With COVID-19 / Coronavirus impacting every area of society, the Government has implemented a number of changes around HMRC payments to help support businesses.  But what are they all and how might they assist you and your business?

In this article our tax experts from across the firm have created a summary; hopefully an overview of where HMRC will show flexibility (and who to) and what you must do to take advantage of them.

We have a separate blog specifically around the various business loans scheme, which can be read by clicking here.

Whilst many businesses will face challenges ahead, we at French Duncan are here to help and support you in the weeks and months ahead – you can contact us at any time. 

Obviously things are changing rapidly, but we will update this blog moving forward. This article was first published on 17th March, and updated 12noon Thursday 19th March.

Time to Pay – VAT, Corporation Tax, PAYE and CIS

These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. Specific industries are more likely to be affected by the virus, such as travel, entertainment, bars, restaurants and hotels, which HMRC will be conscious of when considering eligibility. At present HMRC will consider deferring payments for VAT and PAYE.  They will also discuss Time to Pay arrangements for VAT, Corporation Tax, PAYE and/or CIS where the business is affected by the virus.

Currently, HMRC have stated they are willing to grant a deferral of VAT payments for up to two months.  PAYE deferral can currently be granted for up to 30 days.

After an initial deferment (where applicable), the business can also apply for further assistance via a Time to Pay arrangement. Typically, instalments of no longer than 12 months can be granted, however under these circumstances we expect there to be special concessions made.

HMRC are prepared to discuss this situation where a business with a current Time to Pay arrangement in place that they now cannot or will struggle to meet due to the disruption caused by the virus.

HMRC will take into account your specific circumstances when considering:

• Agreeing an instalment arrangement (see below)
• Suspending debt collection proceedings
• Cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately.

Other Support Measures

Noted below are some further measures the Government are introducing to support businesses through this time.

Support for Individuals Affected by COVID-19:

• Statutory Sick Pay (SSP) will now be available for eligible individuals diagnosed with COVID-19 or those unable to work because they are self-isolating in line with Government advice.
• SSP will be payable from day 1 instead of day 4 for affected individuals.
• 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.
• Those who are not eligible for SSP, e.g. self-employed earning below the £118/week, can now make a claim for Universal Credit or Contributory Employment and Support Allowance.

Support for Businesses Affected by COVID-19:

• Emergency legislation is being passed that means employees suffering from Covid19 will be entitled to SSP from day 1. The Government have also advised that they will rebate employers but are yet to advise exactly how this will work however, HMRC do advise that “The Government will work with stakeholders over the coming months to set up a repayment mechanism as soon as possible.”.
• The eligibility criteria for the scheme will be as follows:
  • This refund will cover up to two weeks’ SSP per eligible employee.
  • Employers with fewer than 250 employees will be eligible.
  • Employers will be able to reclaim expenditure for any employee who has claimed SSP as a result of COVID-19.
  • Employers should maintain records of staff absences, but employees will not need to provide a GP fit note.
  • The eligible period for the scheme will commence the day after the regulations on the extension of SSP to self-isolators comes into force.

Changes to business rates:

Business Rates – Scottish Businesses:

• Full non-domestic rates relief for retail, hospitality and leisure sectors for one year.
• Small businesses in receipt of the Small Business Bonus Scheme or Rural Relief will be eligible for a £10,000 grant.
• Businesses in the hospitality, leisure and retail properties with rateable values of £18,000 – £51,000, will be eligible for a £25,000 grant.
• 1.6% rate relief for all properties.

It is anticipated that applications for grants will be via your local authority.  The above measures are all effective from 1 April 2020.

The Scottish Government are also urging local authorities to allow pubs and restaurants to operate as takeaways on a temporary basis by relaxing planning rules to facilitate this.

Business Rates – Rest of UK businesses:

• 2020/21 Business Rates holiday for retail, hospitality and leisure sectors.
• For businesses operating in the retail, hospitality and leisure sectors operating from smaller premises with a rateable value of £15,000 – £51,000, a £25,000 grant will be available on application to your local authority.  Local authorities will be provided guidance on the business rates holiday by 20 March 2020.
• Businesses which are already paying little or no Business Rates because of Small Business Rate Relief (SBRR) or who are currently eligible for Rural Rate Relief will be eligible for an increased one-off grant of £10,000.  Businesses in the category will be contacted by their local authority.  Funding will be provided to the local authorities in early April.

Those businesses now qualifying for the above reliefs may need to apply to their local authority to receive the discount. Enquiries on eligibility should be directed to the relevant local authority.

Coronavirus Business Interruption Loan Scheme:

• Early next week a temporary Coronavirus Business Interruption Loan Scheme launches.  This is to support businesses to access bank lending and overdrafts.  The government are guaranteeing 80% of each loan up to an increased loan value of £5m. Interest arising on these loans in the first 6 months will be met by Government funding easing the cost to businesses.  No charge will be imposed by the government on businesses for offering the loan guarantee.

Coronavirus Corporate Financing Facility (for larger companies):

• From week commencing 23 March 2020 the Bank of England are offering a quick and cost effective way to raise working capital by purchasing short-term debt.  This is to assist companies who are fundamentally strong, but are experiencing short term cash-flow problems.  Further details on how to access this will be released in the coming days, and we shall update this page as we know more.

Need help? Contact us!

For further information on Time to Pay, the 2020 Budget or anything else you can contact our Tax team on 0141 221 2984, or speak to your usual French Duncan contact who will be happy to assist.

For Corporate Tax specific enquiries, you can also contact Eilidh Kennedy.

For VAT specific enquiries, you can also contact Maria McConnell.

For PAYE specific enquiries, you can also contact Linda Kelly.

For Personal Tax specific enquiries, you can also contact Hazel Burt.

Tax helpline to support businesses affected.

A dedicated helpline has been established to help businesses and self-employed individuals in financial distress, and with outstanding tax liabilities, receive support with their tax affairs. Through this, businesses may be able to agree a bespoke Time to Pay arrangement. If you are concerned about being able to pay your tax due to COVID-19, HMRC’s dedicated helpline is 0800 0159 559.

French Duncan are available to assist and advise any clients in negotiating and agreeing a Time to Pay arrangement with HMRC.

To contact HMRC, yourself or for us to do so on your behalf, you will need to know:

• Reference number (e.g. 10-digit Unique Taxpayer Reference or VAT reference number).
• Value of the tax bill you’re finding it difficult to pay and the reasons why.
• How the virus has affected the business.
• The impact it has had e.g. have orders been cancelled, is the office closed?
• Attempts made to raise the money to pay the bill.
• How much you can pay immediately and how long you may need to settle liability.

Despite HMRC not requiring any documentary evidence to prove that a business has been affected by the coronavirus, they will consider your business’s industry sector when making their decision.

When contacting HMRC to arrange a time to pay the normal identity checks will be carried out, but you will also need the month ending for last VAT return period and the box 5 figure on the last return.

Other COVID-19 Information:

We also have COVID-19 / Coronavirus blog articles, which will be kept updated, on:

• COVID-19 business loans summary, including Coronavirus Business Interruption Loan Scheme (“CBILS”).
• Debt assistance & restructuring – click here to read.