Covid-19 updates and support

The latest support available

The latest covid-19 updates and support

Since the outbreak of the Covid-19 pandemic the government has provided support for business, the self-employed and individuals. The level and type of support available is constantly changing. This page is designed to provide the latest Covid-19 updates and support available.

Here is a summary of the current and future support. We will update this page as any changes are made.

NEW SUPPORT SCHEMES FOR LOCKDOWN 2 FROM NOVEMBER 2020

With the announcement of a second national lockdown from Thursday 5th November further support measures have been announced for businesses and individuals. A summary is a s follows: –

New Furlough Scheme

The Furlough scheme will remain open until December, with employees receiving 80% of their current salary for hours not worked, up to a maximum of £2,500. Under the extended scheme, the cost for employers of retaining workers will be reduced compared to the current scheme, which ended on 31st October. This means the extended furlough scheme is more generous for employers than it was in October.

Employers will be required to pay national insurance and pension contributions.

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.

Help for individuals

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.

Help for Businesses

1. Old Furlough Scheme (Coronavirus Job Retention Scheme - CJRS) is ending on 31st October 2020

  • From 1‌‌‌ ‌September 2020 you will have to start contributing to the wages of your furloughed employees. Grants will be for 70% of usual wages in September and 60% in October, but furloughed employees will continue to be entitled to receive at least 80% of their usual wages. You will have to make up the difference from your own resources.
Job Retention Bonus

Employers who retain previously furloughed staff will be able to claim £1,000 for each employee who remains continuously employed until at least 31st January 2021. Further details will be announced on 31st July.

Incorrect claims

CJRS grants are to cover the costs of your furloughed employees’ wages (and related payroll taxes, National Insurance and pension contributions until 31‌‌‌ ‌July). HMRC may withhold or recover grants if they are claimed based on dishonest or inaccurate information.

They are contacting a number of employers at the moment to check that they have claimed the correct amount.

If you have made an incorrect claim that meant you claimed too much, you can let them know as part of your next online claim without needing to call them. If you have made an error and do not plan to submit further claims, or you have claimed less than you were entitled to, please contact HMRC by searching ‘Contact HMRC’ on GOV‌‌‌‌.UK.

Beware of Scams

Stay vigilant about scams which may mimic government messages as a way of appearing authentic and unthreatening. Search ‘scams’ on GOV‌‌‌‌.UK for information on how to recognise genuine HMRC contact. You can also forward suspicious emails claiming to be from HMRC to phishing@hmrc.gov.uk and texts to 60599.

2. Job Support Scheme from 1st December 2020

A new Job Support Scheme will be introduced from ‌‌1‌‌ December to protect jobs where businesses are facing lower demand over the winter months due to coronavirus (COVID-19). 

Under the scheme, which will run for six months, the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand. 

The employee will need to work a minimum of 20% of their usual hours and the employer will continue to pay them as normal for the hours worked. Alongside this, the employee will receive 66.67% of their normal pay for the hours not worked – this will be made up of contributions from the employer and from the government. The employer will pay 5% of reference salary for the hours not worked, up to a maximum of £125 per month, with the discretion to pay more than this if they wish. The government will pay the remainder of 61.67%, of reference salary for the hours not worked, up to a maximum of £1,541.75 per month. This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.

To be eligible, employees must:  

  • be registered on your PAYE payroll on or before 23 September 2020. This means a Real Time Information (RTI) submission notifying payment in respect of that employee must have been made to HMRC on or before 23 September 2020
  • work at least 20% of their usual hours. The government will consider whether to increase this minimum hours threshold after the first three months of the scheme.

Further eligibility criteria is available on GOV‌.UK by searching ‘Job Support Scheme factsheet’.

The Job Support Scheme will be open to employers across the UK even if you have not previously applied under the Coronavirus Job Retention Scheme (CJRS) which closes on 3‌1‌‌ ‌October.

The Job Support Scheme will start from 1‌ November and you will be able to claim in December. Grants will be paid on a monthly basis.  

The scheme will operate in addition to the Job Retention Bonus. You and your employees can benefit from both schemes in order to help protect viable jobs. 

For information on what is covered by the grant, which employers and employees are eligible, and how to claim, search ‘Job Support Scheme factsheet’ on GOV‌.UK.

3. VAT Deferral

If you deferred payments that were due between 20 March and 30 June 2020, then these payments need to be made to HMRC by 31‌‌ March 2021. You can use the New Payment Scheme to spread these payments over equal instalments up to 31‌‌ March 2022. Alternatively, you can make payments as normal by 31‌‌ March 2021 or make Time To Pay arrangements with HMRC if you need more tailored support.

4. Small Business Grant fund

Small businesses in England which pay little or no business rates are entitled to a one-off cash grant of £10,000 from their local council.

You cannot claim both the small business grant and the retail, hospitality and leisure grant on the same property.

The small business grant counts towards the total de minimis state aid you’re allowed to get over a 3 year period.

Your local council will ask you to complete a de minimis declaration confirming that you will not exceed the de minimis state aid threshold of €200,000.

If you exceed the de minimis threshold you may still be eligible for funding under the COVID-19 Temporary Framework.

Your local council will ask you to complete a declaration confirming that:

  • you will not exceed the state aid temporary framework threshold of €800,000
  • you were not an ‘undertaking in difficulty’ on 31 December 2019

You do not need to take any action. If you’re an eligible business, your local council will contact you and provide details of how to claim.

Contact your local council if you think you’re eligible for a grant but have not yet received it.

5. Business Loan Interruption scheme

The scheme helps small and medium-sized businesses to access loans and other kinds of finance up to £5 million.

The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months.

Eligibility

You can apply for a loan if your business:

  • is based in the UK
  • has an annual turnover of up to £45 million

You need to show that your business:

  • would be viable were it not for the pandemic
  • has been adversely impacted by the coronavirus

If you want to borrow £30,000 or more, you also need to confirm that your business wasn’t classed as a business in difficulty on 31 December 2019.

Who cannot apply

Businesses from any sector can apply, except:

  • banks, insurers and reinsurers (but not insurance brokers)
  • public-sector bodies
  • state-funded primary and secondary schools
How long is the loan for?

The maximum length of the facility depends on the type of finance you apply for and will be:

  • up to 3 years for overdrafts and invoice finance facilities
  • up to 6 years, for loans and asset finance facilities
How to apply

There are over 50 lenders participating in the scheme including all the main retail banks. You should approach a suitable lender yourself via the lender’s website.

You’ll need to tell the lender:

  • the amount you’d like to borrow
  • what the money is for
  • how long you’d like to pay it back

Supporting documents will be required.

You’ll need to provide documents that show you can afford to repay the loan.

These may include:

  • management accounts
  • cash flow forecast
  • business plan
  • historic accounts
  • details of assets

The documents required will vary from lender to lender and depend on how much you’re asking for. If you’re asking your existing lender for a small loan, the process may be automated and not require all of the documents.

The lender will check that the loan is:

  • for a suitable business purpose
  • affordable for you
  • the right type of finance for your needs

The lender will decide whether to offer you a loan or another type of finance and you’ll be responsible for repaying 100% of the amount borrowed.

More details are available at https://www.gov.uk/guidance/check-if-youre-eligible-for-the-coronavirus-small-business-grant-fund

6. Bounce back loan scheme

The scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000.

The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.

If you need a larger loan, you may be entitled to other government support.

Eligibilty

You can apply for a loan if your business:

  • is based in the UK
  • was established before 1 March 2020
  • has been adversely impacted by the coronavirus

If your business was classed as a business in difficulty on 31 December 2019 you’ll need to confirm that you’re complying with additional state aid restrictions.

Who cannot apply

Businesses from any sector can apply, except:

  • banks, insurers and reinsurers (but not insurance brokers)
  • public-sector bodies
  • state-funded primary and secondary schools

If you’re already claiming funding

You cannot apply if you’re already claiming under:

If you’ve already received a loan of up to £50,000 under one of these schemes you can transfer it into the Bounce Back Loan scheme. You have until 4 November 2020 to arrange this with your lender.

How long is the loan for?

The length of the loan is 6 years, but you can repay early without paying a fee. No repayments will be due during the first 12 months.

How to apply

There are 11 lenders participating in the scheme including many of the main retail banks. You should approach a suitable lender yourself via the lender’s website.

The lender will ask you to fill in a short online application form and self-declare that you are eligible.

The lender will decide whether to offer you a loan or another type of finance and you’ll be responsible for repaying 100% of the amount borrowed.

More details are available at https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan

Help for individual business sectors

A reduction in vat to 5% for hospitality, holiday accomodation and attractions as well as business rate relief.

Nurseries may be eligible for a business rates holiday.

Help for self-Employed

1. Self-Employed Grant

The Self-Employment Income Support Scheme Grant Extension provides critical support to the self-employed in the form of two grants, each available for three month periods covering November 2020 to January 2021 and February 2021 to April 2021.

1. Who can claim

To be eligible for the Grant Extension self-employed individuals, including members of 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)
  • declare that they intend to continue to trade and either:
    • are currently actively trading but are impacted by reduced demand due to coronavirus
    • were previously trading but are temporarily unable to do so due to coronavirus

2. What the Grant Extension covers

The extension will last for six months, from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a three-month period.

The first grant will cover a three-month period from 1 November 2020 until 31 January 2021. The Government will provide a taxable grant covering 40% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £3,750 in total.

The Government are providing broadly the same level of support for the self-employed as is being provided for employees through the Job Support scheme.

The second grant will cover a three-month period from 1 February 2021 until 30 April 2021. The Government will review the level of the second grant and set this in due course.

The grants are taxable income and also subject to National Insurance contributions.

3. How to claim

HMRC will provide full details about claiming and applications in guidance on GOV.UK in due course.

2. New Self-Assessment Self-Serve Time To Pay Scheme

If you deferred paying your July 2020 Payment on Account, you will need to pay the deferred amount, in addition to any balancing payment and first 2020/21 Payment on Account, by 3‌1‌‌ ‌January 2021. This may be a larger payment than you usually pay in January.

If you’re unable to pay your Self-Assessment (SA) bill in full by 31‌‌ January 2021, you can set up a Time to Pay payment plan of up to 12 months online without speaking to us. If you have SA tax debts of up to £30,000, you’ll able to access this Time to Pay facility through GOV‌.UK and will get automatic and immediate approval. If your SA debts are over £30,000, or you need longer than 12 months to repay your debt in full, you will still be able to use our Time to Pay arrangement by calling HMRC. 

More details are available at https://www.gov.uk/guidance/defer-your-self-assessment-payment-on-account-due-to-coronavirus-covid-19

If you have any questions regarding your business, the level of support or how to claim please do get in touch. I am very happy to help.

I am here to help if you have any questions?

Please email or call me.

John Lawrence | member of Institute of Chartered Accountants England and Wales | Guida Accountancy