It’s a critical time for our industry and thousands of businesses are suffering across the country – but industry Journalist Chris Hargreaves highlights how you can get help during these unprecedented times…
The chauffeur industry is in a critical state of flux. The government is under pressure to save lives, whilst also knowing the options on the table will have catastrophic implications for millions of businesses in the UK, especially those in the passenger transport and hospitality sector.
Whilst you could argue the media and social media hasn’t helped the situation with speculation and hearsay, the figures of potential deaths in the UK being stated far outstrip the global death toll so far.
Whatever your politics, nobody would want to be in Boris Johnson’s shoes right now. Taking the number of deaths in China and Italy the actions of our government if they get it wrong could easily see far more businesses “die” in the next few months than actual people.
It is clear the current situation is fluid, with major announcements being made without actual real hard facts being stated.
Just looking at headline statements, such as 12-month interest-free loans backed by the government fails to mention if these loans will be repayable immediately via monthly payments.
If you are a chauffeur, sole trader or business how are you going to pay a new monthly loan payment, less any interest with no income for the foreseeable future?
Will the interest be accrued to the debt or will you get a genuine interest free twelve-month period? Whilst any help is welcome the genuine worry and frustration by the trade could be eased if these packages were only released with hard facts.
Thousands of small and medium-sized businesses operate from no premises and are based in garages at home, the kitchen table or spare bedroom, so how does this affect you from obtaining the grant’s being offered by the government via your local authority?
There has been a significant amount of confusion over the government grants to small and medium-sized businesses and could be because there are two types of grants. The first pays £10,000 – originally £3,000 for the smallest businesses – which will automatically be paid to businesses directly from your local council.
This grant is for those businesses in England, note, not the UK, who pay little or no business rates because of small business rate relief (SBBR) or rural rate relief and tapered relief.
Businesses who received the aforementioned reliefs will automatically qualify for a one-off grant of £10,000 payable sometime in April 2020.
Each council holds the records of all businesses in their area that pay business rates, those who are eligible for this grant will be automatically contacted by their council. It is believed that the cash will be paid straight into the business account who resides at the premises and is registered for business rates. However, the trade needs to be vigilant as those businesses that don’t have to pay any business rates because they qualify for SBBR could result in your council not having your bank details.
Scammers could take advantage of the panic and request bank details to obtain your bank details for fraudulent proposes. It may be good practice to search your local council website and sign up for notifications.
The second cash grant is called The Retail and Hospitality Grant Scheme which provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property. For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000 and those with a rateable value of between £15,001 and £51,000, they will receive a grant of £25,000.
This grant is solely for business premises based in England, are occupied hereditaments that are wholly or mainly used as shops, restaurants, cafes, bars and pubs, cinemas or live music venues. It also includes hotels, self-catering accommodation, gyms and places for assembly.
At no point on any government website or press release does it state those working from home will qualify for the first grant and the second appears to be specific to premises in hospitality.
Along with grant’s the decision by the Chancellor, Rishi Sunak to pay millions of people’s wages has to be a relief to millions of people and businesses across the UK.
Effectively signing cheques for millions of workers is unprecedented, the Chancellor is offering to pay 80 per cent of salaries up to a ceiling £2,500 a month – equivalent to the UK average wage of £30,000 a year – as long as employers keep workers on their books, and there will be no limit on the total cost in an attempt to stop companies collapsing.
It is not clear if this is taxable and subject to employer and employee national insurance but I would suspect it will be as it will still create a tax income for the government.
The new lifeline will be active by the end of next month, April and will be backdated till the beginning of March to those claiming.
The delay is due to the fact that no system exists to do this but HMRC claim they are working urgently to set up a system for reimbursement as current systems are not set up to facilitate payments to employers.
The cost to UK PLC is expected to be around £12 billion per month if 5 million workers in affected industries claim the maximum £2,500 per month.
According to the government there is some paperwork to do before you can even claim.
Firstly, you have to designate affected employees as ‘furloughed workers,’ and notify your employees of this change – furlough is to allow or force someone to be absent temporarily from work. In this case, that means anyone asked to stop working during the coronavirus pandemic, but not made redundant.
Importantly, before rushing to change any employees work status please check with current employment laws as changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
Once you have submitted the 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 per employee.
This multi-billion-pound payment has yet to be confirmed if it covers owners, shareholders and, or directors. This crucial oversight and lack of clarification could leave significant numbers in the chauffeur industry who run one man bands or employing wives or children who part-own the business outside of the safety net.
In regards to the self-employed, the Chancellor also stated that the next self-assessment payments will be deferred to January 2021 to further support the self-employed.
He added: ‘I’m strengthening the safety net for self-employed people too by suspending the minimum income floor for everyone affected by the economic impact of coronavirus
‘That means that self-employed people can now access, in full, Universal Credit at a rate equivalent to statutory sick pay for employees.
‘Taken together, I’m announcing nearly £7billion of extra support through the welfare system to strengthen the safety net and protect people’s incomes.’
The self-employed in the chauffeur industry appear will be hit hardest because they will not be able to access the wider packages being offered to bricks and mortar businesses and those that also employ staff and the government urgently needs to address this.
Finally, creating delays to payment of taxes for the self-employed or VAT for business for a few months is pushing the problem down the road. Nobody knows when this will end, two, three, six or 12 months and I am sure it will end, but what will be the appetite for people and business to suddenly want chauffeur services or the hospitality industry.
There will be holidays to take, but will the public be able to afford it? Will businesses reevaluate their transportation needs and ways their staff work following compulsory social distancing?
Will businesses and the public take many months after this crisis ends to get back on their feet?
The answer to these questions are unknown, but the industry is full of passionate individuals who provide a service second to none to businesses, not only in the UK but worldwide.
Whatever your position it costs nothing to speak to your landlord, insurance company or lender. Don’t rush into decisions you may later regret and no matter how hard times are now don’t forget your own wellbeing, mental and physical are just as important as keeping the wolves from the door.
By Chris Hargreaves.
