Coronavirus personal finance update from the LWA team

Many of us are now having to work from home, facing the threat of reduced income, juggling childcare and generally worried about finances. We've been speaking to the high street banks, and we've also summarised the Chancellor's speech today, to provide you with helpful information on your personal finances.

Following our email earlier this week with details of business support and wellbeing processes you can implement as a result of the Covid-19 virus outbreak, take a look at the latest advice and support available for you on a personal level.


JOB RETENTION SCHEME
As a first in UK history, to minimise the impact of Coronavirus, the Government will allow employers of any size, to apply for a HMRC grant covering 80% of salaries (up to £2,500 per month) for those staff that aren't working, but kept on payroll - rather than laying people off. Furthermore, employers will be able to backdate this to 1st March, and claim for employees that were laid off as a response to the outbreak after 28th February.

Working Tax and Universal Credit levels are being increased at the basic / standard level by £1,000 per year for the next 12 months. Furthermore, self-employed people affected by Coronavirus will benefit from Universal Credit at a rate equivalent to Statutory Sick Pay.

Self-assessment tax payments have also been deferred until January 2021. For Chancellor Rishi Sunak's full speech, please click here.


MORTGAGE SUPPORT
Banks including HSBC, NatWest and Lloyds have put measures in place to support customers with mortgage payments in a number of way. We spoke to HSBC who informed us of their process which includes an initial telephone conversation to ask how you've been affected by Coronavirus, and if you take the 3 month mortgage holiday, they have assured your credit score and future borrowings will not be affected. A follow up call within 5-7 days will explain how the break will work.

Employees in the Financial Sector have been identified as Key Workers by the Government and the team at Mortgages Made Simple are available to discuss any options or concerns you may have about your mortgage or protection insurances. You can contact them on 01925 357 060 or email info@mortgagesmadesimple.me.uk.



HELP WITH ENERGY BILLS
Customers with pre-payment meters who may not be able to add credit can speak to their supplier about options to keep them supplied. This will benefit over 4 million customers.

This could include nominating a third party for credit top ups, having a discretionary fund added to their credit, or being sent a pre-loaded top up card so that their supply is not interrupted.

More broadly, any energy customer in financial distress will also be supported by their supplier, which could include debt repayments and bill payments being reassessed, reduced or paused where necessary, while disconnection of credit meters will be completely suspended.

For more information on this, and guidance on reducing your energy usage, read this BBC article here.



LANDLORDS AND TENANTS
The government has announced a radical package of measures to protect those people that are renting, and landlords affected by coronavirus. As a result, there has been a complete ban on evictions and no tenant in either social or private accommodation will be forced out of their home during this difficult time. Furthermore, local housing allowance will be increased to cover a minimum 30% of market rents.

Emergency legislation will be taken forward as an urgent priority so that landlords will not be able to start proceedings to evict tenants for at least a three-month period. As a result of these measures, no tenants in private or social accommodation needs to be concerned about the threat of eviction.

Recognising the additional pressures that Covid-19 may put on landlords, we have confirmed that the three month mortgage payment holiday announced yesterday will be extended to landlords whose tenants are experiencing financial difficulties due to coronavirus. This will alleviate the pressure on landlords, who will be concerned about meeting mortgage payments themselves, and will mean no unnecessary pressure is put on their tenants as a result.

At the end of this period, landlords and tenants will be expected to work together to establish an affordable repayment plan, taking into account tenants’ individual circumstances.

Read more on the Gov.uk website here.


FURTHER BUSINESS UPDATE

From Monday 23rd March, business interruption loans of up to £5m (as a temporary replacement of the Enterprise Finance Guarantee Scheme) will be made available for small firms with a turnover less than £41m with no interest due for the first 12 months - extended from 6 months in Friday's speech (these industry sectors will not be elegible). If you think you might need to apply for the Coronavirus Business Interruption Loan Scheme (CBILS), contact an accredited lender authorised by the British Business Bank. Find out more here.

The Bank of England has cut interest rates even further to 0.1%, and banks have announced they will be relaxing requirements for overdraft extensions and loans applications so, if you need to request this, please speak to your local branch or business bank manager.

Rishi Sunak has also confirmed a deferment of the current VAT quarterly payment to the end of June, and any VAT incurred during this period will not be payable till the end of the current financial year.

HMRC has a set up a telephone helpline on 0800 0159 559 to support businesses and self-employed people concerned about not being able to pay their tax due to Coronavirus. HMRC will discuss your specific circumstances to explore agreeing an instalment arrangement; suspending debt collection proceedings; cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately.

 

HELPFUL GOVERNMENT LINKS


CONTACT US

If you have any concerns about Coronavirus affecting your business or personal finances, please know that you can contact our Managing Partner, Les Leavitt or one of the team here at LWA. Call us on 0161 905 1801 in Manchester, or 01925 830 830 in Warrington. We're here to help.