COVID-19 budget announcements for small businesses (Updated)
During this uncertain time, we understand that COVID-19 will impact small businesses. We wanted to let you know important information from the Budget announcement that could affect your business.
This week, the government announced a £12 billion package to help relieve pressure on businesses affected by COVID-19.
Updated 27 March 2020 with information about the Self-Employed Income Support Scheme, Self Assessment and Universal Credit.
Updated 23 March 2020 with information about the Coronavirus Job Retention Scheme, IR35 and tax support.
Self Employed Income Support Scheme
A taxable grant of 80% average profits for the last three years is now available of up to £2,500 a month.
- It will be accessible to anyone with trading profits of up to £50,000.
- To access the scheme, you must currently be self employed and have a tax return for 2019.
- You need to access the scheme before the beginning of June.
Initially, this is available for three months in one total payment, and will start to be paid from the beginning of June. HMRC will identify those eligible and invite applications to the scheme. They will pay the income straight into the bank account of those eligible.
Changes for employers and employees
In the Coronavirus Job Retention Scheme, HMRC will reimburse 80% of furloughed workers wage costs, up to a maximum £2,500 per month. HMRC are currently setting up a system for reimbursement.
Statutory Sick Pay is now payable from the first day of sickness to those who are self isolating. This previously kicked in on the fourth day of sickness. A doctor’s note for SSP is no longer necessary, instead a call to 111 will evidence your sickness.
Businesses can also reclaim the cost of SSP when it relates to COVID-19:
- They can reclaim the cost for up to 2 weeks, and only when the absence from work is due to COVID-19.
- This affects businesses with under 250 employees only.
- It is yet to be decided how the repayment will be paid, as existing payroll software doesn’t support this.
VAT and Income Tax
Businesses will be supported by deferring VAT and Income Tax payments.
- VAT payments will be deferred for 3 months. This will apply from 20 March 2020 until 30 June 2020.
- Income Tax payments under the Self Assessment scheme for self employed people currently due in July 2020 will be deferred to January 2021.
- If you missed the Self Assessment deadline on 31 January, you have four weeks from today (27 March 2020) to file the tax return.
IR35
The government is delaying the roll-out of IR35 until 1 April 2021.
Universal Credit
If you are ill and self-isolating, you can claim Universal Credit or Employment and Support Allowance (ESA).
Those who are self employed can now access Universal credit in full.
Changes for small businesses
Business rates have been removed for one year for retail, leisure and hospitality sectors.
Cash grants of £10,000 are available for small businesses, with business rateable values below £15,000. This affects businesses already eligible for Small Business Rate Relief SBRR.
The government has temporarily launched The Coronavirus Business Interruption Loan Scheme. This means the government will guarantee lenders 80% of each loan, allowing lenders to give more risky loans to businesses.
If you can’t pay your tax bill due to COVID-19, you can contact HMRC on the dedicated Coronavirus helpline (0800 015 9559) so you may be able to avoid penalties
Business at Bokio
In this difficult time, we want to assure you that you will be able to keep using our software as normal. Our team are working remotely to keep improving Bokio, and we’re here to support you and your business. As usual, if you have any issues, you can contact our support team at support@bokio.co.uk, or use the live chat on the website.
Take care!
Bokio
