With the current situation businesses and individuals are asking about coronavirus what is the government doing. Clients are receiving email updates and the text of these has been added below:
There was nothing significant in the press release on 17 March, but on 18th the Bank of England reduced the base rate to a historic low of 0.1% although it had already been reduced to 0.25% and the impact is likely to be minimal. A list of key workers was also released following the press release on 18th including health service workers etc, these will have children looked after in a supervised environment, and access to shops in special opening times.
17 March update
While the press release yesterday may have given a little optimism the biggest sea change is the postponement this morning of the IR35 reforms which would have taken contractors in the private sector into an effective PAYE position as of April and will be welcomed by a number of my clients. This is a reaction to the coronavirus outbreak and give some certainty in the employment market for a few at least.
The other changes yesterday were:
- Business rates holiday to all firms in the hospitality sector, and for those with a rateable value of less than £51k a grant of up to £25k
- All businesses regardless of whether small, medium (SMEs) or large will be able to access loans backed by the Bank of England (if large) or the Business Interruption Loan Scheme (small or medium)
- The Business Interruption Loan Scheme will be interest free for 12 months and is expected to become available in week commencing 23 March
- To help with cash flow, grants of up to £10,000 will be available to approximately 700,000 of the smallest UK businesses
- 3 month mortgage holiday for those affected by the crisis
Due to the nature of the announcements the details and ways of claiming the funds are unknown at present, but with some suppliers demanding cash payments where accounts existed before, a client who called the banks was offered the options of a 5 year business loan and increased overdraft almost without question. This appeared to be due to their flexibility at the moment than in relation to the government guarantees offered.
Of course any payment holiday or loan will result in additional interest and of course the loans or overdrafts will have to be paid in due course, it is not a government giveaway.
As regards meetings I have tested and am now set up with Zoom.us which offers online face to face meetings allowing screen sharing, and a lot more professional than muddling through with Facetime or Skype. It is my intention to hold year end meetings using this facility, but of course this can be used on other occasions too.
16 March update
In these unprecedented times a lot has happened since the Budget last week with gradually increasing amounts of lock down in the economy. Although things seem likely to change later today the current situation is as follows:
- Statutory sick pay is available and will be refunded by the government, although the exact process is yet to be released
- There is no support for the self employed apart from a hardship fund for local authorities, again there were no further details in the budget
- Small business rates have been reduced to zero but only in the retail, leisure and hospitality sector
- For small businesses below the business rate threshold there will be a £3k grant available
There is no other support for business at the moment and airlines asking for state support is only the tip of the iceberg, and there is currently no clear way forward for clients whose pay depends on them or their staff going to work. I would expect there to be a major announcement on this later today.
As a business, any activity outside of the office which is not necessary or can be done by email/phone has been stopped. Otherwise government guidance on staying safe is being followed, but in reality face to face meetings have ceased. I will try and keep you up to date with developments, especially those which will directly affect you, but in the meantime hope that you and those around you stay healthy and get through any sickness.
These are unprecedented times and the announcements are coming faster than processes can be changed so access to grants, loans and SSP reclaim is unclear at present. You should seek professional advice before taking any steps based on these contents. If you would like advice in this or other areas feel free to call. Alastair Wood, AW Accounting, Gravesend, Kent – Accountants who “speak your language”