Resources on UK Government Support for Businesses
Causeway has reviewed UK Government support packages which are relevant for the construction industry and created a summary of the notable points and links for your business.
Coronavirus Job Retention Scheme
Employers will be able to contact HMRC for a grant to cover 80% of the wages (up to a total of £2,500 per month) of employees who are not working but are “furloughed” and kept on payroll, rather than being dismissed. The Scheme is available to any employer in the country – small or large, charitable or non-profit.
Key points to note:
- To be eligible for the subsidy, when on furlough, an employee can not undertake work for or on behalf of the organisation.
- Furloughed employees must have been on your PAYE payroll on 28 February 2020
- It covers full time, part-time, employees on agency contracts and employees on flexible or zero hours contracts
- The scheme also covers employees who were made redundancy since 28 February 2020
- The employee’s wage will be subject to usual tax and other income deductions.
- When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.
- Employers will receive a grant from HMRC to cover the lower of 80% of an employee’s regular wage or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrollment employer pension contributions on that subsidised wage. Fees, commission and bonuses should not be included
- At a minimum, employers must pay their employee the lower of 80% of their regular wage or £2,500 per month. An employer can also choose to top up an employee’s salary beyond this but is not obliged to under this scheme.
- A furloughed employee can take part in volunteer work or training, as long as it does not provide services to or generate revenue for, or on behalf of your organisation.
- However, if workers are required to for example, complete online training courses whilst they are furloughed, then they must be paid at least the NLW/NMW for the time spent training, even if this is more than the 80% of their wage that will be subsidised.
More information and how to apply for the scheme can be found here.
Deferring VAT Payments
HMRC are allowing businesses to defer the next VAT payments from
- The VAT return periods covered by the deferment are for periods ending 29 February, 31 March, 30 April 2020 and 31 May 2020
- If you choose to defer your VAT payment as a result of coronavirus (COVID-19), you must pay the VAT due on or before 31 March 2021.
- You do not need to tell HMRC that you are deferring your VAT payment. It is open to all UK VAT registered businesses
- Although the payment of VAT liabilities is deferred, businesses must continue to charge VAT on their supplies to customers and must continue to prepare and submit VAT returns by the respective due date.
- Please remember to stop your Direct Debit or payment approval to prevent the payment automatically being taken.
- If your business is in a refund position, HMRC have confirmed that they will offer a lighter touch approach to repaying funds to businesses. This means that, for the 3-month period to 30 June, any enquiry raised by HMRC, will be a lighter touch with the aim to ensure refunds are released to businesses at quickly as possible.
Further information can be found here.
HMRC Time to Pay Scheme (TTP)
The scheme is operated by HMRC, through a helpline, with the aim of agreeing arrangements on delaying the payment of tax liabilities. It has been in existence for several years, although it has been expanded recently to specifically cover the difficulties caused by coronavirus. The agreements under TTP are reached on a case by case basis and are tailored to individual circumstances and liabilities
- Available immediately, please contact HMRC for guidance.
Coronavirus Business Interruption Loan Scheme
The temporary Coronavirus Business Interruption Loan Scheme supports SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years.
The government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.
The government will provide lenders with a guarantee of 80% on each loan (subject to pre-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The scheme will be delivered through commercial lenders, backed by the government-owned British Business Bank.
Key points to note:
- UK based businesses with a turnover of no more than £41m per annum
- Operating within an eligible sector
- Finance terms are from three months up to ten years for term loans and asset finance and up to three years for revolving facilities and invoice finance
- Small businesses should approach one of the 40+ accredited lenders, listed here
Small Business Grant Funding of £10,000 – Small Business Rate Relief (SBRR) & Rural Business Rate Relief (RBRR)
The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.
- Eligible businesses will be contacted by their local authority, likely in early April
- Guidance for local authorities will be provided shortly
Government Funded Sick Pay
To assist businesses and individuals through the pandemic the British Government will fund 2 weeks Statutory Sick Pay for those absent from work due to Covid-19 for businesses with less than 250 employees as at 28 February 2020.
- Eligible from 11 March 2020
- Employees can claim from day 1, not day 4
- £94.25 per employee per week for up to 28 weeks
- GP note not required
- Employer to retain records of staff absence and payments made
- Employers to work with government over coming months to set up repayment mechanism
The following channels of support have also been made available to self-employed individuals:
- Self-Employment Income Support Scheme -a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months – it is available for sole traders and members of partnership but there are additional eligibility criteria to look out for. More information and how to apply for the scheme can be found here.
- Your next Self-Assessment income tax return payment – due on 31 July 2020 – can been deferred until January 2021. The deferral is optional, and you do not need to apply for this.
- Mortgage and rent support are available via three a month ‘holiday’ from payment. More information for landlords and tenants can be found here.
- Banks are providing additional access to finance and lending, including postponing changes to overdraft fees due to roll-out in April – check with your bank
- Changes have been made to Employment & Support Allowance and Universal Credit that will enable you to apply more easily and receive more income through the welfare system.