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02 July 2020
Phase 1: payroll co-funding scheme
Phase 2: payroll co-funding scheme
Business disruption loan guarantee scheme
COVID-19 Special Situations Fund
Deferral of social security contributions
Deferral of GST payments
Government rent deferrals and renegotiations
Income tax debts (arrears)
This article outlines the financial support available to businesses in Jersey that have been adversely affected by measures introduced to manage the spread of COVID-19.(1)
Phase 1 of the payroll co-funding scheme is a short-term wage subsidy measure which was introduced in the early stages of COVID-19. Eligible businesses can apply for £200 per week towards wages paid between 20 and 31 March 2020.
To be eligible for Phase 1, businesses must:
Businesses can apply for £200 per week for employees who:
For employees earning lower amounts, 60% of wages will be paid for the proportion of the month that was affected by the restrictions.
Employees earning more than £10,000 a month (gross) do not qualify.
How to apply
Applications for Phase 1 closed on 30 April 2020.(2) Payments will be made from the beginning of April 2020.
Phase 2 of the payroll co-funding scheme follows Phase 1 but offers greater financial support over a longer period (1 April 2020 to 31 August 2020) to a wider range of businesses. This scheme may be subject to extension. The government will subsidise wages up to a maximum of £1,600 per month to help businesses reduce their costs and protect job prospects in the longer term.
A wage subsidy can be claimed:
A wage subsidy is not available for staff employed through a third party (eg, an employment agency) or employees who earn £4,558 or more per month.
All of the following requirements must be met:
How to apply
Phase 2 support will be available each month for April 2020 to August 2020. Payments will be made from early May 2020. Businesses must pay staff wages before claiming and must present wage records with their applications. Applications should be submitted online each month here.
Where a business is applying for a special exemption from paying 20% of wages, it must provide pro forma cash flow forecasts for the relevant month, as well as additional declarations and financial information as part of its application, including that the change to hours or pay has been agreed with employees and that the business has considered all options for managing its working capital.(4)
Under the business disruption loan guarantee scheme, qualifying businesses can obtain loans or overdrafts to manage short-term cash flow constraints. The government underwrites borrowing by 80% and borrowers remain 100% liable for the debt. The scheme allows banks to extend financing to smaller businesses that are viable but unable to obtain finance under the lender's normal requirements. Businesses can apply to borrow between £5,000 and £500,000.
All local businesses can apply for the scheme, regardless of their business activity or sector.
How to apply
The scheme is available from 1 April 2020.
Businesses should contact their bank in the first instance.
Jersey Business will provide a web portal providing links to apply via the participating banks.(5)
The COVID-19 Special Situations Fund is a £50 million scheme open for applications from qualifying businesses which deliver a public good or serve an essential strategic purpose for Jersey. Support may be provided under the scheme in the form of grants, loans or equity positions.
Applications will be considered by a panel of senior government officials and independent specialists based on criteria including:
To help businesses and self-employed individuals with their cash flow, businesses may be able to defer social security contribution payments. Postponed contributions will be held on the businesses' account and payment will be discussed in due course.
Businesses with fewer than 80 employees and individuals who pay Class 2 contributions (including those who are self-employed) are automatically permitted to defer their payments for Q1 2020 and Q2 2020 (payments due in April 2020 and July 2020) by 12 months.
Businesses with 80 or more employees which can demonstrate that they have been significantly adversely affected by the COVID-19 pandemic can apply to defer their payments for Q1 2020 and Q2 2020 (payments due in April 2020 and July 2020) by 12 months.
Whether deferring payments or not, businesses must continue to submit quarterly schedules.
How to apply
For businesses with fewer than 80 employees, deferral is automatic; it is not necessary to contact the department to request permission.
Businesses which have 80 or more employees and can demonstrate that they have been significantly adversely affected by the COVID-19 pandemic should contact the government's Social Security Contributions Team by email ('firstname.lastname@example.org') or phone (+44 1534 444 444) to apply to defer their payments for Q1 2020 and Q2 2020 by 12 months.(7)
With immediate effect, goods and services tax (GST)-registered businesses can choose to defer the payment of GST relating to quarterly and monthly returns ending 31 March 2020, 30 April 2020, 31 May 2020 and 30 June 2020. This deferral is to help businesses manage their cash flow at this time. This is not a cancellation of monies owed.
The following criteria apply:
How to apply
According to the guidance, businesses need not notify the government that they are deferring the payment. Postponed GST will be held on the businesses' account and arrangements for payment will be made in due course.(8)
Rent deferrals or renegotiations are available where the government or a government-owned company is a landlord to a local business.
This option is available for business tenants which are suffering financial difficulties as a result of the COVID-19 pandemic.
How to apply
Each request for rent deferral will be treated on a case-by-case basis. Requests for rental deferment should be made directly to the landlord or property contact.(9)
The government has introduced measures in relation to the payment of income tax to help businesses which are experiencing cash flow and trading difficulties.
These measures are available to any business that foresees problems paying its debt.
How to apply
Parties should contact the government's Treasury and Exchequer Debt Management Team by email ('email@example.com') or phone (+44 1534 440 088) to discuss their time-to-pay arrangements. Cases of hardship will be treated sympathetically.(10)
For further information on this topic please contact Jonathan Hughes, Helen Ruelle, Bruce MacNeil or Will Austin-Vautier at Ogier by telephone (+44 1481 721 672) or email (firstname.lastname@example.org, email@example.com, firstname.lastname@example.org or email@example.com). The Ogier website can be accessed at www.ogier.com.
(3) The included sectors are those marked in green here.
(4) Further information is available here.
(5) Businesses should first complete the online form to assess their eligibility for the scheme and ensure that they are prepared to make an application directly to one of the participating lending banks. Further information is available here and here. Any questions should be referred to Jersey Business.
(6) Further information is available here.
(9) Further information is available on the Jersey Business website.
(10) Further information is available on the Taxes Office website.
Kate Morel, senior paralegal, assisted with the preparation of this article.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
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