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Coronavirus Government Support

Self–employment Income Support Scheme

The Self-employment Income Support Scheme (SEISS) provides grants to the self-employed based on their average monthly profits.

The scheme:

  • The SEISS is a taxable grant to the self-employed (including members of partnerships) based on a percentage of profits averaged over the last three tax years (or shorter periods if self-employment started after 2016/17).
  • The payment of the grant does not prevent the claimant from continuing to work.
  • The SEISS is restricted in that it is open to those who have annual self-employment trading profits of less than £50,000 and receive at least half their income from self-employment. Non-trading income might include income such as PAYE employment, property income, dividends, savings income, pension income, overseas income and miscellaneous income, including social security.
  • The first grant was for those whose business was adversely affected for the period before 13 July 2020 and has now closed. It was capped at a maximum of £2,500 a month or £7,500 in total.
  • The second grant was for those whose business was adversely affected for the period on or after 14 July 2020. You could claim for the second grant even if you did not make a claim for the first grant. However, the value is slightly reduced. Those eligible for the second grant will be able to receive a grant worth 70% of their average monthly trading profits up to £6,750 in total for the second three month period.
  • If impacted before and after the above dates, you were due both grants.

Scheme extended to a third and fourth grant

The chancellor announced in the Winter Economy Plan that the Self-Employment Income Support Scheme (SEISS) will be extended and subsequently increased the level of support ahead of the national lockdown in England.

What we know:

  • The extension will last for 6 months, from November 2020 to April 2021. Grants will be paid in 2 lump sum instalments each covering a 3 month period.
  • The third grant will cover a 3 month period from 1 November 2020 until 31 January 2021. The government will provide a taxable grant calculated at 80% of 3 months average monthly trading profits, paid out in a single instalment and capped at £7,500 in total. This is an increase from the previously announced amount of 55%.
  • The government are providing the same level of support for the self-employed as is being provided for employees through the Coronavirus Job Retention Scheme which has also been extended until March 2021.
  • The fourth grant will cover February 2021 to April 2021. The government will set out further details, including the level, of the fourth grant in due course.
  • The grants are taxable income and also subject to National Insurance contributions.

Eligibility

To make a claim for the third grant, customers must – as previously:

  • be self-employed or a member of a partnership – they cannot claim the grant if they trade through a limited company or a trust
  • have traded in both the tax years 2018 to 2019 and 2019 to 2020.

For this third SEISS grant customers must also now:

  • either be currently trading but are impacted by reduced business activity, capacity or demand, or have been previously trading but are temporarily unable to do so due to coronavirus
  • declare that they intend to continue to trade, or restart trading, and that they reasonably believe that the impact on their business will cause a significant reduction in their trading profits
  • only claim if the reduction in profits is caused by reduced business activity, capacity or demand, or inability to trade due to coronavirus – reduction in profits due to increased costs (such as having to buy masks) does not make a business eligible for the third SEISS grant.

You can check if you are eligible to claim via a tool on the .gov website here. You will need your Self Assessment Unique Taxpayer Reference (UTR) number and National Insurance number to hand.

Your claim:

In order to make a claim when the grant becomes available you will need a Government Gateway user ID and password, Self Assessment Unique Taxpayer Reference (UTR), National Insurance Number and your UK bank account details to receive payment by Bacs. If a claim under SEISS is approved, the sum will be payable in a single instalment, within 6 working days of making a claim.

If you don’t receive a letter:

Inevitably, some people’s records will not be up to date or they may not be at their normal address. HMRC says anyone who thinks they are eligible but has not heard from it should go to its website and use the checker tool.

We say…

HMRC have stated that ‘You must make the claim yourself. Your tax agent or adviser must not claim on your behalf as this will trigger a fraud alert, and you will have to contact HMRC. This will cause a significant delay to you receiving your payment.’ We are therefore unfortunately unable to complete these claims on behalf of clients. However, our tax team can provide some instructions on how to make their claim, should any clients require support. Full details of the scheme can be found at .Gov here.

Coronavirus Statutory Sick Pay Rebate Scheme

A refund covering up to 2 weeks Statutory Sick Pay (SSP) due to absence caused by COVID-19 is available to employers. This applies for businesses with less than 250 employees and is available from the first day of absence.

The scheme:

  • Employers are able to claim SSP for up to two weeks for any employee who had been off due to Covid-19 (including those in self isolation)
  • The SSP can be claimed from day 1
  • The claims can start for sicknesses starting on or after 13th of March 2020
  • Employees do not have to have a doctor’s fit note to make a claim
  • Employers must have a PAYE scheme in place on or before the 28th of February
  • Employers must have fewer than 250 employees on 28th February
  • All employee contracts are included, FT/PT, agency and zero hours contracts
  • Connected companies can also use the scheme but only if the total number of PAYE employees is fewer than 250 on or before the 28th of February

Record keeping:

The employer must keep all the records of the employees’ absences – those records will have to be kept for at least 3 year following the claim and must include:

  • Reasons for absence
  • Details of the period in which each employee has been off from work
  • Details of the SSP qualifying days when an employee could not work
  • National Insurance numbers of all employees who you have paid SSP to

Watch our video guide to making a SSP claim through the government portal

Our support service:

  • We offer an additional service for our payroll clients to submit their SSP rebate claims to HMRC.
  • If we are not already your PAYE Agent we will need to make arrangements for you to authorise us to submit information on your behalf to HMRC before we can begin.
  • If you would like us to complete this for you, please contact our Payroll Manager, Ula Namyslowska by email. Ula will confirm the information that is needed from you and how to send this to her.

We say…

We have contacted our Payroll clients regarding our new service for submitting their Statutory Sick Pay claims to HMRC. Please contact our team if you would like to discuss how we can assist.

Extended: The Coronavirus Job Retention Scheme

The Coronavirus Job Retention Scheme (CJRS) has been extended as England goes into a second national lockdown. Below we have included updated details on the scheme.

What we know

  • The scheme: The CJRS is a grant that is available to all employers, of any size and in any sector (small or large, including charitable or non-profit). It covers the hours that their employees are not working, calculated by reference to their usual hours worked in a claim period. It involves “furloughing” designated workers who would otherwise have been “laid off” during this crisis. Workers cannot do any work for an employer that has furloughed them.
  • Scheme extension: The scheme will run until the end of March but there will be a government review in January when this level of support, as well as government and employer contributions will be subject to possible change.
  • Open to new applications: Notably, employees do not need to have been previously furloughed in order to be eligible and employers who have not previously furloughed employees are also able to apply.
  • Flexibility: The extended scheme also retains the flexibility for employers to bring furloughed employees back to work on a part-time basis or furlough them full-time, but employers need to report and claim for a minimum period of 7 consecutive calendar days. Employers should continue to pay employees for hours worked in the normal way.
  • Retrospective claims deadline: Employers can agree retrospectively to furlough someone with effect from 1 November 2020, as long as the agreement to retrospectively claim furlough occurs on or before 13 November 2020. It is based on the employee genuinely having been furloughed during this time. If the employee has actually been working all of their usual hours, furlough cannot be backdated.
  • Shortened claim window: The portal for claims opened yesterday. Although the claiming process is the same, there is a shorter claim window. Claims relating to November 2020 will have to be made by 14 December 2020. Claims relating to each subsequent month must be submitted by day 14 of the following month.
  • Re-employing employees: Employees that were employed and on the payroll on 23 September 2020 (the day before the Job Support Scheme announcement) who were made redundant or stopped working afterwards can be re-employed and claimed for. The employer must have made an RTI submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees.
  • Employees serving notice periods: The government is reviewing whether employers should be eligible to claim for employees serving contractual or statutory notice periods and will change the approach for claim periods starting on or after 1 December 2020, with further guidance published in late November. This is a change to the previous guidance and means that those dismissed (whether for redundancy or otherwise) after 1 December 2020 may not be able to eligible to be furloughed during their notice period, as is currently possible.
  • Company names to be published: From December 2020, HMRC will publish the names of companies/Limited Liability Partnerships (LLPs) and the company registration number of those who have made claims under the scheme for the month of December onwards.
  • Employer top ups: Employers are still able to choose to top up employee wages above the CJRS grant at their own expense if they wish.
  • Employees who are shielding: Employees can be furloughed if they are shielding in line with public health guidance (or need to stay at home with someone who is shielding) or if they have caring responsibilities resulting from coronavirus.
  • Written agreements: The employer must confirm in writing to the employee that they have been furloughed, and keep a written record for 5 years.
  • Job Retention Bonus (JRB) removed: A £1,000 bonus per employee brought back from furlough and employed until the end of January 2021 has now been removed. However, the government has confirmed that a similar retention incentive will be deployed at an appropriate time.

How to calculate your claim/s

  • Calculating wages for employees who were previously furloughed: Employers must use the same calculations for calculating reference pay and usual hours as CJRS. This means that workers usual hours are their normal contractual hours at the end of the last pay period ending on or before 19 March 2020. For workers whose hours vary, the guidance states that the worker’s usual hours will be the higher of the average number of hours worked in the 2019/20 tax year or the hours worked in the corresponding period within the 2019/20 tax year. The employer will then need to calculate the number of usual hours in the claim period.
  • An example for a previously furloughed employee: To claim for the whole month of November for a worker who had the usual/contractual hours of 40 hours per week in their last pay period before 19 March 2020, the employer must calculate the number of usual hours in the month. This can be calculated by dividing 40 (the weekly hours) by seven (the number of days in a calendar week), to give daily hours. This is then be multiplied by the number of days in the claim period (i.e there are 30 days in November). If this does not produce a whole number the hours can be rounded up to the nearest whole number. In this case 171.43 would be rounded up to 172. Therefore, the worker’s usual hours for November would be 172.
  • Calculating wages for employees who were not previously furloughed: For an employee who meets the criteria of the extended scheme but was not previously eligible for CJRS, the alternative calculations of reference pay and usual hours must be used. The usual hours for an employee who is contracted for a fixed number of hours and whose pay does not vary according to the number of hours they work, will be the contracted hours worked in the last pay period ending on or before 30 October 2020. For employees working variable hours, it will be the average hours worked between (these dates are inclusive): the start date of the 2020 to 2021 tax year, (for example, 6 April 2020) and the day before their CJRS extension furlough periods begins. Then to work out the reference pay, for those on a fixed salary it will be 80% of the wages payable in the last pay period ending on or before 30 October 2020. For those whose pay varies it will be 80% of the average payable between (these dates are inclusive) the start date of their employment or 6 April 2020 (whichever is later) and the day before their CJRS extension furlough periods begins.
  • An example for a newly furloughed employee: Sam has been employed by A Ltd since April 2020. A Ltd was not eligible to claim a CJRS grant for Sam. Sam is paid weekly. Sam has always been contracted to work a fixed number of hours per week (30 hours), and their pay does not vary according to the number of hours they work. For the claim period 16 November 2020 to 22 November 2020, Sam’s usual hours will be 30 hours, being the number of hours Sam was contracted for on 25 October 2020, the end of the last pay period ending before 30 October.

Eligibility

  • Employee must have been on the employers PAYE Real-Time Information (RTI) return as of 23:59 on 30th October 2020
  • Employees do not need to have been previously furloughed in order to be eligible for the extended scheme. This opens the possibly for employees who have not been furloughed before.
  • The scheme is also now open to employers who have not furloughed employees previously.

Claiming

  • CJRS claims will need to be made monthly and employers will need to move quickly! For the month of November, claims can be made from 8am Wednesday 11 November and must be submitted by 14 December 2020.
  • Moving forward claims relating to each subsequent month must be submitted by day 14 of the following month. This is a major change in some respects as businesses will need to ensure they have the right resource at the right time to make the claims efficiently and not miss out on the much needed funding from the Government.
  • The portal to make claims will remain the same and can be accessed through the Government Gateway here.
  • Funds will be paid within 6 working days of each successful claim submission.
  • You can watch our video guide to making a furlough claim below (based on the originally launched scheme, for which the process remains the same):

Our furloughing service

  • We offer an additional service for our payroll clients where we will process and submit their furloughed claims to HMRC.
  • If you would like us to complete this for you, please contact our Payroll Manager, Ula Namyslowska by email. Ula will confirm the information that is needed from you and how to send this to her.

We say…

Employers will welcome the extension to the scheme, the reverting to 80% government contributions and the fact that the scheme retains the flexibility of part-time working which was added over the summer. With new employees now able to be added, it means employers can reassess their business needs and resourcing, to get the right balance for business continuality during this challenging period.

Bounce Back Loan Scheme (BBLS)

The BBLS is a 100% government backed loan scheme for small businesses. Businesses are able to borrow between £2,000 and £50,000, which are interest free for the first 12 months. The scheme launched for applications on Monday 4 May 2020. You can access these loans through a network of British Business Bank accredited lenders, a list of which can be seen here.

The scheme:

  • The government is offering the guarantee but the funds will issued by accredited lenders.
  • Businesses can apply for a Bounce Back Loan of up to 25 per cent of their turnover, up to £50,000.
  • No interest or capital repayment will be needed in the first 12 months. The government will pay the interest on the loan and any associated fees for this period.
  • Loan terms are be up to 10 years.
  • Sole traders, micro-firms and small businesses that meet the eligibility criteria can apply.
  • The government has requested lenders offer “….a low standardised level of interest for the remaining period of the loan”, however the level of interest rate to expect is not yet known.
  • This scheme was launched due to the slow uptake of CBILS finance, and is 100% backed by the government as opposed to CBILS finance, which is 80% backed by a government guarantee, therefore it offers increased reassurance and security to the lender.
  • There is no limit on a firm’s turnover, however, the government expects only smaller firms to apply because of the limit on funds.

Eligibility:

You can apply for a loan if your business:

  • is based in the UK
  • has been negatively affected by Coronavirus
  • was not an ‘undertaking in difficulty’ on 31 December 2019
  • has been trading for 12 months
  • You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS). However, if you have already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender until 4 November 2020.

Scheme updates

  • The government has extended the deadline for new applications for BBLS loans until the end of January 2021. Previously, it had been due to close for applications at the end of November.
  • The Bounce Back Loan Scheme rules have also been adjusted to allow those businesses who have borrowed less than their maximum (i.e. less than 25% of their 2019 turnover, up to £50,000) to top-up their existing loan. Businesses will be able to request a top-up from next week, but will only be able to do so once, according to government guidance.
  • Businesses that have taken out BBLS loans will have longer to pay them back. Repayments (being rebranded as ‘Pay as You Grow’) can be extended from six years to 10, cutting monthly repayments by nearly half.
  • Businesses struggling can choose to make interest only payments for six months and those “in real trouble” can apply to suspend repayments altogether for six months.
  • Businesses will not see their credit rating fall as a result, the chancellor says.

We say…

Applications are now open and you should contact your bank to discuss whether they can assist or make an application directly with an accredited lender.

With the option now available to extend loan repayment terms on BBLS, you should note that the downside is that there will be a greater charge in total interest costs on your borrowing.

For businesses who have already accessed finance under this scheme but who require further financing, they may be able to (1) refinance an existing BBLS with a CBILS loan, (2) access further CBILS facilities for individual businesses within a group structure or (3) take additional CBILS loans where there is capacity within the maximum loan amount. The availability of these options may vary by lender, so you should speak to your finance provider or bank relationship manager in the first instance.

Coronavirus Business Interruption Loan Scheme (CBILS)

For businesses that need to access cash to pay their rent, salaries, suppliers or purchase stock, they may be able to access government-backed loans under this scheme of up to £5 million. These loans are issued by lenders that partner with the British Business Bank, including all the major banks.

The scheme:

  • The lender receives a guarantee of 80% of the loan amount from the government. The borrower remains liable for 100% of the debt.
  • Loans are available up to £5 million
  • Available from 1-10 years
  • No interest is payable for 12 months
  • Capital repayment holidays are available for 12 months as well – so some businesses will have no payments to make in the first year
  • Some lenders may limit loans to 25% of the business’ turnover in 2019, or double the annual wage bill
  • Self-employed sole traders can be eligible for CBILS as long as the business activity is operated through a business account and satisfies other criteria for the scheme.

Scheme updates

  • The government has extended the deadline for new applications for CBILS until the end of January 2021. Previously, it had been due to close for applications at the end of November.
  • Businesses that have taken out CBILS will have longer to pay them back. It has been announced that lenders can extend the length of loans from the current maximum of six years to 10 years.
  • Businesses struggling can choose to make interest only payments for six months and those “in real trouble” can apply to suspend repayments altogether for six months.
  • Businesses will not see their credit rating fall as a result, the chancellor says.

We say…

With the option now available to extend loan repayment term on CBILS, you should note that the downside is that there will be a greater charge in total interest costs on your borrowing.

For businesses who have already accessed finance under this scheme but who require further financing, they may be able to (1) access further CBILS facilities for individual businesses within a group structure or (2) take additional CBILS loans where there is capacity within the maximum loan amount. The availability of these options may vary by lender, so you should speak to your finance provider or bank relationship manager in the first instance.

Coronavirus Large Business Interruption Loan Scheme (CLBILS)

The Coronavirus Large Business Interruption Loan Scheme (CLBILS) provides funding up to £200 million to businesses with turnover over £45 million who, because of turnover restrictions, are not able to access CBILS funding.

The scheme:

  • Similar to the CBILS, CLBILS is available through a range of British Business Bank accredited lenders and partners and is backed by an 80% government guarantee.
  • A lender can provide up to 25% of your annual turnover. The maximum amount you can borrow is £200 million.
  • Borrowing terms are from three months to three years, and it is available in the form of term loans, revolving credit facilities (including overdrafts), invoice finance or asset finance.
  • There are a number of important differences in a CLBILS backed product to that of a CBILS backed one, including:
    • The government will not cover the interest and any lender-levied fees in the first 12 months, which means that commercial rates of interest will be charged.
    • At 3 years, the maximum repayment term is shorter.
    • The lender and borrower are still free to enter into loan agreements outside of CLBILS.

Eligibility:

  • Be UK-based in its business activity
  • Have an annual turnover over £45 million
  • Self-certify that it has been adversely impacted by the Coronavirus
  • Not have received a facility under the Bank of England’s Covid Corporate Financing Facility (CCFF)
  • The business must generate more than 50% of its turnover from trading activity
  • Have a borrowing proposal which the lender:
    • Would consider viable, were it not for the COVID-19 pandemic
    • Believes it will enable you to trade out of any short-term to medium-term difficulty

Applications:

As with CBILS, CLBILS will be operated through accredited lenders and applications made directly with them.

Scheme update

  • The government has extended the deadline for new applications for CLBILS until the end of January 2021. Previously, it had been due to close for applications at the end of November.

We say…

This is a welcome measure for larger businesses who are unable to access the CBILS funding. It is worth noting that lending to mid-cap and larger businesses is typically more bespoke and may take longer to negotiate by lenders, so this should be factored into your planning for accessing this funding.

COVID-19 Corporate Financing Facility

The COVID-19 Corporate Financing Facility (CCFF) provides funding to businesses by purchasing commercial paper of up to one-year maturity, issued by firms making a material contribution to the UK economy. It is able to helps businesses across a range of sectors to pay wages and suppliers, even while experiencing severe disruption to cashflows.

The facility offers financing on terms comparable to those prevailing in markets in the period before the Covid-19 economic shock, and is open to firms that can demonstrate they were in sound financial health prior to the shock. The facility looks through temporary impacts on firms’ balance sheets and cash flows by basing eligibility on firms’ credit ratings prior to COVID-19. Businesses do not need to have previously issued commercial paper in order to participate.

In practice, firms that meet this requirement are normally: large UK incorporated companies, including those with foreign-incorporated parents and with a genuine business in the UK; companies with significant employment in the UK; firms with their headquarters in the UK. Therefore, companies which generate significant revenues in the UK, serve a large number of customers in the UK or have a number of operating sites in the UK may be considered.

Scheme update

HM Treasury has announced that the CCFF will close and make no purchases of commercial paper after 22 March 2021.

We say…

If you would like to use the CCFF and have not issued commercial paper before, you should contact your bank to discuss whether they can assist.

Future Fund

The new Future Fund was launched to support the UK’s innovative and high-growth businesses. Through the scheme, the UK government will invest between £125,000 and £5 million in qualifying businesses, who may have otherwise seen reduced opportunities for venture capital or private equity funding during the current climate.

The scheme:

  • The Government will make unsecured bridge funding available alongside other private third party matched investor/s. The government loan shall be no more than 50% of the bridge funding being provided to the company by the investors.
  • The government’s investment will be made through a convertible loan note with non-compounding interest accruing, which is ‘rolled-up’ into the principal amount to be converted into the Government’s equity.
  • The funding shall be used solely for working capital purposes and shall not be used by the company to repay any borrowings, make any dividends or bonus payments to staff, management, shareholders or consultants or, in respect of the Government loan, pay any advisory or placement fees or bonuses to external advisers.
  • The loan will mature after a maximum of 36 months and on maturity, the loan can be repaid or converted into shares in the Investee Company in a variety of circumstances, including fundraisings, exit events and upon the maturity of the loans.

Eligibility:

  • It is available on new rounds of funding. The Government is not currently proposing to provide matched funding in respect of recently closed financing rounds.
  • The company must have raised at least £250,000 in equity from third-party investors in previous funding rounds in the last five years (from 1 April 2015 to 19 April 2020, inclusive).
  • If the company is a member of a corporate group, it must be the ultimate parent company.
  • The company does not have any of its shares or other securities listed on a regulated market, a multilateral trading facility, a recognised investment exchange and/or any other similar market, stock exchange or listing venue.
  • The company must be a UK incorporated limited company.
  • The company must have been incorporated on or before 31 December 2019.
  • At least one of the following must be true for the company:
    • Half or more employees are UK based
    • Half or more revenues are from UK sales
  • Enterprise Investment Scheme (EIS) or the Venture Capital Relief (VCR) based investments do not currently count towards the match-funding target.
  • An eligible company shall also be subject to customer fraud, money laundering and KYC checks prior to any loan being made.
  • You can read further FAQ’s on this scheme via the British Business Bank here.

Applications:

  • The scheme is now open for applications via the British Business Bank.
  • This is an investor-led scheme, meaning that a lead investor applies on behalf of themselves and may provide information about other investors making up the investment round, in connection to a company. Investors can apply via the British Business Bank here.
  • The distribution of funds for successful applications will be handled through a nominated company solicitor. It is the company’s responsibility to appoint a solicitor with the necessary right to practice and handle client monies.

Scheme update

The scheme has been extended and will remain open until 30 November 2020. Previously, it had been due to close for applications at the end of September.

We say…

The Future Fund has been a welcomed COVID-19 support measure for pre-revenue, knowledge-intensive companies. These companies may have been unable to access the other government business support programmes (such as CBILS) because they are either pre-revenue, pre-profit or relying on equity investment. You can find further details on this scheme at .gov here.

VAT Payment Deferral

UK VAT registered business with VAT payments due between 20 March 2020 and 30 June 2020 had the option to (1) defer the payment until a later date or (2) pay the VAT due as normal. This did not cover VAT MOSS payments, and VAT refunds and reclaims during this period were paid by the government as normal. No interest or penalties were charged on any amount deferred.

Scheme now closed for VAT deferrals: We have received some questions on whether the VAT deferral applies for the forthcoming quarterly VAT payments. Please note that it was only applicable for VAT payments due between 20 March 2020 and 30 June 2020.

Extended time to repay deferred VAT bills

  • Those who previously deferred their VAT bills can settle them in 11 smaller payments in the financial year 2021-2022, interest free.
  • All businesses which took advantage of the VAT deferral are eligible to use this new payment scheme but they will need to opt in. HMRC has announced they will put in place an opt-in process in early 2021.
  • Alternatively, deferred VAT bills will need to be settled by 31 March 2021.

We say…

The new payment scheme is much welcomed and likely to be a significant help for businesses with cashflow strains.

HMRC Time to Pay

Time to pay for business tax: Businesses and the self-employed in financial distress can agree bespoke ‘Time to Pay’ arrangements giving extra time to settle tax affairs.

We say…

Each case must be agreed on an individual basis by contacting the helpline on 0800 0159 559

Income Tax Payment Deferral

All UK taxpayers, including those who are self-employed, who were due to pay self-assessment income tax payments in July 2020 were able to defer this payment. The deferment was optional and was an automatic offer with no applications required. No penalties or interest for late payment will be charged on this amount.

Deferral extended

It was announced in the Winter Economy Plan that self-assessment taxpayers can benefit from an additional 12-month extension from HMRC on the ‘Time to Pay’ self-service facility. This means that payments already deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.

You can defer these payments without penalties and any Income Tax refunds will be paid to you as normal.

Deferred tax payments may now include (where applicable) your:

  • Second Payment on Account (POA) 2019/20
  • Balancing payment 2019/20
  • Capital gains tax 2019/20 (if not paid under 30-day rule)
  • First POA 2020/21

Setting up monthly installments:

Unlike the deferral previously in place on 31 July 2020, the taxpayer will have to apply for ‘Time to pay’ to spread the tax due over 12 monthly instalments to January 2022.

Where the total tax due doesn’t exceed £30,000 the application for time to pay will be agreed automatically when the taxpayer applies using an online form. However, if the tax due exceeds £30,000 or the taxpayer needs longer to pay, the telephone ‘Time to pay’ service will remain available to agree a bespoke payment plan.

Further details for arranging repayments by monthly installments can be found on .Gov here.

We say…

Repayments being spread over 12 months is a welcome measure, but individuals must remember to apply via the online form or telephone service to access this facility.

NOW CLOSED – £25,000 Retail and Hospitality Grant Scheme

The Retail and Hospitality Grant Scheme provided businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property. Businesses in these sectors with a property with a rateable value of up to £15,000 were eligible for a grant of £10,000. Businesses in these sectors with a property with a rateable value of over £15,000 and less than £51,000 were eligible for a grant of £25,000. Most eligible businesses were contacted by their local authority, though some local authorities to operated an applications process. This scheme came to an end at midnight on Friday 28 August 2020.

VAT cut for the hospitality sector

A temporary VAT cut from 20% to 5% for hospitality and tourism businesses came into force from 15 July 2020.

HMRC’s guidance confirms that the temporary 5% reduced rate of VAT will apply for:

  • Catering sector: food and non-alcoholic beverages sold for on-premises consumption, hot takeaway food and hot takeaway non-alcoholic beverages
  • Hotels, etc and holiday accommodation: sleeping accommodation in hotels, holiday accommodation and pitch fees for caravans/tents/associated facilities
  • Admissions to cultural events/entertainment venues: theatres and cinemas, circuses, fairs and amusement parks, museums and zoos, concerts and exhibitions, similar cultural events and facilities

The 5% reduced rate will also apply to admissions to the following attractions that are not eligible for the cultural VAT exemption: theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions, cultural events and facilities. Where admission to these attractions is covered by the existing cultural exemption, the cultural exemption will take precedence.

Please note that cold takeaway food continues to be subject to 20% VAT or 0% VAT under the existing rules.

Update

The cut in VAT to 5% for the hospitality and tourism sector has been extended until 31 March 2021.

We say…

The cut in VAT for the hospitality sector is a very welcome measure. However, the VAT rules for the hospitality sector are already complex with a variety of VAT regimes, and this temporary change may cause yet further accounting challenges for operators.

If you require assistance you may like to contact us to discuss specifically how we can assist with your current and future VAT accounting needs.

Commercial tenant eviction ban

Commercial tenants who cannot pay their rent because of Coronavirus will be protected from eviction.

Many landlords and tenants are having conversations and reaching voluntary arrangements on rental payments, but the government has put in place a measure to ensure no business is forced out of their premises if they miss a rent payment. The Commercial Tenant Eviction Ban will apply on commercial leases in England, Wales and Northern Ireland.

Scheme extended

Initially this measure was due to end on 30 June, but the government has announced it is to be extended until the end of 2020.

Business Rates Holiday

Businesses in a number of eligible sectors will not have to pay business rates for 12 months, covering the 2020/21 tax period.

This will include hospitality, retail and leisure businesses such as:

  • Food, drink and retail: Shops, restaurants, cafes, takeaways, coffee shops, pubs, bars, drinking establishments, cinemas and live music venues (Including florists, bakers, butchers, grocers, greengrocers, jewellers, stationers, off licences, chemists, newsagents, hardware stores, supermarkets, etc), Charity shops, Opticians, Post offices, Furnishing shops/ display rooms (such as: carpet shops, double glazing, garage doors), Car/caravan show rooms, Second-hand car lots, Markets, Petrol stations, Garden centres, Art galleries (where art is for sale/hire)
  • The provision of services: Hair and beauty services (such as: hairdressers, nail bars, beauty salons, tanning shops, etc), Shoe repairs/key cutting, Travel agents, Ticket offices e.g. for theatre, Dry cleaners, Launderettes, PC/TV/domestic appliance repair, Funeral directors, Photo processing, Tool hire, Car hire, Employment agencies, Estate agents and letting agents, Betting shops
  • Sport, leisure and facilities: Cinema’s and live music venues, Sports grounds and clubs, Museums and art galleries, Nightclubs, Sport and leisure facilities, Stately homes and historic houses, Theatres, Tourist attractions, Gyms, Wellness centres/spas, Casinos/gambling clubs/bingo halls.
  • Hotels and accommodation: Hotels, Guest and Boarding Houses, Holiday homes, Caravan parks and sites.

We say…

No action should be required as these changes should be made automatically for your next business rates tax bill for April 2020. However, in some cases local authorities may have to reissue your bill automatically to exclude the business rate charge so it is worth contacting them. You can find your local authority at .gov here.

NOW CLOSED – £10,000 Small Business Grant Scheme

The government provided additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief. This provided a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs. Most eligible businesses were contacted by their local authority, though some local authorities to operated an applications process. This scheme came to an end at midnight on Friday 28 August 2020.

3 month extension to file your accounts

If your accounts will be late because your company is affected by COVID-19, you can apply for an automatic and immediate 3 month extension to file your accounts. Companies that have already extended their filing deadline, or shortened their accounting reference period, may not be eligible.

We say…

You can apply online here providing the reason, your company number, your email address and any supporting documents (optional). You should hear back within 5 days to tell you whether your application has been successful or not.

Local Restrictions Support Grants

The Local Restrictions Support Grant (LRSG) supports businesses that have been required to close due to temporary COVID-19 lockdown restrictions imposed by the government.

Your business may be eligible if it…

  • occupies property on which it pays business rates
  • has been required to close because of the formal restrictions that resulted in a first full day of closure on or after 9 September. This funding is not retrospective
  • has been required to close for at least 2 weeks because of the lockdown
  • has been unable to provide its usual in-person customer service from its premises

What you can claim

Businesses required to close in England due to local or national restrictions will be eligible for the following grants:

  • For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;
  • For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;
  • For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.

Grants will be based on the rateable value of the property/properties on the first full day of local lockdown restrictions.

Eligible businesses who were in tier 2 and 3 regions prior to the national lockdown will have grants backdated from August 2020.

Discretionary funding

Businesses not eligible for the grant funding, may still be able to claim a grant at the discretion of their local authority if:

  • the business is required to close but you do not pay business rates
  • the business is not required to close, but has been severely affected, for example as a result of customer businesses being closed

How to claim

Local authorities are expected to publish details of how to apply for their grant funding and any exclusions via their websites shortly. You can use this .GOV link to find the website and contact information for your local authority.

The government has asked local authorities to issue these grants to businesses within 28 days, so businesses who are able to claim should receive the funds by the end of November 2020.

We say…

Local authorities may differ in how they handle applications and their specific eligibility, so we would urge businesses to check their website for further information and make contact if necessary to ensure they don’t miss out on this support.

Kickstart funding for job placements

The scheme opened on 2 September 2020 and provides funding to employers to create job placements for 16 to 24 year olds, designed to be a stepping stone to further employment.

Applications must be for a minimum of 30 job placements. Businesses that are unable to offer this many job placements can partner with other organisations to reach the minimum number.

Funding for each job placement will cover:

  • 100% of the relevant National Minimum Wage for 25 hours a week
  • the associated employer National Insurance contributions
  • employer minimum automatic enrolment contributions

Employers will be able to top up this wage if they want to, but this will be from their own funds.

Businesses who join the scheme can also gain £1,500 per placement from the government to go towards support, training, uniforms, setup costs or equipment.

There will also be extra funding to support young people to build their experience and help them move into sustained employment after they have completed their Kickstart Scheme funded job.

The scheme will initially be open until December 2021, with the option of being extended.

Eligibility:

The job placements created with Kickstart funding must be new jobs. They must not:

  • replace existing or planned vacancies
  • cause existing employees or contractors to lose or reduce their employment

The roles must be:

  • a minimum of 25 hours per week, for 6 months
  • paid at least the National Minimum Wage for their age group
  • should not require people to undertake extensive training before they begin the job placement
  • Each application should include how you will help the participants to develop their skills and experience, including:
    • support to look for long-term work, including career advice and setting goals
    • support with CV and interview preparations
    • supporting the participant with basic skills, such as attendance, timekeeping and teamwork
    • Once a job placement is created, it can be taken up by a second person once the first successful applicant has completed their 6-month term.

How to apply:

Business recruiting more than 30 people can submit a bid directly online via the .Gov website here.

Businesses recruiting less than 30 people can find a ‘Kickstart gateway’ (someone who can act on your behalf and apply for a Kickstart Scheme grant for you) via the .Gov website here.

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