Coronavirus support for dental practices
Coronavirus support for dental practices
Coronavirus has changed the world and it will affect your business

Covid-19, or the Coronavirus as it’s more commonly known, has changed the world. Since it first emerged in China at the end of 2019, its effects have been far reaching and we will be seeing the consequences of it for a long time to come.

There’s no getting away from it, it will affect your business. It will affect all businesses – from your own dental practice to your favourite restaurant. And consequently, it will affect all individuals – if you have to reduce the hours of your staff in order to reduce overheads, will they still be able to pay their own bills?

The Government are working hard to support everyone during these very challenging times. The Chancellor, Rishi Sunak has announced several measures to support businesses and workers. As these are very new measures, more information is constantly becoming available. What we know so far is:

(Last updated 27 March 2020 at 14:30pm)

Coronavirus Job Retention Scheme
The government have introduced emergency funding for employees who are “furloughed”, that is, employees put on a temporary leave of absence.
The scheme is available to all UK businesses, other than those that are publicly funded. This includes NHS practices, although there does appear to be a little leeway for mixed practices that are predominantly private.
Funding is available by way of a grant (not loan) for up to 80% of an employee’s normal wage cost (based on historic wages), including Employer National Insurance and compulsory pension contributions, capped at £2.5k per employee per month.

HMRC guidance fortunately covers a lot of questions that many originally had following the announcement of the scheme. Please see our detailed guide for more information.

HMRC are setting up a new portal for recording payments to furloughed workers and funding is available by way of reimbursement. It is expected that this will be available by the end of April, which means cash will start arriving in May. If short term cashflow is needed, emergency funding is available (See below).

The grant is available for those employed by your business on 28 February 2020 but can be backdated to 1 March 2020. Employees who have unfortunately already been let go since 1st March can be re-hired and furloughed, qualifying for the scheme.

Changing the status of an employee to a ‘furloughed worker’, and reducing salary must still be done within existing employment law and the specific contract of employment.

Our friends at Meade King have a helpful summary of options that exist for employers.

Deferred tax payments
Payment of certain tax liabilities has now been deferred. This applies as follows:

Self-assessment (personal tax) payments on account, due 31 July 2020 can now be deferred until 31 January 2021.

VAT payments due between 20 March 2020 and 30 June 2020 are now not due for payment until the end of March 2021. VAT refunds will still be available as normal.

Both of the above apply automatically, with no penalties or interest being charged.

For other tax payments, HMRC have expanded the Time to Pay service (See below).

Extra time to pay your tax
HMRC have been instructed to allow businesses and the self-employed extra time to pay their tax bills (corporation tax and PAYE). They have setup a new helpline to deal with agreeing instalment plans (Time To Pay service) and suspending debt collection procedures. HMRC will also waive late payment penalties that may arise provided you call them as soon as possible. Call 0800 015 9559 to speak to HMRC (Monday to Friday 8am to 8pm, and Saturday 8am to 4pm) and have the relevant reference details handy.

Funding of statutory sick pay (SSP)
Those employees self-isolating due to Coronavirus are entitled to SSP from Day 1 of their isolation period. The Government has previously announced it will fund two weeks of SSP per employee but have yet to confirm how businesses can reclaim these payments. You also need to bear in mind that SSP is payable for up to 28 weeks so for those who are unfortunate and contract Coronavirus, they may be off for more than funded 2-week period.

See our FAQ on Staffing for more information.

Help for self-employed
Support for the self-employed was announced on 26 March 2020.

See our dedicated blog on this.

Emergency funding from banks
Several of the larger high-street banks have announced the availability of emergency loans. And for your existing loans, many are offering payment holidays and / or reduced repayments.

This is also, informally, expanding to asset finance backers.

Contact your own business bank manager for specific advice on how they can help relieve some of the immediate financial burden.

Additional funding support
For those businesses that have failed to secure funding from the main lenders, the Government have announced an extension to the Coronavirus Business Interruption Loan Scheme (previously known as the Enterprise Finance Guarantee). Overdrafts, financing and loans are available with the Government itself providing up to 80% of the loan security.

Funding of up to £5m is available over 3 months to 10 years for businesses with a turnover of up to £45m.

Finance will be interest free for 12 months.

The British Business Bank lending criteria must be met, but the government backing will widen the net for those that otherwise might not meet the bank’s ordinary criteria.

Although it is worth noting that the banks do not yet have details on how to apply this yet but expect to do so early week commencing 23rd March with funding available then.

Grants for smaller businesses
For those businesses that already qualify for Small Business Rate Relief (SBBR) or Rural Rate Relief, emergency funding is available in the form of a one-off grant of up to £10k but this will not be available until April. Your local authority will contact you directly if you qualify so the current advice is to sit tight and wait for them to contact you.

The grant is understood to not be available for publicly funded businesses, such as NHS practices.

Mortgage/loan holidays
Individuals may also be able to take a mortgage/loan payment holiday for up to 3 months after lenders agreed to support customers that are affected by Coronavirus.

Interest will still accrue and the capital will still be due – added to the end of your repayment term, but this does provide cashflow relief for individuals.

To apply, you should contact your lender.

Commercial eviction protection
Measures have been introduced to prevent landlords of commercial properties from evicting tenants who cannot pay rent because of COVID19.

A tenant will no longer automatically forfeit their lease as a result of missing a payment up to 30 June 2020.
In addition to these new measures, you may also want to look at any income protection insurance plans that you may have previously put in place. These could help to top-up your income in the short-term and allow you to pay your own bills.

It’s a constantly changing situation so I’m sure that there will be more announcements of support in the days and weeks to come. We will continually update this page and keep you informed of any changes that may be pertinent to you.

Hive Support Plan
If in the meantime you are at all concerned about your business and how to cope, with our deep and diverse expertise, Hive has a proven programme to help you Stabilise, Protect and, ultimately Regenerate. This has already been deployed to secure our existing clients but we are now happy to offer this programme to all practices.

Please get in touch for an initial consultation.

Simon Vincent
By Simon Vincent Senior Tax Accountant
If you have any questions or comments about this article, please get in touch.