The CJRS has been extended to 30 September 2021. The scheme will run in its current form to 30 June 2021, allowing employers to furlough employees and claim 80% of unworked hours as a grant.
From 1 July 2021, employees must still receive 80% of their usual gross wages for unworked hours, however employers must top up the CJRS grant available as follows:
July 2021 70% grant with 10% employer top up
August 2021 60% grant with 20% employer top up
September 2021 60% grant with 20% employer top up
The claims will be made in the usual format using the online portal on your Government Gateway account.
Job Retention Bonus
The £1,000 Job Retention Bonus that was due to be paid in February for those workers retained by employers during the months of November, December and January has been postponed. The incentive will be ‘redeployed’ at a future appropriate time. We will provide more guidance as it is released.
- The current Local Restrictions Support Grants come to an end on 31 March 2021.
- To support businesses re-opening in England, the Government has set aside £5 billion for a new Restart Grant to help them get back up and running.
- A one-off cash grant of up to £6,000 will be available for non-essential retail businesses and up to £18,000 will be available for hospitality, leisure, personal care and gym businesses, dependent on their rateable value.
Additional Restrictions Grant (England)
This grant will be available to support businesses that have been severely impacted however they have not legally been forced to closed, or those businesses forced to closed but who do not pay business rates.
The full guidance has not been released regarding this grant and we will update this page as soon as further information is made available.
Strategic Framework Business Fund (Scotland)
This is for Scottish businesses that are required to close by law or significantly change its operations as a result of Coronavirus restrictions from 2 November 2020. Grants will be paid every 4 weeks in arrears. The first payment of this grant funding is due on or around 30 November 2020.
Applications to the Strategic Framework Business Fund should be made through your local authority website.
Find out more here.
Scottish Grants Announcement
The Scottish Government has announced two further grants.
Newly Self-Employed Hardship Fund (Phase 2)
This is the second phase of the Newly Self-Employed Hardship fund and is designed to assist those that missed out on the Self Employed Income Support Scheme due to not completing a 2018-19 tax return. To find out if you are eligible and how to apply please visit https://findbusinesssupport.gov.scot/coronavirus-advice/newly-self-employed-hardship-fund. This fund is expected to open week beginning 15 February 2021.
Mobile Close Contact Fund
This fund has been opened to assist those businesses that offer mobile, close contact services and therefore are unable to trade due to restrictions, for example Registered Driving Instructors. To find out if you are eligible and how to apply please visit https://findbusinesssupport.gov.scot/coronavirus-advice/mobile-and-home-based-close-contact-service-fund. This fund is expected to open week beginning 15 February 2021.
Self Employed Income Support Scheme (SEISS)
Details surrounding the SEISS grants were released.
Taxpayers who submitted a 2019/20 tax return will now qualify for support, providing that they also meet the remainder of the qualification criteria – a welcome move that is set to assist an additional 600,000 individuals.
The fourth grant will be available soon and will be calculated as 80% of an average of three months trading profits, capped at £7,500.
A newly announced fifth and final grant will also be available in July. The value of this grant will be linked to self-employed turnover as follows:
Turnover has decreased by 30% or more:
80% of an average of three months profits, capped at £7,500
Turnover has not decreased by 30%:
30% of an average of three months profits, capped at £2,850
We are expecting further information regarding both of the grants in due course and will update our website with full details once available.
Recovery Loan Scheme
The deadline for applications for BBLs and CBILS, and also the Future Fund and Coronavirus Large Bus
- The current Bounce Back Loans (BBL) and Coronavirus Business Interruption Loan (CBIL) schemes come to an end on 31 March 2021.
- These will be replaced by a new Recovery Loan Scheme where businesses can borrow between £25,000 and £10 million as a term loan or overdraft. There will also be invoice and asset finance available of between £10,000 and £10 million. The Government will guarantee 80% of the finance to the lender.
iness Interruption Loan Scheme have been extended to the end of March 2021. The BBL rules have also been adjusted to allow businesses who have already borrowed less than the maximum (£50,000 or 25% of turnover) to ‘top-up’ their existing loans. This will be allowed from 10 November and businesses can only top-up loans once.
Mortgage and Consumer Credit Holidays
Mortgage holidays were due to end on Saturday 31 October. The government has now announced that any borrowers who have not already taken a payment holiday will entitled to a six-month payment holiday. Any borrowers who have already taken a previous payment holiday, will be able to top up the holiday to six months without this being recorded on their credit file.
The above extension also applies to consumer credit products such as personal loans and car finance.
High-cost, short-term borrowing, such as payday loans will continue to be entitled to a maximum one month payment holiday.
Statutory Sick Pay (SSP)
The Government is continuing to allow small and medium-sized businesses to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to Coronavirus. This includes employees self-isolating as a precaution and employees following advice to stay at home. Employees must earn on average at least £118 per week before tax. You can only reclaim two weeks per employee, even if that employee has to isolate more than once.
This refund will cover up to two weeks’ SSP per eligible employee who has been off work because of Coronavirus.
Employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as at 28 February 2020.
Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of Coronavirus.
Employers should maintain records of staff absences, but employees will not need to provide a GP fit note for the first 7 days. After 7 days of absence, it is at the discretion of the employer.
The eligible period for the scheme commenced on 14 March 2020, the day after the regulations on the extension of Statutory Sick Pay to self-isolators come into force.
Coronavirus related SSP can be reclaimed online at https://www.gov.uk/guidance/claim-back-statutory-sick-pay-paid-to-your-employees-due-to-coronavirus-covid-19
Difficulty paying HM Revenue and Customs (HMRC)
Self Assessment tax payments
HMRC has announced that taxpayers will not be charged late payment penalties on the 2019/20 Self Assessment tax liability providing that they contact them to arrange a payment plan prior to 1 April. The payment plan will allow monthly instalments to be made up to January 2022.
Tax returns must still be filed with HMRC by the extended deadline of 28 February 2021.
In order to take advantage of this, please contact the Time to Pay helpline on 0300 200 3822. Alternatively a payment plan can be made online using the Government Gateway account that was used for services such as the Self Employed Income Support Scheme. Please follow the online link HERE [set up a payment plan online]
Updated guidance on deferred VAT payments
Last year, at the beginning of the pandemic, HM Revenue and Customs (HMRC) allowed businesses to defer VAT payments that were due between 20 March 2020 and 30 June 2020.
HMRC have now released that businesses will have several options for making payment of any VAT that was deferred.
- Make payment in full prior to 31 March 2021
- Opt into a payment scheme via the new online service before 21 June 2021 (this service opens on 23 February)
- Contact HMRC for extra help regarding payment before 30 June 2021 by telephone on 0800 024 1222 – this option can be used by those who do not have a VAT Government Gateway
Interest will apply if none of these options are taken.
If the online service option is taken, there is conditions that must be met to take advantage of the scheme:
- All subsequent VAT Returns and payments must be up to date
- The first instalment will be due upon signing up to the scheme
- Pay instalments by direct debit over equal payments, depending on when they join dictates the number of payments as follows:
If you join by: Number of instalments
19 March 2021 11
21 April 2021 10
19 May 2021 9
21 June 2021 8
If you have any queries or issues then please contact one of our VAT specialists here.
VAT and Duties
- Any business that took advantage of the original VAT deferral on VAT returns from 20 March through to the end of June 2020 can now opt to use the VAT Deferral New Payment Scheme to pay that deferred VAT in up to eleven equal payments from March 2021, rather than one larger payment due by 31 March 2021, as originally announced.
- The Government will extend the temporary reduced rate of 5% VAT for goods and services supplied by the tourism and hospitality sector 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 from 1 October 2021 to 31 March 2022.
- Employers with fewer than 250 employees will continue to be able to reclaim up to two weeks of eligible Statutory Sick Pay (SSP) costs per employee from the Government whilst the Covid pandemic remains. This temporary extension is available from the first day of sickness.
Cashflow Top Tips
Here are our top tips to help you deal with the challenges that you may be facing:
- Review your direct debits and standing orders to ascertain which payments are business critical.
- Determine whether your staffing levels are adequate and seek advice if you need to reduce the work force/hours. Utilise the Job Retention Scheme where possible.
- Understand what your debt obligations are (both for the business and the directors personally) and seek to negotiate payment holidays if appropriate.
- Seek rent payment holidays where possible.
- Speak to your customers to obtain payment dates for outstanding debtors – consider their ability to pay if agreeing to longer terms. For any customers who are not responding, consider getting in touch with our Recovery Solutions team.
- Negotiate with suppliers to ensure your ongoing orders can be sourced and delivered; identify alternative suppliers for any business critical item.
- Ongoing funding is likely to be a concern for many. If you cannot demonstrate to a funder that you have taken the above steps then it will be more difficult to obtain. Now is the time to take action, even if you have a buffer that may see you through a short period. Review lending options including the BBL and CBIL Schemes.
- Can you temporarily extend your overdraft facility?
- Contact your finance providers as soon as possible to discuss Hire and Lease Purchase payment holidays. It is always better to agree repayment holidays with your finance providers upfront as this should not affect your credit rating going forward.
- Are your vehicles off the road? Could you SORN them? Visit gov.uk/make-a-sorn to do so.
- Review your insurance cover
Consider reducing your level of cover to accidental damage, fire and theft if you are completely certain the vehicle(s) will not be manoeuvred or driven. If not, you should maintain full cover.
- Adhere to insurer requirements
Look carefully at your policy wording for any specific stipulations and follow any recommendations provided by your insurer, for example keeping your vehicle(s) in a securely locked compound.
The Chancellor has announced that the Self-Employed can now access Universal Credit basic allowance at a rate equivalent to statutory sick pay for employees.
What is it?
If you are on a low income or are out of work, the payment is intended to help with living costs.
- You’re on a low income or out of work
- You’re 18 or over (there are some exceptions if the claimant is 16 to 17)
- You’re under state pension age (or your partner is)
- You and your partner have £16,000 or less in savings between you
- You live in the UK.
How much will I receive and when?
- Universal Credit is made up of a standard allowance of £94.25 a week, and some people may be able to get additional amounts, due to their circumstances. This can include if they have children, or if they have a disability or health condition which prevents them from working, or need help in paying rent.
- The payment is usually made monthly – although this may be more frequent in Scotland.
What additional allowances are available in addition to the basic allowance?
- It’s possible to access independent benefits calculators online, in order to see how much you can get.
- Your circumstances are assessed each month, and changes in circumstances can affect how much you are paid for the whole assessment period – not just from the date that the changes are reported.
Universal Credit basic allowance has been increased by £1,000 per year (£19.23 per week).
Working Tax Credit has been increased by £1,000 per year (£19.23 per week).
Tax Credits and Benefits (Universal Credits)
- A six month extension to the £20 per week Universal Credit uplift to September 2021.
- A one-off payment of £500 to eligible Working Tax Credit claimants to provide extra support over the next six months.
- Maintaining the higher surplus earnings threshold of £2,500 for Universal Credits claimants for a further year to April 2022.
- The suspension of the Minimum Income Floor for self-employed Universal Credit claimants is extended to the end of July 2021. It will be gradually reintroduced from August 2021.
- From April 2021, the period over which Universal Credit advances will be recovered will increase to 24 months.
- From April 2021, the maximum rate at which deductions can be made from a Universal Credit award will reduce from 30% to 25% of the standard allowance.
- The Government will continue to treat Working Tax Credit claimants who have been furloughed, or experienced a temporary reduction in their working hours as a result of COVID-19, as working their normal hours for the duration of the Coronavirus Job Retention Scheme (CJRS). This allows these claimants to remain eligible for Working Tax Credit.
- The Government will extend the temporary increase in the residential Stamp Duty Land Tax (SDLT) nil-rate band to £500,000 in England and Northern Ireland until 30 June 2021. From 1 July 2021, the nil-rate band will reduce to £250,000 until 30 September 2021, before returning to £125,000 on 1 October 2021.
Business Interruption Insurance Claims due to Covid-19
Since the beginning of the pandemic, many businesses have suffered a drop in income due to Government restrictions in place. Many businesses turned to their insurers to file claims under the Business Interruption clause in their insurance policies.
Many claims were declined due to various reasons, including not having positive Covid-19 cases on the business premises and local outbreaks not meeting the criteria within the policy.
The Financial Conduct Authority (FCA) have been battling in the courts against these decisions.
Today a Supreme Court ruling states that claims should now be reviewed, and Hiscox Action Group has hailed the ruling as a ‘massive boost’ to smaller businesses, with an estimated value of claims being £1.2bn.
If your business has experienced a decrease in turnover and you hold business insurance with Business Interruption cover, we advise that you contact your insurers as soon as possible.
If you have any queries, please do not hesitate to contact one of our team.
Business Rates Relief
- Business rates relief of 100% will continue for the first three months of the current tax year, to 30 June 2021, for eligible retail, hospitality and leisure businesses.
- Thereafter, for the period from 1 July 2021 to 31 March 2022 the relief will be reduced to two thirds (66.67%).
- To encourage investment by businesses there will be a ‘super deduction’ of 130% of the cost of investment in new equipment for the next two years.
From 1 April 2021 to 31 March 2023 companies investing in qualifying new plant and machinery will be able to claim 130% capital allowances.
This will cut a company’s tax bill by 25p for every £1 they invest.
- In addition to the above, losses of up to £2,000,000 will be able to be carried back for three years to obtain a tax repayment, as opposed to the current legislation which only allows losses to be carried back for one year. This is a temporary measure and is effective for accounting periods ending between 1 April 2020 to 31 March 2022.
Where an unincorporated business suffers a loss as a result of the pandemic, then a loss which arises in the tax years ended 5 April 2021 and 5 April 2022 can now be carried back for three years instead of just one, thus providing a greater opportunity to reclaim tax paid in previous years.
The Government will extend and increase the payments made to employers in England who hire new apprentices between 1 April 2021 and 30 September 2021. Under this scheme employers will receive £3,000 per new apprentice compared to the previously announced rate of £1,500.