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COVID-19
Knowledgebase

Duncan & Toplis is here to help and support you through the ongoing challenges presented by the coronavirus pandemic. Whilst this is an anxious time for many, it’s important to know that there is help available.

We are summarising the measures, including eligibility requirements, as they are announced and all details can be found here in our COVID-19 Knowledgebase.

Winter Economy Plan

On Thursday 24 September, Chancellor Rishi Sunak delivered a statement outlining further measures to support businesses and workers for the next six months.

As expected, the furlough scheme is still set to finish at the end of October, however the Chancellor has provided clarity for SMEs, large businesses and self-employed individuals needing assistance as the economy adapts to the challenges that COVID-19 poses.

Job Support Scheme

The Coronavirus Job Retention Scheme (CJRS), which was designed to prevent mass redundancies during lockdown, will continue until the end of October as planned. The Job Support Scheme, which differs from the CJRS, will begin from 1 November 2020 and continue for six months to support viable UK employers who are facing lower demand to help them keep their employees part of the workforce.

Employees will need to work a minimum of 33% of their usual hours, and for every hour not worked the employer and government will each pay one third of the employee’s usual pay.

The government contribution will be capped at £697.92 per month. Employees using the scheme will receive at least 77% of their pay, where the government contribution has not been capped. The employer will be reimbursed in arrears for the government contribution. Any employees set to be moved on to the Job Support Scheme cannot be on a redundancy notice.

Eligibility for the Job Support Scheme has been set out to include:

  • Any employers with a UK bank account and UK PAYE scheme
  • All small and medium sized enterprises (SMEs)

Large companies may also benefit from the scheme, but they will be required to demonstrate that their business has been adversely affected by COVID-19, and the government has emphasised that it expects that large employers will not be making capital distributions such as dividends while using the scheme.

Self-Employment Income Support Scheme (SEISS)

An SEISS grant extension has been announced to reflect the continued impact that COVID-19 has had on the self-employed, offering further support for individuals. This will provide critical support to the self-employed, lasting for six months from November 2020 to April 2021. 

The grant will be available to self-employed individuals who are currently eligible for SEISS and are actively continuing to trade but are facing reduced demand. The extension comes in the form of two taxable grants:

  • The first grant will cover a three month period from the start of November to the end of January – this initial grant will cover 20% of an individual’s average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, capped at £1,875 in total.
  • The second grant will cover a three month period from the start of February to the end of April – the level of this second grant will be reviewed in due course.

The Chancellor also announced that the government will give more time to self-employed individuals and other taxpayers to pay taxes that are due in January 2021, building on the self-assessment deferral provided in July 2020. 

Taxpayers with up to £30,000 of self-assessment liabilities due will be able to use HM Revenue & Customs’ self-service ‘Time to Pay’ facility to secure a plan to pay over an additional 12 months. This means that self-assessment liabilities due in July 2020 will not need to be paid in full until January 2022. Any self-assessment tax payer not able to pay their tax bill on time or unable to use the online service can continue to use the ‘Time to Pay’ helpline to agree a plan.

Loan extensions and Pay as you Grow

A range of measures were introduced to help businesses access financial assistance during COVID-19 and the government has now outlined how these will benefit businesses over the coming months.

Four temporary loan schemes are being extended and businesses will now have until 30 November 2020 to apply for the Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) and Future Fund.

The BBLS provides loans of amounts between £2,000 and £50,000, capped at 25% of turnover, with a 100% government guarantee to the lender to provide them with the confidence to support businesses of all sizes. Under the new Pay as you Grow options as outlined below, borrowers will be offered the choice of more time and additional flexibility for repayments. 

The CBILS provides loans of up to £5 million with an 80% government guarantee to the lender. The government does not charge businesses for this guarantee and also covers the first 12 months of interest payments and fees. The Chancellor also announced that CBILS lenders can extend the term of a loan up to a maximum of ten years. 

An investment scheme for innovative and fast-growing UK based businesses, the Future Fund has provided loans ranging from £125,000 to £5 million which are subject to at least matching funding from private investors. Businesses that have already accessed a Future Fund convertible loan cannot apply for another one.

‘Pay as you Grow’ has also been announced to give businesses the flexibility to pay back loans as and when business improves. The government will give businesses that have borrowed under the BBLS the option to repay their loan over a period of up to ten years. This will reduce their average monthly repayments on the loan by almost half. Businesses will also have the option to switch to interest only periods for up to six-months, for a maximum of three times, or pause their repayments for up to six months. This can only be done once, after making six payments. 

VAT cut for hospitality, leisure and tourism

The hospitality, leisure and tourism industries have been heavily impacted by the loss of vital trade during the summer months. It has been confirmed that the government will continue to support the cashflow and viability of over 150,000 UK businesses and protect 2.4 million jobs by extending the temporary reduced rate of VAT at 5% from 12 January to 31 March 2021. 

This will continue to apply to food and non-alcoholic beverages from restaurants, bars, pubs, coffee shops and similar establishments, as well as the supply of accommodation and admission to attractions across the UK.

VAT Deferral Payment Scheme

Businesses that deferred their VAT payments due in March to June 2020 will have the option to spread their payments over the financial year 2021-22.

Any business that took advantage of the VAT deferral can use the New Payment Scheme and they can choose to make 11 equal instalments during this time rather than paying in full at the end of March 2021. All businesses are eligible, but must opt into the scheme which will be implemented in early 2021.

 

Some elements of business support are devolved and therefore support may differ in Scotland, Northern Ireland and Wales.

For the latest guidance and professional advice, please contact us or speak to your dedicated Duncan & Toplis adviser. 

 

Payroll, HR, COVID-19, VAT, Tax


Duncan & Toplis

Duncan & Toplis was established in 1925 and has 11 offices throughout the East Midlands: in Boston, Grantham, Lincoln, Loughborough, Louth, Melton Mowbray, Newark, Skegness, Sleaford, Spalding and Stamford. The group offers accountancy, tax and business advice, audit and assurance services, HR, Payroll, wealth management, IT services, legal and probate services and provides business turnaround support to SMEs. The business has 413 employees, of whom 65 are currently engaged in professional training.

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