The impact of coronavirus has no boundaries and the equestrian sector is certainly feeling the strain. The British Equestrian Federation continues to monitor the outbreak and provide guidance to member bodies based on Government guidelines around the world. Here in the UK all equestrian events have been cancelled or postponed at least until 16 April with British Dressage and British Showjumping releasing a joint statement on 25 March setting out the cancellation of a number of key fixtures. British Eventing and The British Horseracing Authority have also taken similar action.
The UK Government has announced a number of measures to support businesses and workers, and below are the five main areas which will benefit the equestrian sector.
1. Job retention scheme
Aimed at avoiding redundancies and layoffs, businesses are able to agree with employees that they will take ‘furlough leave’ and be paid not to work until such time as their role becomes viable again. This will allow the employer recovery of 80% of wage costs up to £2,500 per month per employee. The remaining 20% can be paid at the employer’s discretion.
The scheme is available from 1 March 2020, initially for three months. If this is a step you are looking to take, then every day counts because the longer decisions are delayed the more wages will need to be funded by the employer.
The furloughed worker details will need to be uploaded onto a HMRC portal which is being urgently set up. March wages will have to be paid by the employer and potentially not be recovered until late April so this will have cashflow implications.
The steps to take to furlough employees are as follows:
- Decide which staff to furlough and consult with them.
- Decide if the 20% discretionary top up will be paid.
- Notify affected employees. We would suggest this is put in writing in a letter or email setting out the date the furlough starts, when it will be reviewed and how to keep in contact.
- Submit month end payroll detail in the usual manner and pay staff.
- Submit detail to HMRC when the portal is live in order to reclaim the qualifying costs.
2. Support for self-employed workers
You will qualify if you are a self-employed individual or a member of a partnership and you:
- have submitted your income tax self-assessment tax return for the tax year 2018-19;
- traded in the tax year 2019-20;
- are trading when you apply, or would be except for COVID-19;
- intend to continue to trade in the tax year 2020-21; and
- have lost trading/partnership trading profits due to COVID-19.
Your self-employed trading profits must also be less than £50,000 and more than half your taxable income. This is determined by at least one of the following conditions being true:
- having taxable trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income; or
- having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period.
If you started trading between 2016-19, HMRC will only use those years for which you filed a self-assessment tax return.
If you have not yet submitted your income tax self-assessment tax return for the tax year 2018-19, you must do this by 23 April 2020 to qualify.
How much will I get?
- You will get a taxable grant which will be 80% of the average profits from the tax years (where applicable):
- 2016 to 2017
- 2017 to 2018
- 2018 to 2019
The maximum you will receive is £2,500 per month for three months. This will be paid directly into your bank account, in one instalment. Payments are expected to be made in June 2020.
There is no need to apply for the scheme, if you are eligible HMRC will contact you.
3. Support for businesses that pay little or no business rates
The Government will provide additional small business grant scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.
You are eligible if:
- your business is based in England;
- you are a business that occupies property; and
- you are receiving small business rate relief or rural rate relief as of 11 March.
You do not need to do anything. Your local authority will write to you if you are eligible for this grant.
4. Deferral for VAT and self-assessment tax payments
VAT payments due falling between 20 March 2020 and 30 June 2020 may be deferred until 31 March 2021.
Self-assessment payments on account due 31 July 2020 may be deferred until 31 January 2021.
The deferral is automatic and does not need to be claimed. If VAT is being paid by direct debit then this should be cancelled and reinstated at a later date.
No interest or penalties will be charged during the deferral period.
5. Business interruption loan scheme
The temporary scheme supports small businesses with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to six years.
What is the Government covering?
- A business interruption payment to cover the first 12 months of interest payments;
- Any lender-levied fees;
- A guarantee of 80% on each loan (subject to pre-lender cap on claims) to give lenders further confidence in continuing to provide finance to small businesses.
The scheme will be delivered through commercial lenders, backed by the government-owned British Business Bank. There are 40 accredited lenders able to offer the scheme, including all the major banks.
You are eligible for the scheme if:
To apply, you should talk to your bank or one of the 40 accredited finance providers as soon as possible, to discuss your business plan.
If you have an existing loan with monthly repayments, you may want to ask for a repayment holiday to help with cash flow.
The guidance and details continue to be announced and our main COVID-19 webpage is being updated regularly, click here to access the page. If you would like to discuss your options please contact Lucie Hammond on 01242 680000 or lucie.hammond@hazlewoods.co.uk