Whilst COVID-19 disrupts the world, it’s business as usual for us. With a home based office we can continue to work and support our clients from home with their ongoing requirements.
If you have any questions or needs regarding mortgages, pensions, life insurance or equity release we remain ready, willing and able to assist you. On that note please find attached the current guidelines regarding the available support available for businesses, individuals and mortgage holidays. Please do give it a thorough read.
COVID-19 Support for Business
A Corona virus Job Retention Scheme
All UK businesses are eligible. You will need to:
Designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)
HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement
Deferring VAT and Income Tax payments
The deferral will apply from 20 March 2020 until 30 June 2020. All UK businesses are eligible.
This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal. This might be extended.
Income Tax
For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021. If you are self-employed you are eligible. No applications required.
No penalties or interest for late payment will be charged in the deferral period.
HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.
A Statutory Sick Pay relief package for SMEs
Legislation is being brought forward to allow small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:
- Will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
- Employers, who are UK based, 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 COVID-19
- Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website
- Eligible period for the scheme will commence the day after the regulations on the extension of SSP 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
Support for businesses that pay business rates
A business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year. Businesses that received the retail discount in the 2019 to 2020 tax year will be re-billed by their local authority as soon as possible.
You are eligible for the business rates holiday if your business is based in England, your business is in the retail, hospitality and/or leisure sector
Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:
As shops, restaurants, cafes, drinking establishments, cinemas and live music venues
for assembly and leisure
As hotels, guest & boarding premises and self-catering accommodation
There is no action for these businesses. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible.
See this link to view all businesses exempt from business rates:
Cash grants for retail, hospitality and leisure businesses
The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.
For businesses in these sectors with a rate-able value of under £15,000, they will receive a grant of £10,000.
For businesses in these sectors with a rate-able value of between £15,001 and £51,000, they will receive a grant of £25,000.
There is nothing for the businesses to do as the local authority will provide
Support for businesses that pay little or no business rates
The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.
You are eligible if your business is based in England, you are a small business and already receive SBBR and/or RRR, you are a business that occupies property. You do not need to do anything. Your local authority will write to you if you are eligible for this grant.
Support for businesses through the Business Interruption Loan Scheme
This will launch early next week to support primarily small and medium-sized 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 £5 million in value.
Businesses can access the first 12 months of that finance interest free, as government will cover the first 12 months of interest payments.
You are eligible for the scheme if your business is UK based, with turnover of no more than £45 million per year. All the major banks will offer the Scheme once it has launched. There are 40 accredited providers in all.
You should talk to your bank or finance provider (not the British Business Bank) as soon as possible and discuss your business plan with them. This will help your finance provider to act quickly once the Scheme has launched. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow. The scheme will be available from early next week commencing 23 March.
Support for larger firms
Under the new Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies. This will support your company if it has been affected by a short-term funding squeeze, and allow you to finance your short-term liabilities.
It will also support corporate finance markets overall and ease the supply of credit to all firms.
All UK businesses are eligible. The scheme will be available early in week beginning 23 March 2020. More information is available from the Bank of England.
Support for businesses paying tax: Time to Pay service
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.
You are eligible if your business pays tax to the UK government, has outstanding tax liabilities
If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559. If you’re worried about a future payment please call HMRC nearer the time.
Useful links:
https://www.acas.org.uk/coronavirus
https://www.cipd.co.uk/knowledge/fundamentals/emp-law/health-safety/coronavirus-factsheet
COVID-19 Support for People
Staying at home
If you have symptoms of coronavirus infection (COVID-19), however mild, stay at home and do not leave your house for 7 days from when your symptoms started.
If you live with others and you are the first in the household to have symptoms of coron avirus, then you must stay at home for 7 days, but all other household members who remain well must stay at home and not leave the house for 14 days. The 14-day period starts from the day when the first person in the house became ill.
See guidance on this through this link:
https://www.gov.uk/government/publications/covid-19-stay-at-home-guidance
Sick pay
You can get £94.25 per week Statutory Sick Pay (SSP) if you’re too ill to work. It’s paid by your employer for up to 28 weeks.
If you are staying at home because of COVID-19 you can now claim SSP. This includes individuals who are caring for people in the same household and therefore have been advised to do a household quarantine.
This will start from Day, not Day 4, and will be backdated to 13th March 2020
To check:
https://www.gov.uk/statutory-sick-pay
For Proof of Sickness go to:
https://111.nhs.uk/isolation-note/
Furloughed Workers
Please read what employers will undertake on Page 1 as they will discuss this with you
If you’re self-employed or not eligible for SSP
If you are not eligible for SSP – for example if you are self-employed or earning below the Lower Earnings Limit of £118 per week – and you have COVID-19 or are advised to stay at home, you can now more easily make a claim for Universal Credit or new style Employment and Support Allowance.
If you are eligible for new style Employment and Support Allowance, it will now be payable from day 1 of sickness, rather than day 8, if you have COVID-19 or are advised to stay at home.
Universal Credit Help Line – 0800 328 5644 – https://www.gov.uk/apply-universal-credit
New Style Allowance – https://www.gov.uk/guidance/new-style-employment-and-support-allowance
Claiming benefits
Whether you are currently in or out of work, if you are on a low income and affected by the economic impacts of COVID-19, you will be able to access the full range of the welfare system, including Universal Credit.
From 6 April the standard allowance in Universal Credit and the basic element in Working Tax Credit for 1 year are being increased by £20 per week on top of planned annual up rating. This will apply to all new and existing Universal Credit claimants and to existing Working Tax Credit claimants.
If you have COVID-19 or are staying at home
You are now able to claim Universal Credit, and if required can access advance payments upfront without needing to attend a job centre.
If you are self-employed
You are able to claim Universal Credit, providing you meet the usual eligibility criteria.
To support you with the economic impact of the outbreak, and allow you to follow government guidance on self-isolation and social distancing, from 6 April the requirements of the Minimum Income Floor will be temporarily relaxed. This change will apply to all Universal Credit claimants and will last for the duration of the outbreak.
New claimants will not need to attend the job center to demonstrate gainful self-employment.
Support for rent costs
Landlords need to read Mortgage Payment Holidays. Rental customers should check eligibility for Universal Credit, which is available for people in and out of work. Support for rental costs will be paid through Universal Credit.
From April, we are increasing Local Housing Allowance rates to the 30th percentile of market rents. This applies to all private renters who are new or existing Universal Credit housing element claimants and to existing Housing Benefit claimants.
Mortgage Payment Holidays
FCA Guidance
To allay customer fears please note guidance that the FCA has provided to all lenders:
- Grant customers a payment holiday for an initial period of 3 months, where they may experience payment difficulties as a result of coron avirus (Covid-19) and where they have indicated they wish to receive one.
- Ensure that there is no additional fee or charge (other than additional interest) as a result of the payment holiday.
The guidance also sets out the step’s firms should take to ensure that the payment holiday does not have a negative impact on the customer’s credit score. The FCA has also made it clear that in the current circumstances, it does not consider that repossession will be in the best interests of the customer. As a result, repossession should not be commenced or continued with unless the firm can demonstrate clearly that the customer has agreed it is in their best interest.
What is a payment holiday? What if I need a longer holiday after 3 months?
The essence of a payment holiday is that interest is added onto the loan and then the monthly repayment altered. The term of the mortgage could be altered as lenders will take a view based on customers affordability.
It could last longer than 3 months and might not have to be repaid immediately. The reasoning for this is if they have lost their job, etc. Further help can be provided so customers must NOT worry.
Some lenders will require you to call in but some like Santander allow customers to apply on line so customers need to check on their lender’s websites first.
What proof will customers need to provide? Are all customers eligible?
Under normal circumstances lenders would assess the customer’s financial situation and ask them to provide information so that they can consider what forbearance options may be the most suitable, however these are exceptional circumstance so generally it is their current situation that will be discussed re COVID-19. Lenders purely want customers to call them to discuss their situation. This measure covers retail mortgages (buy-to-let and residential).
Please note that if a customer is already in arrears they may not be eligible for a payment holiday, but there are other ways that lenders can support them so they still must get in contact.
Generally, lenders are seeking to ascertain are you sick with COVID-19 and now on SSP or have reduced hours working or lost their job, etc. If that is the case then a repayment holiday might apply.
How will this impact my credit score?
Where a payment holiday has been agreed with the customer in advance, this won’t lead to any arrears being reported to the credit reference agencies so this will not impact your credit score. However, if you haven’t come to an agreement with the lender and you miss a payment, this would be reported to the credit reference agencies in line with our normal process.
He holds a CeMAP qualification and has been advising since 2018, continually updating his expertise through ongoing training. Ashley's client-focused approach ensures personalized, effective advice, fostering long-term relationships. Outside of work, he enjoys playing football and exploring new countries. For personalized financial advice, Ashley is dedicated to helping clients achieve their goals.
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