01483 338 438       info@bluematrix.co.uk

Coronavirus

COVID-19
Blue Matrix are working hard to find out the latest information that can help current and new clients during this unexpected period.
Here is a summary of what we know so far:
Job Support Scheme
The current Job Retention Scheme is due to come to an end on the 31st October 2020. The government has announced this afternoon that a new Job Support Scheme will be introduced to support employees and employers from the 1st November 2020. This new scheme will be in place for 6 months from the 1st November 2020. The details so far:

• The new Job Support Scheme will start from the 1st November 2020 and run for 6 months.

• Employees will be required to work part time, a minimum of a 33% of their normal hours, in order to claim and to be paid for this work by their employer.

• The government will provide financial support for up to a 33% of their normal hours, which can then be passed on to the employee. This will ensure that the employee receives a minimum of 77% of their usual pay.

• All small and medium sized business are eligible

• The scheme can be used by any employer, even if they have not used the furlough scheme previously • If you did have an employee on furlough and are to also use the Job Support Scheme for an employee, then you are still eligible for the Job Retention Bonus.

Example: someone that currently earns £2,000 gross per month. They are then asked to work half their usual time per month. They would receive £1,000 from the employer for the work they have done. The remaining £1,000 from their usual pay will be split into 3; one third will be covered by the government, one third covered by the employee and the remaining third not paid. This means that the employer would pay £1,333 for the month and HMRC will pay £333, giving the employee £1666 per month gross pay.
5% VAT for the Tourism and Hospitality
In July, the Chancellor announced that there would be a temporary reduction of VAT chargeable on certain sales in the VAT rates for the hospitality and leisure industries. This reduced rate of 5% (original 20%) was to remain in place until the 13th January 2021. The Chancellor has announced today that this rate will remain in place until the 31st March 2021.
VAT and Personal Tax Deferral
HMRC have deferred Valued Added Tax (VAT) payments due between 20 March 2020 and 30 June 2020 for all VAT-registered UK businesses. There is no need to apply for this scheme. Businesses will be given until the end of 2020/2021 to settle outstanding VAT liabilities that have accumulated as a result of the 3-month deferral

If you normally pay by direct debit you should cancel this with your bank if they are unable to pay. Please do so in sufficient time so that HMRC do not attempt to automatically collect on receipt of your VAT return.

There will now be an option to split this repayment into smaller interest free repayments over the course of 11 months.

Self-Assessment July 2020 payment Deferral

The Self-Assessment second payment on account normally due to be paid to HMRC by 31 July 2020 may now be deferred until January 2021. The deferment is optional and any persons still able to pay their second self-assessment payment on account on 31 July 2020 should still do so.

This is an automatic offer with no applications required. No penalties or interest for late payment will be charged if you defer payment of your July 2020 payment on account until January 2021.

The recent announcement confirms that this payment due 31st January 2021, if individuals are struggling, can extend this tax bill over 12 months from January 2021.

Other tax Payments (Time to Pay)

All businesses including self-employed with outstanding tax liabilities, may be eligible to receive support via HMRC’s Time to Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. If you’ve missed, or are worried about missing, your next tax payment due to coronavirus, you can call the HMRC helpline for advice on 0800 024 122
Self-employment Income Support Scheme
This Self-employment Income Support Scheme will provide a grant to Self-Employed individuals or Partnerships, worth 80% of their profits up to a cap of £2,500 per month.

To be eligible for the scheme you must meet all the criteria below:

  • Be self-employed or a member of partnership;
  • Have lost trading/partnership trading profits;
  • File a tax return for 2018-19 as self-employed or a member of a trading partnership. Those who have not yet filed for 2018-19 will now have until 23rd April 2020 to do so.
  • Have traded in 2019-20 and intend to continue to trade in the tax year 2020 to 2021
  • Have trading profits of less than £50,000 and more than half of your total income come from self-employment.

This can be with reference to at least one of the following conditions:

  • Your trading profits and total income in 2018/19
  • Your average trading profits and total income across up to the three years between 2016-17, 2017-18, and 2018-19.

HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational. HMRC will then pay the grant directly to eligible claimants’ bank account. HMRC is urgently working to deliver the scheme; grants are expected to start to be paid out by beginning of June 2020. You do not need to contact them.

If you have not submitted your returns for 2018-19, you will now have until 23rd April 2020. Please contact us if you require to complete and submit your return.
Coronavirus Bounce Back Loan
On 4th May 2020 the Government will launch the Coronavirus Bounce Back Loan scheme which will help small and medium-sized businesses borrow between £2,000 and £50,000.

Similar to Coronavirus Business Interruption Loan Scheme but the government will guarantee 100% of the loan and there won’t be any fees or interest to pay for the first 12 months.

Loan terms will be up to 10 years. No repayments will be due during the first 12 months. The government will work with lenders to agree a low rate of interest for the remaining period of the loan.

Eligibility

You can apply for a loan if your business:

  • is based in the UK
  • has been negatively affected by coronavirus
  • was not an ‘undertaking in difficulty’ on 31 December 2019

If you’re already claiming funding under the Coronavirus Business Interruption Loan Scheme (CBILS). you cannot apply. However, if you’ve already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender until 4 November 2020.
Small Business Grant Funding
The Government has provided funding for Local Authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

You will be eligible if:

  • Your business is based in England AND
  • In receipt of small business rate relief or rural rate relief as of 11 March AND
  • You are a business that occupies property

Every local authority in England has now received the full amount of grant funding they need to support their local businesses. In most cases, local authorities will need to collect details from small businesses in order to be able to make payments. Local authorities will be in touch with all eligible businesses shortly.
Business Rates Holiday for Retail, Hospitality, Leisure and Nurseries
Businesses in the retail, hospitality leisure and Nurseries sectors in England will not have to pay business rates for the 2020-21 tax year.

There is no action for you. Local authorities will apply the business rates holiday to your bills. However, local authorities may have to reissue your bill. They will do this as soon as possible.
Cash Grant for Retail, Hospitality and Leisure
If your business is in the retail, hospitality or leisure sector, you will receive a cash grant of up to £25,000 per property. For rateable values of under £15,000, you will receive £10,000. Between £15,001 and £51,000, you will receive a grant of £25,000.

You will be eligible if:

    1. Your business is based in England
    2. Your business is in the retail, hospitality and/or leisure sector
    3. Properties that will benefit from the relief will be occupied properties that are wholly or mainly being used:
    • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
    • for assembly and leisure
    • as hotels, guest and boarding premises and self-catering accommodation

Every local authority in England has now received the full amount of grant funding they need to support their local businesses. In most cases, local authorities will need to collect details from small businesses in order to be able to make payments. Local authorities will be in touch with all eligible businesses shortly.
Coronavirus Business Interruption Loan Scheme
The Coronavirus Business Interruption Loan Scheme supports small and medium-sized businesses, with an annual turnover of up to £45m, to access loans, overdrafts, invoice finance and asset finance of up to £5 million for up to 10 years.

The scheme will be delivered via commercial lenders, backed by the Government-owned British Business Bank. The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will also make a Business Interruption Payment to cover the first 12 months of interest payment and any lender-levied fees, so businesses will benefit from no upfront costs and lower initial repayments.

The scheme is due to run until the end of November 2020. There is no limit on the capacity of the scheme.

Your business must:

    1. Be UK-based in its business activity
    2. Have an annual turnover of under £45 million
    3. Have a borrowing proposal which the lender:
      a) would consider viable, were it not for the COVID-19 pandemic
      b) believes will enable you to trade out of any short-term to medium-term difficulty

Businesses from any sector can apply, except the following:

  • Banks and building societies
  • Insurers and reinsurers (but not insurance brokers)
  • Public-sector organisations, including state-funded primary and secondary schools

To apply you should contact your bank via your lender’s website or through one of the 40 accredited finance providers offering the scheme.
Coronavirus Job Retention Scheme
If you are a UK employer with a PAYE scheme that was created and started on or before 19th March 2020, then you will be able to access this scheme to continue paying part of your employees’ salary.

This only applies to employees who have to stopped working but are kept on the payroll, this is also known as ‘furloughed workers’.

HMRC will pay you (the employer) a grant worth 80% of an employee’s usual wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage. This is to prevent workers from being made redundant and will cover the cost of wages backdated to March 1st and is open currently as it is up to 31st July 2020, continuing further after this date up to the 31st October 2020 with greater flexibility to allow workers to return to work part-time.

You will have to notify ‘furloughed workers,’ of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.

Once the new online portal is live you submit the information to HMRC about the employees that have been furloughed and their earnings. If we complete your payroll for you then we will need this information.

HMRC expect the first grants to be before the end of April. If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.
If you are needing any assistance, get in contact with us today using the contact form below. Alternatively, email us at info@bluematrix.co.uk or call us on 01483 338438.

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