COVID-19: Further measures to support businesses
COVID 19: Further measures to support businesses
An update on further measures announced by the UK Government over the past two weeks in relation to COVID-19.
Since our previous edition of Tax Matters Digest on 23 March 2020, the Government has announced a number of additional measures and further guidance to support businesses in navigating the continuing economic uncertainty and disruption caused by the ongoing COVID-19 pandemic and associated lockdown. This article provides an update on developments over the last two weeks.
An article in our previous edition of Tax Matters Digest summarised the measures announced to help small and medium enterprises (SMEs). In addition to the support for SMEs mentioned in our article, the Bank of England had also announced that large businesses, which make a material contribution to the UK economy, could apply for debt finance from the newly created COVID Corporate Financing Facility (CCFF).
On 2 April 2020 the Coronavirus Business Interruption Loan Scheme (CBILS) was expanded so that all viable small businesses affected by COVID-19, and not just those unable to secure regular commercial financing, will now be eligible should they need finance to keep operating during this difficult time. The Government is also stopping lenders from requesting personal guarantees for loans under £250,000 and making operational changes to speed up lending approvals. The Government will continue to cover the first twelve months of interest and fees.
The Government also announced that larger firms with a turnover of £45 million to £500 million will also be eligible for loans under a new Coronavirus Large Business Interruption Loan Scheme (CLBILS). This will be a welcome update for many businesses whose turnover exceeded the £45 million limit for CBILS and were not able to issue commercial paper under the CCFF. These are important changes which should enable more businesses to benefit from government-backed financing during this difficult time.
Over the last two weeks a number of other further announcements have been made by the UK Government, primarily aimed at easing administrative burdens and providing flexibility for businesses, including the following:
- Manufacturers of hand sanitisers and gels will have their applications for denatured alcohol fast-tracked and import taxes on vital medical equipment including ventilators have been waived;
- Changes will be made to the UK’s insolvency framework including a moratorium for companies from creditors enforcing their debts for a period of time whilst they seek a rescue or restructure, protection of their supplies, to enable them to continue trading during the moratorium, and a new restructuring plan binding creditors;
- Wrongful trading provisions will be temporarily suspended retrospectively from 1 March 2020 for three months for Company Directors;
- Listed companies will be allowed an extra two months to publish their audited annual financial reports;
- Companies may apply for a three month extension to the deadline for filing statutory accounts with Companies House;
- HMRC have extended the deadline for implementing digital links for ‘Making Tax Digital’ for VAT (see our separate article for more details);
- HMRC have issued guidance on taxable expenses for employees working from home. Our separate article gives further detail;
- The First-tier Tribunal has stayed proceedings for 28 days from 24 March 2020 and all time limits in any current proceedings are extended by the same period;
- Right to work checks may be conducted by video call and employers may accept scanned copies of documents for the time-being;
- Gender pay gap reporting has been temporarily suspended;
- Companies may hold their annual general meetings online or postpone them; and
- HMRC have provided digital communication methods for dealing with certain tax matters including stamp duty. This is summarised in our separate article.
In addition to the above developments, guidance has been published by HMRC in relation to the job retention scheme (JRS) which is discussed in more detail in our separate article. A similar scheme has also been announced for the self-employed to claim a grant for eighty percent of their profits, up to the same cap of £2,500 per month.
HMRC have also issued guidance on the VAT payment deferral that was announced on 20 March 2020. A further article in this edition of Tax Matters Digest gives an update on the options available for struggling businesses to defer payments of various taxes.
Finally, governments in other jurisdictions have also continued taking action to support businesses in their territories. Keep track of the COVID-19 tax developments around the world at our dedicated page.
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