Forgot Login?   Sign up  

Official Coronavirus Support - Summary

We have been looking at what the Governments recent announcements may mean for General Aviation businesses because, as we know, high level announcements often lack the detail which needs to be understood.

Below is a summary of those Business support measures that apply in England and may be of benefit to you. For Regional variations see the links below. We have also included a section for Self-employed towards the end of this email.

For Scotland see: https://www.gov.scot/news/gbp-1-billion-business-support-fund-opens/
For Wales see: https://businesswales.gov.wales/coronavirus-advice
For Northern Ireland see: https://www.nidirect.gov.uk/articles/coronavirus-covid-19-business-and-employers
For Jersey see: https://www.gov.je/health/coronavirus/Pages/index.aspx
For Guernsey see: https://gov.gg/covid19businessguidance

1) Employers & Employees

Last week, in an attempt to protect jobs, the Government set out plans to pay employees 80% of their salaries, capped at £2,500 per month. This support is referred to as the Coronavirus Job Retention Scheme.

Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. To access the Coronavirus Job Retention Scheme, you will need to discuss with your employees being designated as furloughed worker. This would mean that the employees are kept on your payroll, rather than being laid off.

To qualify for this scheme, furloughed workers should  not undertake work for their employer  while they are furloughed. This will allow employers to claim a grant of up to 80% of furloughed workers wage bill for all employment costs, up to a cap of £2,500 per month.

An employer can choose to fund the differences between this payment and the full salary,ie 20% but does not have to. Employees whilst in furlough cannot work for the employer. This scheme is not available to self employed as it is linked to payrolls.

To access the Coronavirus Job Retention Scheme the Employer will need to:

  • designate affected employees as ‘furloughed workers,’ and notify your employees of this change - changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.

HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

2) Other Business Support

See this Government website for full details. This is a summary of support available:

Coronavirus Business Interruption Loan:

If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.
 
Two further schemes to help business have been announced - a new interest-free Business Interruption Loan Scheme for small and medium-sized firms and a Bank of England finance option for bigger businesses.
 
How will the Business Interruption Loan Scheme work?

UK-based small and medium-sized businesses (SMEs) with an annual turnover of less than £45m can apply for an interest-free loan of up to £5m to help them through Covid-19 related difficulties.

The government will provide a grant payment to cover the interest and initial fees for the first 12 months, and will guarantee 80% of the loan amount to give banks and financial companies the confidence to lend.

Under the scheme, which will initially run for six months, businesses will be able to borrow for up to six years. They will be liable to repay the money in full - the guarantee is for the lenders, not the borrowers.
 
Businesses will have to prove that they are viable businesses which have been trading successfully, but just need extra support to deal with short term difficulties caused by the current disruption. Some businesses may not be successful.
 
GA Aerodromes and associated businesses may be eligible.

 VAT:

Additional support for businesses through deferring VAT and Income Tax payments as the Government is also saying that they will support businesses by deferring Valued Added Tax (VAT) payments for 3 months.

For VAT, the deferral will apply from 20 March 2020 until 30 June 2020.

All UK businesses are eligible.

How to access the scheme

This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.

Business Rate Support (England):

The Government is providing £20 billion of business rates support and grant funding to help the most-affected firms manage their cashflow through this period by giving all retail, hospitality and leisure businesses in England a 100% business rates holiday for the 2020 to 2021 tax year.

Businesses that received the retail discount in the 2019 to 2020 tax year will be re-billed by their local authority as soon as possible.

You are eligible for the business rates holiday if:

  • your business is based in England
  • your business is in the retail, hospitality and/or leisure sector

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

  • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
  • for assembly and leisure
  • as hotels, guest & boarding premises and self-catering accommodation

AOPA believes that GA activity should meet the criteria to be classed as  "leisure" related for many of its activities.

Cash grants for retail, hospitality and leisure businesses (England):

The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.

Businesses in these sectors with a property that has a rateable value of £15,000 and under will receive a grant of £10,000.

Businesses in these sectors with a property that has a rateable value of between £15,000 and £51,000 will receive a grant of £25,000.

You are eligible for the grant if:

  • your business is based in England
  • your business is in the retail, hospitality and/or leisure sector

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

  • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
  • for assembly and leisure
  • as hotels, guest and boarding premises and self-catering accommodation

How to access the scheme

You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

AOPA believes that GA activity should meet the criteria to be classed as  "leisure" related for many of its activities.
 
CAA Defer Increase Charges:
 
CAA has announced that the planned increase in fees / charges will be deferred for 3 months AOPA has asked the CAA to suspend all charges whilst the current situation persist, however this maybe difficult given that the CAA is funded through those that they regulate. Therefore AOPA suggest that they also look at what support they maybe eligible for through Government as part of a package of measures they could adopt in order to stand behind the industry.

2) Self-employed

Self employed instructors / pilots cannot benefit from any of the schemes above at the moment although the Government is considering how something may be done as we currently understand the position. You may be interested in this petition: https://petition.parliament.uk/petitions/300336

Income Tax:

For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021. If you are self-employed you are eligible and it is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period.

HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.

Statutory Sick Pay (SSP):

If you are not eligible for SSP – for example if you are self-employed or earning below the Lower Earnings Limit of £118 per week – and you have COVID-19 or are advised to stay at home, you can now more easily make a claim for Universal Credit or new style Employment and Support Allowance.

If you are eligible for new style Employment and Support Allowance, it will now be payable from day 1 of sickness, rather than day 8, if you have COVID-19 or are advised to stay at home.

AOPA will not have all the answers but we are monitoring daily the Government’s announcements. Please feel free to contact me via email martin@aopa.co.uk and if we need to set up a face to face meeting we can look at Skype or similar technologies.

In case you have not seen it, the CAA have published ORS4 No 1354 which details exemptions for the extension of validity periods for (commercial)licences, ratings and certificates of aircrew, Instructors, Examiners, Aircraft Maintenance Licence holders  and Air Traffic Controllers

Martin Robinson
CEO

Go to top