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Limited Companies – COVID-19 Support Available and How to Claim

***The government has made some changes to the Coronavirus Job Retention Scheme since we posted this blog. Please see our crucial furlough updates mini-blog.***


In our previous blog we discussed support available for the employed. In this blog, we’ll be looking at some key government support for limited companies.


If you’re a sole trader, we’ll be covering what’s available to you in our next blog.


The following is guidance specific to England, but Wales, Scotland and Northern Ireland have similar support available.


We’ve linked their specific support sites at the end, and we’d recommend you read on anyway, as it may give an indication of what you could be entitled to. In this blog we cover:


  • The Coronavirus Job Retention Scheme

  • Claiming Back Statutory Sick Pay

  • Deferring VAT Payments

  • Business Rate Relief

  • Business Support Grants

  • Coronavirus Business Interruption Scheme


The Coronavirus Job Retention Scheme


We covered this – and the rules that surround it – in our previous blog.


As the name suggests, it’s designed so employers can retain their staff during this challenging period.


The scheme provides a grant covering 80% of an employee’s usual monthly wage costs, up to £2,500 per month. It also covers employer national insurance and pension contributions.


This doesn’t just cover limited companies. If employees are paid via PAYE, they can be furloughed.


It is not designed for short-term absences. This would be covered by statutory sick pay, although you can furlough employees who are currently off sick, if eligible and for legitimate business reasons. You can see the main eligibility criteria here.


Employees unable to work due to caring responsibilities (as a result of Coronavirus) can also be furloughed. We’re encouraging employees to maintain an open dialogue with employers, so it’s important as an employer you know what’s covered.


Salaried directors can also be furloughed, but it won’t cover any dividends. The key consideration is whether – and what – is paid via PAYE.


If you are an agency worker paid through an umbrella company, furlough can apply to you, but it must be agreed with the agency as they are your deemed employer. Of course, it should be discussed with your end client, too.

What can employees still do while furloughed?


Employees can volunteer if it doesn’t generate revenue or provide a service to you. The same is true of training and this is being encouraged during the current situation.


Remember, you must confirm in writing to your employees that they have been furloughed and this communication should be kept on record for 5 years.


There are many scenarios (such as how to deal with those on variable salaries). The main point of this post is to highlight that you can receive financial support for staff to be retained. The full guidance is very comprehensive and covers example scenarios that could affect you and your employees.

How do you claim?


You’ll need to calculate the amount you can claim, and this will be paid by BACS to you. Remember, you must pass this onto your employees, and they can receive no less than 80% of their reference pay, capped at £2,500.


Employees retain all existing rights and protections.


You’ll claim through an online service. It’s not ready yet but is expected to be completed by the end of April.


Claiming Back Statutory Sick Pay (SSP)


You can claim back the current rate of SSP paid to current or former employees for 13th March onwards. You cannot claim more than the SSP amount if you provide a higher level of sick pay.


Remember, SSP is now paid from day 1 due to Coronavirus.

Are you eligible?


To be eligible, your PAYE payroll must have been set up before 28th February 2020 and you must have had fewer than 250 employees on this date.


As with the Coronavirus Job Retention Scheme, you must keep records (for 3 years) documenting why the employee couldn’t work, start and end dates of the period, SSP qualifying dates and the employee’s national insurance number.


Further information on the scheme can be found in the full government guidance.

How do you claim?


You’ll claim through an online service, which is not yet available.


Deferring VAT Payments


If you’re due to pay VAT between 20th March and 30th June 2020, you can choose to defer this without penalty. You’ll still need to submit returns on time.


You cannot choose to defer VAT if the payment does not fall between these dates. It’s also unavailable for VAT MOSS or import VAT.


Full government guidance is found here.

How do you claim?


If you’ve chosen to defer, you must pay the VAT due on or before March 31st 2021, but there’s yet to be guidance released as to how this would be paid.


Business Rate Relief

Retail, hospitality and leisure sectors won’t need to pay rates for 2020/2021. This applies to you if you run a shop, restaurant, café, bar, pub, cinema, music venue, gym, spa, sports club, hotel, guest house or self-catering accommodation.


You should check your eligibility and the full guidance.


It can also apply to nurseries, if you provide care and education for children up to 5 years old and are on Ofsted’s Early Years Register. There’s a separate place for nurseries to check their eligibility.

How do you claim?


It’s automatic through your local council’s business rates department. If you think you are eligible and it hasn’t been applied, you should query with your local council.


Business Support Grants

There are two grants available. One covers businesses that receive Small Business Rate or Rural Rate Relief and the other covers retail, hospitality and leisure businesses receiving the Expanded Retail Discount.


Eligible businesses with a rateable value up to £15,000 should be eligible for a grant of £10,000.


Retail, hospitality and leisure businesses with a rateable value up to £15,000 should be eligible for a grant of £10,000, whilst those with a rateable value between £15,000 and £51,000 should be eligible for a grant of £25,000.


These payments could also apply per property.


The eligibility criteria are specific to England. There are different criteria for Wales, Scotland and Northern Ireland, so make sure to check with their specific guidance linked at the bottom of this post.

How do you claim?


Your local authority should be contacting eligible businesses, but we suggest you check your local authority’s website, as for certain administrations you may need to apply.


Coronavirus Business Interruption Scheme

This is available for small and medium size businesses with turnover up to £45m. It provides access to loans, overdrafts, invoice finance and asset finance.


The government will cover the first year of interest plus lender fees.


This means there’s no upfront costs and lower repayments to begin with.


Lenders should be more willing to lend as the government has provided an 80% guarantee to them.


Your business must be UK-based, have a turnover less than £45m and a borrowing proposal that a lender would consider viable if Coronavirus had not occurred.

How do you apply?


There are 40 accredited lenders and you can find them here.


Larger businesses may be able to access similar support through a similar scheme, or the Coronavirus Corporate Financing Facility.


There will be support we haven’t covered above. We’ve tried to focus on the main schemes available. Please see below for the specific sites for each administration.


Some government systems are still being built and we may see policies change as the situation evolves, so use official government sources to ensure you are accessing the most up-to-date and accurate information available to you.


If you need any advice or guidance, we’ll be here to help and you can contact us here.

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Harken Financial Limited is an appointed representative of ValidPath Limited, which is authorised and regulated by the Financial Conduct Authority under FRN 197107. Harken Financial Limited is registered in England and Wales number 12356828.

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