Welcome to the April 2020 Newsletter from Walsh & Co
The coronavirus (COVID-19) pandemic that began in China and spread rapidly around the globe has caused major disruption to businesses and economies worldwide. The UK government has responded to COVID-19 with measures aimed at delaying its spread and mitigating damage to the economy with a substantial stimulus package. Our latest Hot Topic asseses how Chancellor Rishi Sunak's measures will support businesses and workers through the COVID-19 crisis.
Additionally, the Chancellor delivered his first Budget, and the first since the UK's departure from the European Union, against the backdrop of the coronavirus outbreak.
Meanwhile, HMRC has delayed the introduction of off-payroll rules to the private sector as part of its measures to support businesses through the coronavirus (COVID-19) pandemic.
Chancellor unveils £330 billion support package for coronavirus pandemic
Chancellor Rishi Sunak recently unveiled a £330 billion package of support for the UK economy as it combats the coronavirus (COVID-19) pandemic.
The measures dwarf the £12 billion made available in the 2020 Budget, but the Chancellor promised to go further if necessary.
The package includes an increase in government-backed loans, higher cash grants, widened business rates relief for some sectors and mortgage holidays for struggling homeowners. The government is extending the Business Interruption Loan Scheme announced in the Budget from £1.2 million to £5 million, with no interest due for the first six months.
Businesses in the retail, hospitality and leisure sectors will pay no business rates for 12 months, regardless of their rateable value. If they have a rateable value of less than £51,000, they are now eligible for a cash grant too.
The Budget made £2.2 billion available in cash grants of up to £3,000 for businesses currently eligible for Small Business Rate Relief (SBRR) or Rural Rate Relief: this has now been extended to £10,000.
The Chancellor also announced a major wage bailout scheme to cover the salaries of British workers hit by the COVID-19 crisis. As part of the scheme, the government will pay up to 80% of workers' wages, up to a maximum of £2,500 a month.
Any British business, no matter what size, can apply for a wage bailout if it is struggling as a result of the COVID-19 pandemic. There is no limit on the bailout fund, and the government will back date the wage bailout to 1 March and keep it open for at least three months.
In a recent speech, Mr Sunak said: 'Employers will be able to contact HMRC for a grant to cover most of the wages for people who are not working but kept on payroll rather than being laid off.
'That means workers in any part of the UK can retain their job even if their employer cannot afford to retain them.'
The Chancellor also said all VAT payments have been deferred between 20 March and 20 June, while income tax payments for the self-employed have also been deferred for six months.
These are challenging times for businesses. We expect more government announcements on the details of the wage bailout and further help for the self-employed to be made in the coming days.
HMRC delays introduction of off-payroll rules to private sector
HMRC has delayed the introduction of off-payroll rules to the private sector as part of its measures to support businesses through the coronavirus (COVID-19) pandemic.
The reforms will shift the responsibility for assessing employment status to the organisations employing individuals. The rules would have applied to contractors working for medium and large organisations in the private sector and were due to come into effect on 6 April. Steve Barclay, Chief Secretary to the Treasury, stressed that the introduction of the rules has simply been delayed, rather than cancelled. The rules will now take effect on 6 April 2021.
In a statement, HMRC said: 'This is part of additional support for businesses and individuals to deal with the economic impacts of COVID-19.
'This means that the different rules that exist for inside and outside the public sector will continue to apply until 6 April 2021.'
The introduction of the off-payroll rules to the private sector, which are known as IR35 and have applied to the public sector since 2017, was reviewed earlier this year. The changes were due to go ahead alongside the implementation of measures to support affected businesses and individuals.
Commenting on the delay, Andy Chamberlain, Director of Policy at the Association of Independent Professionals and the Self-Employed (IPSE), said: 'The government has done the sensible thing by delaying the changes to IR35 in the private sector.
'This is a sensible step to limit the damage to self-employed businesses in this grave and unprecedented situation, but we also urge the government to do more. It must create an emergency Income Protection Fund to keep the UK's crucial self-employed businesses afloat.'
ESSENTIAL TAX DATES FOR APRIL
5 April
Last day of 2019/20 tax year.
Deadline for 2019/20 ISA investments and pension contributions.
Last day to make disposals using the 2019/20 CGT exemption.
14 April
Due date for income tax for the CT61 period to 31 March 2020.
19 April
Automatic interest is charged where PAYE tax, Student loan deductions, Class 1 NI or CIS deductions for 2019/20 are not paid by today. Penalties may also apply if any payments have been made late throughout the tax year.
PAYE quarterly payments are due for small employers for the pay periods 6 January 2020 to 5 April 2020.
PAYE, Student loan and CIS deductions are due for the month to 5 April 2020.
Deadline for employers' final PAYE return to be submitted online for 2019/20.
QUOTE OF THE MONTH
'We have never faced an economic fight like this one. But we are well prepared. We will get through this. And we will do whatever it takes.'
Rishi Sunak, Chancellor of the Exchequer, commenting on the £330 billion package of support designed to help the UK economy combat the coronavirus.
WEBSITE OF THE MONTH
https://www.gov.uk/coronavirus
Supplies information on the latest measures put into place to combat the coronavirus.
ON OUR WEBSITE
A wealth of resources for businesses
With topics ranging from capital allowances to PAYE, the Your Business section of our site is a hub of essential information.
Useful information for individuals
For a comprehensive bank of guides covering capital gains tax and the family home, giving to charity and much more, please visit the Your Money area of our website.