This update is written and posted on 12 January 2021 and is likely to quickly become out of date. We will endeavour to update information as it becomes available.
Previous updates and other useful information can be found at our WEBSITE.
At the date of the release of this newsletter, other than further grants being made available (see below), no new Government support measures have been announced to support businesses or individuals for lockdown three.
Previous measures have already been extended, with the Government advising that further announcements will be made in the Budget on 3 March 2021. Although there were rumours in the press over the weekend that support may be introduced for those groups who have not been able to access support, in the main the self-employed whose profits were above £50k in 2019 (excluding them from the self-employed grant) and those who operate their business via a limited company (but have remunerated themselves via a low salary and a high dividend policy). With no work, these individuals have been unable to declare dividends, but the amount that can be assessed under the furlough scheme has been minimal due to the low salary.
A summary of the new grants, and a refresher of what Government support is available, is below:
As a result of the third national lockdown, The Chancellor has announced additional one-off top up grants, available to businesses in the retail, hospitality and leisure sectors, in order to support and protect jobs through to the spring.
There will be two grants available.
Business Rates Grants:
- Similar to the first set of grants announced in March 2020, these grants are available to businesses in England that operate out of commercial premises that have been forced to close during lockdown and would normally be paying business rates.
- As before, your local authority will administer the grant process and will contact you if you are eligible. If you don’t hear anything and believe you are eligible, we recommend that you make contact with your local authority but the announcement was only made on Tuesday 5th January, so will take a bit of time for systems and funds to be put in place.
- The one-off grants are per property and are based on rateable value:
- Rateable Value up to £15,000: Grant of £4,000
- Rateable Value between £15,000 and £51,000: Grant of £6,000
- Rateable Value over £51,000: Grant of £9,000
Business Rates Grants:
Local Authorities are also being given further discretionary funding to help other businesses forced to close during lockdown. As with previous discretionary funds provided, the Local Authority will set its own conditions for who will be eligible, so it is important to check with your Local Authority what their policy is.
Further details can be found at HERE.
As part of the Government’s COVID assistance measures announced in March last year, businesses were allowed to opt to defer payment of VAT due between 20 March 2020 and 30 June 2020 (effectively covering VAT payments for the February, March & April VAT Returns). This was on the basis that all deferred VAT was due to be paid by 31 March 2021.
HMRC have recently announced that there will be an extension to this payment date under a new “Deferred VAT Payment Scheme” which is being launched. Businesses will have to opt into the scheme and it will allow for the deferred VAT to be paid between 2 to 11 equal monthly instalments by 31 March 2022. No interest will be added to these deferred payments.
Businesses wishing to use this scheme must:
- be up to date with their VAT returns;
- opt into the scheme before the end of March 2021;
- pay the first instalment before the end of March 2021;
- be able to pay the deferred VAT by Direct Debit.
If businesses do not opt into the scheme the deferred VAT will still be due to be paid to HMRC in full by 31 March 2021.
The scheme is not yet open but HMRC have advised that the online opt in process will be available shortly. Details of the deferment and opt in process when live can be found at:
ONGOING COVID-19 SUPPORT MEASURES
Furlough scheme for employed workers
The scheme is currently available until 30 April 2021 with the Government paying 80% of a furloughed employee’s wage, up to £2,500 per month. An employee can be furloughed if the business is forced to close, or if there is insufficient work for that employee due to a downturn in work which would result in them losing their job, or if your employee is struggling to deal with childcare following the closure of schools. To be eligible, the employee must have been on the payroll at 30 October 2020, with PAYE Real Time Information (RTI) submission made. A summary of the scheme can be found HERE.
Self-employed income support scheme (“SEISS”)
A third grant for those self-employed is currently available to cover the period to the end of January. A fourth grant was already announced before the recent issues, to cover February to end of April to tie in with the end of furlough, however the date for when this is going live has not been given, but is expected to be mid-February. Details of the grant and the change in the eligibility test from earlier grants can be found HERE.
Government backed loans
The Coronavirus business interruption loan scheme (known as CBILS) and the Bounce Back Loan scheme have been extended to 31 March.If a business has previously taken a bounce back loan, it can roll this loan into a CBILS, as it is not possible to have two separate loans.
The Future Fund provides Government loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal funding from private investors. These convertible loans may be an option for businesses that rely on equity investment and are unable to access other Government business support programmes because they are either pre-revenue or pre-profit. The scheme is open for applications until 31 January 2021. Further details can be found HERE.
Coronavirus Statutory Sick Pay Rebate Scheme
Details of the process to claim back employees' coronavirus-related Statutory Sick Pay (SSP) can be found HERE.
Self-Assessment Tax Payment Deferrals
Self-assessment taxpayers who have a liability relating to the 19/20 tax year, falling due on 31 January 2021 (and may have deferred their 31 July payment on account), have the option to defer this liability by a maximum of 12 months. There is daily interest charge to be applied to any unpaid tax at 2.6% pa.
In these difficult times, scammers and fraudsters will continue to try and exploit the coronavirus pandemic as an opportunity for financial crime, so please be vigilant. For example, HMRC will never request your bank details by phone, email or text. There is expected to be an increase in criminal activity as individuals rush to complete house purchases to beat the 31 March stamp duty holiday. Guard your identity, check post, never make any payments to anyone who rings you, confirm who you are making payments to, check details before giving details or transferring money. A fraud protection checklist is available at https://takefive-stopfraud.org.uk/
ASK FOR HELP
We know that this is a very difficult time for all businesses and some difficult decisions are having to be made. We have spoken to hopefully all of you and if not, we would like you to know that we are here ready to help if you need us to provide advice, deal with queries, or just be a business sounding board.
Please do not hesitate to give us a call - 01452 713277
It's vital that everyone follows the guidelines & remember: