Champion Accountants is here to help you understand what financial help is available to you and your business in these unprecedented times.
On Friday evening [20th March], the Chancellor set out a package of temporary targeted measures to support services, individuals and businesses through this period of disruption caused by COVID-19.
The most significant of these measures is the Coronavirus Job Retention Scheme.
The detail, as we understand so far, is as follows:
- The scheme will apply to all employers
- Assistance will be in the form of a cash grant, which will be accessed through HMRC
- The grant will cover up to 80% of the wages – up to a maximum of £2,500 per month – of each staff member who is not working due to the Coronavirus issues/shutdown and who have been temporarily laid off (i.e. “furloughed”, but not made redundant), but are being retained on payroll
- The grant covers qualifying wages/staff from 1st March
- HMRC is setting up the grant scheme as quickly as possible and it is hoped that the first grants will be available by end of April 2020
- The scheme will be open to cover salaries up to end of June 2020 but may be extended
So, for any of your staff that you need to lay off temporarily, you will be able to claim a grant to cover up to 80% of their wages (up to a maximum of £2,500 per month per employee). As we understand it, the grant will only cover wages from the date that staff are temporarily laid off.
HMRC guidance advises that you:
- Designate affected employees as ‘furloughed workers’ and notify your employees of this change. However, changing the status of employees remains subject to existing employment law and depending on the employment contract may be subject to negotiation.
- Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal. HMRC is to set out further details on the information required.
HMRC is urgently working to set up a system for reimbursement. We are constantly monitoring the latest news and will update you at the very moment further information on accessing this funding facility is issued.
Further supporting measures that were announced included:
- Businesses will not be required to pay any VAT liabilities to HMRC from now until the end of June 2020. Businesses can then spread the payment of those unpaid VAT liabilities which have built up over that period until 31st March 2021. This is an automatic deferral and no application is required to HMRC.
- If you are self-employed, your Self-Assessment payment on account of tax ordinarily due on 31st July 2020, will be deferred until 31st January 2021. This is an automatic deferral and no application is required to HMRC. No interest or penalties for late payment will be charged in the deferral period.
- The new Business Interruption Loans being introduced will now be interest free for 12 months, rather than six months. Details on how to access this funding are to be launched this week. The Champion team are here to help businesses devise necessary funding plans and decide what financial arrangements will be best.
As always, we remain on hand to support our clients during this time.
For more information on the above and to discuss the impact of COVID-19 on your business, then please call your Client Manager or your local Champion Accountants office.