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.

 

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.

Apply in December for Third Grant for Self Employed

Applications for the third Self-Employment Income Support Grant (SEISS) can be made from 14 December 2020.

This is later than we had expected. When the application portal opens, it will be four months since the last one.

The grant was announced in the Winter Economy Plan and the amount of grant was doubled earlier this month. 

Self-employed can receive 40% of their average monthly profits x 3 months, up to £3,750. It will be open to anyone who:

  • would have been eligible for the first and second SEISS grants, even if they did not claim
  • continues to trade but has been impacted by coronavirus, or who has temporarily stopped because of coronavirus. 

HMRC will provide full details on how to claim closer to the time. We expect this to be very similar to previous SEISS grants, and will confirm this as soon as we know.

To find out more about the eligibility please see the Government’s Policy Paper. This article is based on the 30 October 2020.

Job Support Scheme – Government paying more for employees who cannot work

The Job Support Scheme has been changed to increase government support and reduce the amount employers have to pay.

The scheme starts on 1 November 2020. When a business is experiencing difficulty keeping staff on, due to coronavirus, the Job Support Scheme can be used to help pay their wages.

What has stayed the same?

The employee will be paid for all of the hours they have worked and 67% of the hours not worked.

Businesses that have to close because of Tier 3 lockdowns can continue to access even greater funding. For these businesses, the Government will pay 67% and the employer does not need to contribute.

In all cases, the employer remains responsible for employer’s National Insurance and pension contributions.

What has changed?

The minimum hours worked has been reduced to 20% (it was going to be 33%).

The Government will now pay 62% of the hours not worked and the employer will pay 5% (was going to be 33% and 33%).

So, who pays what?

The amount of support changes depending on how many hours an employee works.

Job Support Scheme examples

 

The Job Support Scheme will pay different amounts depending on the hours worked

An example

This example shows how much an employee, who normally earns £1,000, would get if they can only work one day a week instead of five.

  • The employee is paid £200 by the employer for the time they have worked (was £330)
  • The employer must pay an additional £40 – that is 4% of their normal pay (was £220)
  • The Government will pay £496 – 49.6% of their normal pay (was £220)
  • The amount not paid will be £264 – which is 26.4% of their pay (was £220)

Employees can end up receiving less pay

Because the minimum hours has been reduced from 33% to 20% , an employee who is kept on working at the bare minimum hours would be worse off under the revised scheme. If the employee is given 33% of their normal hours, they are no worse off.

Self-employed to receive more money from the Government

Pound signThe Government has doubled the next grant for the self-employed.

The grant (SEISS), which was first announced in September, will cover the period from November 2020 to April 2021 and will be paid in two instalments.

The new lump sum will be 40% (previously 20%) of average monthly profits, up to £3,750 (previously £1,875). We expect this to be paid in November.

The level of the fourth SEISS grant, covering February March and April 2021, will be reviewed by the Government in time to come.

To find out more about the eligibility please see the Government’s policy paper

Hospitality businesses to receive grants in Tier 2

Hospitality, accommodation and leisure businesses that are in Tier 2 high-alert level areas will be given an additional grant of between £934 and £2,100 per month. This money will be distributed by Local Authorities.

The grant will be based on rateable value.

Rateable value
Grant
£15,000 or under
£934 per month
£15,000 to £51,000
£1,400 per month
£51,000 and over
£2,100 per month

The grants will be made retrospectively for areas of the country already in Tier 2 and will be paid on top of any extra funding for businesses in Tier 3 areas.

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