COVID-19 Updates

News, opinions and useful links

Latest COVID-19 Updates

Coronavirus business support updates from our accounting team. Featuring news from the government and our opinions on how it will impact businesses.

As well as these short bursts of information, we will be sharing more in-depth articles on our Insights blog and holding workshops to help business owners keep growing.

If you have anything that you think we should feature, please get in touch and let us know.

 

Super-deduction

You will be able to claim a deduction from your corporation tax bill if you invest in new productivity enhancing plant and machinery. The expenditure would need to be incurred between 1 April 2021 and 31 March 2023 and you can save 25p of tax on every £1 invested.

If you are planning investment in March you may wish to consider delaying until April to take advantage of this super deduction. If you’re unsure and would like advice about this, give us a call.

For more information on what can be included and for more details on exclusions please see our Budget Report and visit the government website.

VAT Deferral New Payment Scheme

Businesses can now take advantage of the VAT Deferral New Payment Scheme. It will allow them to pay the deferred VAT from last year in equal monthly instalments, with no interest, starting from March 2021.

Businesses will be able to choose between 2 and 11 instalments, subject to when they join the new scheme. In order to qualify for 11 instalments, you will have to join by 19 March 2021. The first payment will have to be paid when you join and the Direct Debit will need to be set up for the rest.

The online service opened yesterday and businesses will be able to join until 21 June 2021.

Alternatively, you can pay the deferred VAT in full by 31 March 2021 or contact the HMRC should you need additional help.

To find out more about the details of the new Scheme and how to join please see government guidance.

More time to pay your tax

HMRC will not charge the initial 5% late payment penalty, providing that you pay your tax or make a Time to Pay arrangement by 1 April 2021.

This provides you with an additional month to make the payment, after the initial extension of the filing deadline to the end of February.

To find out more, please visit the Government website.

More flexibility with repaying Bounce Back Loans

On 8 February 2021, the government announced additional flexibility in repaying Bounce Back Loans:

  • borrowers will be able to individually adjust their Bounce Back Loan payments
  • all repayments can be delayed for additional 6 months. This allows the borrowers not to make any payments until 18 months from taking the loan. Initially this option could have been used after making the first 6 payments

 

The following options, introduced last year, still apply:

  • borrowers can extend the length from 6 to 10 years. This means that the monthly repayments can be reduced by nearly 50%
  • repay interest only for up to 6 months (this option can be used up to three times)

 

For more information about the scheme please see the government’s website.

One more month to submit your return

HMRC have decided not to issue late filing penalties for filing your 2019-2020 tax return late, providing that you file online by the end of February.

This is to help those who are unable to file by the end of January, however, the Government encourages those who can meet the deadline to do so.

For more information please visit the Government website.

Coronavirus may be a reasonable excuse for filing your tax return late

 

HMRC have said, that if you cannot submit your return on time because of a reasonable excuse related to coronavirus, they may waive the late penalties. They will only do this if the return is made as soon as possible after the reasonable excuse has passed.

At this point we are not sure how forgiving HMRC will be, but we know that submitting your tax return will make it easier to arrange a payment plan for your tax with HMRC.

Jon Rata

 

If you are required to submit a tax return for the 2019/20 tax year, it is due to HMRC by 31 January 2021. The penalty for missing this deadline is £100 if your tax return is up to 3 months late. You’ll have to pay more if it’s later, or if you pay your tax bill late. You’ll also be charged interest on late payments.

For more information on penalties, please see the government guidance. 

There’s still time to submit your return before the deadline and our team are ready to help you. Contact us, if you need help with your self-assessment return.

Furlough grant scheme extended until April

The Job Retention Scheme (known as furlough) has been extended again and will now be open until 30 April 2021.

The government will pay 80% of wages for hours not worked, up to £2,500 a month. Employers will pay 100% of the wages for hours worked.

Today’s announcement also extended the application window for coronavirus loans to 31 March 2021.

Furlough Grant Scheme extended until March

The Job Retention Scheme (known as furlough) has been extended to 31 March 2021.

The government will pay 80% of wages for hours not worked, up to £2,500 a month. Employers will pay 100% of the wages for hours worked.

The scheme will be reviewed in January and a decision will be made regarding increasing employer’s contributions.

Self-Employment Income Support Scheme increased

The grant you can apply for from 30 November has just been increased. It is now 80% of three months profit. This will increase the maximum payment to £7,500.

The grant should be paid within a week from applying.

Summary of support going in to National Lockdown

Self-Employment Income Support Scheme extended

The self-employed will get a grant of 80% of November profits which can be claimed from 30 of November.

So far, there has been no changes in the grant amounts for December and January – it’s still 40% months profits in each month.

As the grant is calculated over 3 months, this will increase the total payment in December from 40% to 55%, to maximum of £5,160.

From our experience, payments are usually made quite quickly. We suggest planning that the payment will be processed within a week.

Eligibility:

Ability to top-up Bounce Back Loans and term to be extended

If the businesses haven’t borrowed the maximum that they were eligible for, which is 25% of their turnover, they have a one-off chance to top up their existing loan. You can use this option from next week.

Applications for a Bounce Back Loans and other government coronavirus loan schemes, is planned to be further extended to the end of January 2021.

Cash grants for closed businesses

Businesses required to close due to coronavirus restrictions will be given additional grant of up to £3,000 per 4 weeks.

Hospitality, accommodation and leisure businesses that are in Tier 2 high-alert level areas will also be paid the cash grants at 70% of the value of closed grants up to a maximum of £2,100 per four weeks for this period.

Additional funding of £1.1 billion will be distributed by Local Authorities and used at their discretion. This funding is expected to start next week.

Reminder of available support for businesses as we prepare for the national lockdown

Over the last few weeks, numerous schemes have been announced to support businesses that are suffering due to lockdown restrictions. This is a summary of these schemes. Further detail can be found on our Covid-19 Update feed.

Lockdown grants

Grants of £934 to £2,500 per month for businesses required to close in the Hospitality and Leisure industries. Further grants, were being paid by local authorities every three weeks for businesses in local lockdowns.

I expect more clarity from the government on how much businesses can claim in grants due to the national lockdown. There are lots of small schemes running alongside each other at the moment and I believe that the government will simplify this before Thursday.

Other support

Grants of up to 80% of wages for employers to keep staff who cannot work on furlough.

Self-employed will get a grant of 40% x 3 months profits, in December.

VAT, self-assessment and other tax payments can be deferred further. Either by contacting HMRC or via online portals expected to be available early next year.

Furlough scheme returns

On the eve of the Job Retention Scheme (JRS, but more commonly referred to as furlough) ending, it has instead been extended until the end of the national lockdown.

JRS was due to be replaced on 1 November with two new, less generous schemes, collectively known as the Job Support Scheme (JSS).

The furlough scheme will pay employers grants to cover the wages of employees who are not working due to coronavirus.

The government will pay 80% of wages for hours not worked. Employers will pay 100% of the wages for hours worked.

Our information is from the government’s press release to accompany the Prime Minister’s press conference on 31 October. The information is quite limited for now. Further guidance is sure to follow, which we will explain here as soon as we know it.

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