RESOURCES

UK COVID-19 aid for businesses – actions and fees

This post summarises the webinar that we held earlier today (25/03/20, 9:30am UK Time) regarding the aid that is available to small businesses and the actions we suggest that you take.

As I noted before, we would like to offer these services to our clients free of charge. However, like everyone else we need to continue to pay our staff, so I am sorry to say that we do need to charge for these services. Consider please that Councils, HMRC and other offices are all operating with many people self-isolating, so in the current environment everything is a little more difficult than usual. I have included under each section our proposed fees. All fees are exclusive of VAT.

For most of the schemes see https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses for more details.

Scheme name: Coronavirus Job Retention Scheme

Reminder of scheme

  • this is the scheme where the government pays 80% of salary up to £2,500/month
  • our working assumption is that the 80% means 80% of February payroll, but this is only a guess
  • our understanding is that it is available to employees on the payroll at 29 February 2020. So it may not be available to people recruited after that date
  • instead of making employees redundant as a result of Covid-19 crisis employers can make them “furloughed workers”
  • this is an option (not an obligation) – the employer can choose to make people redundant instead
  • it is also, in most cases, an option for the employee (it depends on their employment contract). Most employees are likely to accept being furloughed, as the alternative is probably a redundancy
  • under the scheme the: employee must not do any work for the company; government contributes 80% of that employee’s salary, up to a maximum of £2,500/month; and the employer agrees not to make the employee redundant
  • the employer has the choice of paying the additional 20% of the salary
  • it is not clear who pays the PAYE – the Government has not said that it will pay the PAYE
  • the scheme can be backdated to when the employee stopped working as a result of Covid-19 it can’t be backdated to before 1/3/20
  • the scheme will last 3 months, but maybe extended
  • how the refund will be made is not clear – HMRC have said that they will create an online portal and tell us what information they need
  • it looks to us like employers will need to pay payrolls and then get refunds from HMRC
  • all employers in the UK are eligible for this scheme
  • we are not sure if this means employers based overseas – but our guess is that it will apply to everyone who operates UK PAYE

What we think you (or us) need to do

  • make your intentions clear to your employees and seek their written agreement
  • not be too specific, as the details are not yet known
  • tell us the employees that you want it to apply for

Our fees for our clients with 5 or fewer employees

  • our fee for writing a letter: £50 per employee or £200 if you require a template that you will adapt
  • our fee for calling employees to explain and try to negotiate on the employer’s behalf: £30 per call
  • our fee for uploading document’s to HMRC’s portal: £30 per employee per month (we may revise this up or down when we know more about what is needed)

Our fees for our clients with 6 or more employees

  • we will reach agreement on fees on a case by case basis

Scheme name: Statutory Sick Pay (SSP)

Reminder of scheme

  • at the moment, employers pay SSP (£94.25/week for employees who are sick from 4th day to 28 weeks). See https://www.gov.uk/statutory-sick-pay for more details
  • from 13/03/20 employees that self-isolate are covered by SSP and the payment period will be from the 1st day.
  • small employers will be able to reclaim SSP from the Government for sickness to cover Covid-19, up to 2 weeks per employee
  • to be eligible to claim back the Statutory Sick Pay: the employer must be UK based, and have had fewer than 250 employees, and maintain a record of absences

What we think you (or us) need to do

  • there are no details as to how this will work
  • we think you should ask the employee to confirm the time that he was absent and that it was due to COVID or isolation
  • tell us the person and days the person was off sick because of COVID

Our fees for our clients with 5 or fewer employees

  • our fee for processing the reclaim will be £10 per employee per month (we may revise this up or down when we know more about what is needed)

Our fees for our clients with 6 or more employees

  • we will reach agreement on fees on a case by case basis

Scheme name: VAT Deferral Scheme

Reminder of scheme

  • we don’t think that this scheme is available for NETPs
  • we think the scheme applies to VAT payments that are due from now to July 7
  • this is automatic, you don’t need to make an application
  • What we think you (or us) need to do
  • we don’t think you need to do anything, other than cancelling your direct debit

Our fees

  • nothing for us to do

Scheme name: Time To Pay Tax Scheme

Reminder of scheme

  • businesses in financial distress can, as usual, apply to HMRC for a delay in payment
  • the Time To pay will need to be agreed with HMRC on a case by case basis
  • HMRC has a COVID-19 dedicated helpline: 0800 0159 559 see https://www.gov.uk/government/news/tax-helpline-to-support-businesses-affected-by-coronavirus-covid-19

What we think you (or us) need to do

  • you need to tell us or HMRC: 1) why you can’t pay; 2) when you think you will be able to pay; 3) what measures you are taking to ensure that your business will survive; 4) an indication of your normal profitability
  • expect reminders and late payment requests from HMRC

Our fees

  • our fee for a 1 on 1 call to discuss matters with you: £50+VAT (for a maximum of 30 minutes)
  • to write a letter to HMRC: £100 minimum (covers up to 1 hour). We will charge an additional £80/hour for any time that we spend that is more than 1 hour
  • our expectation is that it should not take more than 1 hour for most of our clients

Scheme name: Business Rates Relief

Reminder of scheme

  • retail, hospitality and leisure businesses in England will not need to pay rates for the period April 20 to March 21
  • the relief is automatic, you should get a revised invoice from the Council saying that there is nothing to pay
  • our understanding is that the relief is for Business Rates, not Residential Council Tax
  • to be eligible, the business must be: based in England; be an occupied property trading as a shop, restaurant, hotel etc

What we think you (or us) need to do

  • nothing, you should receive a letter from the Council if this applies to you

Our fees

  • there should be no fee
  • if you want, our fee for a 1 on 1 call to discuss matters with you: £50+VAT (for a maximum of 30 minutes)
  • if you want, our fee for writing a letter to your Council or seeing if you pay business rates is £50

Scheme name: Small Business Grant

Reminder of scheme

  • £10,000 is available as a grant (not a loan) to all businesses that get Small Business Rate Relief or Rural Rate Relief
  • Businesses don’t need to apply, they will be contacted by their Local Authority in April

What we think you (or us) need to do

  • make sure that your local authority has your details

Our fees

  • there should be no fee
  • if you want, our fee for a 1 on 1 call to discuss matters with you: £50+VAT (for a maximum of 30 minutes)
  • if you want us to write a letter to your local authority we will charge £100 minimum (covers up to 1 hour). We will charge an additional £80/hour for any time that we spend that is more than 1 hour

Scheme name: Retail Hospitality & Leisure Grant

Reminder of scheme

  • £25,000 is available to retail, hospitality and leisure businesses operating from premises with a rateable value of £15,000 to £51,000.
  • businesses need to apply to their Local Authority for this

What we think you (or us) need to do

  • write to your local authority and apply for this

Our fees

  • if you want, our fee for a 1 on 1 call to discuss matters with you: £100+VAT (for a maximum of 30 minutes)
  • if you want us to write a letter to HMRC we will charge £200 minimum (covers up to 1 hour). We will charge an additional £150/hour for any time that we spend that is more than 1 hour

Scheme name: Coronavirus Business Interruption Loan

Reminder of scheme

  • from 23/03/20 businesses with an annual turnover of not more than £45 million can apply for a loan or overdraft for up to £5m
  • we are not sure if the £45m applies to the group or the UK company
  • the loans will be provided by UK banks
  • the Government will: guarantee 80% of the loan; and pay the interest for the first 12 months
  • loans will be commercial and will need to be repaid
  • our understanding is that the borrower will need to persuade the banks that: in a normal situation, the business would be able to repay the loan; and that it has a reasonable prospect of surviving the crisis
  • security will be needed on loans over £250k

What we think you (or us) need to do

  • you should prepare: 1) cash flow assuming no COVID; cash flows for next 3, 6 & 9 months assuming COVID; write a loan application letter; send it to your bank

Our fees

  • if you want, our fee for a 1 on 1 call to discuss matters with you: £200+VAT (for a maximum of 30 minutes)
  • if you want us to write the loan or overdraft application we will charge £500 minimum (covers up to 2 hours). We will charge an additional £150/hour for any time that we spend that is more than 2 hours

Scheme name: Protection for renters

Reminder of scheme

  • no direct protection in terms of cash available
  • Landlords can’t evict for at least 3 months

What we think you (or us) need to do

  • start negotiating with your landlord

Our fees

  • if you want, our fee for a 1 on 1 call to discuss matters with you: £50+VAT (for a maximum of 30 minutes)
  • if you want us to write a letter to your landlord we will charge £50 minimum (covers up to 0.5 hours). We will charge an additional £80/hour for any time that we spend that is more than 0.5 hours

I hope this post is helpful

This post summarises the webinar that we held earlier t […]

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