COVID-19 – support for British businesses

The coronavirus pandemic currently sweeping the world is also having a huge impact on the state of the global economy - to prevent a wave of bankruptcies and rising unemployment, the UK government has decided to take far-reaching steps to support business owners in keeping their companies afloat. But what does the support programme look like, and what can British businesses count on? Below we discuss some of the available forms of help.

Coronavirus Job Retention Scheme

The main aim of the scheme is to limit redundancies by subsidising the wages of employees on furlough because of coronavirus. From 1 September, government support under the scheme amounts to 70% of wages (capped at £2,187.50), with the employer responsible for covering the remainder (the employee should receive 80% of their wages, up to £2,500).

Subsidies are available for the wages of employees who were on furlough for 3 consecutive weeks between 1 March and 30 June, provided the claim for support was submitted before 31 July. The scheme is expected to end on 31 October 2020.

Statutory Sick Pay rebate

An employer who has paid sick pay to an employee who received it because of coronavirus can reclaim the amounts paid for a period of up to 2 weeks. Businesses employing up to 250 staff are entitled to this form of support (this number covers all forms of employment, including part-time workers and fixed-term contracts).

VAT deferral

One element of the business support package was the option to defer VAT payments in the UK - the deferral covered tax due for the period from 20 March to 30 June 2020, and the deferred tax must be paid in full by 31 March 2021 at the latest. The rules for settling VAT for periods not covered by the deferral remain unchanged.

Self-Employment Income Support Scheme

It is not only UK Ltd companies that can count on government help, but the self-employed as well. For those running a business as self-employed in the UK, a scheme has been set up guaranteeing financial support to business owners whose finances have suffered because of COVID-19. Applications for the second grant are currently being accepted - the scheme allows you to receive 70% of your average monthly trading profits, paid out for a 3-month period, up to a cap of £6,570. Applications can be submitted until 19 October 2020 at the latest.

Financial support makes it possible to avoid problems with your company’s solvency and to keep staffing levels unchanged. At PolAccount we can help you not only with matters relating to UK taxes and UK tax refunds, but we will also suggest the best solutions for your business - our accountancy office in London provides professional and comprehensive services even in these difficult times, so feel free to get in touch if you think we could help your business too.