Update 3rd April:  Financial aid to tackle Coronavirus impact

 

This fifth client bulletin concentrates on financial steps business should take now.

Before highlighting new measures, I would like to provide further update on the most important support measures announced to date:

[A]  PREVIOUS ANNOUNCEMENTS
UPDATE FOLLOWING ADDITIONAL GUIDANCE

[1]  Coronavirus Job Retention Scheme

• The HMRC application platform is NOT ready yet: it is expected to be available by the end of April 2020.

[2]  Self-Employment Income Support Scheme

• Do NOT contact HMRC: they are using the previously submitted self-assessment tax return submissions to establish your eligibility. If eligible, you will be invited to apply by HMRC, when they have the software operational.

[3]  VAT Deferral

• HMRC will automatically offer the chance to defer – you do NOT need to apply.
• If your business was due to pay VAT during this period, that payment is NOT required (but will be due on or before the 31st March 2021).
• If you do decide to defer, remember to CANCEL your business’s Direct Debit (DD) in favour of HMRC.  If you fail to do so, HMRC will attempt to automatically collect through DD on the usual collection dates.
• Your business must continue to make VAT return submissions on time – it is only the payment being deferred, not the submission.

[4]  Income Tax Payments Deferral

In a recent change:

• HMRC has extended the opportunity to defer the second self-assessment ‘Payment On Account’, which was due for payment on 31 July 2020, until 31 January 2021.
• This now applies to all taxpayers, not just the self-employed, as originally reported.
• This is an automatic offer and no application is required. However, you may decide to pay rather than defer and face a larger tax bill later.

[5]  Coronavirus Business Interruption Loan Scheme

• This loan facility is now open for applications via your usual business bank.

 

[B]  FURTHER ANNOUNCEMENTS

 

[6]  Rules on carrying over annual leave to be relaxed 

• Workers who have not utilised all of their statutory annual leave entitlement, due to COVID-19, will now be able to carry it over into the next 2 leave years.

[7]  Insolvency rules relaxed

The stark reality is that many businesses will be pushed to the point of insolvency by the financial impact of coronavirus. Therefore, it is a relief to know that the Government has decided to relax the rules on insolvency and wrongful trading for a temporary period. This relaxation is designed to give businesses breathing space, not to encourage you to ignore solvency.

• If your business is experiencing a cash shortage, get in touch and we will help you to assess your options and put an action programme in place.

[8]  Ban on evictions for commercial tenants

This new measure hasn’t received much publicity, but it could help some businesses to survive. Naturally, this is a double-edged sword, as it represents a headache for the property owners.

• Please seek legal advice as the matter is not straight forward, and is continuing to evolve.

[9]  Some help for businesses supplying the public sector

If you have contracts with the Public Sector, this announcement might help you. Public bodies have been told to support suppliers by being more flexible than normal. They have been told to:

·         Modify terms of contracts to offer contractors relief.

·         Agree interim payment proposals and modifications to current contracts.

·         Accelerate payment practices to ensure suppliers are paid as quickly as possible.

[10]  HMRC Time to Pay Service

The telephone number has been changed to the HMRC Covid-19 Helpline. Businesses and self-employed individuals who are concerned about paying tax due to coronavirus should call:

• HMRC Covid-19 Helpline:  0800 024 1222.

 

[C]  FUNDAMENTAL PLANNING & COMPLIANCE

 

[11]  NORMAL BOOKKEEPING, ACCOUNTS, TAX, and COMPANIES HOUSE

Don’t forget to send us your accounts and tax return information as soon as possible after your company year-end (or 5th April, for personal tax). This will enable us to advise you as early as possible of your tax liability, in order that you can effectively provide for that liability or get a Time To Pay arrangement in place, if necessary.

• Up-to-date and accurate business accounts give you the essential facts you need to make informed business decisions with confidence.