On Friday, the Chancellor Rishi Sunak set out further details regarding the package of Government support available to businesses. The new measures are designed to support cash flow and employment.
As always, will be closely monitoring the situation and will make sure you receive all the information regarding the measures that are being put in place. Please keep an eye on this page as we will be regularly updating the details as the situation progresses.
Our partners will also be reaching out to clients directly to discuss the different options available.
We have set out below what is known:
The Chancellor stated that VAT payments to HMRC during the period 20 March and 30 June 2020 can be deferred until the end of the tax year without having to agree that formally with HMRC. This will include any quarterly or monthly payments during that period. VAT will still need to be charged and accounted for during this period. If Companies wish to defer other taxes these will still be governed by the time to pay arrangements.
Any self-assessment payments due on 31 July 2020 can be deferred until 31 January 2021.
Employers will be able to recover by way of grant 80% of the cost of furloughed workers up to a maximum of £2,500 per employee per month. A furlough is a period of temporary lay-off, for example if you close all or part of your business temporarily. Details as to how the scheme will work aren’t known but we assume the following:
- you will need to formally implement a furlough;
- you will need to identify the furloughed employees;
- you will need to provide evidence of the furloughed employees wage cost to HMRC;
- you will need to observe appropriate process.
Payments made by HMRC will be in the form of a grant i.e. not be repayable. The process and mechanics are yet to be announced. The scheme is backdated to 1 March although it’s not clear if this will enable previous redundancies to be reversed.
It’s important to note that the grant is for furloughed employees and it is not therefore a subsidy to support your employment costs.
Business Interruption Loan Scheme
Applications can now be made for the Coronavirus business interruption loan scheme. Access to the loans is through a number of accredited lenders listed on the British Business Bank’s website. Accredited lenders can provide a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance facilities.
HURST is already supporting several clients with special projects to support them through this period of uncertainty. Examples of how we are helping include:
- Improving headroom by negotiating with HMRC on Time to Pay, PAYE, Corporation Tax, and VAT arrangements.
- Providing insights with forecasting, projections, and cashflow modelling for both the short and medium term.
- Reviewing funding options available through mainstream banks and tier 2 lenders.
- Developing tax strategies to release funds, including R&D claims.
In our role as supporting many of the region’s best entrepreneurs, we are also providing a range of Executive Insights which our clients have said are always highly valuable.
Other ways we are supporting you:
We are organising a series of video conferences where we will be offering expert guidance on some of the main issues that will be affecting all businesses during this period.
If you would like to speak to one of our partners directly, please note the below key contacts or alternatively, you can give us a call on 0161 477 2474
Adrian Young, HURST Tax Partner
Tel: 0161 441 4994
Narendra Mistry, Head of HURST Payroll
Tel: 0161 429 2504
Nigel Barratt, Head of HURST Corporate Finance
Tel: 0161 429 2523