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Coronavirus Government Support

NOW CLOSED – Self–employment Income Support Scheme

The Self-employment Income Support Scheme (SEISS) provided 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 grants are taxable income and also subject to National Insurance contributions.
  • 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.
  • The third grant covered a 3 month period from 1 November 2020 until 29 January 2021 and was 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. Those who were eligible for the first and second SEISS grant were still eligible for the scheme’s third grant, even if they did not claim either. Applicants for the grant must have been currently trading but impacted by reduced demand during the pandemic, or have been trading but have temporarily had to stop due to coronavirus. Claimants must also have traded in both the 2018/2019 tax year and the 2019/2020 tax year to claim.
  • The fourth grant covers the period February to April 2021 ands will be 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. The scheme has been extended to those who have filed a 2019/20 self assessment tax return prior to 3 March 2021. This means that the newly self-employed from April 2019 now qualify subject to satisfying the other conditions. The online claims service for the fourth grant will be available from late April 2021 until 31 May 2021.
  • A fifth and final grant was confirmed in the Spring Budget 2021 and can be claimed from late July 2021 to cover the period May to September 2021. This grant will be determined by a turnover test. Where the self-employed business turnover has fallen by 30% the grant will be worth 80% of three months’ average trading profits capped at £7,500. People whose turnover has fallen by less than 30% will receive a 30% grant, capped at £2,850. You will be able to claim from late July if you are eligible for the fifth 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 grants become 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.

NOW CLOSED – Coronavirus Statutory Sick Pay Rebate Scheme

A refund covering up to 2 weeks Statutory Sick Pay (SSP) due to absence caused by COVID-19 was available to employers.

The scheme closed on 30 September 2021 meaning that from 1 October, all employers will again be responsible for covering the full cost of SSP. Employers have until 31 December 2021 to file or amend any claims for SSP in respect of coronavirus-related absences prior to the end of September 2021.

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.

NOW CLOSED – The Coronavirus Job Retention Scheme

The Coronavirus Job Retention Scheme (CJRS) is now closed and the last claims for the month of September 2021 must be made on or before 14 October 2021. Our summary of the now closed support scheme is below.

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 was extended at the Spring Budget until the end of September 2021. Employees continue to receive 80% of their salary with employers contributing 10% in July and 20% in August and September.
  • Open to new applications: 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 provides 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.
  • Company names to be published: From December 2020, HMRC publishes the names of companies/Limited Liability Partnerships (LLPs) and the company registration number of those who have made claims under the scheme.
  • 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.
  • Home schooling: HMRC has issued guidance to state that employers ‘can’ (not ‘must’) furlough employees whose health has been affected by coronavirus (COVID-19) or any other conditions. This includes if they are unable to work from home, or working reduced hours, because they are clinically extremely vulnerable or at the highest risk of severe illness from coronavirus or have caring responsibilities resulting from coronavirus (such as caring for children who are at home as a result of school and childcare facilities closing, or caring for a vulnerable individual in their household). This resolves an area of uncertainty, which is whether parents who stay at home to look after school-age children are eligible to be furloughed, which they are. The guidance further states that short term illness/self-isolation should not be a consideration in deciding whether to furlough an employee. If, however, employers want to furlough employees for business reasons and they are currently off sick, they are eligible to do so, as with other employees. You can claim back from both the Coronavirus Job Retention Scheme and the SSP rebate scheme for the same employee but not for the same period of time.
  • 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

  • For periods ending on or before 30 April 2021: You can claim for employees who were employed on 30 October 2020, as long as you have made a PAYE PAYE Real Time Information (RTI) submission to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee. This may differ where you have made employees redundant, or they stopped working for you on or after 23 September 2020 and you have subsequently re-employed them. You do not need to have previously claimed for an employee before 30 October 2020 to claim.
  • For periods starting on or after 1 May 2021: You can claim for employees who were employed on 2 March 2021, as long as you have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021, notifying a payment of earnings for that employee. The government is expected to provide guidance of how you should calculate your claims for periods starting on or after 1 May 2021 in due course.
  • For periods ending on or before 30 June 2021: You can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month. From 1 July 2021, the level of grant will be reduced and you will be asked to contribute towards the cost of your furloughed employees’ wages.

Eligibility

  • Employee must have been on the employers PAYE Real-Time Information (RTI) as per the dates in the ‘How to calculate your claim/s’ section above.
  • 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 open to employers who have not furloughed employees previously.

Claiming

  • Claims relating to each subsequent month must be submitted by day 14 of the following month.
  • The portal to make claims will remain the same and can be accessed through the Government Gateway.
  • 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. 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.

Recovery Loan Scheme

In the Budget 2021 it was announced that a new loan scheme will be introduced to replace those coming to an end (i.e Bounce Back Loans and Coronavirus Business Interruption Loan Schemes).

From 6 April 2021 the Recovery Loan Scheme provides lenders with a guarantee of 80% on eligible loans between £25,000 and £10 million to give them confidence in continuing to provide finance to UK businesses. The scheme is open to all businesses, including those who have already received support under the existing COVID-19 guaranteed loan schemes. Once received, the finance can be used for any legitimate business purpose, including growth and investment.

The scheme launched on 6 April and is open until 31 December 2021, subject to review. Loans are available through a network of accredited lenders.

This scheme includes:

  • Term loans and overdrafts between £25,001 and £10 million per business.
  • Invoice finance and asset finance between £1,000 and £10 million per business.

Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.

No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.

Eligibility

You will be able to apply for a loan if your business:

  • is trading in the UK

You will need to show that your business:

  • is viable or would be viable were it not for the pandemic
  • has been impacted by the coronavirus pandemic
  • is not in collective insolvency proceedings – further details of this requirement are expected in due course

We say…

Most top tier banks are listed on the accredited panel, so in most cases you should speak to your finance provider or bank relationship manager in the first instance.

Please note that not every accredited lender can provide every type of finance available under RLS, and the amount of finance offered varies between lenders. Further information can be found via their respective websites.

You can see a list of accredited lenders for this scheme on the British Bank website here.

NOW CLOSED – Bounce Back Loan Scheme (BBLS)

The BBLS was a 100% government backed loan scheme for small businesses. Businesses were 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. Loans could be accessed through a network of British Business Bank accredited lenders, a list of which can be seen here.

The scheme:

  • The government offering the guarantee but the funds were issued by accredited lenders.
  • Businesses could apply for a Bounce Back Loan of up to 25 per cent of their turnover, up to £50,000.
  • No interest or capital repayment was needed in the first 12 months. The government will pay the interest on the loan and any associated fees for this period.
  • Loan terms were up to 10 years.
  • Sole traders, micro-firms and small businesses that meet the eligibility criteria could apply.
  • There was no limit on a firm’s turnover, however, the government expected only smaller firms to apply because of the limit on funds.

Eligibility:

You could 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 could not apply if you were already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS). However, if you had already received a loan of up to £50,000 under CBILS and wanted to transfer it into the Bounce Back Loan scheme, you could arrange this with your lender up until 4 November 2020.

Scheme updates

  • This loan scheme closed to new applications on 31 March 2021, when it was replaced by the Recovery Loan Scheme which launched from 6 April 2021.
  • The Bounce Back Loan Scheme rules were previously adjusted to allow those businesses who had 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 were able to request a top-up, but were only able to do so once, according to government guidance.
  • Businesses that took out BBLS loans have longer to pay them back from when the scheme originally launched. Repayments (being known 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…

For businesses who have already accessed finance under this scheme but who require further financing, they will be able to access further funding under the Recovery Loan Scheme.

NOW CLOSED – Coronavirus Business Interruption Loan Scheme (CBILS)

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

The scheme:

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

Scheme updates

  • This loan scheme closed to new applications on 31 March 2021, when it was be replaced by the Recovery Loan Scheme which launched from 6 April 2021.
  • Businesses that have taken out CBILS loans have longer to pay them back from when the scheme originally launched. It was 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 will be able to access further funding under the Recovery Loan Scheme.

NOW CLOSED – Coronavirus Large Business Interruption Loan Scheme (CLBILS)

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

The scheme:

  • Similar to the CBILS, CLBILS was available through a range of British Business Bank accredited lenders and partners and was backed by an 80% government guarantee.
  • A lender could provide up to 25% of the annual turnover. The maximum amount you could borrow was £200 million.
  • Borrowing terms were from three months to three years, and it was available in the form of term loans, revolving credit facilities (including overdrafts), invoice finance or asset finance.
  • There were a number of important differences in a CLBILS backed product to that of a CBILS backed one, including:
    • The government would not cover the interest and any lender-levied fees in the first 12 months, which meant that commercial rates of interest were charged.
    • At 3 years, the maximum repayment term was shorter.
    • The lender and borrower were 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 was operated through accredited lenders and applications made directly with them.

Scheme update

  • This loan scheme closed to new applications on 31 March 2021, when it was replaced by the Recovery Loan Scheme which launched from 6 April 2021.

We say…

This was a welcome measure for larger businesses who were unable to access the CBILS funding.

NOW CLOSED – COVID-19 Corporate Financing Facility

The COVID-19 Corporate Financing Facility (CCFF) provided 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 was able to helps businesses across a range of sectors to pay wages and suppliers, even while experiencing severe disruption to cashflows.

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

In practice, firms that meet this requirement were 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 were considered.

Scheme update

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

With effect from 22 March 2021 issuers will still be able to repay funds borrowed via the CCFF prior to maturity, however this will now be by means of a weekly sell-back window.

The Bank of England, operating on behalf of HM Treasury, will run a window on the first working day of each week until the sum of stock held by the CCFF returns to zero. The first such window will be on 29 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.

NOW CLOSED – Future Fund

The Future Fund was launched to support the UK’s innovative and high-growth businesses. Through the scheme, the UK government invested 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. It closed for applications on 30 November 2020.

NOW CLOSED – 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 could arrange to settle them in smaller payments in the financial year 2021-2022, interest free.
  • All businesses which took advantage of the VAT deferral were eligible to use this new payment scheme but they needed to opt in.
  • Businesses must have opted in by 19 March 2021 to benefit from the maximum number of 11 instalments, but could join thereafter until the option was removed on 21 June 2021.
  • Alternatively, deferred VAT bills needed to be settled in full by 31 March 2021.

You may be charged interest or a penalty if you do not:

  • pay the deferred VAT in full by 31 March 2021, or
  • opt into the new payment scheme by 21 June 2021, or
  • agree extra help to pay with HMRC by 30 June 2021

We say…

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

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 between 15 July 2020 and 30 September 2021. A 12.5% rate will now apply for the subsequent six months until 31 March 2022.

HMRC’s guidance confirms that the temporary 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 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

In the Spring Budget 2021, the government announced an extension of the reduced rate until 30 September 2021. To help businesses manage the transition back to the standard 20% rate, a 12.5% rate will apply for the subsequent six months until 31 March 2022.

UKHospitality has been pushing hard to see that the 12.5% reduced rate is made permanent. Through ongoing conversations with MPs and regular ministerial meetings they have also been able to make the case to BEIS and Treasury on numerous occasions and will be running a #VATsEnough campaign in the lead up to the Budget on 27 October.

We say…

The cut in VAT for the hospitality sector has been 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. There are also wide calls across the industry for this temporary reduced rate to made permanent to support the UK hospitality and tourism sector.

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 applies on commercial leases in England, Wales and Northern Ireland.

Scheme extended

On 16 June 2021 the government confirmed that the evictions ban on commercial tenants for non-payment of rent will be extended again until the 25 March 2022.

The government also announced plans for a binding arbitration scheme to resolve disputes between landlords and commercial tenants, which should be in place for when the eviction ban is lifted.

Business Rates Holiday

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

In the Spring Budget 2021, the scheme was extended, with the Chancellor announcing a continuation of 100% business rates relief for eligible retail, hospitality and leisure properties in England to 30 June 2021.

This will be followed by 66% business rates relief for the period from 1 July 2021 to 31 March 2022, capped at £2 million per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties. Nurseries will also qualify for relief in the same way as other eligible properties.

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 in your subsequent business rates tax bill. 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.

NOW CLOSED – Restart Grants

From 1 April 2021 Restart Grants are available for businesses in England of up to £6,000 per premises for non-essential retail businesses and up to £18,000 per premises for hospitality, accommodation, leisure, personal care and gym businesses.

The scheme is being administered by local councils and is expected to help 700,000 business owners. It replaces the previous Local Restrictions Support Grant (closed) and Local Restrictions Support Grant (open) which ended on 31 March 2021.

In addition, local authorities in England will also receive an extra £425 million to distribute grants to businesses not eligible for a Restart Grant but have been impacted by coronavirus restrictions.

The primary principle of the Restart Grant scheme is to support businesses that offer in-person services, where the main service and activity takes place in a fixed rate-paying premises, in the relevant sectors. In some cases it may not be materially clear whether a business falls into one of the categories, so decisions on the eligibility of these businesses will be at the Local Authorities discretion.

The application closure date for this scheme is 30 June 2021 and final payments must be made by 31 July 2021.

How much could you receive from the scheme?

The Restart Grant will support non-essential retail premises with one-off grants of up to £6,000 in Strand One of the Restart Grant. The following thresholds apply for these businesses occupying property with:

  • A rateable value of exactly £15,000 or under on 1st April 2021 will receive a payment of £2,667.
  • A rateable value over £15,000 and less than £51,000 on 1st April 2021 will receive a payment of £4,000.
  • A rateable value of exactly £51,000 or over on 1st April 2021 will receive a payment of £6,000.14.

The Restart Grant will also support hospitality, accommodation, leisure, personal care and gym business premises with one-off grants of up to £18,000 in Strand Two of the Restart Grant. The following thresholds apply for these businesses occupying property with:

  • A rateable value of exactly £15,000 or under on 1st April 2021 will receive a payment of £8,000.
  • A rateable value over £15,000 and less than £51,000 on 1st April 2021 will receive a payment of £12,000.
  • A rateable value of exactly £51,000 or over on 1st April 2021 will receive a payment of £18,000.

We say…

The scheme is being administered by local councils, so you should check the application process and make applications directly with the relevant council/s. You can find your local council using the Gov.uk search facility here.

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.

NOW CLOSED – £1,000 bonus for businesses taking on trainees

Employers could apply for a £1,000 bonus, a cash boost, to help them take on new trainees.

How did this bonus work?

The scheme supported young people to gain skills and experience, helping them to get a job, an apprenticeship, or to pursue further study.

The cash boost, which ended on 31 July 2021, helped businesses with the cost of providing a high-quality work placement for a trainee. This included providing facilities, uniforms or helping with travel costs.

Businesses offering new traineeship opportunities could receive the £1,000 bonus for every trainee they took on, up to a maximum of ten trainees.

Employers could claim the cash incentive for all work placements that have been completed since 1 September 2020.

Further support for hiring

This cash boost was launched in addition to the apprentice scheme announced last year, which offers employers £2,000 for each new apprentice they hire aged under 25, and £1,500 for apprentice aged 25 and over. This includes taking on an apprentice who has been made redundant. More than ten thousand employers have already taken up the offer, which is available until March 2021, so businesses can create even more opportunities and give more people the life changing chance to start a great career.

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