Daily Update – 23 March 2020
You will have seen, heard or read about the chancellor – Rishi Sunak’s speech on Friday where he outlined the additional financial support being provided to small businesses.
I have summarised below the main topics covered and the key points.
Vat – any vat payments ordinarily due between now and end of June will be deferred until the end of the 2020/21 tax year – April 2021.
PAYE/NI – can be deferred for between 1 and 3 months. This scheme is expected to apply up to and including April 2020 payroll, after that payment plans will need to be agreed with HMRC.
Income Tax – Payments on account due by 31 July 2020 have been deferred until 31 January 2021.
Employee wages (Coronavirus Job Retention Scheme – CJRS)– the big announcement from Friday:
- For any employees who would otherwise have been laid off/made redundant and are not working (termed as ‘furloughed’)– employers can claim up to 80% of their wages capped at £2,500. This still leaves a 20% gap which the employer can choose to fund.
- This is back dated to 1 March.
- Initially available for 3 months.
- First payments/grants expected to be paid by end of April.
This is the snapshot – we need to see the real detail of how this will work.
Coronavirus Business interruption loans (CBIL) – these should be available next week. Speak to your own bank – each will have different approaches.
Loans now to be interest free for 12 months.
You will need a business forecast or projections to support a loan application. Speak to me if you would like to discuss this.
Self-employed – (more needed in this area) entitled to same statutory sick pay rates as employees. Currently £94.25 a week.
Yes, there are lots of gaps and questions which I hope to be able to fill/answer as more information becomes available.
There is more information provided on the HMRC website:
For now, the big message is – keep doing what you can, assistance is being provided. The current situation won’t last forever.
Cash flow funding
The funding options outlined above will not be available for several weeks. If you think you may struggle with cash flow before funding is received, whether through any of the loans or grants outlined here or previously, we can assist you with finding a suitable finance facility.
These loans are more expensive but:
- they can be secured quickly
- you don’t pay anything unless you draw down the money
- they provide peace of mind knowing that you have a backup while waiting for the other funding to come through
Please get in touch if you would like to find out more about these options.
A reminder that my weekly webinar for all clients is every Thursday (until further notice) at 12pm. Please send through any questions you have that you would like answered beforehand and I will answer them in the webinar or separately, depending on time available.
You can register here.