On The Spot Blogs
Coronavirus - Loans, Grants & Tax - Small Businesses
Here’s a quick summary of the sort of practical help notified this afternoon by the Chancellor. Together with a reminder of some useful tax rules which may also help with your cashflow.
- No rates payable for 12 months for any business in the retail, hospitality or leisure sectors.
- In those sectors, if your rateable value is less than £51k, you'll also receive a cash grant of up to £25,000.
- Any business which gets small business rates relief, will receive a cash grant of £10,000 (increased from £3,000 announced in the Budget).
Government Backed Loans:
- These should be available from your bank early next week starting 23 March and further details will be issued shortly.
- The government guarantee is for 80% of the loan, so your bank is likely to need some security for the other 20%.
- No interest will be charged for the first 6 months.
- The interest rate will be favourable and the term from 3 months to 10 years.
- If you expect your business to recover from the disruption because you have a sound business, you may wish to take a loan out.
- At least a 3 month mortgage holiday for those in difficulty, from your lender.
- Insurers will pay out against policies that cover pandemics.
- If your income has dropped you may wish to access the benefit system.
- This was made easier as announced in the Budget.
Statutory Sick Pay (SSP):
- If you're a director of your limited company, you can pay 2 weeks if you need to self isolate.
- The government will refund this £94 per week, maximum £188, to your company.
- It will also refund SSP for your staff for up to 2 weeks to your business or your company.
Using Existing Income Tax and Corporation Tax Rules:
- As we're near the end of the tax year, get your income tax return in as soon as possible from 6 April 2020, for a possible refund of some of your January 2020 tax payment. And know the exact amount due in July.
- If you make a sole trader or partnership tax loss to 5 April 2020, generate a tax refund by carrying the loss back to 2019.
- If you're a start up sole trader or partnership, this loss can be carried back 3 years to generate a tax refund from your previous PAYE job or even from rental income.
- If you're a limited company and make a loss in your current year end, carry it back by a year to generate a tax refund.
- If you're working from home more than usual, claim more costs against your taxable income for your home office.
- The sooner you get tax returns sent in, the sooner you can benefit from the above.
- Getting your return in early, doesn't bring forward any tax payment dates, but it does bring forward tax refunds.
- A return of Time To Pay help from HMRC, where you phone HMRC to agree a delay in paying your tax. Have a realistic proposal ready that you expect to adhere to.
Off-Payroll Working (IR35) Delay:
- Freelancers and consultants worried about getting taxed as an employee from 6 April 2020, have a year's reprieve until 6 April 2021.
Thank you and stay well.