduced, and employers will be asked to contribute to furloughed employees’ wages by September 1. Both National Insurance and pension contributions will still be the employer’s responsibility.
This scheme was originally open to those UK employers who had a PAYE scheme created and started on or before February 28, 2020.
On April 15, the Government announced that the eligibility date had been extended to include employees who were both employed and on PAYE payroll on or before March 19.
Employers could furlough employees they would have otherwise laid off, due to coronavirus’ impact, and received grant from HMRC worth 80 percent of an employee’s usual wages, up to £2,500 per month.
HMRC provided the Employer National Insurance contributions and the minimum automatic enrolment employer pension contributions on their wages. Employers must have a UK bank account to benefit from the scheme.
To qualify, employers must have notified their employees that they have been furloughed and share their information through the HMRC portal. All records must be kept for six years.
To file a claim online, the employer must use their Government Gateway user ID and password provided when they registered for PAYE online. All claims must be submitted in a single session, which will time out after 15 minutes of inactivity.
Agents who are authorised to do PAYE online for a client can file for CJRS on behalf of said client. All claims will be supported by a claim reference number, and after HMRC checks the claim, the claim amount will be paid by BACS within six working days.
Coronavirus Business Interruption Loan Scheme (CBILS)
Available through the British Business Bank, this 12-month interest-free scheme is available to SMEs with turnovers below £45m per year. Over 40 commercial lenders have joined the government-backed scheme to offer UK-based SMEs loans, overdrafts, invoice and asset finance up to £5m, for up to six years.
Businesses no longer need to provide personal guarantees on loans under £250,000 however, loans above this amount will have recoveries capped at 20 percent of the outstanding CBILS facility amount. The collateral requirements initially included in CBILS have also been removed, backdated to March 23, but businesses are still required to prove their pre-coronavirus creditworthiness.
The UK Government has also worked to support SMEs with this scheme, providing lenders with an 80 percent guarantee on each loan. This is further supported by a Business Interruption Payment, available to smaller businesses, which works to cover the first 12 months of interest payments and shield businesses from upfront costs.
Additionally, borrowers who used commercial loans can now join CBILS, provided they meet the above criteria. They are encouraged to apply through their lender’s website, and CBILS applications are now open.
This scheme remains closed to banks, insurers, reinsurers, public-sector bodies, grant-funded higher-education facilities, and state-funded primary and secondary schools.
Coronavirus Large Business Interruption Loan Scheme (CLBILS)
This expanded scheme, operated by the Bank of England, allows the treasury to provide government guarantees of 80 percent. Banks can provide maximum loans of £25m to UK-based businesses with an annual turnover above £45m, and £50m to firms with a turnover above £250m.
Under this programme, interest and fees are covered by the government for the first 12 months. Recipients who have received loans through the Bank of England’s “COVID-19 Corporate Financing Facility” are ineligible for CLBILS.
Support for the self-employed
While HMRC is not yet accepting claims for the Self-Employed Income Support Scheme (SEISS), eligible self-employed individuals can apply for a grant worth 80 percent of their typical trading profits, capped at £2,500 per month. However, the self-employed can continue to work alongside this assistance.
SEISS is only available to those earning under £50k and will be available for three months. Additionally, self-employed individuals—or members of a partnership—need to have submitted their 2018-19 Income Tax Self Assessment tax return and traded in the 2019-20 tax year.
Applicants must also be trading when they apply, or would have been if coronavirus had not impacted their business, and intend to continue trading in the 2020-21 tax year. Additionally, trading profits must be below £50k, and no more than half of the total income from the 2018-19 tax years, or the average of tax years 2016-17, 2017-18, and 2018-19.
Those who have lost trading or partnership profits due to coronavirus are also eligible for SEISS. HMRC will use a risk-based approach to determine compliance, and applicants must confirm that their business was negatively affected by coronavirus.
The scheme will be available for three months, and any applicable payments will be deposited by HMRC in a lump-sum format in June. This will be subject to declaration on January 2022 tax returns.
Company owners who pay themselves out of the business will not be covered by SEISS. HMRC will be using “existing information to check potential eligibility,” and will send out direct invitations to the scheme by mid-May 2020—self-employed workers are urged not to contact HMRC directly.
VAT
All UK-based businesses’ VAT payments are automatically deferred from March, 20, 2020 through 30 June, 2020. Businesses do not need to apply for this scheme, and taxpayers have until March 31, 2021 to pay any VAT debt that has accrued.
According to HMRC, no interest will be charged or penalties placed on accounts who decide to defer payments.
Anyone who normally pays via direct debit, but is having financial troubles, should cancel this debt with their bank in advance of HMRC attempting to collect. HMRC will continue to process VAT refunds and reclaims for those taxpayers who wish to continue paying on their accounts.
HMRC “Time to Pay” scheme
Both businesses and self-employed individuals with outstanding tax debt can defer these tax payments through HMRC’s “Time to Pay” scheme. However, HMRC operates on a case-by-case basis for this opportunity.
Those businesses who already pay taxes to the UK Government, and who have outstanding tax debt, are potentially eligible for the scheme. To access this support, contact HMRC directly, or call its advice helpline at 0800 024 1222.
Statutory Sick Pay (SSP) and Rebates
UK-based SMEs can now reclaim any Statutory Sick Pay (SSP) paid due to staff sickness absences due to coronavirus, covering up to two weeks per eligible employee.
To benefit from the scheme, these SMEs must employ fewer than 250 employees as of 28 February, 2020. All employment contracts are covered by the scheme, and PAYE online-authorised agents can claim this rebate on behalf of their clients.
Employees must be paid SSP from the first day they are off work if the sickness started on or after March 13, including if the employee has coronavirus symptoms or is self-isolated, or April 16 if the employee is shielding.
The scheme currently does not have an end date. Employers must keep records for three years following their rebate, indicating an employee’s sick days, qualifying days, reason for absence and NI number.
Additionally, while doctor’s fit notes are not required for businesses to make a rebate claim, employers are still able to request an NHS or GP self-isolation or shielding note from employees.
HMRC will also pay SSP for sick employees at businesses which have become insolvent, directing employees to contact the Statutory Payment Disputes Team at 03000 560 630.
If an employee is sick whilst their contract is terminated, HMRC recommends providing the ex-employee with a completed SSP1 form to claim Employment and Support Allowance. Some individuals under this scheme will also be eligible for Universal Credit.
Statutory annual leave
The Government is set to amend annual leave regulations, now allowing coronavirus-impacted workers to carry their annual leave entitlement into the next two leave years.
Up to four weeks of unused leave can be pushed into 2021 and 2022, allowing pandemic-affected workers to capitalise on their 28 days of holiday without penalisation. The Working Time Regulations will be amended to reflect this ruling.
Support for housing
Under UK Government advice, mortgage lenders must allow financially insecure householders to suspend mortgage payments for three months under a “repayment holiday.”
This scheme will also support Buy to Let mortgages, shielding landlords from footing the bill, but the holiday must be discussed with each individual’s financial lender.
Filing with Companies House
To mitigate the pandemic’s impact, businesses can now defer their Self-Assessment payments from July 31, 2020 until January 2021. Anyone who makes a Self-Assessment payment is eligible and will be entered into the offer automatically, but the deferment is optional.