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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 16 July 2021

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.

What’s new on 16 July 2021 – see the relevant sections below:

Suppport with wages – the Coronavirus Job Retention Scheme

In March 2021 the Government extended the Job Retention Scheme further until 30 September (it was previously due to end on 30 April 2021). It will run in full until the end of June 2021 and will then be phased out over the following 3 months.

The Job Retention Scheme since 1 November 2020

The Job Retention Scheme has run in its current guise since1 November 2020. This version of the Scheme generally operated as its predecessor with businesses paid upfront to cover wages costs. The level of the grant has reverted to the amount available under the Scheme in August.

This means the Government pays 80% of wages up to a cap of £2,500. Employers pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work.  

Under the current Scheme’s arrangements:

The planned winding down of the Scheme

In the Chancellor’s Budget on 3 March 2021, it was announced that up to the end of June, the current 80% government payment level will be maintained (capped at £2,500 a month), with employers responsible for NICs and pension payments.

The government payment will then drop to 70% in July (up to a cap of £2,187.50) and 60% in August and September for employees’ usual wages up to a cap of £1,875.  The Scheme is due to close on 30 September.

Employers will need to continue to pay their furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month. This means, for periods between July and September, employers will need to fund the difference between this and the CJRS grants themselves. Employers can also top up wages above the 80% if they wish, but they are not required to do so.

Employers must also continue to pay the associated Employer National Insurance contributions and pension contributions on subsidised furlough pay from their own funds.

Current Eligibility

The Job Retention Scheme remains open to all employers with a UK bank account and UK PAYE schemes. Neither the employer nor the employee needs to have previously used the Scheme.

The Government expects that publicly funded organisations will not use the Scheme, as has already been the case, but partially publicly funded organisations may be eligible where their private revenues have been disrupted.

Eligibility from 1 May 2021

For periods from 1‌‌ ‌May 2021 onwards, employers have been able to claim for eligible employees who were on employers’ PAYE payrolls on 2 March 2021. This means they must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021, notifying HMRC of the earnings for that employee.

How and when to claim

Employers will need their Government Gateway user ID and password they received when they registered for PAYE online. If you do not finish your claim in one session, you can save a draft. You must, however, complete your claim within seven days of starting it.

All claims for periods from 1 July 2020 to 31 October 2020 had to be submitted by 30 November 2020.

Claims from 1 November 2020 have to be submitted by 11.59pm 14 calendar days after the month you’re claiming for. If this time falls on the weekend then claims should be submitted on the next working day.  See this timetable published by the Government:

Claim for furlough days in:Claim must have been submitted by:
November 202014 December 2020
December 202014 January 2021
January 202115 February 2021
February 202115 March 2021
March 202114 April 2021
April 202114 May 2021
May 202114 June 2021
June 202114 July 2021
July 202116 August 2021
August 202114 September 2021
September 202114 October 2021

For the latest informtion on the Scheme see here 

For information on how to claim, see here

Job Support Scheme – postponed

In his Winter Economy Plan statement, the Chancellor announced a replacement for Coronavirus Job Retention Scheme in the form of the Job Support Scheme (JSS). Given the Job Retention Scheme has now been extended till 30 June 2021, the Job Support Scheme is unlikely to be introduced until later in 2021.   For more information about what had been intended for the Scheme see here.

Job creation grants

On 8 July 2020, the Chancellor’s Summer Statement included a number of grants designed to encourage job creation and protection – particularly for young people.

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 covers 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). See more information here.

There is also £1,500 per job placement available for setup costs, support and training.

Funding is available following a successful application process. Previously, employers could only apply directly for a minimum of 30 job placements. Smaller organisations had to partner with other organisations to reach the minimum number and organisations, like Chambers of Commerces, co-ordinated partnerships to help these businesses utilise the scheme.

From 3 February 2021 the system changed, with the Government removing the minimum requirement of 30 vacancies for businesses to apply directly. To ensure all job placements continue to be of a high quality, the Government will apply rigorous checks on training support and finances.  See here

Employers can also choose to apply through a Kickstart gateway, including those supporting sole traders.  Kickstart gateways already working with the scheme can continue to add more employers and job placements to their grant agreement.

Information about applying for the grant can be found here.

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. For more information see here.

Payments for employers who hire new apprentices

From 1 August 2020 to 31 March 2021, employers in England are able to apply for a payment of £2,000 for each new apprentice they hire aged under 25, and a £1,500 payment for each new apprentice they hire aged 25 and over. 

These payments are in addition to the existing £1,000 payment the Government already provides for new 16-18-year-old apprentices, and any of those aged under 25 with an Education, Health and Care Plan. For more information see here.

Note: Employers who wanted to apply for the £2000 payment had to by 30 April 2021

In his Budget on 3 March 2021, the Chancellor indicated the government will pay an employer who hires a new apprentice between 1 April 2021 until 30 September 2021 a higher payment of  £3,000.  The payment is applicable for apprentices of all ages. More detail on the higher payment and claims process has yet to be released.

Business Rates and Grants

All retail, hospitality and leisure businesses will be 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 will get 66% business rates relief for the period 1 July 2021 to 31 March 2022. The relief will be 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.

Nurseries will also qualify for relief in the same way as other eligible properties.

Restart Grants

In his Budget on the 3 March 2021, the Chancellor announced the government will provide restart grants in England of up to £6,000 per premises for non-essential retail businesses and up to £18,000 per premises for hospitality, accommodation, leisure, personal care and gyms.  The grants were launched on 1 April 2021 and eligible businesses can apply via their Local Authority.  For more information see here and here.

Top up grants for businesses affected by the January 2021 national lockdown

On 5 January 2021, the Chancellor announced a grant support package to help businesses affected by the Govermnent’s latest national lockdown restrictions. This included:

These measures were in addition to the previously announced further discretionary grant funding for Local Authorities, the Local Restriction Support Grants worth up to £3,000 a month and the extension of the furlough scheme.

The one-off top-ups were granted to closed businesses as follows:

These sums relate to businesses in England, however the devolved administrations received additional funding to also provide similar support measures.  

The grants are distributed via Local Authorities, see here and here.  The application closing dates for the different grant payment cycles are as follows:

Grant schemeApplication deadline
National lockdown: 5 January 2021 (first payment cycle – 5 January to 15 February)31 March 2021
National lockdown: 5 January 2021 (second payment cycle – 16 February to 31 March 2021)31 May 2021

Local Restrictions Support Grant Schemes

After November’s lock-down the Government announced 3 grant schemes for those businesses affected by the Coronavirus restrictions. 

The grants from these schemes were distributed by Local Authorities.  The closing date for applications to these grant schemes has now passed.

Sector-specific grants

Wet-led pubs

A Christmas Support Payment was instigated by the Government for wet-led pubs (those that predominantly serve alcohol rather than provide food) and have been severely impacted over the festive season due to temporary local restrictions. Eligible businesses may be entitled to a one-off cash grant of £1,000 from their local council in areas under Tier 2 or Tier 3 local restrictions.  For more information and eligibility criteria see here . Note the deadline for applications for the Christmas Support Payment has been extended to 28 February 2021.

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:

Statutory Sick Pay (SSP)

The Coronavirus Statutory Sick Pay Rebate Scheme was announced in the March 2020 Budget as part of a package of support measures for businesses affected by the COVID-19 outbreak. Employers who are eligible will be able to make their claims through a new online service. Accountants and tax agents will also be able to make claims on behalf of employers.  See here.

This scheme will allow small and medium-sized employers, with fewer than 250 employees, to apply to HMRC to recover the costs of paying coronavirus-related SSP. Connected companies and charities can also use the scheme if their total combined number of PAYE employees was fewer than 250 on the 28 February 2020. View the eligibility criteria here.

Employers who qualify will receive repayments at the relevant rate of SSP that they have paid to current or former employees for eligible periods of sickness starting on or after 13 March 2020.

HMRC has released details of what to have ready to make the claim and the records employers must keep.  You can view it here.

By way of a short overview, The Coronavirus Statutory Sick Pay Rebate Scheme repays employers the current rate of SSP that they pay to current or former employees for periods of sickness starting on or after 13 March 2020. If you’re an employer who pays more than the current rate of SSP you can only claim the current rate amount.

The repayment covers up to 2 weeks starting from the first day of sickness, if an employee is unable to work because they either:

Employees do not have to give you a doctor’s fit note for you to make a claim

Since the end of May, employers have been able claim 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. From 26 August, employers could use this scheme to claim for employees who have been notified by the NHS to self-isolate before surgery. 

Those who are not eligible for SSP, for example the self-employed or people earning below the Lower Earnings Limit of £118 per week, can now more easily make a claim for Universal Credit or Contributory Employment and Support Allowance. See more information here

Loans and finance

In December 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 here

From 6 April 2021, eligible businesses can access a new Recovery Loan Scheme – even if they had taken out a loan under the previous Coronavirus business interruption loan schemes.

The Recovery Loan Scheme

A new Recovery Loan Scheme launched on 6 April and will remain open until 31 December 2021, subject to review. It gives businesses of all sizes access to loans and other kinds of finance from £25,000 to £10 million per business.  The government will guarantee 80% of the finance to the lender and, once received, the finance can be used by the businesss for any legitimate business purpose, including growth and investment.

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

Eligibility

Eligible businesses need to be trading in the UK and show that: 

Business that received support under the earlier COVID-19 guaranteed loan schemes are still eligible to access finance under this scheme if they meet all other eligibility criteria. Businesses from any sector can apply, except:

Finance options available

Businesses can borrow:

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 Reovery 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:

To apply

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

The Future Fund

The £500 million Future Fund was delivered in partnership with the British Business Bank. It provided UK-based companies with between £125,000 and £5 million from the Government, with private investors at least matching the Government commitment. The loans automatically converted into equity on the company’s next qualifying funding round, or at the end of the loan if they were not repaid.  The Future Fund closed to applications on 31 January 2021.

Sustainable Innovation Fund

On 27 June the Government announced a new Sustainable Innovation Fund. This £200m fund from the Government was open to companies across the UK who needed urgent financial support to keep their cutting-edge projects and ideas alive. See here.

This funding, delivered through Innovate UK, formed part of the wider £750 million package of grants and loans announced in April 2020 to support innovative firms. The application deadline has now closed.  For the latest Business Innovation funding opportunities and the application process, see here.

Previous Government-backed Business Interruption Loans

Previous Government-backed loan support for businesses were delivered through four routes.  All these loan schemes have now closed to new applicants.

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 will take into account submitted 2019-20 tax returns. This means the self-employed may be able to claim, even if they were not eligible for previous grants. 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 SEISS grant

The closing date for the fourth grant has now passed (1 June 2021).  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 online claims service for the fourth grant has closed.

The fifth SEISS grant

There will be a fifth and final SEISS grant covering May to September 2021. The amount of the fifth grant will be determined by how much a self-employed business’ turnover has been reduced.

The grant is taxable and will be paid out in a single instalment. Detailed guidance for claiming the grant is available here.

The grant will be 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 will be worth 30% of three months average trading profits and capped at £2,850.

To qualify for the grant applicants must:

Note: HMRC will first look at your 2019 to 2020 Self Assessment tax return and your trading profits must be no more than £50,000 and at least equal to your non-trading income. If you’re not eligible based on your 2019 to 2020 tax return, they will then look at the tax years 2016 to 2017, 2017 to 2018, 2018 to 2019 and 2019 to 2020.

To help your claim:

Applicants must keep evidence that shows how your business has been impacted by coronavirus resulting in less business activity than otherwise expected.  HMRC expects applicants to make an honest assessment about whether they reasonably believe their business will have a significant reduction in profits.  It is investigating and clamping down on assessments and applications which it regards as false or fraudulent. For more information on how to prepare for your claim, see here.

Other points to bear in mind

It is intended the application system for the fifth grant will open from late July.  

As was the case with the previous grants, a self-employed person’s accountant, tax agent or adviser cannot make the grant claim on their behalf. A self-employed person must make the claim themself. Do get in touch with your Shipleys contact for advice ahead of making the submission.

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 this article.

For the latest information on the SEISS, see here

If people have only just started out as a self-employed person and haven’t completed a tax return yet, they will not be able to benefit from the Scheme and are directed to make use of the new welfare arrangements, such as Universal Credit. See here.

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 here.

Support for Exporters

The Government has released guidance for UK businesses trading internationally.  See more here

In particular, financial support is available through UK Export Finance (UKEF).  This organisation works with banks and insurance brokers to help companies of all sizes fulfil and get paid for export contracts. It provides guarantees, loans and insurance on behalf of the Government that can protect UK exporters facing delayed payments or transit restrictions.

Help from UKEF includes:

To find out if UKEF covers your region, email customer.service@ukexportfinance.gov.uk

Time to pay arrangement for outstanding tax liabilities

HMRC has a set up a phone helpline to support businesses and self-employed people concerned about not being able to pay their tax due to coronavirus. SME businesses have now started getting support to delay payment of their VAT and PAYE liabilities.

For those who are unable to pay due to coronavirus, HMRC will discuss your specific circumstances to explore:

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 do not pay in full or make an arrangement to pay by 30 June 2021. See: here.

Businesses on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme can also now join the new payment scheme (from 10 March 2021).  See here

Find out what you need to do now the deferral period has ended.  See here.

The VAT Payments on Account Scheme works on an estimation of historic figures.  Given the Coronavirus crisis, businesses may find their true liability has currently reduced.  We have written an overview on the options to businesses faced with this situation. See here.

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 here

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 has announced it is providing all MTD businesses with more time to put in place digital links between all parts of their functional compatible software. This means that all businesses now have until their first VAT return period starting on or after 1 April 2021 to put digital links in place.

So any accounting-related software (for example a hotel booking system that produces invoices to a customer) must have working digital links to the business accounting system by then.

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 here

Self-Assessment Payments 

On 25 January 2021 HMRC announced that those taxpayers who could not file their self-assessment tax return by the 31 January 2021 deadline would not receive a late filing penalty if they file online by 28 February. They then announced on 19 February that taxpayers will not be charged a 5% late payment penalty if they pay their tax or set up a payment plan by 1 April 2021. See here.

It’s important to note that only the penalty has been temporarily frozen and interest will continue to be charged from 1 February on any outstanding tax liabilities. For more information, see here.

HMRC is also reminding people that taxpayers who cannot afford to pay their tax bill on time can apply online to spread their bill over up to 12 months.  Eligibility criteria apply and for more information see here.

Background

The Self-Assessment payments which were due on the 31 July 2020 were initially deferred until 31 January 2021.  This measure also applied to anyone who was due to pay their second Self-Assessment payment on account on 31 July 2020.  You did not need to tell HMRC that you were deferring your payment on account. Also those who could still make the payment by 31 July 2020 as normal were encouraged to do so.

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.

You can read more here and here.

Companies House

From 25 March 2020 the Government announced businesses would have an additional 3 months to file accounts with Companies House, to help companies avoid penalties as they dealt with the impact of COVID-19. 

On 25 June 2020, the Corporate Insolvency and Governance Act 2020 received royal assent. The Act granted automatic extensions for filing deadlines between 27 June 2020 and 5 April 2021 to relieve the burden on companies during the coronavirus (COVID-19) pandemic and allow them to focus all their efforts on continuing to operate. Automatic extensions were granted for accounts, confirmation statements, event-driven filings and mortgage charges.

The automatic extensions granted by the Act came to an end on 5 April 2021.After this date, you will need to file your documents by your usual deadlines

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 here.

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 here  and here

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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