Updated: Nov 6, 2020
We want to extend our very best wishes to you and your loved ones - we are thinking of you all. We hope you are keeping well, safe and sane during the lock-down. We are working as normal and are available using the usual channels to help our clients and welcome non-clients to contact us with any questions. We share your anxiety as business owners ourselves and will do all we can to support our local community.
As you will be aware, the Chancellor Rishi Sunak has announced a number of measures to help businesses through the turbulent and difficult times ahead. We have summarised them for you here - get in touch if you need any guidance on how these initiatives affect you and your business.
We will be updating this post regularly with updates as they come.
HMRC’s dedicated C-19 helpline: 0800 0159 559
HMRC's Payment Support Service: 0300 200 3835
Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme has been extended by a month until December. As a result, the Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends. This is now expected to be in March.
CJRS extension details:
The extended Job Retention Scheme will operate as the previous scheme did, with businesses being paid upfront to cover wages costs. There will be a short period when we need to change the legal terms of the scheme and update the system and businesses will be paid in arrears for that period.
The CJRS is being extended until the end of March. It will be reviewed in January. The level of the grant will mirror levels available under the CJRS in August, so the Government will pay 80% of wages up to a cap of £2,500 and employers will pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work.
It will be open to new employers and employees.
As under the current CJRS, flexible furloughing will be allowed in addition to full-time furloughing.
Further details, including how to claim this extended support through an updated claims service, will be provided shortly.
The Job Support Scheme will be introduced following the end of the CJRS.
Anyone was made redundant after 23 September – when the furlough replacement was announced – can be brought back on to the scheme.
Who is eligible?
All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.
The Government expects that publicly funded organisations will not use the scheme, as has already been the case for CJRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted. All other eligibility requirements apply to these employers.
To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 30th October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.
As under the current CJRS rules:
Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees.
Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. Such calculations will broadly follow the same methodology as currently under the CJRS.
When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days.
Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.
What support is being provided and employer costs:
For hours not worked by the employee, the Government will pay 80% of wages up to a cap of £2,500. The grant must be paid to the employee in full.
Employers will pay employer NICs and pension contributions, and should continue to pay the employee for hours worked in the normal way.
As with the current CJRS, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.
The Government will confirm shortly when claims can first be made in respect of employee wage costs during November, but there will be no gap in eligibility for support between the previously announced end-date of CJRS and this extension.
Mortgage payment holidays will no longer end today. Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.
The FCA will announce further information.
Further business grants were announced on 31 October 2020.
Businesses required to close in England due to local or national restrictions will be eligible for the following:
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.
Self-employment Income Support Scheme
The Government has announced an extension for the Self-employment Income Support Scheme (SEISS).
The generosity of the Self-Employment Income Support Scheme (SEISS) Grant Extension will be increased from 40% of average trading profits to 80% of average profits – up to £7,500.
In addition, the opening of the service has been brought forward from 14 December to 30 November.
REPLACING THE CORONAVIRUS JOB RETENTION (FURLOUGH) SCHEME
The Chancellor has announced a 'Jobs Support Scheme' for employees working at least a third of their normal hours, for which their employers pay for as normal. Employers and the Government will jointly increase employee's wages to cover at least two-thirds of their lost pay and the employee will keep their job.
More on the terms and conditions of this scheme to follow but for now we know this will run from six months from November, small and medium-sized businesses are eligible, but larger businesses must prove that their income has fallen due to Covid. The government contribution will be capped at £697.92 per month. It will be open to employers who didn't use the CJRS.
SELF-EMPLOYED INCOME TAX DEFERRAL
Income tax liabilities due 31 January 2021 can be deferred. Those with tax liabilities up to £30,000 will be able to set up a payment plan over 12 months to January 2022.
LONGER LOAN REPAYMENT TERMS
Called “pay as you grow”, allowing businesses in receipt of Bounce Back Loans or CBIL Loans to extend repayments from six to 10 years. Businesses can also move to interest-only payments or suspend repayments for six months with credit ratings unaffected.
EXTENSION TO SELF EMPLOYED INCOME SUPPORT SCHEME
The existing grant for self-employed people is to be extended with similar terms to the Jobs Support Scheme. The extension will be in the form of two taxable grants, first three months period which will cover 20% of average monthly trading profits, capped at £1,875 in total. The second grant will cover next three months, government will review the level and setting up.
VAT FOR HOSPITALITY
The temporary reduction of VAT from 20% to 5% for some sectors has been extended to 31 March 2021.
KEEPING THE UK WORKING:
A 'Job Retention Bonus' of £1,000 per employee to encourage employers to retain furloughed staff through to January 2021.
'Kick-start scheme' to cover six-month work placements at NMW and 25 hours per week for 16 to 24-year-olds on universal credit.
Incentive bonus of £1,000 grant per trainee for employers who take on new apprentices aged 16-24.
Grants for employers of £2,000 per apprentice under 25 hired, £1,500 for those over 25, for six months from August.
Doubling the number of work coaches at Jobcentre Plus across Great Britain, with extra help for young jobseekers. HELPING HOSPITALITY: A 6 month VAT cut from 20% to 5% for restaurants, hotels and attractions. 'Eat out to help out' scheme offering 50% discount per person, up to £10, Monday to Wednesday throughout August at participating restaurants. FREEZE ON STAMP DUTY: Threshold for stamp duty on residential property to increase from £125,000 to £500,000 effective immediately through to 31 March 2021. Almost 90% of transactions would be tax-free as a result. Grants up to £5,000 per household for projects to make homes more energy efficient.
The Self-Employed Income Support Scheme (SEISS) has been claimed by 2.6 million people and has paid out £6.8bn so far.
The Chancellor has now announced further help for Self-Employed workers across the UK. There will be a second (and final) lump sum grant payment available in August.
The second round of grants will be slightly reduced to 70% of the 3 month averaged income over the last 3 tax years, now capped at £6,570 (was £7,500).
Employers/Employees - Coronavirus Job Retention Scheme
The scheme will remain as it is through June. From July, employees can return to work part-time which will allow employers to fund the days worked and the Government to fund the rest up to 80%, capped at £2,500.
It has been confirmed that the Job Retention Scheme will end in October.
From August, the scheme remains the same for employees however employers will pay for Employer's NI and pension contributions. From September, the Government will only cover 70% of employees wages (down from 80%, with employers contributing 10%, E'er NI and pension) and the new cap will be £2,190. This will finally be reduced in October to 60% (employers to contribute 20%, E'er NI and pension) and £1,875 when the scheme then comes to a close.
Employers are able to decide the hours/days employees return for and may still choose to top up employees salaries to their usual wage. The CJRS will be closed to new employee entrants from 30th June, therefore employees must be furloughed by 10th June to qualify for continued support.
These are the details which have been announced so far, we will update when detailed guidance is released.
Coronavirus Bounce Back Loan
On the 27th April , the Government announced a further initiative to support small businesses through the Covid -19 crisis. The new Coronavirus Bounce Back Loan will launch on May 4th with businesses able to borrow up to £50,000 interest free for the first twelve months and 100% guaranteed by the Government.
Chancellor Rishi Sunak starts by saying the government understand the Self-Employed are deeply anxious about losing their livelihoods and the current measures for the Self Employed do not go far enough. "You have not been forgotten, we all stand together".
The Self-Employed Income Support Scheme offers a taxable grant of up to 80% of averaged income over the past 3 years, capped at £2,500 per month. This has been set for 3 months, covering same value as employees. This will be available to those with trading profits up to £50k and those who are eligible will be contacted by HMRC - a 2019 tax return must be on file to be eligible and this will not be available for anyone not currently registered as Self-Employed with HMRC.
The Chancellor goes on to describe this as "one of the most generous schemes in the world". Furthermore, HMRC are allowing anyone who missed the January deadline 4 weeks from today to file their 2018/19 tax return. He expects the scheme to be up and running by the beginning of June.
For those with less than 3 years accounts, their grant will be averaged using the data HMRC do have.
Does the Chancellor hint at future tax rises when he mentions the inconsistency in contributions? The Self-Employed currently pay 9% National Insurance on profits compared to 12% paid by Basic Rate employees. Certainly a problem for another day..
Payments on account usually due by 31 July 2020 can be deferred until 31 January 2021. If you were due to make a payment by July, you can defer (no application or notification required) without incurring any interest or penalties, until January 2021.
The Self-Employed rate of Employment and Support Allowance (ESA) has been increased from £73.10 to £94.25 per week, in line with Statutory Sick Pay. This can be claimed online.
Employers and Employees
The Coronavirus Job Retention Scheme recognises the difficulties faced by employers who have had to temporarily close or whose cash flow may have halted and may no longer be able to continue paying its employees.
Rather than have mass lay-offs and redundancies, HMRC are set to reimburse all employers 80% of 'furloughed workers' wages. Employers can choose to fund the difference. Employee's February pay will be used to set this amount and this can be back-dated to 1st March.
This allowance is capped at £2,500 per month, the equivalent of an annual salary of £30,000, and is currently set for three months.
All VAT registered businesses can defer payments for up to 3 months. If you currently pay by Direct Debit, you will need to cancel this.
Businesses will be given until the end of 2020/2021 to settle any remaining outstanding VAT liabilities as a result of using the deferral scheme.
VAT refunds and reclaims will be paid by the government as normal.
Time to Pay
The usual Time to Pay rules will apply throughout. Any business struggling to pay any tax liabilities can request a suitable payment plan with HMRC.
Statutory Sick Pay
Employees earning more than £118 per week will be eligible for SSP from the first day of absence if it is C-19 related. SSP is £94.25 per week. Employees will need to obtain an isolation note which can be downloaded online.
Employers will be able to reclaim up to two weeks of SSP per employee where time off is due to C-19.
Business Interruption Loan Scheme
Businesses with a turnover up to £45 million per year will be eligible for business loans. The government will provide lenders with a guarantee of 80% on each loan and will cover the first 12 months of interest payments and any lender-levied fees.
Extending Filing Deadlines
Companies who are unable to meet their deadlines with Companies House can apply for an extension of up to three months online.
HMRC will introduce a business rates holiday for retail, hospitality and leisure businesses in England for the 2020/2021 tax year.
Cash grants are available for businesses in hospitality, retail, nursery and leisure sectors.
We are here to help. Please contact us if you have any questions or concerns about your business during this crisis. We can be reached on 07311676089 and firstname.lastname@example.org
Equal Accountancy Ltd offers Accountancy and Bookkeeping services in Hemel Hempstead and surrounding areas across Herts, Beds and Bucks. We offer a range of services for Limited Companies, Self-Employed individuals and Landlords including Year End Accounts, Corporation Tax returns, Self-Assessment Tax returns, Payroll services, VAT returns, Bookkeeping and Company Secretarial. Get in touch today for a free, non-obligatory quote for your business needs.