Last updated: 6th November 2020
There are several support measures that have been made available to help businesses through the covid-19 pandemic which are outlined below in turn.
Self-Employed Income Support Scheme
SEISS is a cash grant provided to eligible self-employed individuals who trade independently or through a partnership and have been adversely affected by the coronavirus pandemic.
HMRC are contacting individuals directly with regards to making a claim and you will have to self-certify that your business has been adversely affected.
The grant is based on your average trading profit over the tax years 2016-17 to 2018-19.
Applications for the first and second SEISS grant are now closed.
On 24th September 2020, The Chancellor announced a grant extension to the SEISS. To be eligible, the individual claiming must have been eligible for the previous two SEISS grants although they do not need to have claimed them. The individual needs to declare that they are currently actively trading, intend to continue to trade and that they are impacted by reduced demand due to Covid-19 in the qualifying period.
The first qualifying period of this grant extension is between 1 November and the date of the claim and will cover a three-month period from the start of November until the end of January. This grant will be calculated at 80% of 3 months average monthly trading profits, paid out in a single instalment and capped at £7,500 in total.
The second qualifying period of this grant extension starts of 1 February 2021 until the end of April 2021. The government have pledged to provide the same level of support for the self-employed as is being provided for employees through the Job Retention scheme which has also been extended until March 2021.
All SEISS grants are subject to Income Tax and National Insurance Contributions.
Coronavirus Job Retention Scheme
The job retention scheme was put in place to protect employment where redundancies would have otherwise occurred because of coronavirus.
From 1st September, the government will pay a grant of 70% of wages up to a maximum cap of £2,187.50 for the hours the employee is on furlough.
From 1st October, the government will pay a grant of 60% of wages up to a maximum cap of £1,875 for the hours the employee is on furlough.
Employees must also have been furloughed previously for at least 3 consecutive weeks between 1st March 2020 and 30th June 2020 and employers will pay the employers NICs and pension contributions as well as topping up the employees’ pay to ensure they receive 80% of their regular wages up to a cap of £2,500, for the time they are on furlough.
The scheme was due to close on 31st October 2020 but has now been extended to run through until December with employees receiving 80% of their salary for hours not worked, up to a maximum of £2,500.
Under the extension, businesses will have the flexibility to bring furloughed employees back to work on a part-time basis, or furlough them full time. Employers will still be asked to cover the National Insurance Contributions and employer pension contributions.
To be eligible for the Job Retention Scheme extension, employees must have been on an employer’s PAYE payroll by 23:59 on 30th October 2020.
Job Support Scheme (JSS Open)
The Job Support Scheme was due to start from 1st November 2020 and run for a period of 6 months. This scheme has now been postponed following the extension of the Job Retention Scheme.
All employers with a UK bank account and UK PAYE scheme can claim the grant and neither the employer nor the employee needs to have previously used the Coronavirus Job Retention Scheme.
Large businesses will have to meet a financial assessment test in order to qualify so the scheme is only available to those whose turnover is lower now than before experiencing difficulties from Covid-19. There will be no financial assessment test for small and medium-sized enterprises (SME’s).
Employees must be on an employer’s PAYE payroll on or before 23rd September 2020 and for the first three months of the scheme, the employee must work at least 20% of their usual hours. After three months, the Government will reassess the situation to determine whether to increase this minimum hours threshold. Employees will also be able to cycle on and off the scheme and do not have to be working the same pattern each month, but each short-time working arrangement must cover a minimum period of 7 days.
The employee will be paid as normal for the hours they work and for the 80% of normal hours not worked, the government will contribute 61.67% and the employer will pay 5% for that employee. The Government contribution is capped at £1,541.75 per month.
The grant will be paid in arrears meaning that the payment to the employee must have already been made and reported to HMRC before the claim and does not cover Employer’s National Insurance Contributions of Pension Contributions.
Job Support Scheme Extension (JSS Closed)
With new localised lockdown measures being introduced mid-October, some businesses are being forced to close and to support those businesses, the UK government have pledged to extend the Job Support Scheme.
The extension follows the same rules mentioned above under the Job Support Scheme, however, in this situation, the employee will receive two-thirds of their normal pay, fully funded by the government, to a maximum of £2,083.33 per month.
Job Retention Bonus
The job retention bonus is a one-off payment to employers of £1,000 for every employee who they previously claimed for under the Job Retention Scheme or the Job Support Scheme, and who remains continuously employed through to 31 January 2021. Eligible employees must earn at least £520 per month on average between 1 November 2020 and 31 January 2021.
Employers will be able to claim the Job Retention Bonus after they have filed PAYE for January 2021 and payments are due to be made to employers from February 2021.
Coronavirus Restrictions & Discretionary Grant Fund (Scotland)
The Scottish government have earmarked up to £40m to support employees and businesses impacted by the further restrictions imposed with effect from Friday 9th October.
The restrictions fund is restricted to hospitality and other businesses required to close by the brake restriction regulations and operates as a two-tiered scheme with a smaller grant available of £2,000 for businesses with a rateable value of under £51,000 and a larger grant of £3,000 for business with a rateable value over £51,000.
To be eligible for the restrictions fund, you must be closed due to government guidelines, have a business bank account and your premises must be registered for Non-domestic rates. Additionally, Local Authorities will invite applications for a discretionary business hardship fund with payments up to £1,500 to support business which remain open but are directly impacted by the restrictions, including those in the direct supply chain of firms which must close. Eligibility for this grant is still being reviewed by the Scottish government.
Local Restrictions Support Grant Scheme (England)
Businesses who are legally required to close due to nationally-imposed local lockdown will receive up to £3,000 per month and are eligible for payment after two weeks of closure. Business premises with a rateable value of £15,000 or under will receive £667 per two weeks of closure, business premises with a rateable value between £15,000 and £51,000 will receipt £1,000 per two weeks of closure and if the rateable value is over £51,000 they will receive £1,500 per two weeks closure.
Coronavirus Business Interruption Loan Scheme (CBILS)
The CBILs scheme provides financial support to smaller businesses (SMEs) that are seeing their cash flow disrupted because of coronavirus.
Loans and finance facilities of up to £5 million are being provided through the British Business Bank on repayment terms of up to six years. The government is providing the lenders with a partial guarantee (80%) against the balance of finance provided however, it is important to understand that the borrower remains 100% liable to the debt.
The government will also be covering the first 12 months of interest payments and any lender-levied charged for the borrower.
Loans under £250k will not require any personal guarantees however, this may be required for facilities provided above £250k at the lender’s discretion.
Borrowings can be in the form of loans, overdrafts, invoice finance and asset finance. Applications for CBILS will end on 30th November 2020.
On 24th September 2020, Chancellor Rishi Sunak announced that the government guarantee on CBILs will be extended to 10 years.
Bounce Bank Loans
Bounce Back Loans are available to small and medium sized businesses, whether they are sole traders or an incorporated limited company, subject to certain criteria.
Loans are provided between £2,000 and 25% of the business’ turnover up to a cap of £50,000 and are 100% backed by the government. There are no interest or capital payments for the first 12 months after which the interest rate will be 2.5% a year.
Applications for Bounce Back Loans will end on 30th November 2020.
On 24th September 2020, Chancellor Rishi Sunak announced that a “pay as you grow” scheme will be implemented allowing businesses to extend their BBLs from 6 years to 10 years.
If you’re a UK VAT-Registered business with a VAT payment due between 20th March 2020 and 30th June 2020, you are eligible to defer that payment until 31st March 2021.
On 24th September 2020, the Chancellor announced that businesses who deferred VAT will now have the option to pay in smaller payments over a longer period.
Instead of paying the full amount by the end of March 2021, you can make smaller payments up to the end of March 2022, interest free.
You will need to opt-in to the scheme by contacting HMRC to arrange the payment plan.
Income Tax Deferral
Individuals who had a payment on account for income tax due on 31st July 2020 are able to defer payment until 31st January 2021.
On 24th September 2020, Chancellor Rishi Sunak announced that self-assessed income tax payers who need extra help, can set up a payment plan for their outstanding tax bill over 12 months from January 2021.
Temporary Reduced Rate of VAT for Hospitality, Holiday Accommodation, and Attractions
From 15th July 2020 to 31st March 2021, there is a temporary 5% reduced rate of VAT for certain supplies of hospitality, hotel and holiday accommodation, and admissions to certain attractions.
The following supplies will benefit from the temporary 5% reduced rate of VAT:
- food and non-alcoholic beverages sold for on-premises consumption, for example, in restaurants, cafes and pubs
- hot takeaway food and hot takeaway non-alcoholic beverages
- sleeping accommodation in hotels or similar establishments, holiday accommodation, pitch fees for caravans and tents, and associated facilities
- admissions to the following attractions that are not already eligible for the cultural VAT exemption such as:
- amusement parks
- similar cultural events and facilities
Where admission to these attractions is covered by the existing cultural exemption, the exemption will take precedence.
Small Business and Retail, Hospitality and Leisure Grant Fund
Small businesses who pay little or no business rates may be eligible to a one-off cash grant of £10,000 from their local authority however, businesses in the retail, hospitality and leisure industry can apply for a one-off cash grant of £25,000. You must apply directly to your local authority for the grant and be subject to certain eligibility checks.
Unfortunately, many local authorities are now closed for new applications for the Small Business Grant Fund but you should check with them directly.
Local Authority Discretionary Grant
Small and micro businesses with fixed property costs that are not eligible for the small business grant fund or the retail, hospitality and Leisure fund, may be eligible for the discretionary grants scheme.
Grants under this scheme can be up to £25,000 and are subject to certain eligibility criteria. The local authorities themselves have discretion about how to prioritise their allocation funding and so you should contact them directly about making a claim.
Business Rates relief
Businesses which operate in the retail, hospitality and leisure sectors in England will not have to pay business rates for the 2020 to 2021 tax year and neither will nurseries who are on Ofsted’s Early Years Register and provide care and education for children up to 5 years old (excluding local authority-run nurseries).
In Scotland, all non-domestic properties will get a 1.6% rates relief as well as the retail, hospitality and leisure sector receiving 100% rates relief.
Rates relief is applied automatically by your local authority.
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