27 March 2020
Business Support Measures During Coronavirus (COVID-19) Outbreak
(Update includes more information on accessing small business grants, details on the job retention scheme, provision for the self-employed and new legislative protections for commercial tenants)
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
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 and some further information is provided on
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. Updates include most recent announcement in respect of the
self-employed, as well as new statutory protections from forfeiture for
commercial tenants. 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
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 monthly wage costs
of employees who would otherwise have been laid off, up to a limit of £2,500
per employee, plus the associated Employer National Insurance
contributions and minimum automatic enrolment employer pension contributions on
the 80% figure. The scheme is open to all UK employers that had
created and started a PAYE payroll scheme on or before 28 February 2020.
Payments under this scheme will be made via BACS. Employers may top up the
salary to 100% if they choose to do so.
employees must have been on your PAYE payroll on
28 February 2020, and can be on any type of contract, including
full-time employees, part-time employees, employees on agency contracts and
employees on flexible or zero-hour contracts. The scheme also covers employees who were made
redundant since 28 February 2020, if they are rehired by their employer.
This scheme 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.
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 must not to carry out any work for an employer to ensure they qualify
for the scheme. This includes providing services or generating revenue. While
on furlough, the employee’s wage will be subject to the usual income tax and
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 detailed information can be
Deferral of VAT
Government has now said that businesses have the option to defer business
payments for VAT for the period 20 March 2020 through to 30 June 2020. This is an automatic offer and you do not need to inform HMRC you
are deferring your payment.
Any liabilities accumulating during the
deferral period will be afforded until the end of the 2020/2021 tax year to
make payment. You will still need to submit your VAT returns to HMRC on
time and VAT refunds and reclaims will continue to operate as normal. The Government advice
is If you normally pay by Direct Debit and wish
to defer you should contact your bank to cancel your Direct Debit as soon as you can, or
you can cancel online if you’re registered for online banking.
on this can be found here:
Income Tax for the
For those who are
self-employed, income tax assessments due on 31 July 2020 may now
be deferred until 31 January 2021.
has now indicated this is optional, will be 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
more information, see here:
HMRC ‘Time to Pay’ Service
in financial difficulties and with outstanding tax liabilities may 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,
including 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.
can be reached on 0800 024 1222.
The Government also lists a contact number at 0800 0159 559.
For more information, see
Income Support Scheme (SEISS)
On 26 March, the
Government announced a scheme which allows self-employed individuals or members of
partnerships to claim a taxable grant worth 80% of your trading profits up to a
maximum of £2,500 per month for the next 3 months. To be eligible, your self-employed trading profits must also be less
than £50,000 and more than half of your income must come from
Government has said the scheme will be operational no later than the beginning
of June. Further information on
eligibility and the operation of this scheme can be found here:
Small Business Grant
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. The scheme will be administered by the Department for the Economy and Invest NI,
working with Land and Property Services. The Department for the Economy has now announced
the first payments will be made by 31 March.
grants will be paid using the last year’s rating list to make direct payments
to bank accounts. An online web portal has been set up to allow businesses to
provide these details if they have not already done so. Although the
grant scheme is targeted at 27 000 business, LPS only hold bank details for 7000 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.
The link to the
web portal for registration can be found below:
There is also a
telephone number for enquiries on the scheme:
Tel: 0300 200 7809.
can also monitor announcements from a range of 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 cash flow.
Proposed Reduction in the
Finance Minister announced the intention of the Executive to reduce the
regional business rate. The regional
rate is scheduled to be announced as part of the Budget package on 30 March 2020. The Minister is now due to speak in plenary to
the Assembly on 31 March 2020 on the Budget.
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
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
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 applications.
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
final decision on eligibility rests with the accredited lenders. The dedicated
page for information on the criteria and operation of 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
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.
For further information and FAQs for
Coronavirus Business Interruption Loan Scheme:
Statutory Sick Pay- Rebate for SMEs
UK Government has included provision within the Coronavirus Act 2020 for HMRC to
make regulations to allow qualifying NI SMEs to reclaim statutory sick pay
(‘SSP’). The UK Government announced this would cover up to 2 weeks’ SSP per
eligible employee who is off work due to COVID-19. Legislation
has also 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.).
UK Government has 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 mechanics
of the rebate 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 is requiring work to be
carried out on current systems.
information on this can be found here:
Protection from Forfeiture
During the Relevant Period
the terms of the Coronavirus Act 2020, commercial tenants in Northern Ireland
who cannot pay their rent because of COVID-19 will be protected from forfeiture
(until 30 June).
provisions of the Act mean no business will automatically forfeit their lease
and be forced out of their premises if they miss a payment up until 30 June.
is the option for the Department of Finance to extend this period (more than
once if required) by way of regulations.
The Government advise this is not
a rental holiday. All commercial tenants will remain liable for the rent.
Commercial tenants are protected from eviction if they are unable to pay rent.
More information can be found here:
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):
Number: 0330 123 9717
Business Interruption Insurance
It 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 may be clauses in some policies which may cover
COVID-19 if it was to become a “notified disease”.
Incorporated Practices- Guidance from Companies House on filing of Accounts
and Contact Point
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 evidence.
information can be found here – https://www.gov.uk/government/news/companies-to-receive-3-month-extension-period-to-file-accounts-during-covid-19
Closure of Companies House Contact Centre
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 email@example.com.
Society will continue to update members with information regarding business
support measures in the course of the current crisis, as more detail on their operation
and impact for NI business becomes clear. The
Society will continue to monitor the situation and update members as required.
A. Lavery CB