At the start of the Coronavirus Pandemic in March 2020, the Government announced a series of measures to support businesses through what they thought would be a short time frame. Over the last year, we have experienced numerous more lockdowns and varying restrictions depending on your industry and where you trade. In turn, the Government has announced variations and amendments to the initial measures of support introduced.
We will be happy to help you navigate through the measures and have noted some of the key areas of support below and how they’ve been adjusted over the past year.
Coronavirus Job Retention Scheme
Under the Coronavirus Job Retention Scheme, all UK employers are able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. All UK businesses are eligible. HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. Employees can be work part time and be furloughed for part of the time under the flexi furlough scheme. Applications can be made through your government gateway account.
The Coronavirus Job Retention Scheme has been extended until 30 April 2021.
For the period 1 November 2020 to 30 April 2021 the government grant will cover the full 80% of wages. Employers will not be required to contribute or top-up for the hours not worked. Employers will still need to pay employer National Insurance contributions and employer pension contributions, you cannot claim for these.
You can choose to top up your employees’ wages above the minimum 80% furlough pay amount, but you do not have to. Employees must not work or provide any services for the business during hours which they are recorded as being on furlough, even if they receive a top-up wage.
You must keep a copy of all records for 6 years, including:
- the amount claimed and claim period for each employee
- the claim reference number for your records
- your calculations in case HMRC need more information about your claim
- usual hours worked, including any calculations that were required, for employees you flexibly furloughed
- actual hours worked for employees you flexibly furloughed
Rogers Spencer have the necessary resources and skills to assist you with this process. Please contact us to discuss in more detail.
Self-employed Income Support Scheme
The government also announced their support for the self-employed through the launch of the Self-employment Income Support Scheme (SEISS). The scheme launched on 13 May 2020.
This scheme allows self-employed individuals and partnerships to claim a taxable grant worth 80% of the trading profits up to a maximum of £2,500 per month. The grants are claimed in 3 month periods. The latest 3-month periods covered November 2020 to January 2021 and then the next is February 2021 to April 2021.
Who can apply?
You can apply if you are a self-employed individual or a member of a partnership and you:
- Have submitted an Income Tax Self-Assessment tax return for the tax year 2018-19
- Traded in the tax year 2019-20
- Are trading when you apply, or would be except for COVID-19
- Intend to continue to trade in the tax year 2020-21
- Have lost trading/partnership trading profits due to COVID-19
- Have self-employed trading profits of less than £50,000 and more than half of your income comes from self-employment. This is determined by at least one of the following conditions being true:
- having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
- having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period
If you are a director of your own company, you are not classed as self-employed. You may be able to get support using the Job Retention Scheme.
How do I apply?
You must claim through your government gateway and you will require: –
- Your Self-assessment Unique Taxpayer Reference Number
- Your National Insurance Number
- Your Government Gateway ID and Password
- Bank account number and sort code for payment
Please visit this website for the most up to date advise.
Should you need any clarification on your status, please contact us for further details.
Deferring VAT and Income Tax Payments
The Government supported businesses by deferring Valued Added Tax (VAT) payments for 3 months from March to June 2020. If you deferred VAT between 20 March and 30 June 2020 and still have payments to make, you can:
- pay the deferred VAT in full on or before 31 March 2021
- opt in to the VAT deferral new payment scheme when it launches in 2021
- contact HMRC if you need more help to pay
Instead of paying the full amount by the end of March 2021, you can make up to 11 smaller monthly instalments, interest free. All instalments must be paid by the end of March 2022.
The scheme will allow you to:
- pay your deferred VAT in instalments without adding interest
- select the number of instalments from 2 to 11 equal monthly payments
To use this scheme you must:
- still have deferred VAT to pay
- be up to date with your VAT returns
- opt in before the end of March 2021
- pay the first instalment when you opt in
If you opt in to the scheme, you can still have a time to pay arrangement for other HMRC debts and outstanding tax.
For Income Tax Self-Assessment, payments due on the 31st July 2020 were deferred until 31 January 2021. The deadline for submitting tax returns was extended to 28 February 2021 however there was no formal extension of the tax payment deadline. The government have made it clear arrangements can be made to extend payment terms for income tax through their Time To Pay Scheme.
A Statutory Sick Pay relief package for SMEs
The Government introduced legislation to allow small and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. SSP payments can be made from Day 1. The eligibility criteria for the scheme will be as follows:
- this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
- 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 of 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 COVID-19
- employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that have symptoms can get a note from the NHS website
- eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force
A 12-month business rates holiday for all retail, hospitality and leisure businesses in England
A business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year was introduced.
Small business grant funding through Local Councils
The government initially provided funding for Local Councils to provide one-off grants to certain businesses. This provided one-off grants of £25,000 or £10,000 to eligible businesses to help meet their ongoing business costs back in March.
In January 2021, the government announced further one-off top up grants to be offered for retail, hospitality and leisure businesses as follows:
- £4,000 for businesses with a rateable value of £15,000 or under
- £6,000 for businesses with a rateable value between £15,000 and £51,000
- £9,000 for businesses with a rateable value of over £51,000.
In addition, Local Councils have been allocated funding to provide local businesses discretionary grants.
If you do not qualify for any of the grants but your business has had to close or been seriously impacted, please contact your local authority to enquire how to apply for discretionary grants.
The Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, was launched on 23rd March 2020 to support primarily small and medium-sized businesses to access bank lending and overdrafts. The government provides lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value.
Businesses can access the first 12 months of that finance interest free, as government will cover the first 12 months of interest payments.
Who is eligible?
- your business is UK based, with turnover of no more than £45 million per year
- your business meets the other British Business Bank eligibility criteria
How to access the scheme?
The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/
All the major banks offer the Scheme. There are 40 accredited providers in all.
You should talk to your bank or finance provider (not the British Business Bank) as soon as possible and discuss your business plan with them. This will help your finance provider to act quickly once the Scheme has launched. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.
The scheme is open until 31 March 2021.
Bounce Back Loan
The Bounce Back Loan scheme helps small and medium-sized businesses to borrow between £2,000 and £50,000. The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months and then the interest will be 2.5% per year. Loan terms will be up to 6 years. No repayments will be due during the first 12 months The scheme will be delivered through a network of accredited lenders.
You can apply for a loan if your business:
- is based in the UK
- has been negatively affected by coronavirus
Who cannot apply
The following businesses are not eligible to apply:
- banks, insurers and reinsurers (but not insurance brokers)
- public-sector bodies
- state-funded primary and secondary schools
You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS).
The Scheme is open until 31 March 2021.
Please visit this website for more details.
HMRC Time To Pay Scheme
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time to Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. You are eligible if your business pays tax to the UK government and has outstanding tax liabilities.
If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559.
3-month extension to file accounts from Companies House
From 25 March 2020, businesses were given a 3-month extension for filing their accounts.
This joint initiative between the government and Companies House will mean businesses can prioritise managing the impact of Coronavirus.