These are unprecedented times. The team at MMG has supported local businesses for 100 years, and 2020 marks our centenary. Never before has there been a time for local businesses to support one another, and we want to reassure you that the entire team at MMG is here to help and advise you as best we can.

Following is some general guidance, but if you are facing specific challenges please don’t hesitate to drop us an email.

You can also read our general advice blog here, and our blog for specific support from you local authority here.

 

* PLEASE REMEMBER – HMRC will never contact you out of the blue*

Unfortunately, we are aware of an increase in scam emails, calls and texts. If someone gets in touch with you claiming to be from HMRC saying that financial help can be claimed or   a tax refund if owed, asking to click on a link or provide personal information, DO NOT RESPOND.   HMRC will not do this. If you are in any doubt about the authenticity of such requests please get in touch with us.


Health and wellbeing are the most important things right now. Following government guidance, we have closed our offices and our staff will be working remotely. Our office landlines will not be manned and any messages left may not be picked up for some time.  Please e-mail your usual client account manager or mail@mmgca.co.uk  if you need to speak with someone.

We have invested heavily in our IT infrastructure in recent years and have trained our staff to use the latest technologies to deliver a service you can rely on. We will continue to complete Accounts, VAT, Payroll and Tax returns in a timely manner.   We might not be able to extend our usual hospitality to offer you a cuppa and a biscuit, but rest assured we are always here for you nonetheless.

With many people and businesses currently very worried about their financial state, we believe that one of the most important things we can do right now is provide guidance, advice and support.

In order to be able to do that we need clear and-up-to date financial records. With the vast majority of businesses now working from home, or possibly even not working at all, and enforced limited physical interaction we want you to know that we are set up to collect your records via digital submissions. Please contact us should this be of interest to you.

Our business depends on our client’s business and we must all pull together during the next few weeks. We understand that these digital technologies will be new to many of you. If you need support with this digital approach we are happy to work it through with you, step-by-step.

It’s understandable to feel overwhelmed. Information is changing almost hourly, and this avalanche of info’ includes advice that is unusual, scary and simple inaccurate. Please be careful of what you read and what information you rely upon, especially when it comes to making decisions for your business.

The most reliable source of information is from the Government. Information from other sources may be an interpretation of the Government’s Guidance, an interpretation of an interpretation, a misinterpretation, an opinion or even a falsehood.

The Coronavirus Bill is being drafted, and once it receives Royal Assent, will contain much of the legal framework the needs to be followed. You can read and track the progress of the Bill here:

https://services.parliament.uk/bills/2019-21/coronavirus.html

It is also worth keeping your eye on the latest Government advice:

https://www.gov.uk/government/topical-events/coronavirus-covid-19-uk-government-response

And you may wish to stay up-to-date by subscribing to Governmental email alerts:

https://www.gov.uk/email-signup?link=/government/topical-events/coronavirus-covid-19-uk-government-response

If you require more information, or additional information specific to your circumstances, these Government websites host the latest information. Be careful not to swamp yourself though and so not to feel overwhelmed.

Government action plan:
https://www.gov.uk/government/publications/coronavirus-action-plan

Guidance on social distancing and stay at home:
https://www.gov.uk/government/topical-events/coronavirus-covid-19-uk-government-response

Travel advice:
https://www.gov.uk/guidance/travel-advice-novel-coronavirus

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

Tax helpline to support businesses who are concerned about paying their taxes:
https://www.gov.uk/government/news/tax-helpline-to-support-businesses-affected-by-coronavirus-covid-19

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

Budget 2020: tax-related documents:
https://www.gov.uk/government/collections/budget-2020-tax-related-documents

NHS Coronavirus (COVID-19):
https://www.nhs.uk/conditions/coronavirus-covid-19/

During these unprecedented times the Government is making decisions to safeguard businesses. The Chancellor has set out a package of measures that includes:

  • Coronavirus Job Retention Scheme
  • Deferring VAT and Income Tax payments
  • A Statutory Sick Pay relief package for SMEs
  • The Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
  • A new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
  • HMRC Time To Pay Scheme

Information on each is available below.

 

Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. All UK businesses are eligible.

Eligibility:

You will need to:

  • designate affected employees as ‘furloughed workers,’ and notify your employees 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
    submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.

HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

The Government will support businesses by deferring Valued Added Tax (VAT) payments for 3 months. If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.

VAT
For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.

All UK businesses are eligible.

How to access the scheme:

  • this is an automatic offer with no applications required
  • businesses will not need to make a VAT payment during this period
  • taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period
  • VAT refunds and reclaims will be paid by the government as normal

INCOME TAX
For Income Tax Self-Assessment, payments due on the 31st July 2020 will be deferred until the 31st January 2021.

  • if you are self-employed you are eligible
  • this is an automatic offer with no applications required
  • no penalties or interest for late payment will be charged in the deferral period

HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of COVID-19 and have outstanding tax liabilities.

The Government will make legislation to allow small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19.

The eligibility criteria for the scheme will be as follows:

  • this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
  • employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020
  • employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
  • employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website
  • eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force
  • the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.

You are eligible for the scheme if your business is UK based and your business is small or medium-sized and employs fewer than 250 employees as of 28 February 2020.

There is no action for you. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible.

See: https://www.gov.uk/calculate-your-business-rates where you can estimate the business rate charge you will no longer have to pay and further guidance can be found at:

https://www.gov.uk/government/publications/business-rates-retail-discount-guidance

A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch this week to support primarily small and medium-sized businesses to access bank lending and overdrafts.

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 not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value.

Businesses can access the first 12 months of that finance interest free, as government will cover the first 12 months of interest payments.

You are eligible for the scheme if:

  • your business is UK based, with turnover of no more than £45 million per year
  • your business meets the other British Business Bank eligibility criteria

How to access the scheme:
The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website:

https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

All the major banks will offer the Scheme once it has launched. There are 40 accredited providers in all.

You should talk to your bank or finance provider (not the British Business Bank) as soon as possible and discuss your business plan with them. This will help your finance provider to act quickly once the Scheme has launched. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.

The scheme will be available from early week commencing 23rd March.

We will keep you informed on how to apply as the details emerge.

Under the new COVID-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies.

This will support your company if it has been affected by a short-term funding squeeze and allow you to finance your short-term liabilities. It will also support corporate finance markets overall and ease the supply of credit to all firms. All UK businesses are eligible. The scheme is made available early week beginning 23rd March 2020. We will provide information on how to access the scheme here shortly. More information is available from the Bank of England:

https://www.bankofengland.co.uk/markets/market-notices/2020/ccff-market-notice-march-2020

All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time to Pay service.

These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. You are eligible if your business pays tax to the UK government and has outstanding tax liabilities.

If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559. If you’re worried about a future payment, please call them nearer the time.

Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17th March 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim as long as all other terms and conditions are met.

Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.

The Government has announced a package of support for businesses including a package of measures worth £2.2 billion from 1st April:

  • a full year’s 100% non-domestic rates relief for retail, hospitality and tourism
  • £10,000 grants for small businesses in receipt of the Small Business Bonus Scheme or Rural Relief
  • £25,000 grants for hospitality, leisure and retail properties with a rateable value between £18,000 and £51,000
  • 6% relief for all properties, effectively freezing the poundage rate next year
  • First Minister to convene an emergency meeting of the Financial Services Advisory Board
  • urging local authorities to relax planning rules to allow pubs and restaurants to operate temporarily as takeaways
  • extending the go live date for the deposit return scheme to July 2022
  • halting the introduction of the Visitor Levy Bill

Please see: https://www.gov.scot/news/gbp-2-2-billion-for-business/

The Government has announced measures to support the self-employed and partnerships.

The scheme is called the Coronavirus Self-employment Income Support Scheme (CSEISS).

https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

 

If you have suffered a loss in income, a taxable grant will be paid to the self-employed or partnerships, worth 80% of profits up to a cap of £2,500 per month.

Initially, this will be available for three months in one lump-sum payment and will start to be paid from the beginning of June.

You cannot apply for this scheme yet. HMRC will contact you if you are eligible for the scheme and invite you to apply online.

Government advice: Individuals do not need to contact HMRC now and doing so could delay the work being undertaken to introduce the scheme.

 

Who is eligible?

Self-employed individuals and those who are a member of a partnership. In addition, those eligible must have more than half their income from being self-employed and:

  • have submitted an Income Tax Self-Assessment tax return for the tax year 2018-19
  • traded in the tax year 2019-20
  • are trading when you apply, or would be except for COVID-19
  • intend to continue to trade in the tax year 2020-21
  • have lost trading/partnership trading profits due to COVID-19

 

Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment. This is determined by at least one of the following conditions being true:

  • having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
  • having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period

 

If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.

There a few individuals who have not submitted their 2018-19 Self-Assessment tax return and to qualify they now have until the 23 April 2020 to do so.

Under the Coronavirus Job Retention Scheme (CJRS), all UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis. This applies to employees who have been asked to stop working, but who are being kept on the payroll, otherwise described as “furloughed workers”. HMRC will reimburse 80% of their wages, up to £2,500 per month. This is to safeguard workers from being made redundant. The Coronavirus Job Retention Scheme will cover the cost of wages backdated to 1st March and is initially open for 3 months to 31st May but will be extended if necessary.

All UK-wide employers with a PAYE scheme will be eligible – this includes the public sector, Local Authorities and Charities.

 

What we know so far:

  • If your businesses has been severely affected by the Pandemic and you were about to make employees redundant, the CJRS offers the alternative of “Furlough”. The ‘furloughed workers’ will be on ‘furlough leave’. During this time, they will continue to be employed by the employer, but they will not be required to work for a temporary period of time. The CJRS will assist employers by reimbursing them up to 80% of the wages of each ‘furloughed worker’, up to a maximum of £2,500 a month. (We will update you once the government confirms whether this means £2,500 a month before or after tax).
  • The CJRS will run from April 2020 (date to be confirmed) but will be backdated to 1 March 2020 (such that anyone who has been laid off since 1 March and has not left the business under redundancy can be caught by the scheme) and is expected to run for at least 3 months (although the government may decide to extend it as things progress).
  • The current guidance around the CJRS talks about “reimbursing” employers for wage costs and so our expectation is that employers will need to pay their employees at least 80% of their normal wages during any lay off period and then they apply for a grant which will reimburse them. This means that employers are likely to have to deal with cash flow issues in the interim.

 

CJRS Guidance:

We have had many clients asking us about the mechanics of the CJRS and below we outline (as best we can) the order of actions an employer should take to comply with the scheme:

  • Employers will need to designate affected employees as ‘furloughed workers’ and notify those employees of this change and agree this with them.
  • You should check employee contracts of employment to see if there is a contractual right to lay employees off if there is a downturn in work. If not you will need to discuss and agree with employees that they are “Furloughed”. This may involve a negotiation. Either way you will probably need employees’ consent. Given the alternative of redundancy one assumes common sense will prevail. Note if you have more than 20 employees whose contracts need to be changed a more formal consultation process will need to be done and we recommend legal advice at this point.
  • Employers should notify employees in writing and explain why the decision was necessary (Covid-19 Pandemic).
  • Please note it is solely the employer’s choice to Furlough and not the employee. If the employee requests to be furloughed, the employer can refuse to agree e.g. if there is still work for them to do.
  • Employers then need to submit information to HMRC about those employees who have been designated as ‘furloughed’ and their earnings via a new online portal which is being set up. If you are doing this for the March payroll run you should keep a list of Furloughed employees and salary details.
  • HMRC will then reimburse 80% of wage costs for ‘furloughed workers’ up to a cap of £2,500 per month, per ‘furloughed worker’. Exactly when these funds will be available is currently unknown. (We will advise you when the Portal is “live”).
  • Furloughed employees could be paid 80% of their pay or higher if the employer chooses (bearing in mind the CJRS will reimburse a maximum of 80% to a maximum of £2,500 per employee).
  • In the government’s guidance to employees on this subject, it mentions that employers can claim a grant of up to 80% of a ‘furloughed employee’s’ wages ‘for all employment costs, up to a cap of £2,500 per month’. This suggests that this covers thing such as pension contributions, employer’s NICs etc. Further information on this point is awaited so it can be confirmed whether employers can only use the CJRS grant in respect of an employee’s basic pay or their average take-home pay (which may, for example, include overtime and commission too).
  • Employees should not undertake any work for their employer while they are ‘furloughed’. The fact that the employer is unable to give its employees any work for the time they are ‘furloughed’ is what allows them to claim up to 80% of the employee’s wage for all employment costs (up to £2,500 a month).
  • This scheme does not seem to apply to those on short-time working (e.g. shorter days) or those working certain days of a working week, although this is not yet clear. We will update you when we have further information.
  • Guidance is needed on whether employees can work “elsewhere” to make up the 20%
  • Further guidance is awaited on employees on holiday, maternity, sick or self-isolating.

 

Key points for employers:

  • Ensure that you document your thought processes and discussions when deciding which employees are to be designated at ‘furloughed’ – treat it as if it is a redundancy situation and think about how you would need to evidence your decision.
  • Consider if putting employees on furlough leave is absolutely necessary and reasonable to do in the circumstances. Again, make sure you record your reasons (in writing).
  • Ensure that you notify employees being designated as ‘furloughed’ in writing, giving your reasons, making clear any terms that will apply during this period, and offering reassurance that financial support via the CJRS will be available.
  • The CJRS is intended to be a reimbursement scheme so it is envisaged that the employer will have to make the payments to employees first and then seek reimbursement from HMRC.
  • Be understanding that there may be groups of employees that feel hard done to e.g. those who are genuinely sick with the Coronavirus, those having to self-isolate as a family member is sick, the over 70s and those in vulnerable groups who are only entitled to SSP or contractual sick pay (which may be less than 80% pay) and they feel it is unfair that those ‘furloughed’ are getting much more.

 For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.

All UK businesses are eligible.

 

How to access the scheme:

This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.

Customers who normally pay by direct debit should cancel their direct debit with their 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.

 

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

Businesses are able to apply for a 3-month extension for filing their accounts.

 

This joint initiative between the government and Companies House will mean businesses can prioritise managing the impact of Coronavirus.

As part of the agreed measures, while companies will still have to apply for the 3-month extension to be granted, those citing issues around COVID-19 will be automatically and immediately granted an extension. Applications can be made through a fast-tracked online system which will take just 15 minutes to complete.

 

Please see:

https://www.gov.uk/guidance/apply-for-more-time-to-file-your-companys-accounts

Applying for an extension:

https://beta.companieshouse.gov.uk/extensions

MMGCares.

We’re here for you. We know it’s tough, but we will support you to get through this together.

The blue sky is always there. Sometimes you just can’t see it for the dark clouds.

If you need to talk to us, please get in touch.