The Government recently announced their next set of measures to support business through the pandemic during the winter period.
It has been a tough time for most businesses and we wanted to ensure you are accessing the support that is available. Here we have summarised the initiatives you may be able to utilise to improve your cashflow, retain staff or grow your team.
We have added links for you to find further information on the topics which are relevant to your business.
Self Assessment tax bill – time to pay increased
From 1 October, the limit for time to pay, the online payment plan service used to set up instalment arrangements for paying tax liabilities, is increased to £30,000, up from £10,000.
The increased £30,000 threshold follows the Chancellor of the Exchequer’s announcement on 24 September to increase support for businesses and individuals through the uncertain months ahead
Self-assessment tax due on 31 January 2021 may be spread over 12 interest-free payments.
Payment of VAT
On 24 September 2020, the Chancellor announced that businesses who deferred VAT due from 20 March to 30 June 2020 will now have the option to pay in smaller payments over a longer period.
Instead of paying the full amount by the end of March 2021, you can make smaller payments up to the end of March 2022, interest free.
You will need to opt-in to the scheme, and for those who do, this means that your VAT liabilities due between 20 March and 30 June 2020 do not need to be paid in full until the end of March 2022.
Those that can pay their deferred VAT can still do so by 31 March 2021.
VAT reduction extended
The temporary reduced (5%) rate of VAT for businesses in the hospitality sector will be extended until 31 March 2021
Job Support Scheme
The Coronavirus Job Retention Scheme (CJRS) will end on 31 October 2020.
The new Job Support Scheme starts on 1st November and will provide funding for employers who are able to retain employees but on shorter hours. The scheme will initially run for six months from November
The Job Support Scheme is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce. The scheme will open on 1 November 2020 and run for 6 months.
The company will continue to pay its employee for time worked, but the cost of hours not worked will be split between the employer, the Government (through wage support) and the employee (through a wage reduction), and the employee will keep their job.
The employee must work at least 20% of their usual hours. For every hour not worked, the Government will pay 62% and the employer will both pay 5% of usual wage for that employee. Employees take home at least 74% of pay for working minimum of 20% of hours.
Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.
Job Retention Bonus
The Job Retention Bonus is a £1,000 one-off taxable payment to you (the employer), for each eligible employee that you furloughed and kept continuously employed until 31 January 2021.
You’ll be able to claim the bonus between 15 February 2021 and 31 March 2021. You do not have to pay this money to your employee.
You can claim the bonus if you’re an employer who has furloughed employees and made an eligible claim for them through the Coronavirus Job Retention Scheme. Your employee must have been eligible for the Coronavirus Job Retention Scheme grant for you to be eligible for the bonus.
You can still claim the bonus if you make a claim for that employee through the Job Support Scheme.
To be eligible for the bonus you must make sure that your employees have been paid at least the minimum income threshold.
To meet the minimum income threshold, you must pay your employee a total of at least £1,560 (gross) throughout the tax months:
- 6 November to 5 December 2020
- 6 December 2020 to 5 January 2021
- 6 January to 5 February 2021
You must pay your employee at least one payment of taxable earnings (of any amount) in each of the relevant tax months.
Find out the full details here https://www.gov.uk/guidance/check-if-you-can-claim-the-job-retention-bonus-from-15-february-2021
Bounce Back Loans
The repayment terms of bounce back loans and other coronavirus support loans are to be extended to help businesses with cashflow. In particular, a new Pay As You Grow scheme will allow businesses with bounce back loans to extend the term of the loan from six to 10 years.
If you haven’t applied you have until Monday 30 November 2020 to apply
- You can borrow between £2,000 and £50,000. The amount is capped at 25% of your total turnover (usually for calendar year 2019, or new businesses can estimate).
- No interest will be charged, and no repayments will need to be made in the first 12 months.
- After 12 months, all banks will charge a fixed 2.5% annual interest.
- You can repay the loan early without penalty.Or with some banks you can part-repay or overpay.
- It has just been announced that the loans can now last for 10 years. One year interest free and the rest at 2.5%.
Employing young people
There are currently 2 schemes available to support young people in to work. If you are interested in a employing a young person check out the apprenticeship scheme or kick start scheme or you can use both.
- Apprenticeship scheme
If you are interested in employing younger staff, consider an apprentice or the kick start scheme
- £1,500 for every out-of-work 16-24-year-old given a ”high quality” six-month work placement
- £2,000 for every under-25 apprentice taken on until the end of January, or £1,500 for over-25s
- Kick Start Scheme
The Kickstart Scheme provides funding to employers to create new 6-month job placements for young people who are currently on Universal Credit and at risk of long-term unemployment.
This is part of the government’s Plan for Jobs and aims to create hundreds and thousands of new, fully funded jobs across England, Scotland and Wales. The first placements are likely to be available from November.
Funding will cover for each job placement:
- 100% of the relevant National Minimum Wage for 25 hours a week
- the associated employer National Insurance contributions
- employer minimum automatic enrolment contributions
There will also be extra funding to support young people to build their experience and help them move into sustained employment after they have completed their Kickstart Scheme funded job.
The scheme is aimed at employers who want to recruit 30 or more staff. However Bedfordshire Chamber of Commerce, Wenta and Hertfordshire Chamber of Commerce are working in partnership in order to become an ‘intermediary’ for small businesses in Hertfordshire, Bedfordshire and North London to access the Government Kickstart Scheme.
If you’re a Hertfordshire, Bedfordshire or North London business, you can now register your interest for this scheme here
Before applying, please read the below eligibility requirements.
The Kickstart Scheme job placements must:
• Be for a period of 6 months
• Be for at least 25 hours per week (employers can pay for more hours)
• Be paying at least the National Minimum Wage through PAYE (employers can pay more if they wish to do so)
• Be paying the statutory employer duties for the health, safety and welfare for young people, National Insurance and pension contributions
• Include support for young people to help them get work after they finish their Kickstart Scheme job
• Not replace any existing or planned jobs
• Not cause existing employees or contractors to lose or reduce their employment
Self Employed Income Support Scheme ( SEISS)
There has been a grant extension is for self-employed individuals who are currently eligible for the Self-Employment Income Support Scheme and are actively continuing to trade, but are facing reduced demand due to coronavirus (COVID-19).
To be eligible for the grant extension self-employed individuals, including members of partnerships, must:
- currently be eligible for the the Self-Employment Income Support Scheme (although they do not have to have claimed the previous grants)
- declare that they are currently actively trading and intend to continue to trade
- declare that they are impacted by reduced demand due to coronavirus in the qualifying period (the qualifying period for the grant extension is between 1 November and the date of claim)
The extension will provide two grants and will last for six months, from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a three-month period.
The first grant will cover a three-month period from the start of November until the end of January. HMRC will provide a taxable grant covering 40 per cent of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £1,875 in total.
HMRC are providing broadly the same level of support for the self-employed as is being provided for employees through the Job Support scheme.
The second grant will cover a three-month period from the start of February until the end of April. HMRC will review the level of the second grant and set this in due course.
The grants are subject to Income Tax and National Insurance Contributions.
HMRC will provide full details about claiming and applications in guidance on GOV.UK in due course.
Most of this information has been taken directly from the Government website.Every business has a unique set of circumstances it is important to claim only for what you are entitled to. If we can help and advise you about any of the support on offer, please do get in touch.