Measures to assist with Covid-19

Below we have summarised the latest position on a number of financial measures to assist businesses and individuals with Covid-19. Should you wish to discuss matters further, please contact your relationship partner or email us mail@sgllp.co.uk

(last updated 22 January 2021)

VAT Deferral

A reminder that VAT deferred in the period 20 March to 30 June 2020 is due for payment by 31 March 2021.

It is possible to defer the payment further to 2 to 11 monthly interest free instalments although the entire balance must be paid by the end of March 2022.

It is necessary to opt into the further deferral – the process has not yet opened but will require all VAT returns to be up to date.

The website has been updated with guidance on how errors identified on the deferred return can be included in the further deferral.

Local Restrictions Support Grant (for closed businesses)

Guidance has been published on grants available to businesses forced to close during the lockdown from 5 January 2021 under the LRSG (Closed) Addendum scheme.

This applies for businesses:

  • Based in England
  • Occupying property on which it pays business rates (and is the ratepayer)
  • Required to close because of the national restrictions from 5 January 2021 onwards
  • Has been unable to provide its usual in-person customer service from its premises

This includes, for example, restaurants limited to a take-away service.

Grants available under the scheme are per a property and based on the same rateable value bands, and in addition to, the one-off grants announced earlier this month:

  • £2,001 for each 42-day qualifying period for property with a rateable value of £15,000 or less
  • £3,000 for each 42-day qualifying period for property with a rateable value between £15,000 and £51,000
  • £4,500 for each 42-day qualifying period for property with a rateable value over £51,000

Applications are through the appropriate local council.

Further guidance for closed businesses / Further guidance for open businesses

State Aid Restrictions

Government guidance has been updated to clarify that EU restrictions on state aid only apply for payments made before 1 January 2021.

One-off grant worth up to £9,000

The Government has announced an additional grant for the retail, hospitality and leisure sectors forced to close due to the restrictions. The grant is per a property and based on the same rateable value bands, and in addition to, the existing grants for being closed. The amounts paid will be:

  • £4,000 for property with a rateable value of £15,000 or less
  • £6,000 for property with a rateable value between £15,000 and £51,000
  • £9,000 for property with a rateable value over £51,000

In addition, extra funding will be provided to local authorities for discretionary grants to businesses not covered by this grant that are impacted by the restrictions.

Coronavirus Job Retention Scheme (CJRS)

The guidance has been updated to confirm that staff can be furloughed if they are unable to work, including from home or working reduced hours, because they have caring responsibilities resulting from coronavirus, such as caring for children who are at home as a result of school and childcare facilities closing, or caring for a vulnerable individual in their household.

Recap:

The Government extended the scheme to 30 April 2021. The next stage of the support is to be set out in the Budget on 3 March 2021.

The guidance was updated to clarify that employers do not need be facing a wider reduction in demand or be closed to be eligible to claim for employees who are clinically extremely vulnerable or at the highest risk of severe illness from coronavirus.

The full guidance for the extended scheme has now been published and can be found here.

Loan Funding

The deadline for applying for the following business interruption loan schemes has been extended until 31 March 2021.

  • Coronavirus Business Interruption Loan Scheme (CBILS)
  • Coronavirus Large Business Interruption Loan Scheme (CLBILS)
  • Bounce Back Loan Scheme (BBLS)

Grant for wet-led pubs

The eligibility criteria for pubs to receive the £1,000 grant have been published. A pub may be eligible if it:

  • is based in England;
  • derives less than 50% of sales from food;
  • is in an area subject to Tier 2 or Tier 3 local restrictions since 2 December 2020;
  • was established in the pub before 1 December 2020.

A businesses is excluded from the fund if it:

  • has exceeded the permitted state aid threshold;
  • is in administration, insolvent or has been struck off the Companies House register.

Extension of Insolvency and Regulation Relaxation

The Government has announced the extension of specific provisions which were to end.

  • The removal of Director personal liability for wrongful trading has been extended to 30 April 2021.
  • The relaxed entry requirements for companies gaining protection from termination clauses will be extended until 30 March 2021
  • The option to hold virtual AGMs will be extended to 31 March 2021

Self-Employment Income Support Scheme (SEISS)

Applications for the third tranche of the SEISS have now opened and must be submitted by 29 January 2021. All the requirements for the first two grants remain in place and so anyone not eligible for these isn’t eligible for the third tranche. In addition, the requirements for claiming that the business has been impacted by Covid-19 have been tightened.

In order to claim, a confirmation must be made that, between 1 November 2020 and 29 January 2021, the business was either:

  • Trading but impacted by reduced demand due to Coronavirus; or
  • Previously trading but temporarily unable to do so.

With regard to the second point, this can be due to:

  • Government restrictions;
  • being instructed to shield or self-isolate in-line with NHS guidelines and unable to work from home (self-isolating whilst abroad or after foreign travel does not count);
  • testing positive for Coronavirus and unable to work from home; or
  • unable to work due to caring responsibilities (such as the closure of school or childcare facilities)

In addition, the claimant must confirm that:

  • They intend to continue trading; and
  • They have a reasonable belief that there will be a significant reduction in trading profits for the tax year in which the profits are reported.

This must be determined based on the wider business circumstances for the whole of the tax year, including, for example, increased profits from the “Eat Out to Help Out” scheme.

Evidence must be retained to support the claim. This should include:

  • Amount claimed
  • Grant claim reference

If claiming for reduced activity:

  • Accounts showing reduced activity compared to the previous year
  • Records of reduced or cancelled contracts or appointments
  • Evidence that alternative contracts or appointments were sought
  • Fewer invoices
  • Dates when there was reduced demand or capacity due to Government restrictions

If claiming for business closure:

  • Dates when closed due to Government restrictions
  • NHS communications relating to self-isolation or shielding
  • Test results for a positive coronavirus test
  • Communication from childcare facilities that they will be closed.

With regard to reduced demand, the Government has published new guidance. Reduced demand can be due to:

  • Fewer customers or clients than normally expected due to social distancing or Government restrictions.
  • Contracts have been cancelled and not replaced
  • Carried out less work due to supply chain disruption

In particular, claims cannot be made based solely on increased costs (such as the purchasing of PPE and cleaning supplies). Further details can be found here.

Grant Eligibility

For open businesses, the Government has reduced the period for each grant instalment from 28 days to 14 days.

In consequence, the anticipated payments under the scheme have been halved from the 28 day period amounts to, for each 14 day period:

  • £467 for property with a rateable value of £15,000 or less
  • £700 for property with a rateable value between £15,000 and £51,000
  • £1,050 for property with a rateable value over £51,000

Businesses closed due to national restrictions including restaurants which can only provide takeaway services.

For each 28 day period:

  • £1,334 for property with a rateable value of £15,000 or less
  • £2,000 for property with a rateable value between £15,000 and £51,000
  • £3,000 for property with a rateable value over £51,000

Further guidance on these business grants can be found here.

Businesses closed due to local restrictions after 9 September.

For each 14 day period:

  • £667 for property with a rateable value of £15,000 or less
  • £1,000 for property with a rateable value between £15,000 and £51,000
  • £1,500 for property with a rateable value over £51,000

Further guidance on these business grants can be found here.

Businesses open but impacted by local ‘High’ or ‘Very High’ restrictions since 1 August.

Full eligibility criteria will be determined by local authorities although it is intended to target hospitality, hotel and leisure businesses. Amounts received will be determined by local authorities but the anticipated support is, for each 28 day period:

  • £934 for property with a rateable value of £15,000 or less
  • £1,400 for property with a rateable value between £15,000 and £51,000
  • £2,100 for property with a rateable value over £51,000

Further guidance on these business grants can be found here.

Nightclub, dance hall and adult entertainment closed due to national restrictions. A business which has opened as another type of business (such as a bar) is not eligible.

For each 14 day period:

  • £667 for property with a rateable value of £15,000 or less
  • £1,000 for property with a rateable value between £15,000 and £51,000
  • £1,500 for property with a rateable value over £51,000

Further guidance on these business grants can be found here.

“Additional restrictions” grants are to support businesses not covered by other support (including businesses that do not pay rates) with eligibility set by local authorities. Click here to find out more.

Bounce Back Loan Scheme (BBLS)

From 10 November 2020, companies which previously borrowed under the scheme at less than the maximum amount can apply for a top up which must be done by 31 January 2021. Repayments under the scheme have also been made more flexible with options to:

  • extend the loan term to 10 years
  • move to interest-only repayments for a period of 6 months (this option can be used up to 3 times)
  • pause repayments for a period of 6 months provided at least 6 repayments have been made (this option can only be used once).

Loan Schemes

The deadline for applying for Coronavirus Business Interruption Loan Scheme, Future Fund, Bounce Back Loan and Coronavirus Large Business Interruption Loan Scheme has been extended to 31 January 2021.

Further details can be found on the British Business Bank website.

Additional Lockdown Support

With the extension of lockdown, the Government has announced additional financial support. This is summarised below, with the full details published here.

Job Support Scheme (JSS)

The JSS, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends. Further details can be found here.

Mortgage Holiday

The existing mortgage holiday will be extended so that borrowers who are 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.

Childcare Entitlement

The Government had previously confirmed that working parents who are in receipt of the new Job Support Scheme (JSS) or extended Self-Employment Income Support Scheme (SEISS) will continue to receive their childcare entitlements even if their income temporarily falls below the threshold.

Businesses in Tier 2

Additional funding will be provided to local councils for grants where Tier 2 restrictions are in force. Eligibility for this grant will be backdated and so will apply for any period since August. Local councils will determine eligibility and how to allocate the amounts paid. Further details can be found here.

Self-Employment Income Support Scheme (SEISS)

Applications for the third tranche of the SEISS have now opened and must be submitted by 29 January 2021. All the requirements for the first two grants remain in place and so anyone not eligible for these isn’t eligible for the third tranche. In addition, the requirements for claiming that the business has been impacted by Covid019 have been tightened.

Further details can be found here.

Job Support Scheme – Open

The JSS, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends. Further details can be found here.

Job Support Scheme – Closed

The JSS, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends. Further details can be found here.

Support for businesses in areas of lockdown

The Government announced additional support for businesses required to close due to local lockdown restrictions. This can include businesses that are required to provide only delivery and collection services from their premises.

Job Support Scheme

The JSS, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends. Further details can be found here.

Local Restrictions Support Grant (LRSG)

 

Discretionary Funding

Local councils may make grants of up to £1,500 to:

  • businesses required to close which do not pay business rates
  • businesses not required to close which are severely impacted

Applications for grants should be made through the local council.

Extension of Corporate Governance and Insolvency Measures

Measures in the Corporate Insolvency and Governance Act which were due to expire on 30 September 2020 have been extended:

  • AGMs can continue to be held virtually until 30 December.
  • The restriction on Statutory demands and winding-up petitions will continue until 31 December.
  • Ceasing supply to or requiring additional payments from a company undergoing a rescue process will continue to be prohibited. However, small suppliers remain exempt until 30 March 2021.
  • The entry requirements for entering the moratorium procedure will continue to be relaxed until 30 March 2021.

Income Tax – Deferral of Payment

The Government has provided further details on the option to defer income tax due in January 2021.

Individuals who:

  • have no outstanding tax returns;
  • owe between £32 and £30,000; and
  • have no other tax debts or HMRC payment plans set up

can apply online for, and will automatically be granted, a payment plan. This must be done no later than 60 days from the due date of the tax. Payments must be made by monthly direct debits over 12 months and interest will be charged from 1 February 2021.

For amounts in excess of £30,000 or when a period longer than 12 months is requested, HMRC will need to be contacted directly.

VAT

  • Businesses who deferred their VAT bills will be able to spread repayment over 11 smaller interest-free payments up to March 2022. It will be necessary for businesses to opt into this scheme.
  • The reduced VAT rate for the tourism and hospitality sectors will be extended to the end of March next year.

Statutory Sick Pay

The Government updated their guidance to confirm that, from 26 August 2020, employers can claim for employees who have been notified by the NHS to self-isolate before surgery for up to 14 days.

Grants for businesses affected by local lockdowns

The Government is to introduce grants of either £1,000 or £1,500 paid every 3 weeks to businesses which are forced to shut due to local coronavirus-related restrictions. The grants will be taxable income and will be in addition to other assistance provided.

The higher level of grants will be available to businesses occupying premises with:

  • a rateable value of £51,000 or more; or
  • an annual rent of £51,000 or more; or
  • an annual mortgage payment of £51,000 or more.

The grants will only apply to businesses closed due to a national decision to close businesses in a high incidence area. They will not be available to businesses still closed at a national level.

Grants will be distributed by Local Authorities which will also receive an additional 5% top up to provide grants of up to £1,500 to businesses not eligible under these criteria.

Additional Grants

£20 million of funding to local Growth Hubs to provide support to small and medium sized enterprises in purchasing minor equipment to adapt or adopt new technology and help access specialist professional advice. Additional details can be found here.

Tax-Free Childcare

Full details can be found here.

Furloughed Staff – Salary for Redundancy

The Government announced that from 31 July 2020, statutory redundancy pay will be calculated based on an employee’s normal pay, rather than furlough pay. This also covers other employment rights that rely on average weekly pay, including notice pay, unfair dismissal, and short-time working. However, it does not apply to any enhanced redundancy pay under the individual’s employment contract.

Paying your employees’ personal fuel costs

Although the amount of fuel used is likely to be low in some cases, this does not reduce the income tax arising on the Benefit-in-Kind (BIK). Therefore, it is possible for the resulting tax liability to exceed the amount reimbursed. If you wish to discuss this matter further please contact Steve Williams – Stephen.Williams@sgllp.co.uk

Mini Budget 2020

In his summer update, the Chancellor announced a number of measures to help businesses recover from Covid-19. Whilst further details are to be published, the schemes announced were:

Job Retention Bonus

Due to the extension of the CJRS, the JRB will not be paid in February 2021 but will be delayed to an “appropriate time”.

This is a one-off payment to employers of £1,000 for each eligible employee kept continuously employed until 31 January 2021. The money is for the employer and does not need to be paid to the employee. The bonus is taxable unless it relates to staff that are not employed as part of a business (such as nannies or other domestic staff).

Claims can be made between 15 February and 31 March 2021. Further details can be found here.

VAT Cut for Hospitality Sector

With the fall in the rate of VAT there may be situations where the customer has already agreed a fee/been invoiced/has paid for the service at the higher VAT rate. Further details can be found here. If you would like to discuss how these changes may affect you, please contact Paddy Behan.

Eat Out to Help Out Scheme

The Eat Out to Help Out Scheme closed on 31 August 2020.

Kickstart Scheme

The Kickstart Scheme aims to assist young people on Universal Credit aged between 16-24 in finding six month work placements – with the Government paying 100% of the age-relevant National Minimum Wage, National Insurance and pension contributions for 25 hours a week. Employers can top up this wage.

Details relating to apprenticeship funding can be found here.

Green Jobs

From September 2020, homeowners and landlords can apply for vouchers to make housing more energy efficient. The government will cover two thirds of the cost up to £5,000 per household, and the full cost up to £10,000 for those on low incomes.

Stamp Duty Cut

The Government has increased the Nil Rate Band of Residential SDLT, in England and Northern Ireland, from £125,000 to £500,000. This will apply from 8 July 2020 until 31 March 2021.

Short-Term Home Building Fund Extension

The Government will support small- and medium-sized housebuilders that are unable to access private finance by boosting the Short-Term Home Building Fund, providing an additional £450 million in development finance to smaller firms.

Statutory Sick Pay – TUPE

The Government clarified the guidance to confirm that claims can be made for employees who have transferred under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). Further details can be found here.

Statutory Sick Pay Rebate Scheme

The rules were amended so that claims can now be made for employees who are self-isolating because they’ve been notified by the NHS or public health bodies that they’ve come into contact with someone with coronavirus.

In order to claim, an employer will require their Government Gateway user ID. Further details of the scheme, including links to obtaining the Government Gateway user ID, can be found here.

If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website.

Business Rates Relief

More information can be found here.

Retail, Hospitality and Leisure Grant Fund (RHLGF)

The Retail, Hospitality and Leisure Grant Fund is now closed. You should have received your grant by 30 September 2020. Contact your local council if you think you’re eligible for a grant but have not yet received it.

Support for Nursery Businesses that pay Business Rates

A business rates holiday will apply for nurseries in England for the 2020 to 2021 tax year. Further guidance for local authorities is available in the nursery discount guidance.

Support for Businesses that pay little or no Business Rates

If your business is eligible for SBRR or rural rate relief, you should be contacted by your local authority and do not need to apply.

Coronavirus Business Interruption Loan Scheme

The deadline for applying for the CBILS has been extended to 31 January 2021. Further details can be found on the British Business Bank website.

Covid-19 Corporate Financing Facility (CCFF)

Under the CCFF, the Bank of England will buy short-term debt from large companies. More information is available here and on the Bank of England website.

Coronavirus Large Business Interruption Loan Scheme (CLBILS)

The deadline for applying for the CLBILS has been extended to 31 January 2021. Further details can be found on the British Business Bank website.

Support for Businesses Paying Tax

If you have missed a tax payment or you might miss your next payment due to Covid-19, you should call HMRC’s dedicated helpline: 0800 024 1222. Further details can be found here.

Coronavirus Job Retention Scheme – Flexible Furlough

Deferring VAT and Income Tax

Income Tax payments from the self-employed due in July 2020 under the Self-Assessment system were deferred to January 2021. Any amounts deferred will need to be paid by 31 March 2021.

Protection from Eviction

Under measures to be included in the Coronavirus Bill, no business (in England, Wales and Northern Ireland) will be forced out of their premises if they miss a payment in the period to 30 June. Tenants will still be liable for the rent after this period.

Empty Business Rates Relief

Further guidance can be found here.

Employee Expenses

If you wish to discuss matters relating to the taxation of staff expenses further, please contact Steve Williams Stephen.Williams@sgllp.co.uk

Further details of the taxation of staff expenses can be found here.

Additional guidance can be found here.

Insolvency Rules

The Government has published a number of factsheets offering an explanation of the measures in the Corporate Insolvency and Governance Bill 2020. The bill introduces a series of amendments to insolvency and company law in response to the coronavirus outbreak.

Workplace Pensions

Further information can be found here.

Future Fund

The deadline for applying for the Future Fund has been extended to 31 January 2021. Further details can be found on the British Business Bank website.

The British Business Bank has also issued some Frequently Asked Questions to assist investors providing the funds to be matched by the loan.

Support Finder Tool

The ‘support finder’ tool aims to help businesses and the self-employed identify what financial support is available to them.

HMRC Video Resources

HMRC has produced a number of videos to help businesses understand the assistance available to them.

Coronavirus Bounce Back Loan

From 10 November 2020, companies which previously borrowed under the scheme at less than the maximum amount can apply for a top up which must be done by 31 January 2021. Further details can be found here.

Pension Schemes

Small Self-Administered Schemes (SSAS) and Self-Invested Personal Pensions (SIPP)

HMRC have announced a number of measures to assist Pension Schemes. In particular:

  • Pension Scheme Returns will NOT be required for the 2019/20 tax year due to difficulties in obtaining the required valuations.
  • If a valuation is required (for example, when funds are designated for a drawdown pension), then HMRC will accept that special circumstances exist if, due to COVID-19, trading in the share has been suspended or the closing price is not a proper measure of value. This would allow an alternative method of valuation to be used.
  • HMRC will accept payment holidays on loans to connected parties and rent holidays on commercial property as arm’s length commercial decisions (and so not giving rise to an unauthorised payment charge) without a valuation. The Scheme should still be able to demonstrate that the decision was on an arm’s length commercial basis.

Further details can be found here.

Additional Funding to Local Councils

Details of allocations of additional funding to local authorities can be found here.

Tax-Free Childcare and 30 hours Free Childcare

HMRC have issued guidance on temporary changes during Coronavirus. Further details can be found here.

Governance Changes

The Government has published a number of factsheets to explain the changes being introduced. The legislation will also ease the administration burden by allowing companies to hold closed AGMs, conduct business and communicate with members electronically, and extends filing deadlines, during the period of the pandemic.

Local Authority Discretionary Grants Fund

Eligible businesses can also apply for the Coronavirus Job Retention Scheme (furloughing employees), the Self-Employed Income Support Scheme and other coronavirus-related loans. Further details of the grant can be found here.

Guidance on Assessing Going Concern

The ICAEW has prepared a short document to guide businesses in assessing the Going Concern status of their enterprise. Whilst it is written for directors of limited companies (for whom this is a statutory obligation), the points made on forecasting would also be relevant to other business structures considering the impact of Covid-19.

Military Reservists

The Coronavirus Job Retention Scheme guidance on military reservists has been clarified here.

Support Package for Arts & Culture

The government has announced a £1.57bn package to support Britain’s arts, culture and heritage industries including theatres, heritage, historic palaces, museums, galleries, live music and independent cinema. Further details can be found here.

Regional Assistance

Should you wish to discuss matters further, please contact your engagement/relationship partner or email us mail@sgllp.co.uk

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