Accountancy

12 Key Coronavirus Resources Accountants Should Tell Clients About

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We are living through an unprecedented time, when it feels like reality and the daily routines that we’re used to at work and at home have been completely upended.

In times like these, it’s easy to feel worried about the future – particularly if you’re a business owner, or you’re responsible for keeping a company operating.

Companies will be worrying about a lot at the moment – from concerns about staffing and cash-flow, through to liquidity and how they’re going to afford to weather this growing financial storm.

As an accountant, you’re likely to face a growing number of questions from your clients about what government support is available to them throughout this pandemic, so we thought we’d help you out.

We’ve researched 12 of the most important coronavirus resources accountants should tell clients about to help them improve their financial health during this period.

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1. Coronavirus Job Retention Scheme

One of the most pressing issues facing most employers during the coronavirus crisis is how to pay the wages of their staff whilst the operations of their business are paused. If the business isn’t trading, then it isn’t making money – and that’s naturally a significant problem which would usually lead to employee redundancies.

The Coronavirus Job Retention Scheme is an attempt by the government to mitigate some of the costs of paying employee wages during a period where most businesses can’t trade, allowing them to keep workers employed. 

Covering up to 80% of furloughed employees’ wages (up to £2,500 a month), minimum automatic enrolment pension contributions, and Employer National Insurance contributions, the scheme is open to all UK employers who created and started a PAYE payroll scheme by 28th February 2020.

To be eligible, a company will need to ‘furlough’ workers – temporarily lay them off – and to inform HMRC of their current wages through their online system. This system is due to be up and running by the end of April.

Which clients qualify?

The vast majority of UK organisations will qualify for this support. Businesses, charities, recruitment agencies (agency workers who are paid through PAYE) and public authorities are all eligible.

Which staff qualify?

Full-time employees, part-time employees, employees on flexible and zero hours contracts, and agency workers are all eligible to receive support. Workers who have been made redundant since 28th February 2020 are eligible for the scheme if they’re rehired by their employer, too.

Whilst on furlough leave, employees will not be able to do any work on behalf of the organisation and their wages will still face tax and National Insurance deductions.

What to advise clients

  • Ensure that employees are designated as furloughed workers
  • Send an official, written communication of this to furloughed employees and get their consent
  • Continue paying at least 80% of your furloughed employees’ wages
  • Inform HMRC through the online portal (when it goes live) so that you’ll be reimbursed

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2. Coronavirus Business Interruption Loan Scheme

Ensuring that companies have enough money in the bank to survive will be a major challenge for businesses going forward, particularly as the lockdown grinds on. The temporary Coronavirus Business Interruption Loan Scheme is one attempt by the government to combat that.

Providing SMEs with access to loans, invoice finance, overdrafts and asset finance of up to £5 million, it offers financial support for up to 6 years.

A government-funded Business Interruption Payment will cover the first 12 months of interest payments and lender fees, reducing overall costs for smaller businesses.

The scheme will be offered through 40 accredited lenders, including the main high street banks, and lenders will receive a guarantee of 80% on each loan.

Which employers qualify?

Any UK-based business with a turnover of £45 million a year will qualify for the scheme. You’ll need to have a borrowing proposal to apply. Certain employers, such as banks and building societies, insurers, public-sector organisations, membership organisations and trade unions are not eligible for this scheme.

What to advise clients

  • Check if their business is eligible.
  • Prepare a borrowing proposal.
  • Talk to one of the banks offering the scheme – a full list can be found here.

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3. Support for businesses paying tax: Time to Pay service

Although this resource isn’t new, it could be a useful antidote to the overhead problems that a lot of companies are struggling with at the moment.

The Time to Pay service is an HMRC scheme that allows businesses to repay debt they owe the government over a period of time – usually 6 to 12 months – buying companies breathing space.

Arrangements are decided on a case-by-case basis, so there’s no one-size-fits-all approach. Each plan is tailored to the unique situation of the business.

Which employers qualify?

If your client’s company pays tax to the UK government, and they have outstanding payments to be made, they’ll be eligible for the service.

What to advise clients

Ensure that your tax returns are up to date. Make a note of any outstanding tax invoices.

Contact HMRC and ask about using the Time to Pay Service.


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4. Protection from eviction for commercial tenants

Most business owners will probably be worrying about how they will afford the rent for their premises during this pandemic. In response to growing concerns from businesses about how they’ll meet this cost, the Government has recently announced a ban on commercial evictions until 30th June.

Under the new rules, if a business misses a rent payment in this period, they will not be evicted.

This scheme is not a rent holiday though. Businesses will still be liable for paying the rent that they have missed when the three months are up.

What employers qualify?

All UK commercial tenants qualify for protection from eviction during the coronavirus crisis.

What to advise clients

Businesses do not have to take any action just yet. The changes will happen automatically when the Coronavirus Bill becomes law.


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5. Support for the self-employed

When measures to help businesses weather the coronavirus crisis were announced by the government during March, there was concern about the lack of protection available for self-employed workers. The government responded to this criticism by increasing the support available for the self-employed.

Self-employed workers can now apply for a taxable grant of 80% of their last 3 years’ monthly trading profits, or £2,500 a month – whichever is lowest.

Which clients qualify?

If your client has filed a tax return for the year ending 5th April 2019, has trading profits of less than £50,000 and makes most of their income through self-employment, they’ll qualify.

What to advise clients

  • If your client is eligible to take part, HMRC will contact them directly.
  • Application to the support is through an online form.
  • Payments will be made at the beginning of June 2020 and will be backdated to March.

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6. Deferrals of VAT liability and Self-Assessment payments

Cash-flow is likely to remain a big challenge for many companies and self-employed workers going forward, so the government has announced a range of deferral payments to help companies increase their liquidity.

All UK VAT registered companies who have a VAT payment due after 20th March will be able to defer their VAT payments for three months until 30th June 2020. Similarly, self-assessment payers will be able to defer income tax payments from July 2020 to January 2021.

Both schemes are automatic and HMRC will contact companies to give them more information, if they’re eligible to take part.

Which clients qualify?

  • (For VAT deferrals) Any UK registered business that is VAT registered and has a VAT payment due between 20th March 2020 and 30th June 2020.
  • (For self-assessment payment deferrals) Any worker who pays income tax through self-assessment and has a second payment due on 31st July.

What to advise clients

Both schemes are automatic, so your clients won’t need to do anything – they’ll be contacted by HMRC to take part.


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7. Support for businesses who are paying sick pay to employees

The government recently warned that up to one fifth of the UK’s entire workforce could be off sick with COVID-19 at the peak of the outbreak. This will naturally put a stress on the sick pay processes – and finances – of even the most resilient of companies.

Luckily, there is some support coming. Under the government’s plan, small and medium-sized businesses will be able to claim a refund for up to two weeks of Statutory Sick Pay paid to employees due to COVID-19 sickness and absence. The refund will be per employee and employers with less than 250 employees will be eligible for the scheme.

Employers will need to keep records of employees’ absences, but employees will not need to present a fit note from a GP to return to work. If employers need evidence of an employee’s sickness, employees can get an isolation note online from NHS 111.

Which clients qualify?

UK-based businesses that employ less than 250 employees, as of 28th February 2020.

What to advise clients

  • The mechanism for reclaiming payment is currently being set up. Check with HMRC regularly for updates on its progress.
  • Employers will need to keep adequate records of employee absence to submit claims.
  • Employees do not need to receive a fit note to return to work, provided they are free of symptoms.
  • If your client requires official evidence of absence due to sickness or self-isolation, employees can access isolation notes online via NHS 111.
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8. Business rate holiday for retail, hospitality and leisure businesses (England)

Another welcome measure that was recently announced by the government is a business rate holiday for businesses in the retail, hospitality and leisure sector – sectors that are under massive pressure at the moment.

Under the scheme, all eligible businesses in England will benefit from suspended business rate payments in the 2020 to 2021 tax year.

Which clients qualify?

England-based businesses that operate in the retail, hospitality and leisure sector.

What to advise clients

No action needs to be taken by your client – they’ll be contacted by their local authority if they’re eligible.


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9. Support for nursery businesses that pay business rates

With the majority of parents looking after children themselves, the need for childcare services has dried up, placing many nurseries under intense pressure. To counter this, the government has announced a business rates holiday for nurseries in the 2020 to 2021 tax year.

Which clients qualify?

Businesses based in England that are on Ofsted’s Early Years Register.

What to advise clients

No action needs to be taken by your client – they’ll be contacted by their local authority if they’re eligible.


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10. Support for businesses that pay little or no business rates

Many sectors have received business rate relief, but up until recently there was little support available for those small businesses which pay little or no business rates.

The good news is that extra funding has now been announced for these businesses through the through the Small Business Grant Scheme. Eligible businesses will receive a one-off grant of £10,000 to help them meet ongoing business costs during the pandemic. This will not need to be repaid.

Which clients qualify?

Businesses based in England that receive Small Business Rate Relief, Rural Rate Relief, or Tapered Relief.

What to advise clients

No action needs to be taken by your client – they’ll be contacted by their local authority if they’re eligible.


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11. Cash grants for retail, hospitality and leisure businesses

There is also additional support available for struggling businesses in the retail, hospitality and leisure industries.

Businesses can claim a grant up to a maximum of £25,000, if their property has a rateable value of over £15,000 but less than £51,000. Businesses with property that has a rateable value of less than £15,000 could be eligible for a grant of £10,000.

Which clients qualify?

Businesses based in England that have a rateable value of up to £51,000.

What to advise clients

No action needs to be taken by your client – they’ll be contacted by their local authority if they’re eligible.


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12. Support for larger firms through the COVID-19 Corporate Financing Facility

Most of the packages we’ve outlined here are tailored to smaller businesses, but there’s support available for larger firms too.

The COVID-1 Corporate Financing Facility will let banks buy short-term debt from larger companies, allowing them to cover the cost of short-term liabilities.

Which clients qualify?

Larger companies based in the UK, with good credit ratings, and in sound financial health.

What to advise clients

Apply on the Bank of England website.

We hope that you’ve found these resources useful when answering accountancy-related coronavirus support questions from your clients.


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