The government has promised a number of measures to assist businesses.
- a Coronavirus Job Retention Scheme
- deferring VAT and Income Tax payments
- a Statutory Sick Pay relief package for SMEs
- a 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England
- 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 £5 million 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
The main issue for my clients right now is whether to make staff redundant or put them on lay-off or short-time working. The Coronavirus Job Protection Scheme may be just the answer.
What is furlough leave?
The government scheme is intended for those employees who would otherwise be made redundant or asked to stay at home without pay because either the business has closed, or it has no income to pay wages due to the virus. The government has now offered pay up to 80% of the pay of those workers.
You will still need agreement from staff not to pay them if you do not have a contractual right to stop their pay.
How do employers access the scheme?
Every business is eligible
You will need to:
- designate affected employees as ‘furloughed workers,’; and
- notify your employees of this change;
- submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal
HMRC will then reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC is working urgently to set up a system for reimbursement.