Practical business advice for clients: COVID-19

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20 March 2020: Here’s a quick summary of practical help notified on Tuesday 17 March by the Chancellor together with a reminder of some useful tax rules which can assist business cashflow during the coronavirus pandemic.

Business Rates:

  • No rates payable for 12 months for any business in the retail, hospitality or leisure sectors.
  • In those sectors, if your rateable value is less than £51k, you’ll also receive a cash grant of up to £25,000.
  • Any business which gets small business rates relief, will receive a cash grant of £10,000 (increased from £3,000 announced in the Budget).

Government Backed Loans:

  • These should be available within days via the high street.
  • If you expect your business to recover from the disruption because you have a sound business, you may wish to take a loan out.
  • No interest will be charged for the first 6 months.
  • The interest rate will be favourable and we hope you will be given plenty of time to repay the loan.

Mortgage Holiday:

  • At least a 3 month mortgage holiday for those in difficulty, from your lender.

Insurance Claims:

  • Insurers will pay out against policies that cover pandemics.

Universal Credit:

  • If your income has dropped you may wish to access the benefit system.
  • This was made easier as announced in the Budget.
  • Particularly relevant to the self-employed who cannot claim SSP.

Statutory Sick Pay (SSP):

  • If you’re a director of a limited company, you can pay yourself 2 weeks if you need to self-isolate subject to meeting the minimum payroll requirement for SSP.
  • The government will refund this £94 per week, maximum £188, to your company.
  • It will also refund SSP for your staff for up to 2 weeks to your business or your company.

Using Existing Income Tax and Corporation Tax Rules:

  • As we near the end of the tax year, get your income tax return in as soon as possible after 6 April 2020, for a potential refund of part of your January 2020 tax payment. Then know the exact amount due in July.
  • If you make a sole trader or partnership tax loss to 5 April 2020, generate a tax refund by carrying the loss back to 2019.
  • If you’re a start-up sole trader or partnership, this loss can be carried back 3 years to generate a tax refund from your previous PAYE job or even from rental income.
  • If you’re a limited company and make a loss in your current year end, carry it back by a year to generate a tax refund.
  • If you’re working from home more than usual, claim more costs against your taxable income for your home office.
  • The sooner you get tax returns sent in, the sooner you can benefit from the above.
  • Getting your return in early, doesn’t bring forward any tax payment dates, but it does bring forward tax refunds.
  • An increase in Time-to-pay arrangements from HMRC, where you phone HMRC to agree a delay in paying your tax. Have a realistic proposal ready that you expect to adhere to.

Off-Payroll Working (IR35) Deferral:

Freelancers and consultants worried about getting taxed as an employee from 6 April 2020 have a year’s reprieve until 6 April 2021.

Further information can be found at:

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

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Jenny Dinnage Redshield Chartered Accountants Director
Rachel - an employee of Redshield Chartered Accoutants
Emma is an employee of Redshield Chartered Accountants
Amanda is an employee of Redshield Chartered Accountants

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