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Support for Businesses

On this page you will find the links to the relevant government information being issued on various support schemes to help businesses through Coronavirus.  We are here to help if you have questions about the information below.

Self Employed Income Support Scheme- Stage 5 & the new turnover test

Full details of the fifth SEISS grant, including a new turnover test which determines the level of the grant, have now been published by HMRC.

Level of grants

In most respects the rules for the fifth Self-employment Income Support Scheme (SEISS) grant are the same as for the fourth grant. What has changed is that the level of the grant depends on whether turnover has dropped by more or less than 30%.

The fifth grant is 80% of three months’ average trading profits capped at £7,500 for those whose turnover has reduced by 30% or more. Those with a turnover reduction of less than 30% will receive a grant based on 30% of three months’ average trading profits, capped at £2,850.

Eligibility criteria

Self-employed individuals and members of a partnership are potentially eligible for the fifth SEISS grant where the taxpayer:

  • submitted their 2019/20 self assessment tax return by 2 March 2021;
  • traded in the tax years 2019/20 and 2020/21;
  • is currently trading but is impacted by reduced demand due to coronavirus, or has been trading but is temporarily unable to do so due to coronavirus;
  • intends to continue to trade; and
  • reasonably believes there will be a significant reduction in their trading profits due to the impact of COVID-19 in the period from 1 May 2021 and 30 September 2021.

Your trading profits must be no more than £50,000 and at least half of your total income for either:

the tax year 2019/20; or

the average of the tax years 2016/17, 2017/18, 2018/19 and 2019/20.

These criteria are unchanged from the fourth grant. HMRC will contact taxpayers in mid-July and claims will open in late July. Claims must be made by 30 September 2021.

Turnover test

What was uncertain was how the turnover test which determines the level of the grant will operate. HMRC’s guidance now explains it as follows:

You will need to provide two turnover figures during the claims process, and it is advisable to have these two figures available before starting to make the claim.

1. The pandemic period.

The turnover figure required is for a 12-month period starting on any date between 1 and 6 April 2020. If you prepare accounts on a tax year basis ( i.e to 31 March or 5 April ) you will be able to use the same figure as will appear on the 2020/21 tax return (it is not necessary to submit the return before making a claim, but the turnover figure for the SEISS claim will be checked after the return is filed).

If you use a different accounting date you will need to make a separate calculation spanning 2 years.

If you started or ceased a business in 2020 to 2021 you should include the turnover received between April 2020 to April 2021, even if this covers less than 12 months.

The turnover figure should be for all of your businesses, but exclude COVID-19 support payments (such as: SEISS grants, eat out to help out payments and local authority/devolved administration grants).

2. The reference period.

In most cases this will the turnover figure from the 2019/20 tax return but there is an option to use 2018/19 if 2019/20 was not a normal year for the business. Please see the HMRC guidance below for full details on when this applies.

There are provisions to adjust the turnover figure if the accounting period was longer or shorter than 12 months but there is no requirement to make an adjustment if the period covered is less than 12 months because the business started or ceased in the tax year (this can mean that the comparison is not between two 12-month periods).

Partners will need to provide turnover figures for the partnership as a whole unless they also have other trades, in which case they can use their share of the partnership turnover.

Where to find your figures

Your turnover figure is shown in your accounts on the top of the Profit & Loss account page so please refer to your accounts for the periods needed. You can also find the figures on your tax return and you can find previous tax returns by logging in to your personal tax account to view online.

If you use business accounting software you will also find the figures within it.

It is possible you have not yet completed your accounts for 2020/2021 and in this situation if you cannot calculate your turnover please get in touch as soon as possible.

Read the complete HMRC guidance on calculating  your turnover

Self Employed Income Support Scheme- stages 4 & 5

Details of the 4th grant under the Self Employed Income Support Scheme have now been published. The eligibility is more restrictive than before so you should read the guidance carefully before completing the application when invited to do so by HMRC.

The fourth grant will be open for applications in late April until 1st June 2021. If you are eligible HMRC will contact you in mid April.

Eligibility

To be eligible you must be a self employed individual or a  member of a partnership.

You must have traded in both tax years:

  • 2019 to 2020 and submitted your Self Assessment tax return on or before 2 March 2021.
  • 2020 to 2021

You must either:

You must also declare that:

  • you intend to continue to trade
  • you reasonably believe there will be a significant reduction in your trading profits. This is with reference to your accounting year in which this period falls into. If this period ( 1st Feb – 30 April 2021) falls into 2 years you can choose either one to indicate the drop in profits. HMRC ask you to make an “honest judgement” when considering this point. The reduction can be shown compared to a forecast as opposed to previous years.

You will be required to keep evidence to support your claim.

Please note that any amendments to your 19/20 tax return submitted after 2 March 2021 will be disregarded but you have an obligation to repay the grant if a subsequent amendment reduces or disqualifies you from the grant  with a deminimis of £100.00

You do not need to take into account the receipt of any other coronavirus scheme support payments when making this judgement.

If you have more than one business the reduction only needs to be evidenced in one. If you have diversified due to Covid you should consider how this is reported alongside your original business as it may have an impact on your eligibility. Please contact us for more advice.

Newly self – employed?

Whilst this grant now includes you if you commenced trading in 19/20 HMRC are carrying out many pre verification checks on new businesses asking you to confirm your identity. You will have until 1 June 2021 to comply.

How much?

The fourth grant will be 80% of your average monthly trading profits calculated with reference to the last 4 years submitted tax returns paid in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total. This amount will be taxable.

How is it calculated?

To work out your eligibility for the fourth grant HMRC will first look at your 2019 to 2020 Self Assessment tax return. Your trading profits must be no more than £50,000 and at least equal to or more than your non-trading income.

If you’re not eligible based on your 2019 to 2020 Self Assessment tax return, they will then look at the tax years 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020.

They will work out your average trading profits using up to 4 years’ of submitted tax returns. This may affect the amount you’ll get which could be higher or lower than your previous grants. The previous grants were only over 3 years.

They will  take into account trading profits from the 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020 tax years. If you have a gap in the years you have traded, they will only use your most recent returns after the gap to work out the grant.

 

Fifth Grant

We also know there will be a fifth and final grant covering May to September.

The fifth grant will be worth:

  • 80% of 3 months’ average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more
  • 30% of 3 months’ average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%

Further details will be provided on the fifth grant in due course.

For full details of the scheme  read more.

Restart Grants for Businesses

To support the recovery of the high street as Government trading restrictions are relaxed, the Chancellor has announced the one-off payment ‘Restart Grant’. This grant replaces the Local Restrictions Support Grant from April 2021 onwards (for eligible businesses).

The guidance for this scheme has now been published. The Restart Grant will be made available to qualifying business rated non-essential retail, hospitality, accommodation, leisure, personal care and gym businesses.

We encourage all business owners to read the guidance to confirm eligibility.  Restart Grant guidance [422kb]

  • Non-essential retail businesses with a rateable value of £15,000 or less, will receive a one-off grant of £2,667
  • Non-essential retail businesses with a rateable value over £15,000 and less than £51,000, will receive a one-off grant of £4,000
  • Non-essential retail businesses with a rateable value of £51,000 or above, will receive a one-off grant of £6,000
  • Qualifying Hospitality and Leisure properties with a rateable value of £15,000 or less, will receive a one-off grant of £8,000
  • Qualifying Hospitality and Leisure properties with a rateable value over £15,000 and less than £51,000, will receive a one-off grant of £12,000
  • Qualifying Hospitality and Leisure properties with a rateable value of £51,000 or above, will receive a one-off grant of £18,000

You may not be required to complete a new application for ratepayers that qualified for grants from the January lockdown but we will confirm this after 1st April.

For Torridge District Council you can find more information here

For Cornwall County Council you can find more information here

As yet NDDC does not have details on their website.

Business support grants for those affected by lockdown 3.0 available from local council authorities

New funding for businesses affected by this third lockdown is now available via local council authorities and you should check whether you are eligible as each business needs to make an application.

Local Restrictions Support Grant (LRSG) (Closed) Addendum

This grant is an extension of the grant available for the November lockdown and if you were eligible for the grant from 5 November to 2 December 2020 you will also be eligible for this grant for the period from 5 January 2021 to 15 February 2021. the closing date for this period is 31 March 2021.

This has now been extended to cover the next period from 16 February to 31 March 2021 If you have already applied for a Grant from 5 January 2021 there is no need to re-apply.

If you are applying for the first time you have until 31 May 2021 to make the application.

Closed Business Lockdown Payment

These grants will provide a one-off payment in addition to the LRSG, dependent on the rateable value of your business.

Apply through your local authority

The application process and some eligibility details vary between local authorities, so please check with your local authority for full details for your area.

North Devon District Council you can find more details and apply here.

For Torridge District Council you can find more details and apply here

For Cornwall County Council you can find more details and apply here

Exclusions:

  • Businesses that have already received grant payments that equal the maximum levels of State aid permitted under the de minimis and the Covid-19 Temporary State Aid Framework. For the avoidance of doubt, businesses that are in administration, insolvent or where a striking-off notice has been made, are not eligible for funding under this scheme.
  • Businesses that are able to continue to trade as normal because they do not depend on providing direct in-person services from premises and can operate their services effectively remotely.
  • Businesses  must have been trading up to 4th January 2021 (where businesses were required to close due to restrictions pre-5 January, it is accepted those businesses are still trading)

Businesses that have chosen to close but not been required to will not be eligible for either grant.

In addition to the grants for businesses forced to close that pay business rates, new funding for other businesses affected by this third lockdown is now available via local council authorities and you should check whether you are eligible as each business needs to make an application.

Additional Restrictions Grant (ARG)

These are grants available for:

  • Businesses that pay business rates and have been negatively affected by covid but have not been forced to close due to the restrictions.
  • Businesses that do not pay business rates but have been forced to close due to restrictions.
  • Non-rate paying businesses that have not been forced to close, but have been negatively affected by covid.

Apply through your local authority

The application process and some eligibility details vary between local authorities, so please check with your local authority for full details for your area.

North Devon District Council you can find more details and apply here.

For Torridge District Council you can find more details and apply here

For Cornwall County Council you can find more details and apply here

Exclusions:

  • Businesses that have already received grant payments that equal the maximum levels of State aid permitted under the de minimis and the Covid-19 Temporary State Aid Framework. For the avoidance of doubt, businesses that are in administration, insolvent or where a striking-off notice has been made, are not eligible for funding under this scheme.
  • Businesses that are able to continue to trade as normal because they do not depend on providing direct in-person services from premises and can operate their services effectively remotely.

Please note there may be additional local exclusions imposed by each local authority so please check carefully on their own website

  • The value of these grants has been set by Central Government:

For the period 5 January 2021 to 15 February 2021 (42 days)

  • For properties with a rateable value of £15,000 or under:  £4,000 one-off payment plus £2,001
  • For properties with a rateable value of £15,001 and less than £51,000: £6,000 one-off payment plus £3,000
  • For properties with a rateable value of £51,000 and over: £9,000 one-off payment plus £4,500

For the period 16 February 2021 to 31 March 2021 (44 days)

  • For properties with a rateable value of £15,000 or under:  £2,096.00
  • For properties with a rateable value of £15,001 and less than £51,000: £3143.00
  • For properties with a rateable value of £51,000 and over: £4,714.00

Recovery Loan Scheme

Announced in the Spring Budget The Recovery Loan Scheme will ensure businesses of any size can continue to access finance providing they recover and grow following the pandemic. 80% of these loans will be guaranteed by the government. The scheme will launch on 6th April 2021and will remain open until 31 December 2021.Lenders will be announced shortly

What type of finance is available

  • Term loans and overdrafts will be available between £25,001 and £10 million per business.
  • Invoice finance and asset finance will be available between £1,000 and £10 million per business.

Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.

No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.

Eligibility

You will be able to apply for a loan if your business:

  • is trading in the UK

You will need to show that your business:

  • is viable or would be viable were it not for the pandemic
  • has been impacted by the coronavirus pandemic
  • is not in collective insolvency proceedings – further details will be provided in due course

Business that have received support under the existing COVID-19 guaranteed loan schemes will still be eligible to access finance under this scheme, if they meet all other eligibility criteria.

Read more 

Extension to Furlough Scheme to 30 September 2021

The Coronavirus Job Retention Scheme has now been extended until 30 September 2021.

For periods from 1 November 2020 to 30 April 2020, you can claim for employees who were employed on 30 October 2020, as long as an RTI submission has been made for that employee.

You do not need to have previously claimed for an employee prior to 30 November 2020 to claim for periods from 1 November 2020.

For periods from 1 May 2020, you can claim for employees who were employed on 2 March 2021, as long as an RTI submission has been made for that employee. You do not need to have claimed for that employee before.

Employees on any type of employment contract can be claimed for.  Including, full-time, part-time, agency, flexible or zero-hour contract

For periods ending on or before 30 June 2021 you can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month. The levels of grant will then reduce:

From 1st July 2021 you will only be able to claim 70% up to £2187.50

From 1st August to 30 September 2021you will only be able to claim 60% up to £1875.00

You can continue to choose to top up your employees’ wages above the 80% total and £2,500 cap for the hours not worked at your own expense. For more details on these changes.

You must have:

  • created and started a PAYE payroll scheme on or before 30 October 2020
  • created and started a PAYE payroll scheme on or before 2 March for periods starting on or after 1 May 2021
  • enrolled for PAYE online
  • a UK, Isle of Man or Channel Island bank account

Any entity with a UK payroll can apply, including businesses, charities, recruitment agencies and public authorities.

For full details on the scheme and how to claim visit the HMRC website.

Extension to 5% VAT rate for hospitality, holiday accommodation and attractions

As announced in the budget on 3 March 2021 the 5% rate of AVAt is being extended to 30 September 2021.

 

This will be replaced with 12.5% until 31 March 2022.

 

To find out if your business is eligible click here

Extension to Furlough Scheme to 30 April 2021

The Coronavirus Job Retention Scheme has now been extended until 30 April 2021.

You can still claim 80% of an employees usual salary for hours not worked, up to £2,500 per month.  For periods from 1 November 2020, you can claim for employees who were employed on 30 October 2020, as long as an RTI submission has been made for that employee.

You do not need to have previously claimed for an employee prior to 30 November 2020 to claim for periods from 1 November 2020.

Employees on any type of employment contract can be claimed for.  Including, full-time, part-time, agency, flexible or zero-hour contract.

For full details on the scheme and how to claim visit the HMRC website:  https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme

Self Employed Income Support Scheme- stage 3

The scheme has now been extended and there will be the opportunity for the self employed to make 2 further claims if they meet the eligibility. Please note if you were not eligible the first time you will not be able to claim now.

The third grant will be open for applications from 30 November and must be made by 29 January 2021.

Eligibility

To be eligible your business must have had a new or continuing impact from coronavirus between 1 November 2020 and 29 January 2021.

You must have traded in both tax years:

  • 2018 to 2019 and submitted your Self Assessment tax return on or before 23 April 2020 for that year
  • 2019 to 2020

You must either:

You must also declare that:

  • you intend to continue to trade
  • you reasonably believe there will be a significant reduction in your trading profits

These are tighter restrictions than before so please carefully check your eligibility.

You will be required to keep evidence to support your claim.

How much?

The third grant will be 80% of your average monthly trading profits paid in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total. This amount will be taxable and should be included in your 20/21 Self assessment tax return.

For full details of the scheme read more.

Business support grants for those affected by lockdown 2.0 available from local council authorities

New funding for businesses affected by this second lockdown is now available via local council authorities and you should check whether you are eligible as each business needs to make an application. Different businesses will be eligible for each one.

Local Restrictions Support Grant (LRSG)

This grant is available to businesses with a rateable value that have been forced to close for lockdown 2.0 from 5 November to 2 December 2020.

Eligible businesses will receive:

  • For businesses occupying properties with a rateable value of £15,000, the grant payment will be £1,334 per 28-day qualifying restriction period
  • For businesses occupying properties with a rateable value of between £15,001 – £50,999, the grant payment will be £2,000 per 28-day qualifying restriction period
  • For businesses occupying properties with a rateable value of £51,000 the grant payment will be £3,000 per 28-day qualifying restriction period

You should check your local authority’s website to apply

For North Devon District Council you can find more details and apply here.

For Torridge District Council you can find more details and apply here

For Cornwall County Council you can find more details and apply here

Additional Restrictions Grant (ARG)

This grant is available to:

  • Businesses which – while not legally forced to close – are severely impacted by the restrictions put in place to control the spread of Covid-19.
  • Businesses outside the business rates system, which are forced to close.
  • Larger local businesses which are important to the local economy, feel they would benefit from additional grant money on top of the funding provided to those businesses via the LRSG scheme (State Aid rules apply).

Exclusions:

  • Businesses that have already received grant payments that equal the maximum levels of State aid permitted under the de minimis and the Covid-19 Temporary State Aid Framework. For the avoidance of doubt, businesses that are in administration, insolvent or where a striking-off notice has been made, are not eligible for funding under this scheme.
  • Businesses that are able to continue to trade as normal because they do not depend on providing direct in-person services from premises and can operate their services effectively remotely.
  • Businesses who were not open as usual and providing in-person services to customers up to 4th November 2020 and who did not intend to continue trading after 4th November 2020

Businesses that have chosen to close but not been required to will not be eligible for either grant.

Please note there may be additional local exclusions imposed by each local authority so please check carefully on their own website.

Locally in Torridge and North Devon, some but not all of the exclusions include:

  • Businesses in the accommodation sector that advertise solely on Air BnB
  • Business in the accommodation sector that are second homes that are also let to paying guests
  • Bed and Breakfast business with more than 6 letting rooms
  • Businesses who do not trade all year round

Each council has their own deadlines for applications so check your eligibility now so you don’t miss the window. e.g Cornwall is 30th November and NDDC and TDC 2nd December.

For North Devon District Council you can find more information and apply here

For Torridge District Council you can find more information and apply here

For Cornwall County Council you can find more information and apply here

Further Economic Support for second lockdown including extension to Furlough Scheme

Following the announcement by Boris Johnson on 31 October that England faces the second lockdown from Thursday 5th November there have been new economic measures announced including a further extension to the Job Retention Scheme to 31 March 2021.

Job Retention Scheme

The extended Job Retention Scheme will now continue until 31 March 2021.

Businesses will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time, and will only be asked to cover National Insurance and employer pension contributions which, for the average claim, accounts for just 5% of total employment costs.

Claims can be made from 8am on 11th November and submitted no later than 14 December for November claims. ( see below for more details)

Job Retention Bonus

This will now not be paid in February.

Mortgage & Credit Holidays

Mortgage payment holidays will no longer end on 31st October. Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.

Payment holidays will also continue to be available for consumer credit products such as personal loans and car finance. As with mortgages, borrowers impacted by coronavirus who have not yet taken a payment holiday on that product can ask for one of up to 6 months and those that currently have a payment holiday will be eligible to top up to six months without this being recorded on their credit file. Borrowers with high-cost short-term credit products such as payday loans will continue to be entitled to a maximum month payment holiday.

Self Employed Income Support Scheme

The help for the self employed has now been improved and where they are experiencing reduced demand due to coronavirus or cannot trade the support will now be 80% based on an average 3 months trading profits capped at £2500 paid in November and February.

The window for making an application for the first of these payments will open on 30 November.

Business Grants

Businesses required to close in England due to local or national restrictions will be eligible for the following:

  • For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;
  • For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;
  • For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.

Business Loan Guarantee Schemes

The deadline for making these applications has now been extended to 31 January 2021. Also any businesses that applied for less than their maximum (i.e the lower of £50,000 or less than 25% of their turnover) will be able to top up the loan from the second week in November.

Further information

JOB RETENTION SCHEME

  • This extended Job Retention Scheme will operate as the previous scheme did, with businesses being paid upfront to cover wages costs.
  • The CJRS is being extended until 31 March 2021. The level of the grant will mirror levels available under the CJRS in August, so the government will pay 80% of wages up to a cap of £2,500 and employers will pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work.
  • As under the current CJRS, flexible furloughing will be allowed in addition to full-time furloughing.

Who is eligible?

Employers

  • All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.

Employees

  • To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 30th October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.
  • Employees that were employed and on the payroll on 23 September 2020 (the day before the Job Support Scheme announcement) who were made redundant or stopped working afterwards can be re-employed and claimed for. The employer must have made an RTI submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees.

As under the current CJRS rules:

  • Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees.
  • Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. Such calculations will broadly follow the same methodology as currently under the CJRS.
  • When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days.
  • Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
  • For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.

What support is being provided and employer costs:

  • For hours not worked by the employee, the government will pay 80% of wages up to a cap of £2,500. The grant must be paid to the employee in full.
  • Employers will pay employer NICs and pension contributions, and should continue to pay the employee for hours worked in the normal way.
  • As with the current CJRS, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.
  • Further details on this scheme and how to claim are available here and full guidance will be published on Tuesday 10 November.
  • There will be no gap in eligibility for support between the previously announced end-date of CJRS and this extension.

Read more

Update to the Winter Economy Plan - 22 October 2020

In recognition of the challenging times ahead, the Chancellor said he would be increasing support through the existing Job Support and self-employed schemes, and expanding business grants to support companies in high-alert level areas

  • open businesses which are experiencing considerable difficulty will be given extra help to keep staff on as government significantly increases contribution to wage costs under the Job Support Scheme, and business contributions drop to 5%
  • business grants are expanded to cover businesses in particularly affected sectors in high-alert level areas, helping them stay afloat and protecting jobs
  • grants for the self-employed doubled to 40% of previous earnings

    Job Support Scheme (JSS)

    Recognising the pressure businesses in some sectors and areas are facing, today’s announcement lightens the burden of keeping on staff.

    When originally announced, the JSS – which will come into effect on 1 November – saw employers paying a third of their employees’ wages for hours not worked, and required employers to be working 33% of their normal hours.

    Today’s announcement reduces the employer contribution to those unworked hours to just 5%, and reduces the minimum hours requirements to 20%, so those working just one day a week will be eligible. That means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.

    Employers will continue to receive the £1,000 Job Retention Bonus. The Job Support Scheme Closed for businesses legally required to close remains unchanged.

    Self-employed grant

    Today’s announcement increases the amount of profits covered by the two forthcoming self-employed grants from 20 per cent to 40 per cent, meaning the maximum grant will increase from £1,875 to £3,750.

    This is a potential further £3.1 billion of support to the self-employed through November to January alone, with a further grant to follow covering February to April.

    Business Grants

    The Chancellor has also announced approved additional funding to support cash grants of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert level areas. These grants will be available retrospectively for areas who have already been subject to restrictions, and come on top of higher levels of additional business support for Local Authorities moving into Tier 3 which, if scaled up across the country, would be worth more than £1 billion.

    These grants could benefit around 150,000 businesses in England, including hotels, restaurants, B&Bs and many more who aren’t legally required to close but have been adversely affected by local restrictions nonetheless.

    Tax and loan deferments

    Further to deferrals already in place HMRC will be offering a longer period to pay VAT deferred to March 2021 allowing payments over 11 months. Self employed tax deferred from July 2020 and liabilities that would normally fall due in January 2021 can be deferred using a self service “time to pay” service to defer payment until January 2022.

    The reduced Vat rate of 5% is to be extended to the end of March 2021.

    Both Bounce Back loans and CBILS borrowing will have the option to extend the repayments from 6 to 10 years with options for payment holidays which will drastically reduce the repayments required.

    The deadline for making a loan application has now been extended to 30 November from the 4th.

     

    Further information

    Job Support Scheme – Open

    • The JSS starts to operate from 1 November and covers all Nations of the UK. For every hour not worked, the employee will be paid up to two-thirds of their usual salary.
    • The government will provide up to 61.67% of wages for hours not worked, up to £1541.75 per month (more than doubling the maximum payment of £697.92 under the previous rules). The cap is set above median earnings for employees in August at a reference salary of £3,125 per month.
    • Example: a typical full-time employee in the hospitality industry is paid an average of £1,100 per month. Under the Jobs Support Scheme for open businesses, they will still take home at least £807 a month. All the employer needs to pay is a total of £283 a month or just £70 a week; the government will pay the rest.
    • Employers using the scheme will also be able to claim the Job Retention Bonus (JRB) for each employee that meets the eligibility criteria of the JRB. This is worth £1,000 per employee. Taking JSS-Open and JRB together, an employer could receive over 95% of the total wage costs of their employees if they are retained until February.
    • For more information see the Job Support Scheme Open Factsheet (PDF, 104KB, 5 pages).

    Self Employed

    • The government will provide two taxable SEISS grants to support those experiencing reduced demand due to COVID-19 but are continuing to trade, or temporarily cannot trade.
    • It will be available to anyone who was previously eligible for the SEISS grant one and grant two, and meets the eligibility criteria.
    • Grants will be paid in two lump sum instalments each covering 3 months. The first grant will cover a three-month period from the start of November 2020 until the end of January 2021. The government will pay a taxable grant which is calculated based on 40% of three months’ average trading profits, paid out in a single instalment and capped at £3,750.
    • The second grant will cover a three-month period from the start of February until the end of April 2021. The government will review the level of the second grant and set this in due course.
    • For more information, see the HMRC website

    Business Grants

    • We are providing additional funding to allow Local Authorities (LAs) to support businesses in high-alert level areas which are not legally closed, but which are severely impacted by the restrictions on socialising. The funding LAs will receive will be based on the number of hospitality, hotel, B&B, and leisure businesses in their area.
    • LAs will receive a funding amount that will be the equivalent of:
    • For properties with a rateable value of £15,000 or under, grants of £934 per month.
    • For properties with a rateable value over £15,000 and below £51,000, grants of £1,400 per month.
    • For properties with a rateable value of exactly £51,000 and over, grants of £2,100 per month.
    • This is equivalent to 70% of the grant amounts given to legally closed businesses (worth up to £3,000/month).
    • Local Authorities will also receive a 5% top up amount to these implied grant amounts to cover other businesses that might be affected by the local restrictions, but which do not neatly fit into these categories.
    • It will be up to Local Authorities to determine which businesses are eligible for grant funding in their local areas, and what precise funding to allocate to each business – the above levels are an approximate guide.
    • Businesses in Very High alert level areas will qualify for greater support whether closed (up to £3,000/month) or open. In the latter case support is being provided through business support packages provided to Local Authorities as they move into the alert level. The government is working with local leaders to ensure the Alert Level very high packages are fair and transparent.
    • For more information see the Business Grants Factsheet (PDF, 124KB, 1 page).

Original Coronavirus Job Retention Scheme

The government have now also announced not only an extension to the furlough scheme but also changes giving more flexibility to employers who are bringing back employees as they begin to open their business.   

 Changes to the Job Retention Scheme from 1st July 2020 

 June

31 July is the last day that you can submit claims for periods ending on or before 30 June so make sure you have made all claims by that date. 

 

Separate claims will need to be submitted to cover the days in June and the days in July that you want to claim for, even if employees are furloughed continuously. This may mean that your claim periods will differ from the pay periods you use. 

From 1st July 

From 1 July, employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS grant for the hours not worked. 

If you flexibly furlough employees, you’ll need to agree this with the employee and keep a new written agreement that confirms the new furlough arrangement. You’ll need to: 

  • make sure that the agreement is consistent with employment, equality and discrimination laws 
  • keep a written record of the agreement for five years 
  • keep records of how many hours your employees work and then number of hours they are furloughed (i.e. not working). 

 Employees can enter into a flexible furlough agreement more than once but where a previously furloughed employee starts a new furlough period before 1 July this furlough period must be for a minimum of 3 consecutive weeks. This is the case regardless of whether the 3 consecutive week minimum period ends before or after 1 July. 

 You will still be able to claim the 80% furlough grant for the hours your flexibly furloughed employees do not work, compared to the hours they would normally have worked in that period. You will pay for the hours they have worked. 

  From this date, only employees that you have successfully claimed a previous grant for will be eligible for more grants under the scheme. This means they must have previously been furloughed for at least 3 consecutive weeks taking place any time between 1 March and 30 June 2020. For the minimum 3 consecutive week period to be completed by 30 June, the last day an employee could have started furlough for the first time was 10 June. 

 The number of you claim for in any single claim period starting from 1 July cannot exceed the maximum number of employees you claimed for under any claim ending by 30 June. 

 Details on how to claim 

The first time you will be able to make claims for days in July will be 1 July, you cannot claim for periods in July before this point. 

Claim periods starting on or after 1 July must start and end within the same calendar month and must last at least 7 days unless you’re claiming for the first few days or the last few days in a month. You can only claim for a period of fewer than 7 days if the period you are claiming for includes either the first or last day of the calendar month, and you have already claimed for the period ending immediately before it. 

You should match your claim period to the dates you process your payroll, if you can. You can only make one claim for any period so you must include all your furloughed or flexibly furloughed employees in one claim even if you pay them at different times. If you make more than one claim, your subsequent claim cannot overlap with any other claim that you make. Where employees have been furloughed or flexibly furloughed continuously (or both), the claim periods must follow on from each other with no gaps in between the dates. 

You should not claim until you are sure of the exact number of hours your employees have worked during the claim period. If you claim in advance and your employee works for more hours, then you will have to pay some of the grant back to HMRC. 

Full details with examples can be found here: 

https://www.gov.uk/guidance/steps-to-take-before-calculating-your-claim-using-the-coronavirus-job-retention-scheme#deciding-the-length-of-your-claim-period 

From 1 August 2020 

From 1 August 2020, the level of grant will be reduced each month.  

 For August, the government will pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough and employers will pay ER NICs and pension contributions for the hours the employee is on furlough.  

     Wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours:  

  • For September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
  • For October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed. 

Employers will continue to able to choose to top up employee wages above the 80% total and £2,500 cap for the hours not worked at their own expense if they wish. Employers will have to pay their employees for the hours worked. 

The Coronavirus Job Retention Scheme will close on 31 October 2020. 

Full details on the Job Retention Scheme can be found here:    https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme 

Bank Holidays and Annual Leave 

Guidance on how holiday and bank holidays are dealt with in the Furlough Grant . Here is a step by step guide for employers: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/880099/Coronavirus_Job_Retention_Scheme_step_by_step_guide_for_employers.pdf 

If a furloughed employee takes holiday, the employer should pay their usual holiday pay in accordance with the Working Time Regulations. 

Employers will be obliged to pay additional amounts over the grant, though will have the flexibility to restrict when leave can be taken if there is a business need. This applies for both the furlough period and the recovery period. 

If an employee usually works bank holidays then the employer can agree that this is included in the grant payment. If the employee usually takes the bank holiday as leave then the employer would either have to top up their usual holiday pay, or give the employee a day of holiday in lieu. 

Coronavirus Statutory Sick Pay Rebate Scheme

This scheme is due to launch online on 26 May and will enable employers with fewer than 250 employees to claim coronavirus related Statutory Sick Pay (SSP).

The repayment will cover up to 2 weeks of the applicable rate of SSP for employees who:

  • have coronavirus (Covid-19) symptoms
  • cannot work because they are self-isolating because a member of their household has symptoms
  • are sheilding.

Full details can be found at https://www.gov.uk/guidance/claim-back-statutory-sick-pay-paid-to-employees-due-to-coronavirus-covid-19

Free Business Advisory Consultations

Now more than ever, businesses need sound professional advice to ensure they are optimally financed and structured to take advantage of government’s support programmes, and to emerge from the current challenges able to thrive and grow in the future.

As a member of the ICAEW Business advisory support scheme we can offer up to 1 hour free advice to small and medium sized businesses click here for more details

Self Employed Income Support Scheme- stage 1 & 2

The scheme is now closed to new claims for the first grant.

The scheme has now been extended and if you were eligible for the first grant and can confirm the HMRC that business has been adversely affected by Covid-19 on or after 14 July 2020, you will be able to make a second and final grant claim from Monday 17 August 2020.

You can make a claim for the second and final grant if you’re eligible, even if you did not claim for the first grant.

The online portal to make your claim opens on Monday 17 August 2020 and HMRC will contact you if you are eligible.

For full details, go to: https://www.gov.uk/guidance/claim-a-grant-through-the-self-employment-income-support-scheme

Eligibility
You can claim if you are a self-employed individual or a member of a partnership adversely affected by coronavirus on or after 14 July 2020 and you:

  • Have submitted your self-assessment tax return for the tax year 2018/19;
  • Traded in the tax year 2019/20;
  • Are trading when you apply, or would be except for coronavirus;
  • Intend to continue to trade in the tax year 2020/21;
  • Have lost trading profits due to coronavirus;

Your trading profits must also be:

  • Less than £50,000 AND more than half of your total income for EITHER the tax year 2018/19 OR the average of the tax years 2016/17, 2017/18 and 2018/19.

It is our understanding that total income will be taken directly from your tax returns that have already been submitted.

What Is Trading Profit?

  • HMRC guidance indicates that, broadly, trading profits will be your business income less allowable business expenditure, less capital allowances.
  • Deductions such as pensions or Gift Aid will be ignored.
  • This is likely to correspond with boxes on the self-assessment return and these figures will be directly lifted by HMRC for your claim.

Check Your Eligibility Now
You can now check your eligibility online with HMRC  https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme, you will need your Unique Taxpayer Reference (UTR – a 10-digit number which can be found on any correspondence you have received from HMRC)  and your National Insurance (NI) number to do this.  We would recommend that you do this.  HMRC will then tell you when you will be able to make a claim.

How Much Will You Receive?

  • The average of your trading profits over the three years 2016/17, 2017/18 and 2018/19.  The second and final grant is worth 70% of your average monthly trading profits, paid in a single instalment covering 3 months’ worth of profit and capped at £6,570 in total.
  • Where losses have been experienced during this time they will be treated as negative figures.
  • For farmers, the figures will be taken prior to any averaging computations.
  • Where one of the years is a short period, e.g. in an opening year, there will be no pro rata’ing during the short period.

Other Things To Think About

  • Where you have two trades, HMRC will simply add these together.
  • The figures will be based on figures from continuous periods of self-employment, so where there has been a gap the three-year average will not be applied.
  • Any amendments to your 2019 tax return carried out after 26 March 2020 will be disregarded by HMRC.
  • You can continue to work throughout the period and still make a claim.

How Do You Get Your Money?

  • Your 2018/19 tax returns must have been submitted prior to Thursday 23 April.
  • HMRC will calculate the grant using the figures on your tax return.
  • You will not be asked to calculate the claim or provide figures to them.
  • The grant is taxable and Class 4 NIC’s apply.
  • The grant will have to be reported on your 2020/21 tax return.
  • HMRC are opening the claim portal on 13 May 2020 and aim to pay you within 6 working days of a successful claim.

Please note what you will need to make the claim:

  • Self Assessment UTR
  • National Insurance Number
  • Government Gateway User ID and Password
  • Bank account number and sort code

Things To Do Now

Be aware of scams.  You should be certain that before providing any bank details that the correspondence you have received is legitimate and from HMRC.  If you are in any doubt, please do not respond and contact us immediately.

Please be aware that when you are completing the online registration you will be asked to tick a box to say that you have continued to trade through 2019/20 and intend to continue to do so and that you have lost trading profits due to coronavirus.

Other Help Available

Universal Credit
Whilst you are waiting for this grant to be paid you may be eligible for Universal Credit and we would encourage you to explore this:  https://www.gov.uk/universal-credit.  Please be aware that the receipt of the Self-Employed Income Support Scheme will need to be declared as income for Universal Credit purposes, however, this will only be in the month of receipt.  This may mean that you are entitled to Universal Credit in the months leading up to the payment of the grant.

Working Tax Credits
If you are already in receipt of Working Tax Credits we would encourage you to finalise your 2019/20 claim as soon as possible, allowing you to provide cautious expected income for 2020/21 taking into account the effect on your business of coronavirus.

Please Note:  if you are in receipt of Working Tax Credits please think carefully before applying for Universal Credit as once you have done so you cannot go back to the Working Tax Credit system.

We will keep you informed of any other information as we receive it.  If you would like our help please contact us by emailing info@maynardjohns.co.uk.

Here is a link to the full guidance:  https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

Business Rate Relief Grants

These were one of the first initiatives rolled out.

The Retail, Hospitality and Leisure Grant means that businesses in these sectors with a rateable value of up to £15,000 get a grant of £10,000 whilst those with property valuations between £15,000 and £51,000 will be eligible for a grant of £25,000.

The Small Business Grant Fund means that any business eligible for small business rate relief or the rural rate relief scheme is eligible for a grant of £10,000.

Anyone eligible for a grant such as this was contacted by their local council and asked to provide payment details for it to be paid directly into bank accounts with no application process necessary.

If you think your business fits into either of these schemes and you haven’t received your grant, please contact us for help.

Limited Companies

One disappointing aspect of the support so far is that there has been little support aimed at directors of limited companies.

Whilst directors are able to place themselves on furlough if they are on the PAYE scheme for the business, this then means that they are limited to only carrying out statutory duties for the firm and unable to generate work.

Income provided by dividends or other payments from the company are not eligible for support.

Full details can be found at:  https://www.gov.uk/guidance/check-which-employees-you-can-put-on-furlough-to-use-the-coronavirus-job-retention-scheme#individuals-you-can-claim-for-who-are-not-employees

Bounce Back Loans

The Bounceback Loan Scheme (BBLS) has been set up to allow smaller business to access funds more quickly during the Conronavirus pandemic.The scheme helps small and medium businesses borrow between £2,000 and up to 25% of their turnover up to £50,000.  The scheme is 100% guaranteed by the government and there will be no fees or interest for twelve months.  After twelve months the interest rate will be 2.5%.

The application window has now been extended to 31 March 2021.

For full details and how to apply go to:  https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan

Coronavirus Business Interuption Loan Scheme

For businesses needing to borrow more than £50,000 applications can be made under CBILS https://www.gov.uk/guidance/apply-for-the-coronavirus-business-interruption-loan-scheme. These loans are more process heavy than the bounce back loans.

Support for Farmers

Self-Employed Income Support Scheme

We are regularly being asked whether farmers can apply for this scheme and the simple answer is yes. Providing you trade as a sole trader or as part of a partnership each person is entitled to make their own claim providing that your farm business has been adversely affected by coronavirus.

Adversely affected could include;

  • a reduction to your milk price
  • a reduction in the finished price of cattle
  • an inability to sell your products
  • delays in receiving feeds and other essentials and a rising price of consumables
  • or any other financial impact

The scheme currently allows you to claim a taxable grant worth 80% of your average monthly trading profits paid out in a single instalment covering three months’ worth of profits and capped at £7500 in total.

To be eligible your average annual profit per person must be less than £50,000 and must represent more than half of your total income in a year.

If you’re eligible and want to claim the first grant you must make your claim on or before 13th July 2020.

To make your claim please follow this link:

https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference

This scheme is now being extended and you will be able to make a claim for a 2nd and final grant in August 2020. The online service for this second stage is not available yet.

If you’re eligible the 2nd and final grant will be a taxable grant worth 70% of your average monthly trading profits paid out and in a single instalment covering a further three months’ worth of profit and capped at £6570 pounds in total.

We will keep you informed when we know the portal is open for the second grant.

Discretionary Fund

This grant is available from 1st of June 2020  and is open to bed and breakfasts

We sent you an email on the 1st of June outlining the discretionary funds released by local councils to assist certain businesses which include bed and breakfasts. Providing you did not receive a grant under the small business grants from the local cancel earlier this year you are eligible to make a claim and receive a grant for your bed and breakfast.

You will find details on eligibility for the grant and links to the local authority websites where you can apply on the Discretionary Funds tab above.

Dairy Response Fund 2020

This fund gives access to grants up to £10,000 per business to help overcome the impact of the Coronavirus outbreak.

To be eligible for the scheme dairy farmers must have lost more than 25% of their income over April and May due to coronavirus disruptions. The grant will be capped at 70% of the lost income during the two months and is designed to ensure dairy farmers can continue to operate and sustain production capacity without impacts on animal welfare.

Full details can be found at:  https://www.gov.uk/government/publications/dairy-response-fund-2020

Other Support Available for Businesses

The government has now passed legislation to start helping businesses through this difficult time.  The information above is a summary on most of hte guidance available at present.  We predict that the support and advice available is going to change very quickly on this issue and would suggest you review the guidance directly  from the offical government website as to what specific assistance applies to you and your business:

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

This will be updated by the government regularly as support develops and increases, so is the best source of information for you to begin with.

Due to the current uncertainty and regular announcements we are experiencing an extremely high volume of queries.  Please bear with us, we will get in touch with everyone but it may take us a bit longer than normal.  We are working on this as a team and you may speak to any one of our senior accountants rather than your normal accountant depending on the query and the volume of questions on any given day.

We are working very hard to support you through these difficult times and will keep in touch.

Give us a call or email!

Telephone 01237 472071

Email:  info@maynardjohns.co.uk

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