As the pandemic continues, the government is rolling out new support measures in terms of grants, loans and deferred tax payments. We thought it might be useful to round these up in an ‘at a glance’ summary. However if you need guidance or advice on your own unique set of circumstances, please do get in touch, we are here to help you make the right financial decisions: for you and your business.
Coronavirus Job Retention Scheme (CJRS)
This will end 31 October 2020.
Job Support Scheme
This replaces the CJRS, lasts for 6 months and is aimed at businesses who are able to retain staff on shorter hours. It involves both employer and government contributions. Full details can be found on a government factsheet HERE. This can be claimed alongside the Job Retention Bonus (below).
Job Retention Bonus
The Job Support Scheme is intended to work alongside the Job Support Scheme (above). It is a one-off payment to employers of £1,000 for every employee who they previously claimed for under the furlough scheme, and who remains continuously employed through to 31 January 2021. Eligible employees must earn at least £520 a month on average between the 1 November 2020 and 31 January 2021. Employers will be able to claim the Job Retention Bonus after they have filed PAYE for January and payments will be made to employers from February 2021. More details can be found HERE.
Reduced VAT rate for hospitality and tourism sectors
This was reduced to 5% and the time period has been extended until 31st March 2021.
Deferred tax bills
Taxpayers will be given more flexibility over payment of VAT and self-assessment tax bills. Any payment plans must be applied for and agreed in advance. For VAT an ‘opt-in’ process will be set up for use by early 2021. For self-assessment, taxpayers will use HMRC’s Time to Pay scheme (link HERE).
VAT ‘New Payment Scheme’: Deferred VAT may be spread over 11 instalments
Self-assessment ‘Time to Pay’: Tax due on 31 January 2021 may be spread over 12 interest-free payments
Coronavirus-related loan payment terms
The repayment terms of bounce back loans and other coronavirus support loans are to be extended to help businesses with cashflow. In particular, a new Pay As You Grow scheme will allow businesses with bounce back loans to extend the term of the loan from six to 10 years, therefore reducing monthly payments.
Self Employment Income Support Scheme
Following on from the first two SEISS taxable grants, there are plans for two further grants, albeit at a much lower rate. They are, as before, designed for self-employed people where their business has been affected by Coronavirus.
Grant 3: November 2020 to January 2021: 20% of average monthly profits up to a total of £1,875.
Grant 4: February 2021 – end April 2021, details to follow when announced although it is expected to be at a similar rate.
This is a 100% funded scheme designed for 16-24 year olds taking on a new role for six months. Read our web page on this for full details HERE.
“Wage support, tax deferrals and help for the self-employed will reduce the scarring effect of unnecessary job losses as the UK tackles the virus. Employers will apply the same spirit of creativity, seizing every opportunity to retrain and upskill their workers”
[Dame Carolyn Fairbairn, CBI Director-General]
We have aimed to cover all of the main support offerings available on our Covid-19 updates web page HERE.