There is so much information coming out and so much still missing. This post gives some of the main information links but please keep checking back as information is changing all the time. Business support is still coming through and details are being ironed out as we go so please be patient.
*Transcript of PMs video 10 May re moving from level 4 to level 3 danger
*FAQs following 10 May video
- Remember that the loans and deferred tax will have to be repaid at some point so please do a business plan to ensure that you will be able to manage this
- You must cancel your DD if you are deferring your VAT payment. You must still submit your VAT return as normal
- As at 6 April we are hearing of more successful CBIL applications for businesses which were profitable BEFORE the virus.
- Discretionary fund for business property costs 3/5
CBILS (Corona Virus Business Interruption Loan Scheme)
- We don’t yet have the mechanism for reclaiming the 80% but this will be available by the end of April.
- The base wage will be based on payrolls prior to March so no good trying to artificially boost wages this month. For those on variable amounts you can use the same month last year or average of the 12 months.
- This can be backdated to employees already made redundant
- It only applies to employees who are “furloughed”, not to those on reduced hours
- Employees can do training while furloughed but must be paid above NMW if they are doing this
- Directors can be furloughed and continue to carry out their statutory duties but NO other work
- 20/4HMRC portal up and running successfully and payments made within 5 days. Spreadsheet upload only available for businesses with 100 or more furloughed staff.
- so difficulties with annual payroll schemes
- furlough must be for a minimum of 3 weeks at a time but it is possible to work for a day or more between furloughs so that essential staff can check in or to effectively rotate staff.
*Helpful article from Accountancy Age on furloughing as a director
- So far there is no direct help for those trading less than a year or earning profits over £50,000
- This support provides 80% of profits but nothing towards covering committed costs. Here’s how the grant is calculated
- You must have suffered negatively as a result of the virus
- You may continue to work while receiving this grant
- Claim will be via a form issued by HMRC in June. A backdated lump sum will be paid directly into your bank account
- This grant is taxable
- Coronavirus Act 2020 direction re SEISS
- Check whether you’re eligible and when you can apply (mid-May)
- The claim must be done through the business’s own Government Gateway so it can not be done by their accountant.
- Director/shareholders are not classed as self-employed
- For those taking low salary and high dividends there is no allowance to compensate for dividends. You may offset the salary element under the Job Retention Scheme above
- 27/3 confirmed that directors can be furloughed if they are not working (they can still continue to carry out their statutory duties)
- No relief for regular dividend income. This may be for a number of reasons (not encouraging tax avoidance, no current profits for dividends, practicalities to differentiate dividends from investments etc)
- 100% guaranteed by govt
- Can borrow £2,000-£50,000 up to 25% turnover
- normal loan, govt pay 12m interest so no interest or repayments for first 12 months. Low rates after that (rumours of 2.5%)
- Available to apply via banks from 9am Monday 4 May
- 2 page simple self-certified application form
- available for sole trade and small co
- no personal guarantee required
- Cash in 24 hours as banks are merely administering loans, not authorising them
- 2.5% for 6 years but no regulation
Your own health
There is a reasonable chance that you will be ill and unable to work at full capacity for 1-2 weeks. You must have a contingency plan for how your business will run without you during this period. This is the biggest point of all our courses – the business must be able to function without the business owner.
5 ways to work from home and manage anxiety (Nick Elston via Accountex)
My teens are mixing 5 hours a day of schoolwork with lots of garden chores to provide fresh air and exercise. They’re also cooking some of our meals which takes the pressure off me. If you’re trying to work from home with primary aged kids then our Business Manager, Emma, has some great ideas over here
This post will be updated as more information becomes available. Please also sign up to join our weekly ‘One for All’ webinars at 9:30am each Friday for as long as required.
You can watch the old webinars here