Assistance with Government Initiatives in Covid-19 Crisis / March 2020

Here is the link on what HMRC is doing to support businesses:

Here are some of the useful links and articles

In summary, the government has introduced measures to assist businesses and employees to cope financially. The most relevant directive concerns the commitment made by the government to pay 80% of furloughed employees’ salary (i.e. those given absence of leave)

How does this work?  –  The employer must designate affected employees as furloughed workers.

•  They should notify the employee that they have been marked as Furlough. Agreement from the employee may be required.

•  HMRC must be notified of the employee designated as furloughed workers as well as details of their earnings. This is done through an online portal (not currently set up).

•  HMRC will reimburse 80% of furloughed workers wage costs, based on their February earnings (to be confirmed), up to a cap of £2,500 per month.

•  Employees remain employed.

•  Employer may choose to top-up the other 20% of salary.

The above applies to company directors as well. However, only the salary is included and dividends are excluded from the provision. To apply we need to wait until HMRC sets up a portal which is expected to come live at the end of April, until then we need to wait. If you have employees (I don’t think this applies to you) there are some employment issues to keep in mind as follows:


What are the employment issues?

Changing the status of employees to a furloughed worker remains subject to existing employment law. Generally, where an employee’s contract contains a layoff or short term clause employers should be able to place employees on furlough leave. Where there is no such clause, it is best advised to get agreement from the employee.

Additionally, a 20% reduction in salary will be a change in terms and conditions of employment. Where employers are not topping up the government payment, they should also seek agreement from the employee.

Given the current situation and the alternatives for those employees should they not agree, one can expect that most employees will agree. That said, prudent employers will seek to get their employees agreement as part of their furlough leave process.

We will have a template letter to employees on the above available to you shortly.


For the self-employed

Self-employed individuals will also receive support from the government. The scheme will allow self-employed individuals to claim a taxable grant worth 80% of the trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed. The payment will not be made until June.


Landlords and Tenants

With regards to Landlords and tenants, I have attached the directive issued by the government. It is fairly straightforward but please do let me know if in doubt.



Grants and loans

A small business grant funding of £10,000 will be available to all business in receipt of small business rate relief or rural rate relief. This applies only to those businesses which are renting business premises.

In addition the temporary Coronavirus Business Interruption Loan Scheme is available to SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years. The government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments. The loans are available from all major banks but they are repayable.


Delays to tax bills

Any income tax due on 31 July 2020 is deferred until 31 January 2021. VAT payments due over the next 3 months can also be deferred. Whether direct debits are in place, these should be cancelled to stop HMRC software automatically collecting the VAT.

This is a fast moving situation. However, we stand ready to help our clients with advice and support in these difficult times. Call 0208 857 5781