As uncertainty around COVID-19 continues and the colder months draw in, the next six months will be a very difficult time for businesses and their workers across Lincolnshire. Fortunately, more government support has been announced, with major changes set to begin almost immediately.
For self-employed individuals, the Self Employment Income Support Scheme (SEISS) will offer further support until April 2021. The grant will be available to self-employed individuals who are currently eligible for SEISS and are actively continuing to trade but facing reduced demand due to COVID-19.
The extension comes in the form of two taxable grants: One which will cover a three month period from the start of November to the end of January, funding 20% of an individual’s average monthly trading profits, paid out in a single instalment covering three months’ worth of profits. This will be 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 although the level of this support is yet to be announced.
The government will also 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 HMRC’s ‘Time to Pay’ self-service 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.
The tourism and hospitality industry is very important in Lincolnshire, and the Chancellor announced that the government will continue to support many businesses in these sectors by extending the temporary reduced rate of VAT from 12 January to 31 March 2021.
As well as these larger announcements, a range of measures are being introduced to help businesses access financial assistance during COVID-19, some of which will be explained in more detail in 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.
Pay as you Grow has also been announced to give businesses the flexibility to pay back loans as and when business improves. Businesses that have borrowed under the BBLS are now able to repay their loan over a period of up to ten years and businesses can also switch to interest only periods for up to six months or pause their repayments for up to six months.
A new VAT deferral payment scheme has also been announced, with businesses which deferred their VAT payments due in March to June 2020 now having the option to spread their payments over the financial year 2021-22. Businesses can also choose to make 11 equal instalments rather than paying in full at the end of March 2021.
With the support for businesses changing regularly, it’s important to understand the right path for you. If you would like more information, visit our COVID-19 knowledgebase or contact our team for expert professional advice.