This update is written and posted on 25 September 2020 and is likely to quickly become out of date.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.
Government Winter Covid-19 Support Packages
The Chancellor has announced a package of measures that he hopes will continue to protect jobs and help businesses through the winter months ahead, following the growth in the spread of the virus and the re-introduction of measures to prevent/slow the spread.
Central to the plan and a new package is the new Job Support Scheme, which will be introduced from 1 November 2020 to April 2021 to protect viable jobs in businesses who are facing lower demand over the winter months due to coronavirus. To support the self-employed, the Self Employment Income Support Scheme (“SEISS”) has also been extended.
Full details re the Job Support Scheme are still to be released, however we have produced a summary which can be found HERE, based on what we know following the Chancellor’s announcement.
Other measures announced:
- Extending the SEISS, with an initial taxable grant provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus. The initial lump sum will cover three months’ worth of profits for the period from November to the end of January next year. This is worth 20% of average monthly profits, up to a total of £1,875.
An additional second grant, which may be adjusted to respond to changing circumstances, will be available for self-employed individuals to cover the period from February 2021 to the end of April 2021.
Don’t forget that the current SEISS application (the second grant) is currently open and you must make your claim for on or before 19 October 2020.
- An extension of the temporary 15% VAT cut for the tourism and hospitality sectors to 31 March 2021;
- More time to pay deferred VAT for those businesses who deferred their VAT payments earlier in the year, which were due to be repaid by 31 March 2021 (HMRC recently sending out reminders to businesses). More time will be given under a New Payment Scheme, which gives business the option to pay back 11 instalments interest-free payments during the 2021-22 financial year;
- An extension to the self-assessment for the deferred payment on account from 31 July 2020 to 31 January 2021, which now does not need to be paid until 31 January 2022.
In respect of all deferred tax payments, it is still best practice to save the tax payment in a separate account and only use where necessary.
- Bounce Back Loans - The period of the loan is extended from six years to ten, which will reduce monthly repayments. Interest-only periods of up to six months and payment holidays will also be available to businesses;
- Coronavirus Business Interruption Loan Scheme (“CBILS”) - Lenders will be given the power to extend the length of loans from six years to ten years, if it will help businesses to repay the loan;
CBILS was due to close at the end of September, but will now remain open until November, in line with the bounce back loan.
- The Future Fund (Government support scheme for early stage businesses) will remain open.
The above is a summary of the announcement made by the Chancellor, more detail will be released on each measure in due course, in particular regarding the Job Support Scheme.
- Furlough Fraud - HMRC has announced in giving evidence to the Public Accounts Committee, that it believes £3.5bn (10% of the funds distributed) of furlough funds have been fraudulent claimed or claimed in error. HMRC estimates 27,000 high risks cases, where it will write to employers by the end of November. It also is gearing up to undertake 10,000 one on one investigations by the end of the year.
- HMRC miscalculates coronavirus grants for self-employed – in our July update we advised of the 90 day window for employers and the self-employed to repay any furlough pay or SEISS incorrectly (or fraudulently) claimed. HMRC has admitted that over 16,000 SEISS grants were either too high or should not have been paid out at all. Integrated Dispute Resolutions, a legal services firm which highlighted the error, called on HMRC to be transparent about how much the errors have cost. A spokesman for HMRC said: “The Self Employment Income Support Scheme has been delivered at unprecedented pace and has protected the livelihoods of 2.7m self-employed people in the UK. The vast majority of grants were paid correctly but in a very small number of cases not all the information held on a tax return was taken into account when calculating eligibility and grants.” Per our July update, you need to check and confirm your entitlement in case you are required to repay and need to rely on the 90-day amnesty.
- Grants - Gloucestershire Growth Hub has announced that applications for the SME Recovery and the Kick-starting Tourism Grants will open at 10am on Monday 28th September. The grants will be assessed and processed on a “first come, first served” basis – based on the date and time of submission. After the first 200 applications have been received, applications will be temporarily paused in order to make an initial assessment of the applications received. Details of what the grant covers and who can apply can be found at https://www.thegrowthhub.biz/grants
For those not based in Gloucestershire, check your local Growth Hub or Local Enterprise Partnership website for details.
- Kickstarter Jobs Scheme expanded to attract small businesses - The Government has opened its £2bn Kickstart Jobs Scheme to intermediaries following criticism (including Harbour Key) that many small businesses would be left out, due to the initial requirement that an employer had to recruit 30 employees. The Federation of Small Businesses is one intermediary given permission to help small businesses offering fewer than 30 vacancies apply for funding. In Gloucestershire Circle2 Success is an intermediary.
As ever, matters are still developing and we will endeavour to keep you up to date, flag to you opportunities and signpost to the key details as best as we can via our updates. A summary of the Government’s support schemes can be found at our website, including a list of non-Government funding opportunities, which we update regularly and can be found HERE.
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.
It's vital that everyone follows the guidelines & remember:
#Hands #Face #Space