The Indigo Group will endeavour to update this guidance in line with Government updates. Please check back regularly.
- Updated 31st March 2020
Coronavirus (COVID-19): Letter to the construction sector.
- Updated 31st March 2020
A large majority of small businesses are owned and run by one or two directors, with no other employees.
What government financial support is available to the director and shareholders during the coronavirus crisis?
We’ve found a great article from Ross Martin that discussing points such as furloughing, salary or dividends, potential insolvency, and additional support.
Other useful links.
https://www.businesssupport.gov.uk/coronavirus-business-support/
https://www.moneysavingexpert.com/news/2020/03/uk-coronavirus-help-and-your-rights/
https://www.moneysavingexpert.com/news/2020/03/chancellor-announces-help-for-self-employed/
- Updated 30th March 2020
Specialist units are operating to combat misinformation about coronavirus and five to ten incidents are being identified and tackled each day.
We recommend that you check the main Government website at www.gov.uk/coronavirus to ensure you have the most up to date and correct information.
- Updated 27 March 2020
In light of the Government’s announcement on 26th March regarding support for the self-employed, our website has been updated to reflect the current information published by the Government.
The Indigo Group are actively working on a package for all Clients, Subcontractors and Employees that will help support cashflow in the coming weeks and months, and we will endeavour to roll this out in the coming days.
Stay safe,
Ian Cole–Wilkins
CEO, The Indigo Group
Self Employed support during COVID-19/Coronavirus pandemic
Chancellor Rishi Sunak said:
“Self-employed people are a crucial part of the UK’s workforce who have understandably been looking for reassurance and support during this national emergency.
“The package for the self-employed I’ve outlined today is one of the most generous in the world that has been announced so far. It targets support to those who need help most, offering the self-employed the same level of support as those in work.”
“Together with support packages for businesses and for workers, I am confident we now have the measures in place to ensure we can get through this emergency together.”
Last week the Chancellor Rishi Sunak announced the Government is to pay 80% of employees’ wages if their employers are struggling, up to a monthly maximum of £2,500. But until now the UK’s five million self-employed workers have been left waiting to hear how they will be supported, beyond boosts to benefits.
Self-employed workers will be able to apply for taxable grants worth up to 80% of their average monthly profits to combat loss of income due to the coronavirus pandemic, the Chancellor announced yesterday (26th March 2020).
But the grants will be capped at £2,500/month and not everyone will be able to claim them.
Who is eligible for the scheme?
There are a few conditions to the eligibility of this scheme
To apply to the new Self-Employment Income Support Scheme, the following must apply:
- More than half of your income must come from self-employment
- This must be true for either your 2018/19 tax return or the average of your last three years’ tax returns: 2016/17, 2017/18 and 2018/19 tax returns (or both).
- Your average annual trading profit must be less than £50,000.
The Government have said that this average annual trading profit will be calculated from either your 2018/19 tax return or the average of your 2016/17, 2017/18 and 2018/19 tax returns.
What’s not clear yet is what would be used if these figures differ in any way, and we hope that further clarity on this will be published soon.
Other considerations include having filed a tax return for 2018/19. This means that you must have been self-employed prior to 6 April 2019.
If you were due to file a 2018/19 tax return but missed the deadline this year, you’ll have until Thursday 23 April to submit your tax return, after which you can access the scheme.
How much could the grants be worth?
Similarly to the amounts quoted for employed workers, the grants will be worth 80% of your profits, capped at £2,500 a month, based on the criteria outlined above.
If you became self-employed after April 2018 the Government won’t pro-rata if you only have a few months’ self-employment on your 2018/19 return, this will be counted as your total profit for the year.
How do I apply to the scheme?
The Government announced that those who are eligible will be contacted directly by HMRC, but they didn’t give any time frames for when this might happen, only that people will hear from them “once the scheme is operational”. The online process will ask you to complete a form and the grant will be paid directly to you by the Government.
There’s no need to contact HMRC now as there’s nothing you can do to apply at this stage.
If once the scheme is operational you believe you’re eligible and don’t hear anything from HMRC then you will be able to contact them at that time.
If you’re not eligible for a grant
If you earn over £50,000 a year or don’t have any trading history, then, unfortunately, you won’t be able to claim the grant but there could be other options available to you.
The Indigo Group are actively working on a package for all Clients, Subcontractors and Employees that will help support cashflow in the coming weeks and months, we will endeavour to roll this out in the coming days.
The Indigo Group are here to help and support you with appropriate advice in respect of business continuity and risk management.
Please do not hesitate to contact your business manager or our support team.
Stay safe,
Ian Cole–Wilkins
CEO, The Indigo Group
- Updated 24 March 2020
Parliament continues to debate the Coronavirus Bill that includes a provision for those who are Self-Employed.
We will update this advice once more information is available.
Please do not hesitate to contact your business manager or our support team.
Stay safe,
Ian Cole–Wilkins
CEO, The Indigo Group
- Updated 23 March 2020
What practical help is available for businesses and the self-employed?
The Government has announced changes in the budget for businesses and the self-employed affected by the COVID-19 Coronavirus outbreak.
Should anyone test positive or be required to self-isolate or due to the virus will be able to make an application for Employment and Support Allowance (ESA) from the first day of sickness or absence.
There has been limited detail. However, we understand that to apply for ESA; it is best to call 08000 556 688 in the first instance or complete this document.
https://www.gov.uk/government/publications/new-style-employment-and-support-allowance-esa-claim-form
We will try and ascertain as much detail as possible to support our clients and are happy to help all we can; however, we are at the mercy of the government updates. We plan to make this a fluid update and will adapt our position based on the government direction, but hope this briefing helps.
While we continue to monitor the industry for a response to any potential coverage, we wanted to share the recent update from the UK government.
The Chancellor has set out a package of temporary, timely and targeted measures to support public services, people and businesses through this period of disruption caused by COVID-19.
The package includes measures to support businesses, including:
— a statutory sick pay relief package for SMEs
— a 12-month business rates holiday for all retail, hospitality and leisure businesses in England for the 2020/21 tax year.
— small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
— grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
— the ‘Coronavirus Business Interruption Loan Scheme’ offering loans of up to £5million for SMEs through the British Business Bank
— a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge Coronavirus disruption to their cash flows through loans
—the HMRC’ Time to Pay’ Scheme
— Existing small business rate relief continues to apply, this provides full relief for businesses using a single property with a rateable value of £12,000 or less.
— Pubs are given a rates discount of £5,000
— a Coronavirus Job Retention Scheme
— deferring VAT and Income Tax payments
Support for businesses through the ‘Coronavirus Business Interruption Loan Scheme’
A new temporary ‘Coronavirus Business Interruption Loan Scheme’, delivered by the British Business Bank, will launch 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 six months of that finance, interest-free, as the Government will cover the first six months of interest payments.
Further details, including on the lenders providing access to this Scheme will be available in the coming days, and the Scheme will be accessible from the week commencing 23 March 2020.
Support for businesses who are paying sick (SSP) pay to employees
The Government is to bring forward legislation 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:
— refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
— 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 up to two weeks 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
— 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
— The rate of SSP, for working a five-day week is currently £95.85 per week.
— SSP will be payable from day one instead of day four for affected individuals.
— HMRC’s SSP calculator does not appear to have been yet updated.
— SSP is paid to eligible employees by their employers.
— SSP is not available to those earning below the Lower Earnings Limit of £118 per week
— ABC info here
— Employees will not need to provide a GP fit note.
— People who are advised to self-isolate for COVID-19 will soon be able to obtain an alternative to the fit note to cover this by contacting NHS 111, rather than visiting a doctor.
— This can be used by employees where their employers require evidence.
— Further details will be confirmed shortly.
Sick Pay
Those who follow advice to stay at home and who cannot work as a result will be eligible for statutory sick pay (SSP), even if they are not themselves sick.
Employers should use their discretion and respect the medical need to self-isolate in making decisions about sick pay.
Anyone not eligible to receive sick pay, including those earning less than an average of £118 per week, some of those working in the gig economy, or self-employed people, is able to claim Universal Credit and or contributory Employment and Support Allowance.
For those on a low income and already claiming Universal Credit, it is designed to automatically adjust depending on people’s earnings or other income. However, if someone needs money urgently, they can apply for an advance through the portal.
IR35 and Off-Payroll Working
— HM Treasury has said they intend to postpone the introduction of the off-payroll working rules to the private sector.
— The extension of the off-payroll working rules was due to commence on 6 April 2020. The start date is now be deferred to 6 April 2021.
— More information can be found here.
IR35: Off- Off-Payroll Working and SSP
— Following the Government’s announcement to postpone the introduction of the off-payroll working rules to the private sector, all workers providing their labour via their own Personal Service Companies (PSCs) to private sector end clients, will be entitled, as they are currently in 2019-20 above to claim SSP under the current rules, via their own PSC.
— The extension of the off-payroll working rules was due to commence on 6 April 2020. The start date will now be deferred to 6 April 2021.
Support for businesses that pay business rates
The Government will introduce business rates retail 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 rebilled by their local authority as soon as possible.
A £25,000 grant will be provided to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value between £15,000 and £51,000.
Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority. Guidance for local authorities on the business rates holiday will be published by 20 March.
Support for businesses that pay little or no business rates
The Government will provide additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR).
This will provide a one-off grant of £10,000 to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs. 700,000 businesses are currently eligible for SBRR or Rural Rate Relief.
If your business is eligible for SBRR or rural rate relief, you will be contacted by
your local authority – you do not need to apply.
Funding for the Scheme will be provided to local authorities by the Government in early April. Guidance for local authorities on the Scheme will be provided shortly.
Support for larger firms through the COVID-19 Corporate Financing Facility
To support larger firms, the Bank of England has announced a new lending facility to provide a quick and cost-effective way to raise working capital via the purchase of short-term debt.
This will support companies which are fundamentally strong but have been affected by a short-term funding squeeze, enabling them to continue financing their short-term liabilities.
It will also support corporate finance markets overall and ease the supply of credit to all firms. Further details, including on how to access this funding will follow in the coming days, and the Scheme will be available from the week commencing 23 March.
Support for businesses paying tax
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.
Key essentials for employers;
— An SME is an employer with fewer than 250 employees, the size of an employer will be determined by the number of people they employed as of 28 February 2020.
— Employers should maintain records of staff absences and payments of SSP.
— The eligible period for the Scheme will commence the day after the regulations on the extension of Statutory Sick Pay to those staying at home/self-isolating 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. Existing systems are not designed to facilitate employer refunds for SSP.
Self-employed and low earners
Self-employed individuals and people earning below the Lower Earnings Limit of £118 per week are not eligible for SSP.
— These individuals can make a claim for Universal Credit or Contributory Employment and Support Allowance
— Special measures apply for the duration of the virus outbreak.
— The requirements of the Universal Credit Minimum Income Floor will be temporarily relaxed for those who have COVID-19 or are self-isolating according to government advice. This is to ensure self-employed claimants will receive support.
— People will be able to claim Universal Credit and access advance payments upfront without the current requirement to attend a jobcentre if they are advised to self-isolate.
— A contributory Employment and Support Allowance will be payable, at a rate of £73.10 a week if you are over 25. This may be claimed by eligible people affected by COVID-19 or self-isolating in line with advice from Day one of sickness, rather than Day eight.
More details are expected from the Government on eligibility criteria. We assume that you may self-certify perhaps after receiving advice by ringing NHS 111
Certifying absence from work
By law, medical evidence is not required for the first 7 days of sickness. After 7 days, employers may use their discretion around the need for medical evidence if an employee is staying at home.
We strongly suggest that employers use their discretion around the need for medical evidence for a period of absence where an employee is advised to stay at home either as they are unwell themselves, or live with someone who is, in accordance with the public health advice issued by the Government.
If evidence is required to cover self-isolation or household isolation beyond the first 7 days of absence then employees can get an isolation note from NHS 111 online or from the NHS website.
SMEs: Coronavirus Business Interruption Loan Scheme
— A new Coronavirus Business Interruption Loan Scheme will be delivered by the British Business Bank.
— This is aimed at small and medium-sized businesses to access bank lending and overdrafts.
— The Scheme is covered by the Government and 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 six months of that finance interest-free, as the Government will cover the first six months of interest payments.
Further details, including on the lenders providing access to this Scheme will be announced in the coming days, and the Scheme will be available from early week commencing 23 March 2020.
Larger business: COVID-19 Corporate Financing Facility
— The Bank of England has announced a new lending facility for larger businesses to provide a quick and cost-effective way to raise working capital via the purchase of short-term debt.
— This will support companies which are ‘fundamentally strong’ (we assume more detail will be provided as to the criteria to be met) to enable them to continue financing their short-term liabilities.
— The Bank will also support corporate finance markets overall and ease the supply of credit to all firms.
Further details, including on how to access this funding will follow in the coming days, and the Scheme will be available from the week commencing 23 March.
Business Taxes: Time to Pay
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.
It is essential to contact HMRC and make a Time to Pay agreement before the tax debt becomes due.
If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.
Deferring VAT and Income Tax payments
The Government will support businesses by deferring Valued Added Tax (VAT) payments for 3 months.
If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
VAT
For VAT, 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.
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.
— This is an automatic offer with 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.
Coronavirus Job Retention Scheme
Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.
— Businesses must identify affected employees as ‘furloughed workers,’ and notify them 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.
— Businesses should 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. Existing systems are not set up to facilitate payments to employers.
Insurance
Standard business interruption policies are unlikely to cover a pandemic. You need to check your policy wording and contact your insurer.
Hardship Fund. Social housing and the homeless.
— The Government has announced a new £500 million Hardship Fund so Local Authorities can support economically vulnerable people and households.
— The Government expects most of this funding to be used to provide more council tax relief, either through existing Local Council Tax Support schemes or through similar measures.
— The Ministry of Housing, Communities and Local Government will set out more detail on this funding, including allocations, shortly.
Other Immediate Changes Applicable for Direct and Indirect Taxes Statutory Residence Test (SRT)
For the purposes of day counting for SRT. If you:
— are quarantined or advised by a health professional to self-isolate in the UK as a result of the virus
— find yourself in a ‘lockdown’ situation as a result of the virus are unable to leave the UK due to the closure of international borders
— are asked by your employer to return to the UK temporarily as a result of the virus
— HMRC consider that the circumstances are ‘exceptional’.
Guidance for health care workers
As diagnosed and serious cases of Coronavirus continue to rise in the UK, healthcare workers are most at risk in their workplace, and for healthcare providers who have diagnosed a case within their facility, the Government have issued the following recommendations.
The document provides advice for healthcare providers on actions for healthcare staff, who have recently identified cases of COVID-19 in existing admitted patients who were not initially diagnosed.
The document includes provision for the following:
— Staff exposures
— Staff return to work criteria
— Patient exposures
— Visitors
— Cleaning
Further information can be found here
Non-UK
For businesses based in Jersey, please refer to the Jersey government website https://www.gov.je/Health/Coronavirus/Pages/CoronavirusBusinessAdvice.aspx
If you have any further concerns regarding COVID-19, call HMRC’s dedicated helpline on 0800 0159 559 or visit https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
The Indigo Group are here to help and support you with appropriate advice in respect of business continuity and risk management.
Please do not hesitate to contact your business manager or our support team.
Stay safe,
Ian Cole–Wilkins
CEO, The Indigo Group
The information provided in this webpage is provided for general informational purposes and is the view of the Indigo Group only. Although we make reasonable efforts to ensure the information provided is accurate, complete, and up to date we make no representations, warranties or guarantees, whether express or implied, that the information is accurate, complete or up to date and you should not rely upon it. [The information does not constitute medical, legal, accounting, taxation or other advice.] You are advised to check the information prior to using it. We disclaim any liability for your use of the information to the fullest extent permitted by law.
All free to access information published by the UK Government, including further details on all of the above can be found here https://www.gov.uk/coronavirus