25 March 2020
NEW UPDATE - Business Support Measures During (Covid-19) Outbreak
UPDATED - 25th March 2020
Society appreciates that in these uncertain times, there will be
significant financial and other pressures on our members as businesses
serving the community. It is a worrying and uncertain time for business
owners, staff and the wider community. Solicitors firms not only serve
the public through representing their clients, you also inject support
for other businesses within your local community. This must be
recognised in any support packages coming from Government.
UK Government and the Northern Ireland Executive have announced a range
of measures to mitigate against these unprecedented circumstances and
it is likely there will be more developments in a very fast-moving
situation. It is important that this funding support is accessible
quickly through workable channels, in order to support the shock to the
economy and solicitors’ practices as key pillars of that economy.
Implementation is the next stage.
This Information Notice signposts some of the initiatives which have been announced to support businesses through this period, including
support in paying salaries, rates relief, tax deferral, loans and other
key measures aimed at supporting businesses through cash flow shocks.
Key gaps remain, including making appropriate provision for the
self-employed, which is critical. The Society will continue to
provide guidance to members throughout the current situation and to
impress upon our Executive the importance of financial relief for firms
as small and medium-sized businesses.
Business Support Measures Announced by the Treasury and the Northern Ireland Executive
Coronavirus Job Retention Scheme
Under the Coronavirus Job Retention Scheme, the UK Government has indicated that all employers will be able to access
funding from HMRC to pay 80% of the salaries of workers who would
otherwise have been laid off, up to a limit of £2,500 per employee.
This has been backdated to take effect for wage packets from 1 March and will be in place for an initial period of three months. The Government has acknowledged that this period may be extended depending on the future trajectory of the crisis so this should be factored into business planning.
Details of the scheme are emerging from HMRC, but at this point the broad outline of the scheme is as follows:
Ø Employers need to designate affected employees as “furloughed workers” and employees should be informed. A change in employee status remains subject to the principles of employment law and the contractual position of the employer
(including any scope for negotiation). During the period in which they
are furloughed, the Government advises employees not to carry out work
for an employer to ensure they qualify for the scheme;
online portal will be created within HMRC through which the affected
employees’ details should be submitted (further details on the practical
workings of this are awaited from HMRC). There is work underway to put in place appropriate electronic systems to facilitate the payments to employers.
In terms of timescales at this stage. Government are advising that they are seeking to start monies being paid by the end of April.
This is an important consideration in terms of immediate cash flow in
the interim. The availability of business interruption loans may be a
form of bridge financing to consider if there is an immediate need (see
Further information can be found here:
Deferral of VAT
The UK Government will be automatically deferring business payments for VAT for the period 20 March 2020 through to the 30 June 2020. Any liabilities accumulating during the deferral period will be afforded until the end of the 2020/2021 tax year to make payment. VAT refunds and reclaims will continue to operate as normal.
Income Tax for the Self-Employed
For those self-employed, income tax assessments due on 31 July 2020 will be deferred until 31 January 2021. This is applied to the self-employed automatically and
does not involve an application process. No penalties or interest for
late payment will be charged during the deferral period.
measures are due to be announced by the Chancellor in respect of
self-employed persons and there is growing pressure for an announcement
on this. The Minister for the Economy Diane Dodds MLA, has said that
the Executive has asked for this to use average earnings over recent
years to calculate this, or to move to a guaranteed income.
The First and deputy First Minister have announced that all small
businesses who are entitled to benefit through the Small Business Rates
Relief Scheme (those with a Net Annual Value for rates of £15,000 or
less), will be provided with an immediate grant of £10,000 to relieve
financial pressures. We know the scheme will be administered by the Department for the Economy and Invest NI, working with Land and Property Services.
Minister for the Economy has announced that the grants will be paid
using the last year’s rating list to make direct payments to bank
accounts. An online web portal will be set up later this week to
allow businesses to provide these details if they are not available.
Although the grant scheme is targeted at 27 000 business, LPS only hold
bank details for 9000 of those businesses. Members to whom this scheme would apply should take swift action to ensure they can access this payment as soon as practicable.
will be important for members to monitor announcements from those
sources regularly to learn more about the practicalities of accessing
this grant funding.
Immediate Rates Relief
Northern Ireland Executive has announced that it will be bringing
forward a package of proposals to provide financial relief for
businesses. Finance Minister Conor Murphy MLA has said there will be a
three month ‘rates holiday’ in which businesses will pay zero rates for April, May and June 2020.
The effect of this is a 25% reduction in the annual rates bill for
small businesses. Rates bills due to be issued in April will be now be
deferred until June and members should be aware of the option to make
payment through monthly instalments from June 2020 to March 2021 to aid
Proposed Reduction in the Regional Rate
The Finance Minister announced the intention of the Executive to reduce the regional business rate. The regional rate will be announced as part of the Budget package on 30 March 2020.
The Executive’s contingency planning group met on 18 March and it is
anticipated there will be further announcements. Members should monitor
the Department of Finance for further information.
Small Business Rate Relief Scheme
In addition, members should be aware that the Small Business Rate Relief scheme remains in operation for 2020/2021. This applies a tapered range of discounts automatically to
your rates bill if the Net Annual Value of your property is £15,000 or
less. Land and Property Services have a helpful guide for applicants here,
which includes a contact number, which may be useful if members believe
they have not received the appropriate relief. LPS has recently
reviewed the rates which will apply from April 2020 and more information
can be found here to check your valuation.
Hardship Rate Relief
Hardship rate relief is in place to help businesses recover from a temporary crisis caused by exceptional circumstances. However,
the guidance on this suggests that it may not be granted where other
compensation is available (in this case the business grants may make
this inaccessible). This relates to those risks and impacts which
produce a serious loss of business and could not have been foreseen.
Guidance notes on this can be found here:
Coronavirus Business Interruption Loan Scheme (‘CBILS’)- UK Government
UK Government has launched the new temporary CBILS through the British
Business Bank, in order to support businesses accessing bank lending and
overdrafts during the crisis. The purpose of the scheme is to provide lending
to viable UK businesses that would be turned down for a loan or other
forms of debt finance due to inadequate security. Loan values under
CBILS through a maximum upper limit of £5 million per applicant. The
Government has said they will cover the interest payments on the loans
for the first twelve months (previously six). The scheme is now open for
mechanism is a government commitment to lenders of a guarantee of 80%
on each loan, with no charge for this guarantee to businesses or banks. It is important to note businesses remain responsible for repaying any loans; the guarantee is made to the lender.
The exact eligibility criteria remain to be finalised, as this is a
developing scheme, although the final decision on eligibility rests with
the accredited lenders. The dedicated page for information on the
scheme can be found here.
for the Economy Diane Dodds MLA has expressed the determination of her
department to make the scheme business-friendly for NI businesses.
Members interested in learning more should monitor Gov.uk, the British
Business Bank and contact accredited lenders. A list of accredited
lenders for the purposes of CBILS can be found here. This page can be filtered to identify Northern Ireland lenders who should be contacted for more information. There may be other online funding sources also identified by the British Business Bank, more information is found here.
will be important for members considering making an application for a
CBILS loan to consider readying a cash flow impact analysis and
detailing how cash flow issues will increase in severity, depending on
the period over which the crisis extends. It may be worth modelling this
impact in measurable time periods, e.g. three months, six months etc to
support your application. This forms part of a wider business plan in
terms of how to manage cash flow- other areas of enquiry might include
asking lenders for repayment holidays on loans or asset purchases.
FAQs for Coronavirus Business Interruption Loan Scheme
Statutory Sick Pay- Rebate for SMEs
UK Government is including within the Coronavirus Bill proceeding
through Parliament this week to allow qualifying NI SMEs to reclaim
statutory sick pay (‘SSP’), covering up to 2 weeks’ SSP per eligible
employee who is off work due to COVID-19. Legislation has been passed
which provides for self-isolation due to COVID-19 to come within sick
pay arrangements (see below, this expires after eight months- see here.).
The UK Government announced the scheme will be open to employers with
fewer than 250 employees and will come into operation on the day after
the necessary regulations on the extension of SSP to self-isolators
comes into force. Further clarity is awaited on the precise operation of this scheme for NI businesses.
preparation, it is important to note employers should maintain records
of staff absences and payments of SSP and the Government has announced
it will work with employers to set up the repayment mechanism, as this
will require work to be carried out on current systems.
HMRC ‘Time to Pay’ Service
in financial difficulties and with outstanding tax liabilities should
enquire if they are eligible to receive support with their tax payments.
These applications are assessed on a case by case basis to reflect
individual circumstances. It may be worth making contact to enquire
about eligibility for deferral of VAT and PAYE payments, information
about payment by instalment and relief from penalties. There is a dedicated COVID-19 helpline which has been established to provide advice and support on these issues.
HMRC’s coronavirus helpline can be reached on 0800 0159 559.
Professional Indemnity Insurance
Society has contacted the brokers about the impact of COVID-19 on
professional indemnity insurance premium payment arrangements and what
options might be available to firms in these unprecedented
circumstances. We have been advised by our insurance brokers that
Premium Credit will engage with clients individually on the possibility
of deferring some instalments. Firms seeking to avail of this facility
should contact Premium Credit directly (or other relevant body):
Phone Number : 0330 123 9717
Email : email@example.com
Business Interruption Insurance
is important to contact your provider, however the vast majority of
business interruption insurance policies that firms may have taken out
will likely not include cover for losses caused by a pandemic. These
policies typically insure against damage to property, although there are
clauses in some policies which may cover COVID-19 if it was to become a
Incorporated Practices- Guidance from Companies House on filing of Accounts and Contact Point
3 Month Extension
As of 25 March 2020, businesses will be able to apply for a 3-month extension on filing their accounts. All
companies who apply for an extension as a result of COVID-19 will
automatically be granted the extension without needing to provide
Further information can be found here – https://www.gov.uk/government/news/companies-to-receive-3-month-extension-period-to-file-accounts-during-covid-19
Temporary Closure of Companies House Contact Centre
House has made the decision to temporarily close their Contact Centre
until further notice. From 25 March, any queries should be directed to
your Customer Care Manager or to firstname.lastname@example.org.
The Society will continue to update members with information regarding business support measures in the course of the current crisis as their application and impact for NI business becomes clear. The Economy Minister has also said they are committed to addressing any gaps in business support.
The Finance Minister has indicated he supports looking at relief on national insurance contributions, which the Society would support. The Society will monitor this and update members as required.
David A. Lavery CB