The coronavirus is beginning to have, at the time of writing, a genuine, significant and growing impact on UK businesses. It’s a fast-moving and dynamic situation that requires almost minute by minute updates, but earlier this week, (March 17) UK chancellor Rishi Sunak unveiled an unprecedented package of measures designed to support various parts of the UK economy. And there is more to come, he reassured nervous business owners, promising further measures as the crisis develops.
For now, though, this is what we have:
- Statutory Sick Pay (SSP) covers necessary self-isolation as well as actual sickness. And the Government has announced that in some cases employers with fewer than 250 staff can reclaim up to 14 days SSP per employee
- Small Business Rate Relief has been increased to 100% for small businesses below a rateable threshold (£15,000). Grants for this will be available and businesses will be contacted by their local authority
- A 12-month business rates holiday for businesses in the retail leisure and hospitality sectors
- The announcement of the Coronavirus Business Interruption Loan Scheme, providing government-backed loans of up to £5million for small businesses, with a 6-month interest-free holiday.
- A new helpline (Time to Pay) to assist small business with problems paying taxes to HMRC
- The government has also announced that it had postponed the extension of IR35 into the private sector for a year. This was due to start on 6th April.
As a quick guide, SSP is payable if employees are:
- Incapacitated due to injury or illness (i.e. symptomatic)
- Deemed to be incapacitated despite being ‘capable’ of work because of necessary self isolation. Employers should regularly check the public health guidance on self-isolation as it has changed as the pandemic has developed, and it directly affects who is entitled to SSP during self-isolation
- Changes were announced to SSP in the 2020 budget, which will (in due course):
- Allow eligible workers to claim SSP from day one of absence (removing the requirement for three ‘waiting days’)
- Temporarily extend SSP to cover people caring for those within the same household who display coronavirus symptoms and have been told to self-isolate
- The government has also announced that small businesses (with fewer than 250 employees) will be reimbursed for any SSP paid to employees in respect of the first 14 days of sickness related to COVID-19
For most businesses, this is a time of great uncertainty. The impact on businesses for the period of isolation is primarily focused on the loss of income with no suspension of fixed and semi-variable costs, which can blow a sizeable hole in the cash flow and profitability. And that’s without mentioning the related consequences on their suppliers, employees, and dependents.
In other news, the controversial IR35 off-payroll changes, due to come into force next month, will be delayed until April 2021. Ministers argue that the reforms clamp down on a tax loophole used by self-employed people working through a company.
There is no silver bullet here. However, despite the challenges of planning in such uncertain times, there’s no better alternative than to at least try. Indeed, as Dwight Eisenhower said, Plans are useless, but planning is indispensable. Therefore, it’s vital to time to consider what you can do to mitigate the impact of a slow-down on your business.
And we are here to help. Whether it’s tax, payroll, accounting or banking, we can sense check those plans and help them get through the worst. We’re there to make sure the basics are all in place so that the clients can work hard on achieving their goals.
For those in need, there are a number of links worth bookmarking as the Covid-19 outbreak progresses: