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Support measures for businesses amidst the Coronavirus

In these rapidly changing times, many businesses need support and help to navigate through the dramatic economic conditions the pandemic has presented.

Updated 1 April 2022

The Shipleys LLP team are closely following all the announcements and papers released by Government Bodies, including the Treasury.  On this page, which is being updated as fresh announcements emerge, you’ll find an overview of the support measures in place for businesses. You can find more information from the Government here: Covid 19 Support for Businesses

What’s new on 1 April 2022 – see the relevant sections below:

The Coronavirus Statutory Sick Pay Rebate Scheme

This scheme was established in the early stages of the pandemic in 2020. It enabled employers to be repayed the Statutory Sick Pay which they had paid to current or former employees. The scheme was reintroduced in early 2022 and in this current guise, employers could claim for employees who were off work on or after 21 December 2021 until 17 March 2022.

The Scheme closed to covid-related absences after 17 March. Employers had up to and including 24 March 2022 to submit any final claims, and amend claims they’d already submitted

For the latest information see this Gov.uk page: Check if you can claim back Statutory Sick Pay paid to employees due to coronavirus

Job creation grants

Traineeships

Employers who provide work experience for 16-24-year-olds in work placements and training will receive a payment of £1,000 per trainee. Provision of traineeships and eligibility for them will be extended to those with Level 3 qualifications and below, to ensure that more young people have access to training. 

The incentive has been extended until July 2022. Claims for placements completed on or before 31 July 2021 had to be made by the end of September 2021 to allow time for any errors to be corrected.

For more information see Gov.uk Traineeship information for employees. Information about claiming the incentive can be found at: Gov.uk Employer Incentive Payments.

Payments for employers who hire new apprentices

In the third guise of this scheme, which has run since August 2020, Employers can apply for a payment of £3,000 for new apprentices with an employment start date from 1 October 2021 to 31 January 2022. See more information here: Gov.uk Incentive Payments for hiring a new apprentices

Organisations can apply for apprentices with an employment start date from 1 October 2021 to 31 January 2022. They will also need to have an apprenticeship start date from 1 October 2021 to 31 March 2022. Note employers must set up an apprenticeship service account before they can apply.

Kickstart Scheme

The Kickstart Scheme was created to provide high quality six-month work placements for those aged 16-24, who are on Universal Credit and considered to be at risk of long-term unemployment. 

Government funding for each job covered 100% of the relevant National Minimum Wage for 25 hours a week plus the associated employer NICs and employer minimum automatic enrolment contributions (a maximum of about £6,500). There was also £1,500 per job placement available for setup costs, support and training.

The scheme has now ended. See the Gov.uk Kickstart Scheme closure page for further information.

Business Rates and Grants

The Omicron Hospitality and Leisure Grant

Introduced at the end of 2021, this grant provides local councils with one-off grant funding to support to hospitality, leisure and accommodation businesses impacted by the Omnicron variant. Qualifying businesses include those:

The grant is covered 3 possible subsidy allowances. These can be combined for a potential total allowance of up to £12,235,000. For more information on the Scheme see Gov.uk Eligibility for the Omicron Hospitality and Leisure Grant. Be aware applications will need to be made via your local Council.

Business rates

All retail, hospitality and leisure businesses were exempt from paying business rates from March 2020 to 30 June 2021  in a bid to combat the financial damage caused by the COVID-19 outbreak. After 30 June these business gained 66% business rates relief for the period 1 July 2021 to 31 March 2022.

The relief is capped at £2 million per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties.

Further business rates relief

In England, eligible charities and community amateur sports clubs may apply for relief of up to 80%.  Also ratepayers experiencing financial difficulties may apply to their local authority for hardship relief which may grant a discount or exemption to the ratepayer at their discretion.

You can find a full list of exemptions, and types of relief for:

Loans and finance

In December 2020 the Chancellor announced that the closing date for the Government’s three Coronavirus business interruption loan schemes would be extended further to 31 March 2021. This extended the previously scheduled closing date of 31 January 2021.  See Chancellor extends furlough and loan scheme

The Recovery Loan Scheme

The Recovery Loan Scheme launched on 6 April 2021. It gives businesses access to loans and other kinds of finance. This finance can be used by the businesss for any legitimate business purpose, including growth and investment. Eligible businesses could apply for the Recovery Loan Scheme – even if they had taken out a loan under the previous Coronavirus business interruption loan schemes.

Loans are available through a network of accredited lenders, listed on the British Business Bank’s website – see accredited lenders for loans.

Changes from 1 January 2022

From 1 January 2022, the following changes have come into force:

Finance options

A lender can provide up to £2 million as one of the following facilities:

No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.  For businesses borrowing more than £250,000 the lender has the discretion to decide whether to take personal guarantees. However the maximum amount that can be covered under Recovery Loan Scheme (RLS) is capped at a maximum of 20% of the outstanding balance of the RLS facility after the proceeds of business assets have been applied

The time limit for the loans is:

For more information visit the recovery loan scheme page on the British Business Bank website.

To apply

Accedited lenders are published on the British Business Bank website – see accredited lenders. We can also introduce you to accredited lenders, and please talk with your usual Shipleys contact if this would be helpful.

The Self-Employed Income Support Scheme

Background

In Autumn 2020 the Chancellor announced the SEISS was to be extended from 1 November 2020, in the form of two new grants (known as the third and fourth grants, given the previous two already distributed since Spring 2020). Both the third and fourth grants would be available for three month periods covering:

The Government’s third taxable grant covered 80% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500. Note the closing date for claims of the third SEISS grant has now passed (29 January 2021). 

The grant had been increased from the previously announced level of 40% of trading profits to 80% of trading profits, for 1 November 2020 to 31 January 2021.

In his Budget on 3 March 2021, the Chancellor announced that the SEISS will continue until September with a fourth and fifth grant.

The fourth and fifth grants took into account submitted 2019-20 tax returns. To qualify they must have submitted their 2019-20 tax returns by 2 March 2021 to be eligible for the fourth and fifth grants. They must have also traded in the 2020/21 tax year.

The fourth and fifth SEISS grants – Both schemes are now closed to applications.

With the fourth grant, the Government paid a taxable grant which was calculated based on 80% of three months’ average trading profits, paid out in a single payment and capped at £7,500 in total. 

The value of the grant was based on an average of the self-employed person’s trading profits for up to four tax years between 2016 to 2020, where available. As with previous grants, trading profits couldn’t be more than £50,000 and at least equal to non-trading income in order to claim the fourth SEISS grant.

Eligibility for the fourth SEISS grant also depended on if you had experienced a significant financial impact from coronavirus between February 2021 and April 2021. As the calculation took into account the tax year 2019-20, if you previously claimed SEISS grants you could receive grants that were higher or lower in value than any previous SEISS payments received.

The fifth and final SEISS grant covered May to September 2021. The amount of the fifth grant was determined by how much a self-employed business’ turnover has been reduced. The grant was taxable and was paid out in a single instalment.

The grant was worth 80% of three months’ average trading profits, capped at £7,500, for those with a higher reduction in turnover (30% or more). For those with a lower reduction in turnover, of less than 30%, then the grant was worth 30% of three months average trading profits and capped at £2,850.

The online claims service for the fourth and fifth grant have closed.

Note: The grants are subject to income tax and National Insurance contributions, but do not need to be repaid. Recipients are warned to be mindful of when the tax is due on the various grants – see getting the timing right for your self income support scheme grant tax liability.

UPDATE: January 2022.

If applicants have not been able to make a claim for an SEISS grant due to an HMRC error or other exceptional circumstances, they have until 28 February 2022 to contact HMRC. Similarly, if you think your grant amount is too low, you must also contact them by 28 February 2022. If you still need to make a claim.

Support for Charities

In addition to the Charity Commission Guidance released in March, the Government announced in April a fresh set of measures to help charities facing financial difficulties as a result of the Coronavirus situation.  On 17 April it also released information regarding processing ticket refunds for cancelled charity events during the coronavirus (COVID-19) pandemic. You can find an overview of all the current support measures for Charities in our Charity Update pages.

Time to pay arrangement for outstanding tax liabilities

HMRC set up a phone helpline to support businesses and self-employed people concerned about not being able to pay their tax.

The helpline number is 0800 0159 559 – and is an addition to other HMRC phone contact numbers. The helpline is open from Monday to Friday 8am to 8pm, and Saturday 8am to 4pm (excluding bank holidays).

What to have to hand before you call HMRC

Businesses are strongly advised to be prepared for the conversation with HMRC and have the following key information to hand:

VAT 

VAT payments due between 20 March – 30 June 2020 were permitted to be deferred. 

In September 2020 the Government announced a ‘New Payment Scheme’ for VAT deferral. It offered businesses that deferred VAT due in March to June 2020 the option to spread their payments over the financial year 2021/22 in 11 equal instalments. All businesses that took advantage of the VAT deferral were eligible and could use the Scheme. However, they needed to opt in.  The online opt-in system closed to new entrants on 21 June 2021. Businesses may be charged a 5% penalty or interest if they did not pay in full or make an arrangement to pay by 30 June 2021. See: deferral of vat payments due to coronavirus covid 19.

Find out what you need to do now the deferral period has ended.  See deferring vat payments during the coronavirus situation.

A reduced 5% VAT rate was introduced from 15 July 2020 for the hospitality, holiday accommodation and leisure attractions sectors. It will remain in place until 30 September 2021. A new reduced rate of 12.5% will apply from 1 October 2021 to 31 March 2022, at which point the rate will revert to the 20% standard rate. For more information see vat reduced rate for hospitality holiday accommodation and attractions

Making Tax Digital for VAT

Businesses with VAT periods ending after 31 March 2020 were due to have ensured their digital links were Making Tax Digital (MTD)-friendly, however, HMRC extended the deadline.

In response to the impact of COVID-19, it announced qualifying businesses had until their first VAT return period starting on or after 1 April 2021 to put digital links in place.

Be mindful the Government has announced that from 1 April 2022 all VAT registered businesses must follow its Making Tax Digital for VAT rules regardless of turnover. For more information see making tax digital for vat widens its scope

Self-Assessment Payments 

In his Winter Economy Statement the Chancellor announced the self-employed and other taxpayers will be given more time to pay taxes due in January 2021.

Under his Enhanced Time to Pay Scheme, taxpayers with up to £30,000 of self-assessment liabilities due will be able to use HMRC’s self-service Time to Pay facility to secure a plan to pay over an additional 12 months.

This means that self-assessment liabilities originally due in July 2020 will not need to be paid in full until January 2022. Any self-assessment taxpayer not able to pay their tax bill on time, including those who cannot use the online service, can continue to use HMRC’s Time to Pay Self-Assessment helpline to agree a payment plan.

Read more:
https://www.gov.uk/government/news/self-assessment-customers-to-benefit-from-enhanced-payment-plans 
and:
https://www.gov.uk/guidance/defer-your-self-assessment-payment-on-account-due-to-coronavirus-covid-19

Things to consider:

Your insurance policies

The Government has stated that it considers that its current statements are sufficient to bring interruption to business policies into effect and require insurance companies to make good on those policies. Do though check with your insurance provider.  A recent test case is helping those businesses who have had difficulty claiming under their business interruption policies.  See covid related business interruption insurance claims benefit from test case

Employment considerations

The priority for most employers will no doubt to be to retain staff if they can. Please refer to the Government proposed support for wages above. In the meantime, and in your discussions with staff, it is sensible to be as open and transparent as possible about the situation the business is in, the measures you are taking to enable it to survive and what you are asking of them.  There is some information from the Government: layoffs short timeworking

Contracts

If you have contracts in place for the supply of goods or services it is important to check if there are clauses to cover you for force majeure. This relates to what happens if something stops or delays you or someone else performing the contract due to factors outside your or their control. Check the wording of those clauses to be clear if it covers you for the pandemic and what is or isn’t covered in terms of disruption.  Get legal advice is necessary and if you need introductions to legal contacts, please let us know.

Other financing measures

In addition to the Government support, other lenders are initiating financing options to help businesses in areas such as spreading the cost of equipment purchases, short-term loans, finance against unpaid loans etc.  Talk to one of our team for introductions.

Summary and can we help?

We will continue to monitor the announcements from the Government and update this page as new guidance and legislation emerges.  In the meantime, please do get in touch with your usual Shipleys’ contact if you need any further advice or call one of our offices.

London: +44 (0)20 7312 0000  or email advice@shipleys.com

Godalming: +44 (0)1483 423607 or email godalming@shipleys.com

Specific advice should be obtained before taking action, or refraining from taking action, in relation to this summary. If you would like advice or further information, please speak to your usual Shipleys contact.

Copyright © Shipleys LLP 2021

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