Guidance from the government continues to evolve, and there have been changes to the Winter Support Schemes. Initial information has been announced but the government has stated that they will issue further guidance and details in due course.
Furlough Scheme
- The scheme ends on 31 October 2020 with all claims required to be made by 30 November 2020.
Job Support Scheme – for those businesses open but experiencing difficulty
- It will replace the Furlough Scheme and commence from 1 November 2020 and run to 30 April 2021.
- Employers will continue to pay the wages of staff for the hours they work.
- For the hours not worked, the government will pay 61.67% of the hours not worked capped at £1,541.75 per month and the employer will pay 5% of the hours not worked up to £125 per month.
- Employers will be required to cover Employers National Insurance and pension contributions.
- Employers can top up over the 5% minimum contribution of unworked hours at their discretion.
- Employees must be working at least 20% of their usual hours. The level of grant will be calculated based on employee’s usual salary.
- The Job Support Scheme will be open to businesses across the UK even if they have not previously used the furlough scheme.
- Employees are eligible if they were on the employers PAYE payroll on or before 23 September 2020.
- Employees will be able to move on and off the scheme and do not have to have the same pattern each month but each short time working arrangement must be for at least seven consecutive days.
Job Support Scheme – for those businesses required to close
- Businesses required to close can utilise the expanded Job Support Scheme also to commence from 1 November 2020 to 30 April 2021.
- Two-thirds of an employee salary will be paid (67%) by the government capped at £2,083.33 per month.
- Employers will be required to cover Employers National Insurance and pension contributions.
- Employers do not have to contribute towards wages but can top up if they want at their discretion.
- Only applies if the business is forced to close due to local restrictions and the employees must be off work for a minimum of seven consecutive days.
- The Job Support Scheme will be open to businesses across the UK even if they have not previously used the furlough scheme.
- Employees are eligible if they were on the employers PAYE payroll on or before 23 September 2020.
Job Retention Bonus
- Able to claim between 15 February 2021 and 31 March 2021.
- The bonus is a £1,000 non-taxable payment to the employer (not required to be paid to the employee).
- Can claim for each eligible employee that was furloughed and kept continuously employed until 31 January 2021.
- You can still claim if the employee is then also claimed for, through the Job Support Scheme.
- You cannot claim if the employee or the employer has served notice of their employment contract on 31 January 2021.
- Employees must have been paid the minimum income threshold (gross) of £1,560 from 6 November 2020 to 5 February 2021 (at least one payment each tax month).
Self-Employment Income Support Scheme Extension
- Must be eligible for current Self Employment Income Support Scheme (but do not have to have claimed).
- Must declare they are actively trading and intend to trade.
- Declare that they are impacted by “reduced demand” due to Coronavirus in the qualifying period (from 1 November 2020). Note the change in criteria from the previous scheme.
- There are two grants available for 6 months.
- The first grant will cover three months from 1 November 2020 to 31 January 2021.
- HMRC will pay 40% of average monthly trading profits capped at £3,750 for this period.
- The second period to 30 April 2021 grant level is yet to be determined.
Business Grants
- Businesses required to close by law could be eligible for up to £3,000 per month under the Local Restrictions Support Grant Scheme.
- The Businesses in high alert level areas which are not legally closed but which are severely impacted. Grants are up to £2,100 per month.
- The grant amount is relevant to the rateable value of the property the business occupies.
- It is up to Local Authorities to determine eligibility for grant funding and precise funding is allocated so please contact your local authority.
Tax cuts and deferrals
- The temporary 15% VAT cut for the tourism and hospitality sectors has been extended to the end of March 2021.
- Businesses who deferred their VAT liabilities will be given more breathing space through the New Payment Scheme, which gives them the option to pay back via instalments up to March 2022.
There will be an opportunity to opt into a formal scheme to make the payment arrangement. Details are to follow in the coming months.
- Self-Assessment taxpayers will be able to benefit from a separate additional 12-month extension from HMRC on the “Time to Pay” self-service facility, if their total liability is less than £30,000. For greater amounts, you will need to speak to the helpline and negotiate a time scale.
Giving businesses flexibility to pay back loans
- Businesses who took out a Bounce Back Loan can utilise a new Pay as You Grow flexible repayment system. This will provide flexibility for firms repaying a Bounce Back Loan.
- This includes extending the length of the loan from six to ten years. Interest-only periods of up to six months and payment holidays will also be available to businesses.
- Those who obtained Coronavirus Business Interruption Loans can also extend the length of loans from a maximum of six to ten years if it will help businesses to repay the loan.
- New applications for the government’s coronavirus loan schemes and bounce back loans can be made up to the end of November 2020.
If you have questions, we are happy to speak to you, so please feel free to contact one of our team. Please bear with us whilst we work remotely and are able to call or email back to your enquiry.