Covid-19

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NEWS & UPDATES IN THE ACCOUNTING WORLD

Coronavirus (CV19) – Financial support for individuals and small/medium sized businesses in England

 

THIS GUIDANCE IS CHANGING AS MORE DETAIL BECOMES AVAILABLE (updated 07/02/2021)
Next Chancellor review due on 15/02/2021

 

Here is a list of the main categories of financial support. It is not exhaustive.

It should help as a checklist and lead you to the correct place with official guidance.

 

FOR INDIVIDUALS (for businesses see lower down)
https://www.gov.uk/coronavirus

 

  • Job retention scheme (Employees) (CJRS) ‘Furloughment’ – enables employer’s to recover up to 80% of qualifying employee’s wages, capped at £2,500/month. The original CJRS scheme meant from 10th June no employee can be placed on furlough for the first time.

NEW! – NOW EXTENDED TO THE END OF APRIL (per Chancellor 12/12/2020) – Firms can call back employees part time, but employers can once again claim 80% of wages in relation to hours not worked (unlike recent restrictions) up to a maximum of £2,500/month. Eligible employees must have had a payroll submission made to HMRC before midnight on 30th October 2020. The scheme ends at the end of April, but is subject to ongoing review.

 

  • SUSPENDED – Job support scheme (JSS) – Per previously released guidance - This is the replacement for what was known as the ‘furlough scheme’ and is open to employees who had a payroll submission made prior to 24th September 2020. Like the furlough scheme, it is claimable by employers and although it starts from 1st November 2020 businesses can claim relief from 8th December 2020. The scheme is broken into 2 parts:
    - JSS OPEN – This is for employees of businesses which are open, but working at reduced capacity. Employees must be working for a minimum of 20% of their usual hours and be paid for those hours. With regards to the unworked hours, the employee will receive 66.67% of their usual pay. This will be made up of a maximum £125 from the employer and 61.67% from the government (refunded to the business). This leads to employees receiving 73% of their wages, where they to earn £3,125 a month or less.
    - JSS CLOSED – This is for employees of businesses legally required to close their businesses as a result of government imposed restrictions. Employees will receive 66.67% of their normal pay to a maximum reimbursement of £2,083.33 per month although their employer can choose to pay more if they wish.
    https://www.gov.uk/government/publications/the-job-support-scheme/the-job-support-scheme#how-to-claim

 

  • Statutory sick pay (SSP) - If you are sick and cannot work for whatever reason you can claim SSP of £95.85 per week for up to 28 weeks. With regards to CV19, you can claim SSP if you cannot work as a result of the health condition of yourself, a person in a shared home, or a person in your ‘support bubble’ where they are showing symptoms. You can also claim if you have been advised to self-isolate by a health professional/NHS whether their advice is because you are sick, a potential carrier, or advised to ‘shield’ due to high risk status or ahead of surgery.
    Employers can choose to continue to pay you greater amounts depending on agreements with them. For CV19 claims you should obtain an isolation note from NHS111 https://111.nhs.uk/covid-19/, or the shielding letter from your GP and give it to your employer so they can recover the payments from the government.
    https://www.gov.uk/statutory-sick-pay

  • NOW ENDED - Self-assessment payment on account deferral - If you have a tax liability payment in July you can choose to automatically defer payment until 31st January. Interest applies after that date. If you are unable to pay by the 31st January in full and your liability is less than £30,000 then HMRC’s ‘time to pay’ options may be useful to you.
    https://www.gov.uk/guidance/defer-your-self-assessment-payment-on-account-due-to-coronavirus-covid-19

  • Difficulties paying tax liabilities - HMRC acknowledge the exceptional times and will discuss payment plans with you. You MUST contact them as quickly as possible as they are less obliging after a debt is over 60 days old!
    https://www.gov.uk/difficulties-paying-hmrc

  • NEW! - Self-assessment deadline extension – For the first time ever, HMRC extended the deadline for self-assessment tax return submissions from 31st January to 28th February. This means no late filing penalty for anyone filing their return prior to 28th February, but does not extend the deadline for payment of liabilities or interest payable thereon.

  • Universal credit - A means-tested benefits option which applies to assist with living costs and is paid monthly. Online calculator good place to start, especially if already receiving some type of tax credit.
    https://www.gov.uk/benefits-calculators
    https://www.gov.uk/universal-credit

  • Essential bill payment holidays (mortgage, rent, electricity etc) - The government has an agreement with mortgage providers and suppliers of essential utilities services to assist with those struggling to pay at this time. For the more serious supplies, such as rent, mortgages and other forms of loan repayments you must make your application for assistance before 31/03/2021. Others supplies appear more flexible but, as ever with topics of this nature, act as soon as you think you have a problem.

There are many types of supply so please refer to the link below for specific guidance on the supply you have difficulty with.

Payment holidays may affect your credit rating or make it harder to obtain finance from elsewhere so do check this with your lender/supplier or give thought to what other assistance you may need.
https://www.gov.uk/government/news/advice-for-people-who-are-struggling-to-pay-essential-bills-because-of-coronavirus
https://www.fca.org.uk/consumers/coronavirus-information-personal-loans-credit-cards-overdrafts

 

  • NOW ENDED, but . . .  - ‘Eat out to help out’ scheme – Although this has now ended some businesses have decided to continue the offering at their own expense.
    (Previous guidance: This will ONLY apply to eligible eateries who have applied to be part of the scheme. Don’t think it applies everywhere! An automatic 50% discount to a maximum of £10 per head will be applied to your bill for eating out Monday-Wednesday throughout the month of August. There is no limit to how many times this can be used . . . so you may want to make 3 bookings and move a few doors down the high street between courses!)
    https://www.gov.uk/guidance/get-a-discount-with-the-eat-out-to-help-out-scheme

  • Green Homes Grant Scheme - Vouchers of up to £5,000 (£10,000 for the poorest households) will be available to fund two thirds of qualifying energy improvement work being done. The offering also applies to landlords so costly energy consumption of tenants is also improved. Vouchers must be applied for and improvements completed by 31/03/2021
    https://www.gov.uk/guidance/apply-for-the-green-homes-grant-scheme

 

 

FOR BUSINESSES

https://www.gov.uk/government/collections/financial-support-for-businesses-during-coronavirus-covid-19

https://www.gov.uk/coronavirus/business-support?priority-taxon=774cee22-d896-44c1-a611-e3109cce8eae

 

  • SUSPENDED! – Job support scheme (JSS) – Per previously released guidance - This is the replacement for what was known as the ‘furlough scheme’ and is open to employees who had a payroll submission made prior to 24th September 2020. Like the furlough scheme, it is claimable by employers and although it starts from 1st November 2020 businesses can claim relief from 8th December 2020. The scheme is broken into 2 parts:
    - JSS ‘OPEN’ – This is for employees of businesses which are open, but working at reduced capacity. Employees must be working for a minimum of 20% of their usual hours and be paid for those hours. With regards to the unworked hours, the employee will receive 66.67% of their usual pay. This will be made up of a maximum £125 from the employer and 61.67% from the government (refunded to the business). This leads to employees receiving 73% of their wages, where they to earn £3,125 a month or less.
    - JSS ‘CLOSED’ – This is for employees of businesses legally required to close their businesses as a result of government imposed restrictions. Employees will receive 66.67% of their normal pay to a maximum reimbursement of £2,083.33 per month although their employer can choose to pay more if they wish.
    https://www.gov.uk/government/publications/the-job-support-scheme/the-job-support-scheme#how-to-claim

 

  • Business rates relief - Similarly qualifying businesses will not have to pay business rates for the 2020-21 financial year. Local Authorities will automatically reduce this to zero, but check if you’ve not heard.
    https://www.gov.uk/apply-for-business-rate-relief

  • NOW ENDED - Small business grant fund (SBGF) - All businesses in England in receipt of small business rates relief or rural rates relief entitled to a grant of £10,000. Notice should have come from local authorities, but check if you’ve not heard. This relief ended on 5th October 2020
    https://www.gov.uk/guidance/check-if-youre-eligible-for-the-coronavirus-small-business-grant-fund

  • Job retention scheme (Employees) (CJRS) (‘furloughment’ – enables employer’s to recover up to 80% of qualifying employee’s wages, capped at £2,500/month. The original CJRS scheme meant from 10th June no employee can be placed on furlough for the first time)

https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme
Extension (per Chancellor 29/05/2020) – The extension has built-in reductions which affect employers. Specifics to be announced later, but broadly:
- 1st July - Firms can call back employees part-time (previously disallowed) and be responsible for their pay while in work. Grant covers the rest. Employees subject to a claim must have been successfully furloughed at some stage since 1st March.
- 1st August - Employees continue to return to work, but grants no longer cover Employer’s National Insurance or Pension Contributions which must now be paid by the employer. 80% of wages still paid by grant and capped at £2,500
- September - Grant further reduces to 70% of wages, capped at £2,187.50 –employer pays other 10%
- October - Grant further reduces to 60% of wages, capped at £1,875 – employer pays other 20%
This grant scheme ends on 31st October 2020
NEW! – NOW EXTENDED TO THE END OF APRIL (per Chancellor 12/12/2020) – (Firms can call back employees part time, but employers can once again claim 80% of wages in relation to hours not worked (unlike recent restrictions) up to a maximum of £2,500/month. Eligible employees must have had a payroll submission made to HMRC before midnight on 30th October 2020. Employer’s still pay employer’s national insurance and pension contributions. The scheme essentially operates in the same way it did during August and ends at the end of April, but is subject to ongoing review)

https://www.gov.uk/government/news/chancellor-extends-self-employment-support-scheme-and-confirms-furlough-next-steps

 

A NOTE ON LOANS: When assessing loan support it is important to ask yourself the question – Am I in difficulty as a result of CV19, or was I in difficulty anyway? This is a common theme amongst the questions connected with obtaining financial assistance . . . .

  • EXTENDED - Loan type 1 - Business Interruption Loan Scheme (CBILS) - Uncapped and more akin to normal borrowing, but the government guarantees 80% of the loan. Interest free for 12 months. Make the application through your bank. Scheme closes on 31/03/2021
    https://www.gov.uk/guidance/apply-for-the-coronavirus-business-interruption-loan-scheme

  • EXTENDED - Loan type 2 – Bounce Back Loans (BBL) - Capped at 25% of the 2019 calendar year turnover, but the government guarantees 100% of the loan. Interest free for 12 months, then typically 2.5% over 6 years thereafter. Prior to repayments starting you can now apply to adopt an interest only option, extend to 10 years, or pause repayments if you have already made 6 repayments.
    Very easy application form and can apply through 11 designated banks. Scheme closes on 31/03/2021
    https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan

  • EXTENDED - VAT rate reduction - Although primarily aimed at consumers this could assist your business if you are in the designated sector of hospitality and recreation. This is a temporary reduction to the rate of VAT from 20% to 5% on certain hospitality sectors. The VAT cut will apply to eat-in or hot takeaway food and non-alcoholic drinks from restaurants, cafes and pubs, accommodation in hotels, B&Bs, campsites and caravan sites, and attractions like cinemas, theme parks and zoos. The reduction will apply from 15/07/2020 to 31/03/2021.
    Whether the whole reduction to VAT will be passed on to the consumer is up to the establishment. The concept is to stimulate trade and that can be done by either reducing prices or increasing profit margins to enable business survival and support for things like wages.
    (If you are using the flat rate scheme for VAT and operate in one of these sectors then your flat rate has been temporarily adjusted)
    https://www.gov.uk/government/publications/revenue-and-customs-brief-10-2020-temporary-reduced-rate-of-vat-for-hospitality-holiday-accommodation-and-attractions/guidance-on-the-temporary-reduced-rate-of-vat-for-hospitality-holiday-accommodation-and-attractions

  • NOW ENDED, but . . .  - ‘Eat out to help out’ scheme – Although this has now ended some businesses have decided to continue the offering at their own expense.
    (Previous guidance: This will ONLY apply to eateries who have applied to be part of the scheme. If you want to be on the scheme you will need to apply for it. Once your application has been accepted an automatic 50% discount to a maximum of £10 per head can be applied to your customer’s bill for eating out Monday-Wednesday throughout the month of August. There is no limit to how many times this can be used. The discount is reclaimable from the government. One of the conditions to be eligible is you need to have applied to your local authority to operate as a food business before the end of 7th July 2020)
    https://www.gov.uk/government/publications/get-more-information-about-the-eat-out-to-help-out-scheme/get-more-information-about-the-eat-out-to-help-out-scheme
     

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