HMRC schemes during Covid19 Pandemic

Scheme Eligible Business Loan, grant or deferral? Key terms First point of contact Commentary
Business Interruption Scheme All UK businesses with a UK turnover of up to £45 million. Loan British Business Bank, on behalf of the government, will guarantee 80% of a loan up to £5 million.
No interest is payable for the first
twelve months.
Your usual lender. Borrowers will still need to receive approval from the bank’s credit committee. Personal guarantees or other security may be required. Anecodtally, we are hearing that many lenders are not yet geared up to progress new loan applications.
Corporate Financing Facility Larger UK businesses making a “material contribution” to the UK economy and which have a significant presence in the UK. Loan Businesses will be able to issue commercial paper for up to twelve months at a low rate of interest, in order to meet short term cash flow requirements. Your usual lender. Only suitable for larger businesses with a credit rating and which are accustomed to accessing the debt capital markets.
Job retention scheme All UK businesses. Grant Businesses can be re-imbursed for 80% of the wage costs of employees who would otherwise have been made redundant due to the Covid crisis, up to a cap of
£2,500 per employee.
Information will need to be
uploaded to a new HMRC on-line portal, which is currently being set up.
Businesses should originate a list of affected, or
“furloughed”, workers.
VAT deferral scheme All UK businesses. Deferral Businesses will not need to make VAT payments in the period 20 March 2020 to 30 June 2020;  and will have until the end of the current tax year to catch up on those payments. The government will continue to pay VAT refunds. Automatic – no application is required. This deferral scheme will ease cash flow, but ultimately businesses will need to catch up on their VAT payments by the end of the tax year, otherwise interest and penalties could be levied in the usual way. The government still needs to define what the end of the tax year means for this purpose. Cash flow benefit derived from the scheme might be used by businesses to plug the gap until they can draw down new facilities and/or receive payments under the job retention scheme and statutory sick pay re-imbursement scheme.
Income tax deferral scheme All self-employed individuals. Deferral Income tax self-assessment payments due on 31 July 2020 will be deferred to 31 January 2021. Automatic – no application is required. This deferral scheme will ease cash flow for self-employed individuals, but ultimately those persons will need to catch up on their self- assessment payments by 31 January 2021, otherwise interest and penalties could be levied in the usual way.
Statutory sick pay re- imbursement scheme All UK businesses with fewer than 250 employees at 28 February 2020. Grant Businesses will be able to reclaim up to two weeks’ of statutory sick pay per employee who has been off sick due to Covid. Government is in the process of
setting up a refund
mechanism.
There will be some complexity in administering the system. In the meantime, employers should keep an accurate record of those employees who have been off sick due to Covid.
Delay to IR35 reforms All UK businesses. N/A The government has announced it will delay the introduction of the new IR35 reforms until 2021. No action to be taken. This will come as a relief to those businesses which engage self-employed contractors, and will reduce the administrative burden of having to implement these new reforms.
Business rates holiday All English businesses in the retail, hospitality and leisure sectors; and also certain UK nurseries. Grant Businesses in these sectors will receive an automatic business rates holiday for the 2020/2021 tax year. Automatic – this rates holiday will be factored into rates bills to be issued by local authorities in April 2020. Online calculators are available to estimate the amount of the saving.
Cash grant scheme English businesses in the retail, hospitality and leisure sectors with a rateable value of up to
£51,000.
Grant Cash grants of between £10,000 and £25,000 are available to eligible businesses. Automatic – local authorites will write to eligible businesses in due course. This scheme should provide some incentive for eligible businesses to avoid complete cessation of trading.
Small business grant scheme Small English businesses that receive Small Business Rate Relief or Rural Rate Relief, and which occupy a property. Grant A cash grant of £10,000 is available. Automatic – local authorites will write to eligible businesses in due course. This scheme should provide some incentive for eligible businesses to avoid complete cessation of trading.
HMRC Time to Pay service All tax-paying businesses and individuals in the UK. Deferral HMRC operates a scheme to provide assistance to businesses and individuals struggling to pay their tax liabilities. Your usual tax
office.
At this stage, it is unclear to what extent HMRC will provide additional forbearance as a result of the Covid crisis.
Self Employed Income Support Scheme Self-employed individuals, including members of partnerships, earning up to £50,000 a year and who earn the majority of their earnings from self- employment. Grant Allows self-employed persons to claim a grant for the next three months of 80% of the average of their monthly profits over the last three years (or applicable lesser period), up to a monthly cap of
£2,500. The three month period may be extended if required.
Automatic – HMRC will contact you if you are eligible. Various conditions apply, including that you have submitted a self-assessment tax return for the year ended 5 April 2019. If you haven’t filed such a return, there is an extended grace period to do so by 23 April 2020.
This scheme will not cover individuals who operate via a company and pay themselves wholly or mainly by dividends.

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