Here’s the latest government support measures at the time of writing. Please get in touch for specific advice as legislation is subject to change.
Furlough
The Job Retention Scheme (CJRS) has been extended until the end of March 2021. If you can’t maintain your workforce because operations have been affected by Covid-19 you can furlough your employees and apply for a grant. From 1st November 2020 you can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month. The employer will need to pay the cost of employer’s NIC’s and pension costs.
Employees can be placed on full or flexible furlough. On flexible furlough, any work pattern can be agreed but no work can be undertaken during the hours that are recorded as being on furlough.
You can claim for employees who were employed on 30th October 2020 as long as a PAYE RTI submission has been made between 20th March 2020 and 30th October 2020.
You do not need to have previously claimed for an employee before 30th October 2020 to claim for a period from 1st November 2020.
Employers should discuss with their staff and make any changes to employment contracts by agreement. To be eligible for the grant, employers must confirm to their employee in writing that they have been furloughed.
HMRC have confirmed that the claims portal process remains the same.
The Job Retention Bonus will no longer be paid in February 2021 as CJRS will still be available at that time. An alternative retention incentive will be put in place at the appropriate time.
Self-Employment Income Support Scheme (SEISS) Grant Extension
SEISS has been extended to provide support to the self-employed in the form of two further grants, each available for 3 month periods covering November 2020 to January 2021 and February 2021 to April 2021. The third grant is calculated at 80% of three months average profits. The level of the fourth grant will be announced in due course.
To be eligible for the grant extension, self-employed individuals, including partnerships, must:
- have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
- must either be trading and impacted by reduced demand or have been trading but be temporarily unable to do so due to coronavirus; and
- intend to continue to trade and reasonably believe that the impact on their business will cause a significant reduction in trading profits due to reduced business activity, capacity or inability to trade due to coronavirus.
The last point is particularly important as this is an additional test that has now been added for the third grant. HMRC expects you to make an honest assessment about whether you reasonably believe your business will have a significant reduction in profits.
The online service for the next grant will be available from 30th November 2020.
Bounce Back Loans (BBLS)
UK firms now have until the end of January to apply for a Bounce Back Loan (BBLS).
The maximum amount available is 25% of turnover up to a limit of £50,000.
Small businesses that have already received funds through the 100% government backed scheme will be able to top up their existing loan up to the maximum. The capital repayment holiday of 12 months will run from the initial draw down date.
The loans are repayable at 2.5% interest over a 6 year term. No interest or repayments are due in the first 12 months.
The Chancellor has also launched the Pay as you Grow payback scheme. Measures include extending the repayment of Bounce Back Loans from 6 to 10 years, allowing struggling businesses to make interest only payments or suspending payments entirely for up to 6 months.
Support Grants During National Lockdown – Local Restrictions Support Grants (LRSG) and Additional Restrictions Grant (ARG)
Following a national lockdown from 5th November to 2nd December 2020, the Chancellor released details of the LRSG.
After that, depending on the number of infections it is intended that Local Authorities will return to a tiered system of restrictions.
Grant funding is available to cover the 28 day period from 5 November to 2 December 2020. Funding can vary per Local Authority, so please see your Local Authority website for specific details. The funding below is specific to North East Lincolnshire Council:
- Eligible ratepaying business who have been forced to close under the national lockdown, will receive between £1,334 and £3,000 depending on the rateable value of the premises.
- Eligible businesses forced to close who are not in the rating system will receive £667.
- Eligible ratepaying businesses in the supply chain who are not forced to close but can justify a significant loss due to their business customers being closed, will receive between £934 and £2,100 depending on the rateable value of the premises.
- Eligible businesses and individuals unable to claim support through the Job Retention Scheme or Self-Employment Income Support Scheme, who are suppliers, or provide a service to, businesses forced to close will receive £667.
- In addition, eligible cafes, restaurants, hotels, B&Bs and indoor leisure businesses who were not required to close during the Tier 2 period of restrictions imposed between 31 October and 4 November 2020, but were severely impacted by social distancing restrictions, will receive an additional payment of between £167 and £375 to cover this 5 day period.
The application form is now available on the NELC website.
Deferral of VAT Payments
If you’re a UK VAT-registered business that deferred VAT payments between 20th March 2020 and 30th June 2020, you now need to:
- set-up cancelled Direct Debits in enough time for HMRC to take payment
- continue to submit VAT returns as normal, and on time
- pay the VAT in full on payments due after 30th June
Any VAT payments you have deferred between 20th March and 30th June should be paid in full on or before 31st March 2021.
On 24th September, the Chancellor announced that businesses who deferred VAT due from 20th March to 30th June 2020 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, and for those who do, this means that your VAT liabilities due between 20th March and 30th June do not need to be paid in full until the end of March 2022.
Those that can pay their deferred VAT can still do so by the 31st March 2021.
If you have any questions on the latest government support measures please get in touch by calling 07511 011703 or email lisa.ross@lrca.co.uk
