Coronavirus Small Business, Your questions

During the tough time COVID-19 has brought to us, it must have been extremely difficult for you or people around you to make a living, at least not the same as you used to. There must be a lot of you who have some unanswered questions in your heads, here I am writing to clear your doubts and concepts and update you on the new measures the chancellor has announced recently.

Your question might include;

Am I a small business owner/self-employed?

So, if you have your own company and you work as a director and shareholder, it does not make you self-employed. It makes you an officeholder, employee, and investor. This means that you are likely to be entitled to the 80% retention scheme which will cover part of your director’s income but will not provide any grant to help cover your lost dividend salary. It has not yet been confirmed by the government that there would be any dividend support and has not mentioned if there would be any exclusions for the directors of the company on the retention scheme. The government also has not taken measures for directors on how to deal with irregular salaries where people earn different amounts every month.

What if I am self-employed?

Being self-employed means that you are a sole trader or you work in a partnership. When it comes to self-employed people, the government will provide an amount to cover up to £2,500 approx. of your monthly income, meanwhile, you are allowed to keep working if you can. This makes an average of one’s last three tax returns, which is obliging in case your income has been decreased by the year-end, yet not so helpful if your income had been growing and your business had good growth. For the businesses that are still profitable, payments will come into rolling by June, as mentioned by the government.

When will I get the support?

As mentioned above, payments for the self-employed will come into rolling by June, while the other businesses are dependent on the type of scheme. Perhaps the same timeline as self-employed will be considered for others as well.

How do I claim it?

The government is currently building a portal where you will be able to claim by submitting evidence of your business needs and provide your bank details to the government, which is surely secure.

Why is there so little information about the support program?

This is not an easy task, it requires a lot of attention and consideration. The information at the moment may be limited because the government is winging it and is trying to work on the details properly. The government’s motive is to help as many people as it can, for which, they need to organize everything first and make a proper system to prevent scams. Since this could be a great opportunity for anyone to exploit the government and obtain the money that they do not deserve, the government has to be very careful and look into every firm’s matters individually.

According to the Government, do I not need to pay my VAT bill?

To avail this opportunity, you will need to file the VAT return, keeping in mind that you also have to cancel the direct debit, otherwise, the bill would be expected to be paid by you on time. Keep track of it, and set up a reminder so you can pay it later on.

What about my self-assessment payment on account?

You just have to keep in mind to cancel the direct debit, since your earlier payments of even 2020 have been delayed. One more thing, if you anticipate that you are going to have lower business profits in the year-end, you will be able to reduce your payment on account and can easily get a refund of part of the money you paid earlier in 2020. The accountants in Milton Keynes can guide you on the PoA.

What about delaying other tax payments?

You can call the HMRC to organize a payment plan on any taxes that you still owe. They have a usual period for paying service running. Remember you just have to explain everything clearly to the accountants, which can be the accountants in Milton Keynes, on the phone, including information like what caused the cash flow problem, and how you are looking forward to it being resolved. However, you need to be patient because the waiting times, for now, are quite long.

Do I give full pay to my staff while they are off duty?

Approximately 80% of your employees’ pay would be covered by the government, but the rest 20% will have to be covered by your business. Although the employees are not taking a leave because they want to, it is all because of the situation that they have to stay at home and not work. However, the employees also will have much lower costs than usual, but on the contrary, your business is going to need a good amount of deposit and every possible saving to get through the upcoming months, because there is a higher chance that your business might have lower business profits or even losses in the near future. So, it would be considerate to negotiate with your staff and ask them for compensation, if they can help your business to stay intact by sacrificing a part of their pay. This will provide better job security to your employees in the long run. You have to keep in mind that the government support is not overriding any existing contracts you have with them so you should seek professional advice from our accountants in MK if you’re not sure what to do at the moment.

What can I do today?

If you own a small business, and you think you are eligible for the £10,000 grant being offered by the government, then make sure to get noticed by your local council. You as a business owner, need to look for your office on your council’s list and address to them because commercial landlords usually do not acknowledge the council when a business moves in or out, hence staying in touch with your local council will help them know that you are the tenant. However, if they have sent you a notice at the beginning of the year that you are not supposed to pay business rates or have to pay only reduced ones, then you are good to go.

You can also get different flexible sources of borrowing money, through loans and credit cards or even the CBIL’s scheme backed by the government. Chances are you will not be needing them, however, you can cancel them later. But in case you need it, then by the time you realize you need it, it will be too late to do anything about it, therefore, we suggest you keep yourself prepared from day one.

For this specific situation, you might want to take some time out and jot down a business plan, use your free time effectively, and find ways that will help your business stay intact.

FAQs for the Coronavirus Job Retention Scheme and Government Support for Coronavirus

Who is it for?

This scheme is for all small business owners.

Who will it help?

It is designed for the employees & directors who are unable to work because of coronavirus and used to earn up to £2,500 a month pre coronavirus.

What we know

The government designed this scheme to encourage business owners to hold back staff during this period of inactivity. 80% of an employee’s salary is covered by the government, with the remaining 20% to be paid by the employer, or through a contract or mutual understanding of the employer and employee, the 20% can be canceled and be put into the business for security. This will surely be quite useful for company directors as they would receive 80% of their pays from the government.

What we don’t know

Does the program have any exclusions for company directors who also hold shares?

What if people have irregular incomes? How will the salary be measured for them?

How to get the support

A government portal is currently being built, through which you can easily claim your grant.

Deferring VAT and Income Tax payments

Who is it for?

All businesses and self-employed people.

Who will it help?

Company owners and self-employed people

What we know

According to the government’s statement, any VAT payment which is due in the next three months can be deferred by a year.

What we don’t know

We do not know if there are going to be any interest rates charged and whether there will be any reminders sent out from HMRC for the payments to prevent late payment.

How to get the support

Businesses will automatically be provided with it, without having to call HMRC first.

Support for businesses who are paying sick pay to employees

Who is it for?

It is for all businesses having less than 250 employees.

Who will it help?

It will help both, self-employed business owners and company owners, including employees.

What we know

Sick pay is now accessible from the first day of having to take your days off because of the deadly virus, while earlier in the usual days, it was available a day four. Now, this support may be less effective because of the job retention scheme, however, if some of your employees can not turn up to work because of virus fears, while the rest of your employees are still actively working, then we can say this relief is useful, as the cost worth two weeks of sick pay would be covered by the government. The employees affected by the virus need to obtain an isolation note from the NHS 111 service or on the NHS website.

What we don’t know

We do not know how to claim it yet, and neither are we sure if it has any exclusions.

How to get it

That also we are not sure about yet, but it’s likely to be taken care of by us using our payroll software.

Time to Pay Services

Who is it for?

It is for all businesses.

Who will it help?

Company owners and self-employed people

What we know

The usual time in which you have to pay service is still available, hence it can be help businesses in arranging a payment plan for their PAYE and Corporation tax bills.

What we don’t know

We are not sure about it but maybe HMRC is going to reduce the support in this area because the VAT deferral scheme seems to be enough.

How to get it

You can find the contact number and further details at the following link: https://www.gov.uk/difficulties-paying-hmrc

Support for businesses that pay little or no business rates

Who is it for?

Businesses that pay only a small amount or don’t pay business rates at all.

Who will it help?

It will help both, self-employed business owners and company owners

What we know

Local authorities will distribute a £10,000 grant to these businesses.

What we don’t know

When will the money arrive, whether there are any restrictions on how to spend the money, and what application processes shall be considered when spending money?

How to get it

If you are the only one in your community who hasn’t received it, get in touch with the council. Otherwise, just for your local council to direct you to the next step.

Support for businesses through the Coronavirus Business Interruption Loan Scheme

Who is it for?

Small Businesses.

Who will it help?

Company owners and self-employed people

What we know

This scheme is for small businesses to cover the costs caused by the virus. This will make it easier and to access funding.

What we don’t know

When the money will arrive, the application process, and what the interest rates are if no interest then what the lending criteria is.

How to get it

Banks will deliver it directly.

Stay home, stay safe, and get in touch with our expert accountants in Milton Keynes if you need any further advice or if you still have your questions unanswered.

For a list of support measure the government is providing, visit;

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#support-for-businesses-that-pay-business-rates

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