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  • Excel Accountancy Norwich

COVID-19 Legislation Updates

Updated: Mar 26

Ok, I’m sorry but it had to be done.

I have gone into the territory of the Coronavirus and the impact COVID-19 will have on our businesses. I have heard from several business owners that they are unsure where to find the latest information, or which source is reliable with so much fake news and scaremongering around.



As a small business owner, I feel your pain. This situation is something along the lines of a disaster movie and far from the norm for us all. We don’t really know where we are going, and our concerns have shifted from worrying about who’s turn it is to bath the dog or remembering your child’s PE kit to something far more pressing.


I am therefore going to endeavour to simplify the message and post links to the most reliable sources of information. I hope this will make a start at taking the pressure off you as busy business people, trying to manage the joys of homeschooling, caring for vulnerable people plus trying to locate that rare roll of toilet paper in the supermarket, which seems to be on the verge of becoming a mythical object!


The situation is changing daily so I will date all of the additions I make below, and as always if you have a query send me a message on social media or an email info@excelaccountancynorwich.co.uk


Whilst I will try and keep to the reports and updates most relevant to the business world I will drop in any useful points which I come across to help people who are personally struggling with financial issues.












26th March


Self Employed (Sole Traders)


Help has been announced for the self employed as follows


  • It will be issue as a taxable grant, meaning that the amount received will be added to taxable income for the tax year 2019/2020 and will be included in your tax return.

  • The grant will be made for 80% of your average earnings for the past 3 years. If you do not have 3 years tax returns the average income will be calculated from the years you have submitted eg. 1 or 2 years. The maximum claim will be for 80% of £2500 per month.

  • It will be paid for 3 months and reviewed after that time, the aim is to be paid in June for 3 months.

  • You can carry on working and still claim the grant.


To be eligible the following must apply

  • Your earnings must be under £50000

  • Your self employed income must be your main income.

  • Only people who submitted a tax return for the tax year 2018/2019 will be eligible.

If you are late submitting your tax return which was due 31.01.2020 you will have 4 weeks from today to submit this to be included.

If you may be eligible the government will write to you and you will be required to complete an online form to apply.

If you are not eligible, for example this is your first year of self employment then you should look at Universal Credit and the welfare provisions in place.


In addition the following was previously announced


Self assessment tax payments due prior to June to be deferred until Jan 2021. There is no need to apply, this will be automatically applied.


The minimum income floor has been removed so self-employed people can claim the same level of statutory sick pay via Universal Credit as someone on PAYE would receive.

23rd March


The message this evening is very clear, if too many people get it at one time the NHS simply won’t cope. We need to slow the speed of the disease so we can deal with it effectively.

As of midnight tonight, all non essential shops will be closed for example clothes or electrical shops. We are being encouraged to use food delivery services where possible.

You can leave the house for the following reasons:


  • Essential shopping eg food

  • One form of exercise per day

  • Medical needs

  • Travelling to and from work, where its totally necessary and can’t be done from home.


Police will have powers to enforce with fines


No more than 2 people in any gathering, excluding people from within your own home.

All social events including weddings and baptism will be cancelled. Funerals can go ahead.

Parks are going to remain open , but only for exercise. Any groups of social gatherings will be moved on.

This will be reviewed in 3 weeks.


All pubs, clubs, restaurants, cafes, leisure centres and gyms to close this evening until further notice. They will, however, be able to offer take out food.


21st March


Protecting Employees Jobs


Employers will be able to claim for a grant for 80% of an employees salary up to £2500 in order to retain them when not working.

This scheme will be backdated from 1st March 2020 and will initially last 3 months, then this will be reviewed. The government are aiming for the first grants to be paid out in weeks.


VAT


The payment for VAT due between 20th March 2020 and 30th June 2020 can be deferred until the end of the year.


There is no need to apply for this, simply businesses do not need to make a payment during this period. All businesses are eligible.

If you have a direct debit set up and would like to delay payment, please make sure you cancel this so no payment is taken from your account.


Coronavirus Relief Loan Scheme


The interest-free period has been increased to 12 months from 6 months to allow a longer period of breathing space.



Benefits


The income limit for both Working Tax Credit and Universal Credit have been increased by £1000 for the next financial year, meaning you can earn a higher amount than before and still be entitled to receive benefits. This could potentially mean £20 a week extra per family.


Universal credit will be paid within 5 weeks with an advance payment to be maid almost immediately when it is claimed. Self employed people can now access Universal Credit in full.


Housing benefit and the associated part of Universal Credit are also being changed so that the allowance is based on 30% of the local value of properties in your area. This may again mean people are now eligible who were not before. Contact your local council directly if you think this may benefit you.


The children of key workers will include the following :


Health & Social Care

Education & Childcare

Key public Services (religious, charity, justice)

Local & National Government - only those involved in administration & effective delivery of COVID19 response or essential public services such as benefits

Food & other necessary goods

Public Safety & National Security

Transport

Utilities, communication & financial services


The overruling advice is to keep children at home if you are able to.


For the full list see the following link


https://www.gov.uk/government/publications/coronavirus-covid-19-maintaining-educational-provision/guidance-for-schools-colleges-and-local-authorities-on-maintaining-educational-provision?fbclid=IwAR2GTZ7lMEl-3GA-5YpoB236dWOntg4AFsbjVjanLo_mD_oJ2iiouo8yOWk


19th March 2020

So the latest announcement is as follows

• The Bank of England has announced the interest rate is being cut to 0.1% this is because the previous cut to 2.5% didn’t filter through to the markets and the people who are on the ground and needed to borrow money to save their business. This was likely because of the uncertainty and lack of confidence in the security of the UK’s financial situation.


• The will be a further briefing tomorrow (20th March) from the Chancellor of the Exchequer which will update the situation.


Previously announced support measures

• Business rates - there will be holidays available for business rates for the retail, hospitality and leisure industries. No application is required this will be automatically applied, some bills need to be reissued.


• A cash grant of £25000 for retail, hospitality and leisure industry business operating from small premises with a rateable value of between £15000 - £51000. Your local authority will write to you if you are eligible.


• Grants of £10000 for businesses who pay little or no business rates (including those who are eligible for small business rate relief). If eligible you will be contacted by your local authority. This won’t include people who are working from home unfortunately, however, the loan scheme below may help more people. Your local authority will write to you if you are eligible.


• Coronavirus business interruption loan scheme will launch week commencing 23rd March to support mainly small and medium businesses. The government will guarantee up to 80% of the loan to the bank and the first 6 months will be interest-free, however, this is still a loan which will need to be repaid. Speak to your business bank if you would like to apply. All major banks will be offering this, further details will be released.


• Short term support for larger firms through the government buying debt to enable the company to meet its short term requirements. Details to be released in the coming days.


• Time to pay service will allow arrangements to be set up on a case by case basis with regards to tax payments holidays.

Companies Paying SSP


All persons who are self isolating due to coronavirus are entitled to SSP from day 1 (you normally have to wait 3 days) and the government will be reimbursing small and medium businesses for up to two weeks of SSP. Further details will be released when developed.


The HMRC has set up a line to call if you are self-employed and worried about your ability to pay tax 0800 0159559


The best place to check out what has been announced is on the gov.uk website, a specific COVID-19 page has been set up https://www.gov.uk/government/news/coronavirus-covid-19-guidance-for-employees-employers-and-businesses


Beware of fake news, click bate and embellished stories. It sounds so obvious but it’s really easy for a piece of news to become one-sided if it isn’t presented correctly.


And if you are still unsure please ask, if we work together it will be easier to ride the storms. In the meantime think about the little guys, if you can buy from your local shop, order from an independent trader and support one another. If you would like me to focus on a particular topic please let me know.


Common Questions


I work from home, can I get the grant?

At the moment no, the grants are available for people who are usually exempt or pay very little business rates to relieve the pressure of running the business. There are currently multiple petitions running to extend assistance to small and micro businesses so please have a look and sign if you believe In the cause! I am hopeful that we will be given more in


formation in the next announcement of further aid.



Do I have to repay the loan as the government is backing it?

Yes, this is still a loan and it will still need to be repaid. If you are considering this, please consider your future cash flows and the impact this will have on your business.

Hopefully, the banks will need to reflect the drops in interest rate to us and it may depend greatly on the type of credit and the agreement you took it out on, but essentially it means almost free borrowing. This doesn’t mean you should take out loads of unnecessary finance it still needs to be paid back!

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