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Coronavirus and your business

Help for sole traders and businesses

Government guidance

The government has released guidance for employers and businesses on how you should deal with the impact of coronavirus. The guides cover several topics, such as how to help prevent the spread of the virus and what to do if someone in your work force has coronavirus.

Help for the self-employed and businesses

The government has announced the following help for self-employed people and businesses.

HMRC Coronavirus Helpline

You can call the HMRC Coronavirus Helpline on 0800 024 1222 if you cannot pay your tax bill on time because of coronavirus. You can also continue to use HMRC’s Time to Pay service.

Deferral of some payments to HMRC

Some businesses have been given longer to make certain payments to HMRC. This includes the following.

Extra time to get a payment arrangement in place and prevent late filing penalties

HMRC also said that they will not charge the 5% late payment penalty that is usually added on 3 March 2021 if you:

  • had paid your tax by 1 April 2021; or
  • had set up a payment plan with them by 1 April 2021.

For more information, see GOV.UK.

Benefit entitlement and Time to Pay arrangements with HMRC

If you need to claim a benefit that requires you to have paid Class 2 National Insurance contributions for the 2019/20 tax year, it is possible that a Time to Pay arrangement with HMRC could delay your benefit claim. This is because HMRC may put your payments toward the July 2020 payment on account before paying your National Insurance contributions. Benefits this could affect include Maternity Allowance and New Style Employment and Support Allowance.

If you are affected by this, you can ask HMRC to put your payments toward your National Insurance contributions first. For more information, see the guidance on GOV.UK.

Extra time for filing your 2020 to 2021 self assessment tax return

File your tax return on time if you can. However, HMRC has said that you will not be charged a penalty for filing your 2020 to 2021 self assessment tax return late if it is filed online by 28 February 2022.

You still need to pay your self assessment tax bill by 31 January 2022 and interest will be charged from 1 February 2022 on any outstanding amounts.

Extra time for filing your 2019 to 2020 self assessment tax return

HMRC has said that you should not be charged a penalty for filing your 2019 to 2020 self assessment tax return late if it was filed online by 28 February 2021.

You still need to have paid your self assessment tax bill by 31 January 2021 and interest is charged from 1 February 2021 on any outstanding amounts. You can pay online, through your bank or by post before you file.

Late filing daily penalties will not apply for 2018 to 2019 self assessment returns

HMRC has said that daily penalties will not be charged for the late filing of 2018 to 2019 self assessment tax returns. This is because of the difficult circumstances many taxpayers faced due to coronavirus during the time that daily penalties accrued.

Other penalties will still apply and HMRC will expect you to submit any outstanding returns as soon as possible.

Reducing Payments on Account

You can ask HMRC to reduce your Payments on Account if you think that your 2020 to 2021 tax bill is going to be lower than your 2019 to 2020 bill (for example, because of a loss of earnings caused by the pandemic).

If you are considering this, be aware that HMRC will charge you interest if it is found that a reduced on account payment is less than it should have been.

For more information, see GOV.UK.

Extra time to appeal against some HMRC decisions

If you have been affected by coronavirus, HMRC has given an extra three months for you to appeal a tax or penalty decision that was dated between 1 February 2020 and 30 September 2021.

Standard time limits will apply if you want to appeal a decision that is dated from 1 October 2021 onwards. However, HMRC has said that it is aware that some customers are still feeling the impact of coronavirus, and this may still be a reasonable excuse for not meeting their tax obligations on time in some cases.

If you plan to appeal, send your appeal as soon as you can and explain if the delay was caused by coronavirus.

VAT rate change for some businesses

The rate of VAT is being temporarily cut on most tourism and hospitality-related activities and on admission charges for some attractions. The rate is reduced from 20%:

  • to 5% from 15 July 2020 until 30 September 2021; and
  • to 12.5% from 1 October 2021 until 31 March 2022.

For more information, see GOV.UK.

Self-Employment Income Support Scheme (SEISS)

The SEISS has closed.

If you claimed a grant through the SEISS, HMRC will write to you with information:

  • on how to report SEISS grants correctly on your tax return; and
  • what to do if anything has changed since you claimed a SEISS grant.

Recovery Loan Scheme

The scheme is open until 30 June 2022.

It allows you to apply for government-backed finance to use for your business needs. The finance available includes:

  • loans and overdrafts of between £25,001 and £10 million per business; and
  • invoice finance and asset finance of between £1,000 and £10 million per business.

A list of the creditors that you can apply to for this scheme is available on the British Business Bank's website.

If you meet the eligibility conditions, you can apply to the Recovery Loan Scheme even if you have already had help from other coronavirus loan schemes.

For more information, see GOV.UK.

The Bounce Back Loan scheme

This scheme closed to new applications and top-up applications on 31 March 2021.

If you have a Bounce Back Loan, no repayments are due for the first 12 months of the loan. See GOV.UK for more information about this scheme.

Options when your Bounce Back Loan repayments become due

Your lender should write to you at least three months before your Bounce Back Loan repayments are due to start. The letter should explain that that you can ask your lender for the following options.

  • To extend the length of the loan from six years to ten years.
  • To make interest-only payments for six months. You can use this option up to three times during the term of the loan.
  • To pause repayments entirely for up to six months. You can only use this option once during the term of the loan.

You can ask for the above even if you haven’t missed a payment. However, if you use one or more of these options, you will pay more interest overall. Also, the length of your loan will increase in line with any repayment holidays you take.

The Financial Conduct Authority (FCA) has also issued guidance on the collection of Bounce Back Loan repayments.

The Coronavirus Business Interruption Loan Scheme

This scheme closed to new applications on 31 March 2021.

It allowed banks to offer government-backed loans to support small and medium sized businesses. Government also covered the first 12 months of interest payments under the scheme.

If you took out a loan under this scheme:

  • your lender should not have asked you to secure the loan against your home; and
  • for loans under £250,000, should not have asked for a personal guarantee.

For more information, see the British Business Bank website.

Problem-solving training (England only)

The Peer Networks Programme focuses on helping business owners improve their problem-solving skills. It seeks to help you develop the skills to deal with challenges brought about by the coronavirus crisis.

The programme is funded by government and is available to small and medium sized businesses that have:

  • operated for at least one year;
  • at least five employees;
  • a turnover of at least £100,000; and
  • an aspiration to improve.

Business support finder

GOV.UK has an online business support finder. It asks you several multiple choice questions. It uses your answers to produce a list of the types of coronavirus support that may be available to you and your business.

Business rent

The Government has introduced further temporary measures to protect business tenants who have eligible business rent debts. These are debts that built up because your business was forced to close (or partly close) its premises because of coronavirus regulations between:

  • 21 March 2020 and 18 July 2021 for premises in England; and
  • 21 March 2020 and 7 August 2021 for premises in Wales.

If you have an eligible business rent debt, called a 'protected rent debt', you may benefit from the following measures.

Arbitration

If you are unable to come to an arrangement with your landlord, you may be able to apply to an independent arbitrator to ask for relief from payment of the debt. If you are successful, the relief will ringfence your protected rent debt and create a binding agreement that:

  • can reduce the amount you owe to your landlord; and/or
  • give you extra time to pay the debt (up to 24 months).

There is fee for applying for arbitration and you must apply by 23 September 2022.

Temporary protection from enforcement

During the moratorium period, your landlord will be temporarily prevented from enforcing a protected rent debt. This means that they cannot:

  • use your rent deposit to pay a protected rent debt;
  • use bailiffs under the commercial rent arrears recovery (CRAR) process to recover a protected rent debt;
  • forfeit the lease because of a protected rent debt;
  • issue a civil money claim for a protected rent debt;
  • petition to wind-up your business based on a protected rent debt; or
  • petition for your bankruptcy based on a statutory demand or judgment that applies to a protected rent debt.

The moratorium period applies from 24 March 2022 until:

  • 24 September 2022 if you have not made an application for arbitration for the protected rent debt; or
  • the date your arbitration is concluded if you have made an application for arbitration.

Extra rules also back date protection to 10 November 2021 for bankruptcy action and civil money claims.

If your landlord is threatening any of the above enforcement for a protected rent debt or you received a claim form or statutory demand for a protected rent debt on or after 10 November 2021, contact us for advice.

Business rates

For businesses in England

For 2022 to 2023

From 1 April 2022 to 31 March 2023, eligible retail, hospitality and leisure businesses can get 50% business rates relief (up to a total value of £110,000 per business). To find out if you qualify, contact your local authority.

You may be able to get the retail, hospitality and leisure relief on top of other types of business rates relief that you are eligible for. For more information on the types of business rates relief available in England, see GOV.UK.

Relief for previous years

The following support was given for eligible retail, leisure and hospitality businesses and qualifying nursery businesses.

  • Business rates were scrapped for 12 months from 1 April 2020.
  • 100% business rates relief was given from 1 April 2021 to 30 June 2021.
  • 66% business rates relief was given from 1 July 2021 to 31 March 2022.

For businesses in Wales

For 2022 to 2023

From 1 April 2022 to 31 March 2023, eligible retail, leisure and hospitality businesses can get 50% business rates relief (capped at £110,000 per business). To find out if you qualify and to make an application, contact your local authority. Links to local authority application forms are also available on the Business Wales website.

For more information on the types of business rates relief available in Wales, see GOV.Wales.

Relief for previous years

The following support was given for retail, leisure and hospitality businesses with a rateable value of £500,000 or below.

  • Business rates were scrapped for 12 months from 1 April 2020.
  • 100% business rates relief was given from 1 April 2021 to 31 March 2022.

Hospitality and leisure sector businesses with a rateable value over £500,000 may have been given up to 100% business rates relief from 1 April 2021 to 31 March 2022.

Grants

For businesses in England

Incentive payments for hiring an apprentice

The government will give an incentive payment of £3,000 if you hire new apprentices. To be eligible, the apprentice must:

  • start their employment at your organisation between 1 October 2021 and 31 January 2022; and
  • start their apprenticeship between 1 October 2021 and 31 March 2022.

Applications can be made from 11 January 2022 until 15 May 2022.

For more information, see GOV.UK - Incentive payments for hiring a new apprentice.

Other grants

Other grants for certain business types may also be available through other organisations. GOV.UK contains information about government support for businesses in England. Go to www.gov.uk and search for 'Coronavirus (COVID-19): Business support' or call 0800 998 1098.

For businesses in Wales

Funding for the sports, culture, creative and arts sectors

Business Wales has information about funds that are available for the sports, culture, creative and arts sectors. Check the Business Wales website for up-to-date information about any support that may be available for your business.

HMRC guidance

HMRC has produced guidance to help you find out if you need to include a coronavirus grant or support payment on your tax return. For more information, see GOV.UK.

Business interruption insurance

The Chancellor confirmed in a statement on 17 March 2020 that advice given by government to avoid pubs, clubs and theatres is sufficient for you to claim on your insurance if you have appropriate business interruption cover for pandemics in place. Although advice did change and the government said that many of these businesses had to close, the Chancellor's earlier statement may affect the date from which your insurer pays you.

The Financial Conduct Authority’s (FCA’s) test case

As there was widespread uncertainty about what was covered by business interruption insurance policies, the FCA took a test case to court. Based on what the court decided, the FCA has created a policy checker. You can use the FCA’s policy checker to find out if your insurance policy may cover business interruption losses caused by coronavirus and what you can do next.

Companies House accounts

The government introduced temporary measures to extend the time that most companies had to file their accounts. The extension was given automatically to:

  • public companies with a filing deadline that fell between 25 March 2020 and 6 April 2021; and
  • private companies with a filing deadline that fell between 26 June 2020 and 6 April 2021.

You can check what the deadline is for filing your company’s accounts on the Companies House website.

Directors’ duties

The government introduced measures that temporarily suspended liability for wrongful trading. For many limited companies, this means that a director is not responsible for any worsening of the financial position of the company or its creditors that occurred between the following periods.

  • 1 March 2020 to 30 September 2020.
  • 26 November 2020 to 30 June 2021.

Temporary protections for limited companies from statutory demands and winding-up notices

The government has introduced some temporary measures. In certain circumstances, your company may have extra protection from creditors using a statutory demand or other grounds to apply for the business to be wound up. More information is available in our Limited companies fact sheet.