Dealing with the Impact of Coronavirus: Changes for Companies

With the coronavirus continuing to spread across the world, the UK Government is introducing further support and relief to companies in an attempt to limit its impact.

Information as of Friday 20th March 2020 at 9am UK

With the coronavirus continuing to spread across the world, the UK Government is introducing further support and relief to companies in an attempt to limit its impact.

We have highlighted some of the measures being introduced in an attempt to help you navigate what may be available to your business. Announcements are being made frequently, but we will endeavour to keep you as updated as we can.

New information can be found in our most recent article here including announcements relating to Value Added Tax (VAT), Income Tax, Salary Grants and Interest Free Loans.

Companies House Filing Deadlines Extended

Companies House is now granting those who apply a two month extension to file company accounts - provided they act before the filing deadline. The law already permits a three month extension to filing deadlines but Companies House typically does not allow extensions unless there are extreme circumstances. Due to the coronavirus, Companies House has changed its policy to automatically allow for a two month extension and then another month after that if companies can demonstrate that they have been faced with extreme circumstances.

For the latest information and updates, see the Companies House page.

SMEs: Coronavirus Business Interruption Loan Scheme

A new Coronavirus Business Interruption Loan Scheme (CBILS) will be provided by the British Business Bank. This proposal is designed to provide small and medium sized enterprises (SMEs) with access to loans and overdrafts. The UK Government has agreed to provide lenders with a guarantee of 80% per loan (subject to a cap on claims for each lender) to help them continue to provide finance of up to £5m in value. Borrowers and lenders will not be charged for this guarantee and the Government will cover the first six months of interest payments.

Further details, including the lenders providing access to CBILS, are yet to be announced but the initiative should be available from week commencing 23rd March 2020.

Larger Business: COVID-19 Corporate Financing Facility

The Bank of England has announced a new lending facility to raise working capital via the purchase of short term debt. Qualifying criteria is yet to be announced but The Bank of England has also pledged to support corporate finance markets and ease the supply of credit.

Further details, including the lenders providing access to CBILS, can be found here.

Business Taxes: Time to Pay

All companies and those who are self-employed with outstanding tax liabilities and in financial distress may be eligible to receive support through the HM Revenue & Customs (HMRC) 'Time To Pay' service, provided contact is made before the tax debt becomes due.

If you are concerned about being able to pay your tax, call HMRC's dedicated helpline on 0800 0159 559.

Business Rates

A business rate holiday applies to retail, hospitality and leisure businesses in England for the 2020/21 tax year and a £25k grant will be provided to those operating from smaller premises, with a rateable value of between £15k and £51k. Pubs have also been granted a £5k rates discount.

One-off Grant

The Government will provide a one-off grant of £10k to around 700,000 businesses currently eligible for the Small Business Rate Relief Scheme (SBRR) or Rural Rate Relief. Funding will be provided to local authorities by the Government in early April.

Statutory Sick Pay (SSP)

The UK Government has said it will bring forward legislation to allow SMEs to reclaim SSP paid for sickness absence due to coronavirus (COVID-19). The changes mean SSP will be payable from day one instead of day four for affected individuals. SMEs may reclaim up to two weeks' SSP expenditure per eligible employee who has been off work because of the virus at a rate of £95.85 per week for a full time employee.

For the purposes of the SSP changes, an SME is an employer with fewer than 250 employees as at 28th February 2020. As always, employers should maintain records of staff absences and payments of SSP; however, employees will not need to provide a GP fit note.

Employees who are advised to self-isolate will soon be able to obtain an alternative to the fit note by contacting NHS 111 which can be used if an employer requires evidence.

Existing systems are not designed to facilitate employer refunds for SSP; however, the UK Government has suggested it will work with employers to set up the repayment mechanism as soon as possible.

IR35: Off-payroll working & SSP

Following the Government's announcement to postpone the introduction of the off-payroll working rules to the private sector, all workers using their own Personal Service Companies (PSCs) to provide labour to private sector clients will be entitled to claim SSP under the current rules via their own PSC.

In Conclusion

Whilst no other changes have yet been outlined in relation to tax, we anticipate that certain other measures due to commence in 2020/21 may be delayed, and additional announcements may be made in the coming weeks and months.

Please contact us for more information.

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