This update is written and posted on 29 March 2021 and is likely to quickly become out of date.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.
Today England enters stage 2 of the unlock roadmap, with up to six people or any number from two households being able to gather outside, some organised sports restarting and sport facilities opening. Wales opened up at the weekend and Scotland will open later this week. The message is now stay local, as opposed to stay at home.
The Government continues to support businesses and individuals, with many positive announcements in the Budget. We have summarised these below, as well as providing some reminders, and detailing support which is closing.
The furlough scheme covering 80% of salaries (to a maximum of £2,500 per month) continues until 30 September 2021, but with a taper. From 1 July 2021, the level of grant will be reduced, with the employer contributing towards the cost of the furloughed employees’ wages, a 10% contribution for month of July and 20% in August and September. You can use flexible furloughing as well as full-time furloughing, and you can top up your employee’s wages if you wish to. When on furlough, employees can’t do any work that makes money or provides services.
For the current version of the scheme, an employee can be furloughed (full or in part) provided that the employee was employed on 30 October 2020 and a payroll report submitted to HMRC between 20 March 2020 and 30 October 2020, which included a report of a payment of earnings to the employee. The employee did not have to be eligible for the earlier versions of the furlough scheme, to qualify for the current scheme. Eligibility increases from May 2021, when you will be able to claim for eligible employees who were employed and payrolled on 2 March 2021. More details can be found HERE.
SELF-EMPLOYED INCOME SUPPORT SCHEME ("SEISS")
We were already aware of the fourth SEIS grant, which covers the period of February 2021 to April 2021, paying 80% of average trading profits for three months, up to a cap of £7,500. In the Budget, the Government extended the scheme with a fifth grant. This will cover May 2021 to July 2021 and will pay 80% of average trading profits if there has been a drop in turnover of 30% or more due to Covid-19. Eligibility for the fourth and fifth grant is wider than the earlier SEIS grants but you must have submitted a 2019-20 tax return by 2 March to be eligible, which means people who were newly self-employed can now apply for the grant. To be eligible, trading profits must be less than £50,000, and you must have made more than half of your income from being self-employed. The grant is taxable, and your trade must have been impacted by reduced demand due to Covid. The fourth grant application process is expected to open mid-April, the application being made via your Government Gateway account. Do not give your bank details for payment in reply to an email, text message or over the phone, this will be a scam, not HMRC.
More details can be found at HERE.
There was nothing in the Budget to support those individuals who operate their own limited company and extract profits via a low salary and dividends.
From April, a new restart grant will be available for businesses in England to help reopen the high street after lockdown. The restart grant offers a one-off cash grant of up to £18,000 to businesses, including, pubs, bars, clubs, hotels, restaurants, gyms and hair/beauty salons. Non-essential retail businesses can get up to £6,000 through the scheme as the roadmap plans for shops to reopen sooner than other businesses.
As with previous grants, the scheme will be operated by your local authority. A business may be eligible if it pays business rates, has had to close because of national lockdown from January 2021 or between 5 November and 2 December 2020 and has been unable to provide usual in-person customer service. More details can be found at HERE.
BOUNCE BACK LOAN & CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME ("CBILS")
These Government backed loan schemes are to close on midnight 31 March 2021, to be replaced by a new Government loan scheme, the Recovery Loan (see below). From what we have seen with the replacement scheme, the Bounce Back Loan and CBILS have the more generous terms.
BUSINESS RATES HOLIDAY
This business rates holiday applied in England for the full tax year 2020-21, has now been extended until June 2021 for shops, restaurants, cafés, bars, pubs, cinemas, live music venues, leisure properties for example sports clubs, gyms, spas, hospitality properties, like hotels, guest houses and self-catering accommodation. After June 2021, business rates will be at a 66% discount for the remaining part of the tax year.
- Moratorium for creditors – The measures which suspended winding up petitions and provided business with a short period where they can be protected from creditors, and allows directors to trade an insolvent business, expire 31 March.
- VAT Deferment – VAT payable for the period March to June 2020 which was deferred last year, has to be paid by the 31 March. However the Deferred VAT Payment Scheme allows for the deferred VAT to be paid between 2 to 11 equal monthly instalments by 31st March 2022. No interest will be added to these deferred payments. You must opt into VAT payment scheme before 31 March 2021.
- VAT Reduction – For businesses in hospitality and tourism, VAT has been reduced to 5% and this has been extended through to 30 September, rising to 12.5% for a further 6 months before returning to the normal rate.
- Trade Credit Support Scheme - Government trade credit insurance market support, (agreeing to take 90% of losses) expires in June 2021, though a further extension is possible
FREE RAPID TEST FOR ALL BUSINESSES
The Government is enabling all businesses in England, including those with fewer than 50 employees, to sign up to a free coronavirus workplace testing programme. Businesses are encouraged to register their interest by 31st March to order free lateral flow tests for their employees. Rapid testing detects cases in under 30 minutes, meaning positive cases can isolate immediately, breaking chains of transmission. Harbour Key have been using these tests since the start of the year.
The Government initiative can be found HERE.
LONDON MAYOR'S RESILIENCE FUND
The Mayor of London has launched a £1 million challenge fund to help London emerge stronger from COVID-19 and ensure the capital is prepared for future disruptive challenges. The fund is open to early-stage, start-up, or a social enterprise with a good idea which solves one of 10 challenges identified by the Resilience Partners and the Mayor of London to opening London. Details can be found at https://challenges.org/mayors-resilience/ Applications close on 4 April 2021.
The Chancellor announced in the Budget, £100m of investment to create a taskforce to deal with COVID-19 fraud, appointing 1,000 investigators. The Government believes that one-third of taxpayer funded support has been claimed illegal, or in error, for example the rumours circulating of self-employed construction workers who have had little Covid-19 impact, but have still claimed SEISS grants. The message is, HMRC will check and review claims and have already commenced the process.
HMRC have stated that reports of fraudulent furlough claims have reached 26,232, The Cabinet Office have announced that 24,000 suspicious activity reports have been filed by Banks re fraudulent bounce bank loans and 15,983 reports of misuses of other Government schemes.
To minimise the risk of an adverse decision or a prolonged compliance check, please make sure you have your supporting documents and workings in place for any Government support you have taken.