How we respond to the impact of coronavirus, as an employer and business owner, is at the forefront of all of our minds. It has created concerns and uncertainty for us all on a personal and a business level. We know that some difficult decisions are having to be made and we would like you to know that we are here and ready to help if you need advice, support or a business sounding board.

In this section we'll be sharing guidance and practical steps you can take for your business and your employees. We'll continue to add to this page as Government guidance is issued and as and when we liaise with our diverse client base, we'll share our learnings on the issues being faced but also the practical steps you can to take to navigate through this difficult time. Please do get in touch with your usual Johnston Carmichael adviser, or the central JC team, with any queries and concerns you have at the moment and we'll do our very best to guide you through this.

Guidance and practical steps:

Coronavirus Job Retention Scheme

The UK Government will pay wages through the Coronavirus Job Retention Scheme – every employer in the country will be eligible to participate in the scheme. Companies are advised to contact HMRC and apply for a grant to cover the wages for people who are in furlough (those who have been sent home from work due to the coronavirus outbreak as long as they are not undertaking any work and will be brought back into work). The amount available is 80% of an employee’s salary up to a maximum of £2,500 per month, per employee. It can also be backdated to March 1 and will be open initially for three months. HMRC are working hard to get this up and running. It is thought that the first grants will be paid in the coming weeks and fully set up by the end of April. 

We've created an initial briefing note on this scheme based on the information available at the moment. Visit our Coronavirus Job Retention Scheme page for more details.

Bridging loan scheme

Further to the Bridging Loan announcements earlier this week, the Government are reviewing an extension of the scheme to include larger and medium-sized businesses. We expect further announcements on the details next week.

Coronavirus Business Interruption Loan Scheme (CBILS)

This will now be interest free for 12 months, instead of the six months as previously announced. Loans are available now. On 3 April the Chancellor announced key updates to the scheme to make it more accessible for all businesses including a CBILS for large businesses. Full details are available in our blog here

Next quarterly VAT payment deferred

The next quarterly VAT payment due by businesses is to be deferred. Payments are deferred from now until end of June and companies will have until the end of the financial year to pay any deferred VAT. This is a direct injection of £30 bn of cash to employers, equivalent to 1.5% of GDP.

Key points to note:
  • VAT returns are still required to be prepared and filed by the normal due date.
  • The deferment is applied automatically, there is no requirement for businesses to apply to HMRC.
  • If VAT is normally paid by direct debit, a business will need to cancel the direct debit with their bank to ensure a VAT payment is not collected.
  • Similarly, payments on account (if applicable) for VAT would need to be cancelled to ensure that payments are not collected.
  • This is simply a deferment and the amount of VAT deferred will still be payable to HMRC at a future date. Payment will be due by 31 March 2021 and further guidance is expected from HMRC soon as to how businesses can repay the VAT deferred.
  • HMRC will not charge interest or penalties on any amount deferred.
  • The deferment is optional and businesses who are in a position to pay their VAT liability as normal can choose to do so.
  • VAT payments due following the end of the deferral period need to be paid as normal.
  • It is not absolutely clear if the deferral applies to non-resident businesses with a UK VAT registration or only to UK businesses. We are proceeding on the basis that the deferral would also be available to non-resident businesses with a UK VAT liability.
  • Deferment is not available for VAT MOSS payments.
  • VAT refund returns should be processed and paid by HMRC as normal.

Income tax payment on account due 31 July 2020 deferred

To assist the self-employed the 31 July 2020 Income Tax Payment on Account is being deferred and is to be paid on 31 January 2021.

How to apply

There will be a nationwide advertising campaign from Monday 23 March to communicate the measures.

Find out more on the Government's website.

 The Chancellor made a plea to all business to review all options before considering making anyone redundant.  

Business cash flow and time to pay arrangements

For any business or self-employed people in financial facing financial distress at the moment, we’ve noted below some immediate steps you could take now:

  • Prepare regular updates to trading and cash flow forecasts, ensuring the business can remain on track in the coming weeks.
  • Review the cost base and take whatever restructuring and cost action is required to keep the business as viable as possible until trading hopefully recovers.
  • Be mindful of Director’s duties with regards to the solvency of the business.
  • Proactive discussion with bank and funders regarding the provision / extension of existing facilities.
  • Proactive discussions with customers about how to manage changes to Service Level Agreements/contracts.

If you need any support with these please do not hesitate to get in touch with the Johnston Carmichael team, we’re here to help.

Concerns about paying your tax bill – use the Time To Pay service

We would recommend constant dialogue with customers and bank funders to ensure ongoing relationships through this time.

All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

If you are concerned about being able to pay your tax due to coronavirus, please call HMRC’s dedicated helpline now: 0800 024 1222.

More guidance

HMRC’s dedicated helpline aims to support businesses affected by coronavirus and allows access to tailored support and advice. Further details of the helpline can be found on the Government's website.

Third Sector Resilence Fund

The Third Sector Resilience Fund (TSRF) is now live. TSRF is a £20m emergency fund for charities, community groups, social enterprises and voluntary organisations working in Scotland. The fund will support organisations that already deliver services and products but find themselves in financial difficulties directly as a result of the coronavirus pandemic. Full details are available on the SCVO's website now.

In addition to this, OSCR has published coronavirus guidance for charities on their website. This guidance brings together information charities need to know during this time and highlights other organisations who may be able to offer support. Visit OSCR's website now.

Gender pay gap reporting

Due to the coronavirus crisis, the Government Equalities Office and the Equality and Human Rights Commission have suspended the gender pay gap reporting deadline for this year (2019/20). There is no obligation for employers to submit a report this year 

Business rates relief

Supportive measures were announced in Budget 2020 to support business as we respond as a nation to the global impact of coronavirus.

Of the measures announced, business rates was at the top of the agenda with the following reliefs announced for businesses in England:

  • Business Rates retail discount had already been announced back in October 2018, with 33% relief to be given from 2020/21 to those businesses with a rateable value of less than £51,000. The Chancellor announced this would be increased to 50% relief for 2020/21. 
  • For small businesses affected by coronavirus the business rates retail discount is to be increased to 100% for 2020/21.
  • The business rates retail discount has been expanded to the leisure and hospitality sectors, who will be amongst the worst affected during the coronavirus outbreak. Initial exclusions to this, which included estate agents, lettings agencies and bingo halls, have now been removed. Find out more.
  • The government had also previously advised they would introduce a £1,000 business rates discount for pubs with a rateable value below £100,000 in England for one year from 1 April 2020, this is now being increased to £5,000.
  • Businesses who benefit from Small Business Rate Relief will also be given a cash grant of £3,000 per business.

HMRC’s dedicated helpline aims to support businesses affected by coronavirus and allows access to tailored support and advice. Read the full detail on the Government's website.

In Scotland, the Finance Secretary announced measures for Scottish businesses.

In Scotland, the Economy Secretary, Fiona Hyslop has also significantly improved the package of reliefs and grants available for Scottish business in line with the UK announcements, to include:

  • 100% relief for all retail, hospitality, leisure and aviation businesses (previously it was only applicable to properties with a rateable value of less than £69,000) from 1 April 2020. Find out more.
  • Businesses eligible for small business rates relief or rural rates relief will now be eligible for a £10,000 grant. This now includes self-catering accommodation. Check the Scottish Government’s website for a link to your local council’s application page. 
  • A £25,000 grant for those leisure, retail and hospitality businesses with a rateable value between £18,000 and £51,000. Each business can only claim for one non-domestic property in their portfolio. Check your local council website for details of how to apply from 24 March.
  • 1.6% rates relief for all properties across Scotland, effectively reversing the planned below inflation uplift in the poundage from 1 April 2020

Positively Kate Forbes, the Finance Secretary confirmed that the reliefs announced by the Economy Secretary will automatically apply to rates bills from 1st April 2020.

A Scottish specific helpline for business has been set up, open Monday to Friday from 8:30am to 5:30pm to address business queries. Call: 0300 303 0660

Find out more on the Scottish Government's website.

Not sure what your rateable value is? Find out on the Scottish Assessors website.

Statutory Sick Pay relief package

The government will allow small and medium sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to coronavirus. The eligibility criteria for the scheme will be as follows:

  • This refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of coronavirus.
  • Employers with fewer than 250 employees will be eligible - the size of an employer will be determined by the number of people they employed as of 28 February 2020.
  • Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of coronavirus.
  • Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note.
  • Eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to those staying at home comes into force.
  • The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.

Further guidance

Guidance for this and how to apply for this can be found on the Government’s website.

Coronavirus Business Interruption Loan Scheme

A Coronavirus Business Interruption Loan Scheme will be launched to support businesses to access bank lending and overdrafts. The Government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The Government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5m in value. Businesses can access the first six months of that finance interest free, as the Government will cover the first six months of interest payments.

Further guidance

Guidance for this and how to apply for this can be found on the Government’s website.

Grants available to small businesses

The government has introduced small business grant funding of £10,000 for all businesses in receipt of small business rate relief or rural rate relief. This has been increased from the previous grant available of £3,000 and now includes self-catering accommodation in Scotland.

Find out more on the Government's website if you are in England.

Check your local council website for details of how to apply.

Companies House - apply for an extension to your filing deadline

Companies House have just issued guidance that if, immediately before the filing deadline, it becomes apparent that accounts will not be filed on time due to a company being affected by coronavirus, the company may make an application to extend the period allowed for filing. Full information is available on the Companies House website. If you need support to do this, please get in touch with your Johnston Carmichael adviser. 

If you do not apply for an extension and your accounts have been filed late, an automatic penalty will be imposed. The registrar has very limited discretion not to collect a penalty, however any appeal is treated on a case-by-case basis, and Companies House already have policies in place to deal with appeals based upon unforeseen poor health. Appeals based upon COVID-19 will be considered under these policies.