I am a director paying a small salary and dividends – will my spouse or I qualify for the 80% wages subsidy?
The scheme covers payroll salary only and not dividends.
***27/3/2020 update*** Company directors are not excluded from the scheme. They can carry on with their ‘statutory duties’ such as ensuring the company’s confirmation statement and accounts are filed. If they are generating income by providing personal services to clients, this will definitely make them ineligible. Find out more here.
I am a director paying a small salary and dividends – do I qualify for sick pay if I can’t work due to the coronavirus?
If you need to self-isolate due to coronavirus, you can pay yourself two weeks of SSP. The government will refund £94 per week, maximum £188, to your company.
I am having trouble paying my normal living costs – what can I do?
If you have a mortgage, contact your lender by email or phone to ask if a payment holiday is possible. Note that this will defer the payment, it will not save you money overall. We have heard from other clients that this process is relatively simple.
If you rent, contact your landlord and ask if a temporary holiday / reduction is possible.
Am I eligible for the £10k small business grant?
If you work from home or at your clients’ premises / on site / on set, you will probably not be eligible for this. If you rent an office / studio / warehouse and you receive a business rates bill for zero (due to Small Business Rates Relief) from your local council, you should be eligible. Apparently, these will be issued automatically so you won’t even need to apply, but as the local council rates department won’t have your bank details, we don’t yet know how this will work. Cheques are a possibility, but as this would require lots of additional people to visit a bank in person, plus it would increase the chances of fraud, we hope this won’t be the method!
Do I need to pay my next VAT bill?
The next quarter of VAT payment due dates will be deferred, meaning businesses will not need to make VAT payments until the end of June 2020. Businesses will then have until the end of the 2020-21 tax year to pay any liabilities that have accumulated during the deferral period.
The deferral applies automatically. Businesses don’t need to apply for it. VAT rebates will be processed as usual.
***27/3/2020 update – if you normally pay your VAT bill by direct debit and you want to take advantage of the deferral scheme, you will need to cancel your direct debit with your bank a few days before it is due****
Remember – this is only a deferral – it will not save you money overall.
Do I need to pay my 31/7/2020 Self-Assessment Payment on Account?
Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021 for those who are self-employed (***31/3/2020 update*** this is now available to anyone in self-assessment, whether self-employed or not). This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period.
If you defer it, you will still need to pay it in Jan 2021, along with your 2019/20 balancing payment AND your first payment on account for 2020/21. This could be a big sum, so if you have the funds in July 2020, it could be sensible to pay it in July anyway.
The best way to plan for the payment is to prepare your 2020/21 personal tax return ASAP after 5/4/2020. We will then know for sure what is actually payable by 31/1/2021 and you can start planning accordingly.
Do I need to pay my next PAYE bill?
You could potentially defer this with agreement from HMRC, but in most cases I advise this is not a good idea. PAYE is usually fairly small in comparison to other taxes, so I’d say pay it and avoid having another problem down the line.
If you defer it, you will still need to pay it eventually.
Do I need to pay my next corporation tax bill?
You could potentially defer this with agreement from HMRC, but if you have already reserved funds and your business can run for the coming months with reduced income, it might be better to pay it on time.
If you defer it, you will still need to pay it eventually.
I am a landlord and my tenant can’t pay the rent – what can I do?
If you have a mortgage, contact your lender by email or phone to ask if a payment holiday is possible. Note that this will defer the payment, it will not save you money overall. We have heard from other clients that this process is relatively simple.
Can I access additional finance?
These should be available from today (23/3/20) and are delivered by the major banks. The lender receives a guarantee of 80% of the loan amount from the government.
They are available for UK-based businesses with turnover of up to £45 million and can provide a loan of up to £5 million. The borrower remains liable for 100% of the debt.
No interest will be charged for the first 12 months.
***28/3/2020 update*** We have heard first hand from clients that the scheme is not operating as the government promote it. Banks are asking for personal guarantees which would rank higher as a creditor than the government guarantee. This means your personal assets would be at risk if your business cannot repay the loan. Therefore the scheme is not suitable for many businesses!
*** 1/4/2020 update*** We understand personal guarantee requirements have been dropped for smaller (sub-£250k) loans by at least one major bank. A major overhaul of the scheme is expected in the coming days.