COVID19 Financial Support Q&A

We are sure this is a period of great uncertainty and hardship for many of you.

The handbook below aims to summarise the recently announced  financial support from the government for the  individuals and small businesses and answer some of the questions you may have.

Please feel free to get in touch with us on contact@htaaccountants.co.uk for further detail.

Please follow the link here to download our free guide COVID19 Q&A

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Selection of Q&As

 

What is a ‘furloughed’ employee ?

A furloughed employee is an employee whose work has ceased directly due to the outbreak of the virus.  Their pay is likely to be covered if the employee status is declared as furloughed and the employer claims 80% of their monthly pay (limited to £2,500).

If an employee is self-isolating but work remains in place following the outbreak then they should claim Statutory Sick Pay (SSP).

As an employer, do I need employee’s consent for them to be furloughed?

Yes, you need to consult the employee and agree change to their employment status.

My business is suffering from cash-flow and can not wait until April, What are my options?

Subject to the employee agreement, you may be able to reduce their hours or pay.  You may also propose that the employee take an unpaid leave. Unfortunately, many employees may not able to take those options.

What support is available for company directors?

The main support available is under the Coronavirus Job Retention Scheme (CJRS). To claim under this scheme, the directors must be furloughed and not undertaking any activities involved in running the business. Dividends are unlikely to be covered by the scheme.

What support is available for sole traders?

The government has announced Self Employed Income Support Scheme (SEISS) to support the sole traders.  To be eligible you will have completed a self assessment in the previous tax year (i.e. 2018/19). If you have not yet filed a return for 2018/19, you should do so as soon as possible as you only have four weeks to make a return from 26th March 2020.

I am on a zero-hour contract, what support can I receive?

Employees on zero hours contracts may be eligible for support under the CJRS and Universal Credit schemes. Under the CJRS support, if you and your employer agree, you can be put on “furlough” which puts your job on hold. It pays you 80% of your usual income up to £2,500 a month. This will be based on your average monthly earnings.

What shall I do about the VAT bill?

VAT payments are being deferred but returns should continue to be made.

I have an income tax bill to settle in July, can I defer this payment?

Absolutely, the income tax payments for July are being deferred to 31st January 2021.

I pay little or no business rates, can I claim for a support?

If you or your business rent a premises and claim business rate relief then you may be entitled to £10k of government grant. Retail, hospitality and leisure businesses are entitled to up to £25k of grant if their property rateable value is in a range of £15k-£51k.

I can not afford to pay my mortgage, what support is available for me?

The Support for Mortgage Interest (SMI) is loan which you may be able to apply. This is usually available to people in receipt of benefits.

What is the Self Employed Income Support Scheme (SEISS)?

This is a scheme for the self employed or a member of a partnership.

You can apply if you’re a self-employed individual or a member of a partnership and you:

  • have submitted your Income Tax Self Assessment tax return for the tax year 2018-19
  • traded in the tax year 2019-20
  • are trading when you apply, or would be except for COVID-19
  • intend to continue to trade in the tax year 2020-21
  • have lost trading/partnership trading profits due to COVID-19
  • Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment.

 

How much you’ll get

You’ll get a taxable grant which will be 80% of the average profits from the tax years (where applicable):

  • 2016 to 2017
  • 2017 to 2018
  • 2018 to 2019

To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.

It will be up to a maximum of £2,500 per month for 3 months.

HMRC will pay the grant directly into your bank account, in one instalment.

 

 

 

Note:

The above Q&A is for the purpose of sharing information only.  We do not accept any responsibility for the use of this information.

 

 

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