CORONAVIROUS
FINANCIAL INFORMATION
Last Updated: 30/03/2020
INTRODUCTION
This document has been created to help people understand what schemes are available to you from the government.
The vast majority of the information has been created using a document produced by Shabbar Jaffer Director of Jaffer Accountancy Ltd. MKSI Leicester thank him for his efforts and may Allah SWT bless him and his family in these challenging times.
The schemes available differ depending on whether you are:
- A business owner
- Self Employed
- Employee
- BUSINESS OWNERS
1.1. Job Retention Scheme
1.2. Statutory Sick Pay
1.3. Deferring VAT
1.4. Cash Grant
1.5. Business Rates
1.6. Interruption Loan Scheme
1.7. Insurance
1.8. Unable to pay a tax bill - SELF EMPLOYED
2.1 Universal Credit
2.2 Deferring Income Tax
2.3 Time to Pay Offer
2.4 Self-employment Income Support Scheme - EMPLOYEE
3.1. Job Retention Scheme
3.2. Statutory Sick Pay
3.3. Working Tax Credit
3.4. Universal Credit - General
4.1. Mortgage Payments Holiday
4.2. Struggling to Pay Rent
4.3. Struggling to Pay Bills
4.4. Other Loans.
1. BUSINESS OWNERS
1.1.Job Retention Scheme
HMRC will support your business by paying 80% of each of your employees’ salary who would have been laid off during the crisis at the maximum of £2,500.
For Example, you have one employee earning £2,000 a month, so you will be able to claim 80% of this which is £1,600. If you have a second employee earning £3,500 per month then 80% would be £2,800 however this would be capped at £2,500.
When does it start? The scheme is expected to start from the 1st April 2020 and last for 3 months. You can backdate claims from the 1st March 2020.
Who is eligible? All UK businesses regardless of size will be eligible for this scheme.
How do I apply for this scheme? Firstly, you will need to designate any of your affected employees as furloughed workers and then you will need to notify your employee of this. Secondly, you will need to make the claim through HMRC’s portal. The reimbursement portal is expected to be available from 1st April 2020.
1.2.Statutory Sick Pay
Statutory sick pay is currently £94.25 per week. If you have had employees off sick due to COVID-19 then you will be refunded the first 2 weeks of statutory sick pay paid to your employee.
Who is eligible? The relief will be available to UK businesses with fewer than 250 employees as at 28th Feb 2020. As an employer, you should maintain records of staff absences and payments of SSP made.
How do I apply for this scheme? The rebate scheme is currently being developed.
1.3.Deferring VAT
Any VAT liabilities accumulated from 20th March 2020 until 30th June 2020 will not need to be paid over to HMRC until the 5th April 2021. This will help strengthen your cash flow.
However, this is not a relief and therefore the VAT will eventually have to be paid to HMRC. There will be no interest or penalties charged in the deferral period.
Who is eligible? All UK businesses regardless of size will be eligible for this scheme.
How do I apply for this scheme? The scheme is automatic; you do not have to apply for this scheme to HMRC.
1.4.Cash Grant
This scheme is a cash grant of £25,000 available to businesses in the retail, hospitality and leisure sectors who have a rateable value between £15,001 and £51,000.
Who is eligible? You will receive a grant of £10,000 if your rateable value is less than £15,001.
How do I apply for this scheme? Your local authority will write to you if you are eligible for this grant.
1.5.Business Rates
A business rates holiday period will come into effect for the tax year 2020 to 2021 for those businesses in the retail, hospitality and leisure business.
Who is eligible? Your business will be eligible if you fall into one of the following categories: Shops, Restaurants, Café’s, Drinking establishments, Cinemas, Live music venues, Properties for assembly and leisure, Hotels, Guest & boarding premises, Self-catering accommodation.
How do I apply for this scheme? This will automatically apply to your next council tax bill in April 2020.
1.6.Loan Interruption Scheme
A temporary loan scheme should be available from 23rd March 2020 to support small and medium sized businesses.
As a business you will be able to access a 12-month interest free loan because the government will cover your first 12 months interest. The scheme will support loans of up to £5 million in value.
Who is eligible? You will be eligible if your turnover is no more than £45 million per year and your business meets the other British Business Bank eligibility criteria. All major banks will be offering the loan once the scheme is launched.
How do I apply for this scheme? Talk to your bank as soon as possible and discuss your business plan with them.
1.7.Insurance
Businesses that have cover for pandemics and government ordered closure may be covered. Speak to your insurance company to discuss your terms and conditions.
1.8.Unable to Pay a Tax Bill
Call the HMRC Coronavirus helpline:
Telephone: 0800 015 9559
Monday to Friday, 8am to 8pm
Saturday, 8am to 4pm
2. SELF EMPLOYED
2.1.Universal Credit
As a sole trader, you may be entitled to claim universal credits.
The scheme will calculate a minimum income floor based on number of hours expected to work and the minimum wage for your age group. This minimum income floor is basically a figure that the system expects you to earn every month.
If you earn below the income set by the system, your benefits will not be calculated on how much you earnt but will be calculated on how much the system expected you to earn every month.
What has changed? A new temporary scheme has been announced by the government to remove the minimum income floor. Therefore, universal credits will be paid based on your actual earnings which during these times may be below the minimum income floor.
Example: If your minimum income floor is set to £1,000 per month and your earnings were £600 for the month then your benefits would be based on earnings of £1,000, even though you earnt £400 less. With the new temporary scheme, your credit award would be based on your actual earnings of £600 and so this would increase your universal credit claim.
How do I apply for Universal Credit? Apply online using the link https://www.gov.uk/apply-universal-credit. There is a Universal Credit Helpline which is open Monday to Friday between 8am to 6pm. The telephone number is 0800 328 5644.
2.2.Deferring Income Tax
As a sole trader, you need to make a payment on account by the 31st July 2020. The payment on account will be 50% of your tax liability for the tax year 2019/20.
Example: Your income tax liability for the tax year 2019/20 was £5,000. Your first payment will have been due by 31st January 2020 for £7,500 (£5,000 + £2,500 (50%)). Your second payment for the remainder of the 50% (£2,500) would be due for the 31st July 2020. For those of you who need to make a payment on account for the 31st July 2020, your payment will be deferred until the 31st Jan 2021.
No penalties or interest for late payment will be charged in the deferral period.
How do I apply for this scheme? The scheme is automatic; you do not have to apply for this scheme to HMRC.
2.3.Time to Pay Offer
If you already have an outstanding tax liability with HMRC and you have missed or may miss your next tax payment due to COVID-19, then please call HMRC on 0800 0159 559. These arrangements are agreed on a case by case basis and are tailored to individual circumstances and liabilities.
2.4.Self-employment Income Support Scheme
Use this scheme if you’re self-employed or a member of a partnership and have lost income due to coronavirus. This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed.
Who is eligible? 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. This is determined by at least one of the following conditions being true:
• having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
• having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period.
If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020.
HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way.
How much will I 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.
How do I apply for this scheme? You cannot apply for this scheme yet.
HMRC will contact you if you are eligible for the scheme and invite you to apply online.
Individuals do not need to contact HMRC now and doing so will only delay the urgent work being undertaken to introduce the scheme.
3. EMPLOYEE
3.1.Job Retention Scheme
HMRC will be supporting your employer by paying 80% of your wages (maximum of £2,500 per month) and so the cost to your employer will only be 20% of your total wage. You will be eligible for this if you are categorised as a ‘furloughed employee’ by your employer.
Your employer must not have laid you of work in order to apply for this scheme. The scheme is currently available for 3 months starting from 1st April 2020. However, your employer may back date the claim from the 1st March 2020.
What if I earn more than £2,500? Unfortunately, the reimbursement will be capped at £2,500. Example: if your total wages is £3,000 per month, HMRC will contribute £2,500 and your employer will be expected to cover the remainder £500.
What if I am on a Zero-hour contract? The scheme would cover all individuals under the PAYE scheme. Therefore, it is expected employees on Zero-hour contracts to also be protected by the new scheme. It has been suggested that your February Income will be used to determine your gross wage.
What if I am an agency worker? It is expected that the same rules under zero hour contract to also apply to agency workers. Further clarification is required from HMRC.
3.2.Statutory Sick Pay
Statutory sick pay is currently £94.25 per week. Statutory sick pay is normally available from the 4th day of your illness. However from the 13th March 2020, if you have been of sick or have had to self-isolate due to Covid-19 then you will be entitled to SSP from day one.
Do I need to provide a GP fit note for this scheme? There is no requirement for you to provide a GP fit note however if your employer requires one then you have been advised to obtain one from the NHS 111 online.
3.3.Working Tax Credit
If you work a certain number of hours and have an income below a certain level, you could get up to £1,960 a year in working tax credit. This is known as the basic element.
How has the scheme been changed? For those on working tax credit, your basic element will be increased by £1,000 for the next 12 months, making the basic element £2,960. The standard universal credit allowance will also increase by £1,000 for the next 12 months. How much you get depends on your earnings and other factors.
How do I apply for Working Tax Credit? Apply online using the link https://www.gov.uk/working-tax-credit/how-to-claim. You can find out more from the website or contact HM Revenue and Customs which is open Monday to Friday between 8am to 8pm and Saturday 8am to 4pm. The telephone number is 0345 300 3900.
3.4.Universal Credit
Universal Credit is a benefit you can claim if you’re on a low income or unemployed.
It might be worth claiming Universal Credit if:
- you’re struggling to pay the bills
- you’ve lost your job and have no income
- you have a disability or illness that stops you working
- you have expensive childcare costs
- you’re caring for someone
Who is eligible? To get Universal Credit you must:
- be 18 years old or over – or in some cases 16 or 17
- be under State Pension age – check your State Pension age if you’re over 60 years old on GOV.UK
- live in the UK – there are extra rules if you’re not a British citizen
- have less than £16,000 in savings
How do I apply for Universal Credit? Apply online using the link https://www.gov.uk/apply-universal-credit. There is a Universal Credit Helpline which is open Monday to Friday between 8am to 6pm. The telephone number is 0800 328 5644.
4. General
4.1.Mortgage Payments Holiday
On the 17th March 2020 it was announced that homeowners including landlords of by to let mortgages affected by COVID-19 can apply for a mortgage payment holiday of up to 3 months.
Will this affect my credit score? Many banks will have different approaches; speak to your bank to discuss your concerns.
What about interest payments on the help to buy scheme? On the 18th March 2020, the government confirmed it would offer interest free payment holidays to borrowers struggling to pay back their help to buy loans.
How do I apply for this scheme? Please get in touch with your bank for more details; alternatively you may be able to apply online to speed up the process.
Please note that some lenders may recalculate your monthly mortgage payments after 3 months and this may result in higher capital & interest payments.
4.2.Struggling to Pay Rent
The government has announced a ban on evictions – your landlord can’t start court action for at least 3 months. You should explain the situation to your landlord straight away – they might give you more time to pay. You still need to pay your rent. If you’ve fallen behind with your rent you should start dealing with rent arrears. You can also check if you can get extra financial help.
If your landlord doesn’t offer to be flexible with your rent payments, it’s a good idea to pay as much as you can afford and keep a record of what you discussed. You should also contact your nearest Citizens Advice https://www.citizensadvice.org.uk/about-us/contact-us/contact-us/contact-us/. An adviser can help you explain things to your landlord. The Advice line is available 9am to 5pm, Monday to Friday 03444 111 444.
Harrow: Civic 9 Station Road, HARROW, Middlesex, HA1 2XH
Bushey: 8 Rudolph Road, BUSHEY, Hertfordshire, WD23 3DU
Watford: St Mary’s Churchyard High St, WATFORD, Hertfordshire, WD17 2BE
You may be entitled to benefits to help with housing costs if your income has reduced, even if you’re still working.
If Housing Benefit or Universal Credit doesn’t cover all your rent and you need more money, you could make a claim for a discretionary housing payment (DHP). A DHP is extra money from your local council to help pay your rent.
You will only be able to apply for Discretionary Housing Payments (DHP) if you are:
- entitled to housing benefit or universal credit
- responsible for rent payments and need more financial help with housing costs
- receiving less than the maximum amount of housing benefit for your household
When you apply, be as clear as you can when you’re explaining why you need a DHP. For example, you should explain:
- why you can’t afford to pay the rent
- why you can’t move somewhere cheaper
- if it’s causing problems for someone you look after, like a child or elderly relative
- any evidence you have, like a letter from your doctor or details of debts you’re paying off
You should also tell the council if you’re waiting for them to decide whether you can get Housing Benefit.
If you apply on a paper form, it’s a good idea to keep a copy of the form for your records.
4.3.Struggling to Pay Bills
There are things you can do if you’re struggling to pay things like energy bills because of coronavirus. It’s important you don’t ignore your bills. Speak to the organisation you owe money to – they might be able to help by letting you pay smaller amounts or take a break.
If you’re at least 10 weeks pregnant or have a child under 4 years old, you might be able to get free vitamins and Healthy Start vouchers for milk, fruit and vegetables and infant formula milk.
To get the free vitamins and Healthy Start vouchers you must also be claiming either:
- Income Support
- income-based Jobseeker’s Allowance
- income-related Employment and Support Allowance – but only if you’re pregnant
- Child Tax Credit – and your household earns £16,190 a year or less
- Pension Credit
- Universal Credit – and your household earns £408 a month or less
Ask your midwife or health visitor for an application form. You can also call the Healthy Start helpline on 0345 607 6823 and ask them to send you a form.
4.4.Other Loans
Many lenders are now revising their terms and conditions on your loans and credit cards. Get in touch with your lender to see how they can help you
