We are here to support you and your businesses during these uncertain times. If there is anything we can do to help please get in touch, we’re happy to help if you have financial concerns or simply need to talk to someone about how this might impact your business or personal position.
On 24 September 2020 the Chancellor announced further support for businesses and the self-employed. We have summarised the key changes below and the current guidance can also be found here. HM Government's Business Support website can be found here. There is also a support finder to see what support is available for you and your business.
Job Support Scheme (replacement for ‘furlough’)
The new Job Support Scheme will top up wages for employees who work less hours than usual, because their employer is facing lower demand due to Coronavirus. The Job Support Scheme will commence in November 2020 (with the ‘furlough’ scheme ceasing at the end of October 2019) and run for six months.
For any particular employee to be eligible they will need to work at least 33% of their ‘normal’ hours and have received a payroll payment from the employer on or before 23 September 2020. Of the remaining ‘normal’ hours not worked 1/3 will be paid by the government and 1/3 by the employer. Meaning that the employee will receive up to 77% of their normal wages where the cap doesn’t apply.
- The grant will be taxable income for the employer
- The grant will be based on the employee’s usual salary and will be capped at £697.92 per month
- The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer
- Workers on the Job Support Scheme will not be able to face redundancy
- Employers who qualify can use Job Support Scheme even if they didn’t use the ‘furlough’ scheme
- Employers will be able to make a claim online through Gov.uk from December 2020 and they will be paid on a monthly basis in arrears.
- Employers must agree the new short-time working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing
The scheme will sit alongside the Jobs Retention Bonus and could be worth 60% of average wages for employees who have been furloughed and are kept on until February 2021. In order to protect jobs, businesses can benefit from both schemes.
The Chancellor has also announced that he is extending the Self Employed Income Support Scheme Grant (SEISS) in order to support the self employed who have been affected by COVID-19. If you have previously been identified as eligible then you should continue to be eligible for the third (and future) SEISS grants provided you are continuing to actively trade but face reduced demand due to coronavirus.
The taxable grant will again be paid in a lump sum to cover the period November 2020 to January 2021. The grant will equate to 20% of average monthly profits, up to a maximum of £1,875.
An additional (fourth) SEISS grant will be available to cover the period February 2021 to April 2021, ensuring that support continues into next year.
Further details on the dates for claiming and confirmation of eligibility are expected to be confirmed shortly.
Income tax payments
Self-assessment income tax payers can extend the deferment of their tax bill for a further 12 months from January 2021 to January 2022, under the ‘Time to Pay’ self-service facility. This will include 31 July 2020 payments which have been deferred as well as liabilities that fall due 31 January 2021.
Bounce back loans / CBILS / new loans
To give small businesses more time and flexibility Bounce Back Loans will become "Pay as You Grow", so the loan repayment period can be extended from six to ten years. Businesses can move to interest only payments or defer payments if they are ‘in real trouble’ for up to six months. It has been confirmed that this will not impact businesses credit ratings.
The government’s guarantee for the Coronavirus Business Interruption Loans (CBILS) will also be extended to 10 years making it easier for lenders to give businesses more time to pay.
As well as extending the application window for current coronavirus loan until the end of November 2020, the Chancellor has also advised there will be a new government backed loan scheme introduced in January 2021. Further details on this are expected to follow nearer the time.
Businesses who deferred their VAT bill earlier this year will no longer have to pay it back in a lump sum in March 2021. Instead business will be able to pay this, interest free, over an 11 month period during the financial year 2021-22.
VAT in hospitality and tourism
The 5% rate of VAT will remain in place for hospitality and tourism until the end of March 2021, it will not go back up to 20% in January 2021 as previously planned.
- The Chancellor has announced details of an extension to the Coronavirus Job Retention Scheme (CJRS) for employers. The scheme will close to new entrants from 30 June (which means that the final date that you can furlough an employee for the first time will be 10 June). From 1 July 2020 employers have the flexibility to bring already furloughed employees back to work on a part-time basis whilst the government continue to pay up to 80% of the wages for any of their usual hours which they do not work. Finally, the government grant paid for furloughed employees will be reduced from August onwards. Further details can be found here.
- The Chancellor has announced details of an extension to the Self Employed Income Support Scheme (SEISS) for the self-employed and partners in partnerships. If you qualify, the grant will be worth 70% of average monthly trading profits, paid out as a lump sum covering a further 3 months. The grant is capped at £6,570 and will be liable to tax.
- The online service to reclaim Coronavirus Statutory Sick Pay (SSP) will be available from 26 May 2020, which will repay employers the SSP paid to current or former employees.
- The Coronavirus Job Retention Scheme has been extended to the end of October 2020. Furloughed workers will continue to receive 80% of salary up to £2,500 per month, but employers will now be asked to contribute towards the salaries. There will be more flexibility with workers able to return to work part-time. Further details will be announced before the end of May 2020.
- The self-employed can confirm their eligibility and find out when a claim can be submitted for the Self-Employed Income Support Scheme via HMRC's online tool. You will need to create a HMRC account to submit a claim and would recommend this is set up as soon as possible.
- A top-up to the local business grant fund scheme has been announced aimed at businesses with ongoing fixed property related costs. The allocation of funding will be at the discretion of the local authorities but they will be asked to prioritise businesses in shared spaces, regular market traders, small charities and bed and breakfasts. Businesses must be small, under 50 employees, and must also be able to demonstrate that they have seen a significant drop of income due to Coronavirus restrictions. Grants will be up to £25,000.
- A temporary zero-rating for VAT will apply to the supply of personal protective equipment (PPE) from 1 May to 31 July 2020.
- The Chancellor has announced a Bounce Back Loan Scheme offering small and medium sized businesses loans of between £2,000 and £50,000 with the government guaranteeing 100% of the loan. There are no fees and no interest to pay for the first 12 months. The scheme will launch on 4 May.
- The portal through which claims for the Coronavirus Job Retention Scheme are to be made is now live and can be accessed here. HMRC is advising that payments will be made 6 working days after a claim is submitted.
- The Coronavirus Job Retention Scheme (Furlough) has been extended to 30 June.
- The cut-off date for the Furlough scheme has been extended to 19 March (previously 28 February). A payment needs to have been made to an employee and reported to HMRC prior to that date for the employee to qualify.
- The Chancellor has announced a £750m package to keep struggling charities afloat during the coronavirus pandemic.
- The deferral of self-assessment payments due on 31 July 2021 now applies to everyone, not just the self-employed.
- Wrongful Trading provisions are to be suspended from 1 March 2020 for three months for company directors so they can keep their businesses going without the threat of personal liability. Changes will be made to insolvency legislation to enable UK companies undergoing a rescue or restructure process to continue trading, giving them breathing space that could help them avoid insolvency.
- Further details in respect of the deferral of VAT payments (businesses should cancel their VAT Direct Debits if they wish to make use of the deferral)
- The Coronavirus Business Interruption Loan Scheme has now launched, the first point of contact is your lender. Links to the major bank's CBILS webpages are: Barclays, HSBC, Lloyds, Natwest, RBS
- Support for landlords (3 month mortgage holiday) and tenants (3 month protection from eviction)
The packages of measures to support individuals and business through this period of disruption are shown below. A number of which are automatic so you do not need to apply for them.
- HMRC have scaled up their Time To Pay offer to all individuals and businesses who are in financial distress.
If you have missed a tax payment or expect to miss an upcoming payment because of COVID-19 please call HMRC directly on 0800 024 1222.
- A Job Retention Scheme for which all UK businesses are eligible.
Employers will need to grant a leave of absence to designated employees, notify them of the change and submit information to HMRC about those employees and their earnings via a new online portal. HMRC will reimburse 80% of the worker's wages cost, up to £2,500 per month. Details of how reimbursement payments will be made are to follow.
- Most lenders are offering their personal and business customers payment holidays of up to 3 months on loans and mortgages as well as increased facilities on overdrafts and cards. You will need to contact your bank to apply.
- Deferral of VAT payments for all UK VAT registered businesses from 20 March to 30 June 2020.
Quite simply businesses do not need to pay over VAT to HMRC during this period. You will have until the end of the 2020/21 tax year to pay over the deferred liabilities. This is an automatic provision, you do not need to apply and VAT refunds and reclaims will continue to be paid.
- Deferral of income tax payments on account.
Payments on account due on 31 July 2020 will be deferred until 31 January 2021 without penalties or late payment interest. This is automatic, you do not need to apply.
- Refund of Statutory Sick Pay (SSP) for employers with fewer than 250 employees as at 28 February 2020.
The refund will cover up to 2 weeks SSP per employee who has been off work due to COVID-19. You will be required to retain records of staff absences but employees do not need to provide a ‘fit note’. Details of how reimbursement payments will be made are to follow.
- Small Business Grant Scheme
A one-off grant of £10,000 to businesses in England that pay no business rates because of the Small Business Rate Relief, Rural Rate Relief and tapered relief. Your local authority will notify you if you are eligible.
- The Coronavirus Business Interruption Loan Scheme for businesses with a turnover of no more than £45m
The scheme will launch early week commencing 23rd March to provide access to bank lending and overdraft facilities up to £5m. The first 12 months will be interest free. We would be happy to assist you with the application process with your bank or finance provider and in providing any financial information you might need in support your application. Further details are also available on the British Business Bank website.
The Treasury has also announced that the proposed reforms to IR35 (off-payroll working) will be delayed 12 months to April 2021.
Other useful information can be found at:
HM Government Coronavirus: what you need to do
How to keep you and your employees safe
Guidance for employers and businesses
Support for businesses
Guidance for employees
Statutory Sick Pay (SSP) Employer Guide
To help prevent the spread of the virus, and to protect our team and clients, we will not be attending face to face meetings in the short term. All meetings will go ahead via telephone or video calls. If you have a meeting in the diary with us and you haven’t heard from us yet we will be in touch shortly.
Should you need to attend our offices, for example to drop off documents, please contact us in advance to arrange a convenient time, one of the team will meet you at the door.
Most of our team will be working remotely from home with a skeleton team in the office. Many of our team regularly work remotely and as such we already have the systems and technology in place to continue operating with minimal disruption to the service you receive from us. You may also find the following tools useful to assist with meetings and remote working:
Voice over IP telephones
So please contact us as and when you need to, by telephone or e-mail.
From our team to yours, look after yourselves and keep in touch.