How is the government supporting people during the Coronavirus outbreak?
Wednesday 25 March, 2020
Thomas Wheatley, Mortgage Broker & Protection Adviser in Tottenham, North London reviews how the government supports businesses and their employees during the Coronavirus outbreak.
Since the Coronavirus outbreak the government has started introducing different financial measures in order to try and assist the public. Most people are aware of the mortgage payment holiday as many people have started requesting these from their lenders. Most people are also aware of the assistance for the employed sector. But the government has also bought in other measures as well to help the self-employed and the government is expected to bring in further policies to assist us all during the Coronavirus outbreak.
Below I will give a brief overview of these measures, but you can find further information in the following link and also eligibility rules if these are apparent.
1. Coronavirus Business Interruption Loan Scheme
As part of the budget on the 11th of March 2020 the Chancellor announced that he would support small businesses. The details of this are subject to clarification but largely due to the Coronavirus outbreak the scheme was improved and was brought forward to the 23rd March 2020.
How will the government support local businesses in North London and Hertfordshire during the Coronavirus outbreak?
The concept is to allow business to be able to borrow money through participating provider banks and at more attractive terms for both businesses applying for new facilities and lenders. The scheme is government backed so there is a guarantee from the government to the lender which will hopefully mean that lenders are more likely to accept the application. With the aim of supporting the continued provision of finance to UK businesses during the Covid-19 outbreak.
Small and medium London businesses in Goff’s Oak, Cheshunt, Barnet, Enfield and Hertford will be supported by the government announcement
Then to further assist the business during the outbreak the government will pay the interest element of their loans for the first 12 months so the business will benefit from lower initial repayments while still remaining liable for the capital repayment.
2. Coronavirus Job Retention Scheme
The government has allowed employers to request a grant from the government to cover 80% of a retained employees salary up to a maximum of £2,500.
This is in order to prevent many employers from making staff redundant as their company income falls significantly during the outbreak and staff can’t work. This is now even more likely since the lockdown announcement of the 23rd of March 2020.
Although the scheme isn’t up and running just yet, it is expected to be by the end of April 2020 with the grants backdated to the 1st of March this year.
3. VAT payments
The government has announced that any VAT payments due between now and the end of June 2020 will be deferred. Also, that VAT registered businesses will not have to make a VAT payment normally due within their VAT return to HMRC in that period. The payment can be deferred to the next VAT period.
4. Income tax payments
Income tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021. This is going to be done automatically by HMRC and they will not charge any interest on the amount that would usually be paid in July 2020 which is now being deferred.
5. Business Rates
The government has announced that they are introducing a business rate holiday for retail, hospitality, leisure and nursery businesses in England for the 2020 to 2021 tax year. Due to there being different criteria and assistance for the differing business. The government also announced they will provide additional Small Business Grant Scheme funding for local authorities to support small businesses who are already paying limited or no business rates due to the small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. For eligible business this will provide them with a one-off grant of £10,000 to assist them with the ongoing costs of the business.
‘When we speak to our North London clients who have local businesses in Barnet, Tottenham, Enfield, Goff’s Oak and Cheshunt they are very relieved that the government has introduced these measures to support them through this difficult time. At Thomas Oliver we offer financial planning advice for companies and we also work closely with other professional intermediaries including accountants and solicitors to ensure your business gets the most appropriate financial advice at all times. The government has introduced a whole raft of new legislation which all local North London and Hertfordshire businesses need to understand. If you would like to know more about how these changes affect you and your business, please contact one of our Thomas Oliver financial planning team on 01707 872000. We offer all businesses a free financial planning consultation to discuss your company requirements.’