Monday 23 March 2020 Update

Monday 23 March 2020

 

Mostons remain fully functioning, albeit with some remoteness from each other.  We are still able to offer support and guidance and if you do need to talk then please do give us a call.  Please remember though that this is a rapidly changing situation and we urge you to follow guidance given by the Government.

 

It is our aim to keep in touch by sending a weekly email to clients.  These emails cannot replace the on-line detail but may provide you with some reassurance that help is at hand. Please do visit our website where additional updates will be available.

 

Throughout the last week we have had daily briefings from the Prime Minister and his team.  These are welcomed and do deliver headline advice and guidance required in these unprecedented times.

 

There have been many announcements around supporting businesses and their employees, however, each update raises many more questions.  Some clients have been in touch directly and we are happy to help wherever we can, although in many cases we are still waiting for the detail to be delivered.

 

We know that more announcements will be made in the coming days.  The banks will begin to roll out the business interruption Government backed loan guarantee scheme very soon and HMRC will be accepting deferrals of taxes.

 

Here is the link for general advice:

 

https://www.gov.uk/coronavirus

 

Here is the link to the Governments support for businesses:

 

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

 

Furloughing employees

 

The most recent announcement on Friday regarding furloughing employees was the first time this measure has been used in the UK. There will be further updates on this very soon and it is important to follow the steps set out by HMRC to ensure that you comply with employment regulations.  This will be in place to cover March salaries. The employees affected by this will need to be registered by the employer, online and will be for an initial three-month period.

 

Financial Support

 

  • Many of you will be aware for grants and business rates coverage available to certain business sectors and you must seek to establish whether your company qualifies for this type of backing. Our view is that this is not widely available.

 

  • Banks & Government – Look out for contact from your banks in the next day or so offering the previously mentioned interruption loans. These will be low cost and interest free for 12 months.  No detail on repayment terms, although we have seen up to ten years mentioned.  Do consider what you may need during a three-month dormancy and beyond, whilst the economy recovers.

 

  • HMRC will not be expecting payment of your next VAT quarter. You will need to submit this as normal and I expect direct debits to be deferred and no penalty/interest on withheld payments for April, May and June.

 

  • Personal tax for July 2020 will not be payable until 31 January 2021.

 

  • Payroll changes are mainly around sick pay entitlement and recoverability. If they do qualify, staff can receive sick pay from the first day up to 2 weeks. Record keeping is essential.  The rebate scheme has not yet been set up but will be soon and is going to be a separate portal and not part of RTI processing.  Employees must obtain a certificate by visiting the NHS 111 website:  https://111.nhs.uk/

 

 

Insurance

 

Do check to see if your business interruption policy covers any losses you are likely to incur.  Our opinion on this is that it will be a tough process to meet the terms and conditions on your policy.  However, please do check even though most businesses will not have this cover in place.

 

Self-employed

 

In any situation there will be certain people or groups that appear to be overlooked.  The self-employed do seem to be that group in this crisis.  Apart from extending entitlement to universal credit there seems to be no direct financial support.  However, if you are in business then you will be entitled to the previously mentioned loans etc.

 

We recommend looking at your personal expenditure and taking any action necessary to maintain financial stability, including mortgage holidays, speaking to landlords, contacting all suppliers both business and personal.

 

Other measures

 

  • The roll-out of IR35 has been postponed for 12 months
  • Companies House will accept late accounts filing (initially 2 months and then up to one further month)

 

A personal perspective

 

This will pass.  We will get through this, financially bruised and shaken by the experience.  Hopefully we will then be wiser and better prepared should this happen again.

 

In the next few months do look at both personal and business outgoings and take advantage of any financial support available.  At home we were surprised to find how easy it was to put Sky sports on hold as well as suspending certain outgoings.

 

Look after yourselves and keep in touch.

 

Best wishes.