According to statistics released by the Department of Business, Energy and Industrial Strategy in October 2019, the vast majority (over 99%) of the country's 5.9 million private businesses employ fewer than 249 employees. Together, SMEs employ 16.6 million people accounting for 60% of the total workforce with an estimated turnover of £2.2 trillion. Of these businesses, nearly one-fifth (19.7%) are micro businesses employing 1 to 9 employees. There is little doubt that independent businesses are the lifeblood of the UK economy.
Business Rate Holiday
Following the announcement of a business rate relief in the 2020 Budget that left out estate & letting agents, HM Treasury has today removed such exclusion to include real estate businesses forced to close due to COVID-19. This means that agents are also going to be exempted from business rates and they do not have to make business rate payments in the financial year 2020-2021 which normally starts next month. The government will fully compensate local authorities in the UK to make up for the downfall in council income.
In practice, eligible businesses will be rebilled by their local authorities with a 100% discount. Paid bills will be refunded. To enquire about your business rate bill, you should reach out to your local authority.
The Coronavirus Job Retention Scheme
Following calls for financial support from different industries experiencing widespread redundancies, the government announced on 20 March 2020 an unprecedented level of financial support to curb redundancies and keep workers on payrolls. The idea is that the government will pay 80% of the wages of affected workers (workers who would otherwise be laid off), up to a cap of £2,500 a month, for 3 months starting from 1 March 2020.
To access this scheme, employers need to designate the employment status of affected workers as 'furloughed workers' and communicate this change to affected employees. A new online portal is being set up where employers will be able to submit information about furloughed workers and receive reimbursements. The financial support will be backdated up until the 1 March 2020. All UK businesses are eligible for this scheme. We will report on the new online portal as soon as HMRC announces its launch.
Statutory Sick Pay (SSP)
Businesses with fewer than 250 employees on 28 February 2020 will be eligible for the SSP scheme. Through this support scheme businesses will be able to reclaim SSP paid for sickness absence during the coronavirus outbreak. The refund will cover up to two weeks’ SSP per employee who has been absent from work due to COVID-19.
To access the SSP scheme, employers should keep records of staff absences and SSP payments. Do NOT ask employees to provide a GP fit note. You can ask employees to provide you with an ‘isolation note’ from NHS 111 online. As per public health guidance people showing coronavirus symptoms must stay away from GP surgeries and only seek medical help if their symptoms worsen (for more info please consult up to date advice from NHS 111 online).
More details on the scheme will become available as the government work urgently to set up the reimbursement mechanism and related legislation.
Small Business Grant Scheme
The government will make £10,000 available to eligible businesses as a one-off grant. A small business which occupies a property and is already a recipient of small business rate relief (SBBR), rural rate relief (RRR) or tapered relief will be eligible.
Businesses do NOT have to apply for this grant. Instead, your local authority will write to you if you are eligible. If you do have any enquiries about this scheme, you are encouraged to reach out to your local authority and not other government departments.
Businesses that are VAT-registered would normally make payments when they submit their VAT return. The government has announced an automatic deferral which means that businesses do not have to make a VAT payment during the deferral period (20 March to 30 June 2020). Taxpayers will now have until the end of the 2020-2021 tax year to pay back accumulated VAT during the deferral period. Refunds and reclaims will be processed by the government as normal.
As this is an automatic deferral businesses do not have to actively apply for later payments but those with direct debit set up should cancel their direct debit mandate if they are unable to pay. This is to prevent HMRC's automatic collection from going through.
Self-assessment Income Tax
Self-employed workers will have a six-month deferral period to pay their self-assessment income tax. Instead of paying on 31 July 2020, those self-employed will have until 31 January 2021 to pay their owed income tax. This is automatically available to all self-employed workers.
Time to Pay
The basics of 'Time to Pay' is to allow businesses to delay any owed payments to HMRC and negotiate a pre-agreed, bespoke time period to pay these back. To show their commitment to activate 'Time to Pay', HMRC have mobilised an additional 2,000 call handlers to support businesses seeking to apply for deferred payments. The HMRC urges business owners to enquire about future payments closer to time to free up its capacity to support more urgent queries.
Businesses should call this dedicated helpline to discuss a missed payment or the possibility of missing an upcoming payment: 0800 0159 559.
The Coronavirus Business Interruption Loan Scheme (CBILS)
Apart from the usual commercial loans offered through lenders, the CBILS was set up to provide businesses with short-term cash flow support. This scheme is open to not only limited companies, but also sole traders, freelancers, and limited partnerships. Like commercial loans, applicants must meet certain criteria to be successful. In a nutshell, applicants should have a viable business plan and have a UK-based business turning over less than £45m where at least 50% is generated from trading activities. While the scheme is being delivered by the British Business Bank applicants are urged to apply directly through the 40+ lenders’ websites. Here’s an up to date list of accredited lenders.
David Smith, Policy Director of RLA, has written about legal dilemmas caused by the viral outbreak. Read the full article Novel Coronavirus and Safety Certificates here to understand how your legal liability to carry out safety checks may be affected because of COVID-19.
For more information about managing lettings and properties during the ongoing crisis, check out Lettings & Property Management in the Age of COVID-19.