This post summarises the webinar that we held earlier today (25/03/20, 9:30am UK Time) regarding the aid that is available to small businesses and the actions we suggest that you take.
As I noted before, we would like to offer these services to our clients free of charge. However, like everyone else we need to continue to pay our staff, so I am sorry to say that we do need to charge for these services. Consider please that Councils, HMRC and other offices are all operating with many people self-isolating, so in the current environment everything is a little more difficult than usual. I have included under each section our proposed fees. All fees are exclusive of VAT.
For most of the schemes see https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses for more details.
Scheme name: Coronavirus Job Retention Scheme
Reminder of scheme
- this is the scheme where the government pays 80% of salary up to £2,500/month
- our working assumption is that the 80% means 80% of February payroll, but this is only a guess
- our understanding is that it is available to employees on the payroll at 29 February 2020. So it may not be available to people recruited after that date
- instead of making employees redundant as a result of Covid-19 crisis employers can make them “furloughed workers”
- this is an option (not an obligation) – the employer can choose to make people redundant instead
- it is also, in most cases, an option for the employee (it depends on their employment contract). Most employees are likely to accept being furloughed, as the alternative is probably a redundancy
- under the scheme the: employee must not do any work for the company; government contributes 80% of that employee’s salary, up to a maximum of £2,500/month; and the employer agrees not to make the employee redundant
- the employer has the choice of paying the additional 20% of the salary
- it is not clear who pays the PAYE – the Government has not said that it will pay the PAYE
- the scheme can be backdated to when the employee stopped working as a result of Covid-19 it can’t be backdated to before 1/3/20
- the scheme will last 3 months, but maybe extended
- how the refund will be made is not clear – HMRC have said that they will create an online portal and tell us what information they need
- it looks to us like employers will need to pay payrolls and then get refunds from HMRC
- all employers in the UK are eligible for this scheme
- we are not sure if this means employers based overseas – but our guess is that it will apply to everyone who operates UK PAYE
What we think you (or us) need to do
- make your intentions clear to your employees and seek their written agreement
- not be too specific, as the details are not yet known
- tell us the employees that you want it to apply for
Our fees for our clients with 5 or fewer employees
- our fee for writing a letter: £50 per employee or £200 if you require a template that you will adapt
- our fee for calling employees to explain and try to negotiate on the employer’s behalf: £30 per call
- our fee for uploading document’s to HMRC’s portal: £30 per employee per month (we may revise this up or down when we know more about what is needed)
Our fees for our clients with 6 or more employees
- we will reach agreement on fees on a case by case basis
Scheme name: Statutory Sick Pay (SSP)
Reminder of scheme
- at the moment, employers pay SSP (£94.25/week for employees who are sick from 4th day to 28 weeks). See https://www.gov.uk/statutory-sick-pay for more details
- from 13/03/20 employees that self-isolate are covered by SSP and the payment period will be from the 1st day.
- small employers will be able to reclaim SSP from the Government for sickness to cover Covid-19, up to 2 weeks per employee
- to be eligible to claim back the Statutory Sick Pay: the employer must be UK based, and have had fewer than 250 employees, and maintain a record of absences
What we think you (or us) need to do
- there are no details as to how this will work
- we think you should ask the employee to confirm the time that he was absent and that it was due to COVID or isolation
- tell us the person and days the person was off sick because of COVID
Our fees for our clients with 5 or fewer employees
- our fee for processing the reclaim will be £10 per employee per month (we may revise this up or down when we know more about what is needed)
Our fees for our clients with 6 or more employees
- we will reach agreement on fees on a case by case basis
Scheme name: VAT Deferral Scheme
Reminder of scheme
- we don’t think that this scheme is available for NETPs
- we think the scheme applies to VAT payments that are due from now to July 7
- this is automatic, you don’t need to make an application
- What we think you (or us) need to do
- we don’t think you need to do anything, other than cancelling your direct debit
Our fees
- nothing for us to do
Scheme name: Time To Pay Tax Scheme
Reminder of scheme
- businesses in financial distress can, as usual, apply to HMRC for a delay in payment
- the Time To pay will need to be agreed with HMRC on a case by case basis
- HMRC has a COVID-19 dedicated helpline: 0800 0159 559 see https://www.gov.uk/government/news/tax-helpline-to-support-businesses-affected-by-coronavirus-covid-19
What we think you (or us) need to do
- you need to tell us or HMRC: 1) why you can’t pay; 2) when you think you will be able to pay; 3) what measures you are taking to ensure that your business will survive; 4) an indication of your normal profitability
- expect reminders and late payment requests from HMRC
Our fees
- our fee for a 1 on 1 call to discuss matters with you: £50+VAT (for a maximum of 30 minutes)
- to write a letter to HMRC: £100 minimum (covers up to 1 hour). We will charge an additional £80/hour for any time that we spend that is more than 1 hour
- our expectation is that it should not take more than 1 hour for most of our clients
Scheme name: Business Rates Relief
Reminder of scheme
- retail, hospitality and leisure businesses in England will not need to pay rates for the period April 20 to March 21
- the relief is automatic, you should get a revised invoice from the Council saying that there is nothing to pay
- our understanding is that the relief is for Business Rates, not Residential Council Tax
- to be eligible, the business must be: based in England; be an occupied property trading as a shop, restaurant, hotel etc
What we think you (or us) need to do
- nothing, you should receive a letter from the Council if this applies to you
Our fees
- there should be no fee
- if you want, our fee for a 1 on 1 call to discuss matters with you: £50+VAT (for a maximum of 30 minutes)
- if you want, our fee for writing a letter to your Council or seeing if you pay business rates is £50
Scheme name: Small Business Grant
Reminder of scheme
- £10,000 is available as a grant (not a loan) to all businesses that get Small Business Rate Relief or Rural Rate Relief
- Businesses don’t need to apply, they will be contacted by their Local Authority in April
What we think you (or us) need to do
- make sure that your local authority has your details
Our fees
- there should be no fee
- if you want, our fee for a 1 on 1 call to discuss matters with you: £50+VAT (for a maximum of 30 minutes)
- if you want us to write a letter to your local authority we will charge £100 minimum (covers up to 1 hour). We will charge an additional £80/hour for any time that we spend that is more than 1 hour
Scheme name: Retail Hospitality & Leisure Grant
Reminder of scheme
- £25,000 is available to retail, hospitality and leisure businesses operating from premises with a rateable value of £15,000 to £51,000.
- businesses need to apply to their Local Authority for this
What we think you (or us) need to do
- write to your local authority and apply for this
Our fees
- if you want, our fee for a 1 on 1 call to discuss matters with you: £100+VAT (for a maximum of 30 minutes)
- if you want us to write a letter to HMRC we will charge £200 minimum (covers up to 1 hour). We will charge an additional £150/hour for any time that we spend that is more than 1 hour
Scheme name: Coronavirus Business Interruption Loan
Reminder of scheme
- from 23/03/20 businesses with an annual turnover of not more than £45 million can apply for a loan or overdraft for up to £5m
- we are not sure if the £45m applies to the group or the UK company
- the loans will be provided by UK banks
- the Government will: guarantee 80% of the loan; and pay the interest for the first 12 months
- loans will be commercial and will need to be repaid
- our understanding is that the borrower will need to persuade the banks that: in a normal situation, the business would be able to repay the loan; and that it has a reasonable prospect of surviving the crisis
- security will be needed on loans over £250k
What we think you (or us) need to do
- you should prepare: 1) cash flow assuming no COVID; cash flows for next 3, 6 & 9 months assuming COVID; write a loan application letter; send it to your bank
Our fees
- if you want, our fee for a 1 on 1 call to discuss matters with you: £200+VAT (for a maximum of 30 minutes)
- if you want us to write the loan or overdraft application we will charge £500 minimum (covers up to 2 hours). We will charge an additional £150/hour for any time that we spend that is more than 2 hours
Scheme name: Protection for renters
Reminder of scheme
- no direct protection in terms of cash available
- Landlords can’t evict for at least 3 months
What we think you (or us) need to do
- start negotiating with your landlord
Our fees
- if you want, our fee for a 1 on 1 call to discuss matters with you: £50+VAT (for a maximum of 30 minutes)
- if you want us to write a letter to your landlord we will charge £50 minimum (covers up to 0.5 hours). We will charge an additional £80/hour for any time that we spend that is more than 0.5 hours
I hope this post is helpful
This post summarises the webinar that we held earlier today (25/03/20, 9:30am UK Time) regarding the aid that is available to small businesses and the actions we suggest that you take. As I noted before, we would like to offer these services to our clients free of charge. However, like everyone else we need to […]