Government Coronavirus Support - the details for you and your business from the 5th November announcement

LWA are fully working during lockdown and we're here to help. Following the weekend's speech from 10 Downing Street, Rishi Sunak has announced (on Thursday 5th November) his plan to support the economy for a further 5 months as we enter another national lockdown in the midst of the second wave of Covid-19 cases. Our blog below details everything you need to know as an individual or business.

CORONAVIRUS JOB RETENTION SCHEME
The Job Support Scheme which should have been effective on 1st November has now been postponed as the CJRS will now be extended until 31st March 2021, however, please note that the current rules detailed below will be effective until 31st January 2021 - the scheme will be reviewed for claims from 1st February 2021 onwards. We have been informed that further details on the extension will be issued on Tuesday 10th November, however below are the details from yesterday's announcement:
  • Overall, the scheme rules will remain the same except where advised differently by the Government. You can see details of the full CJRS rules on Gov.uk here.
  • For claim periods running to January 2021, employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month.
  • The £2,500 cap is proportional to the hours not worked.
  • Employer contributions during the CJRS extension until January 2021 will be the same as in August 2020. This means that for hours not worked by their employee, employers will only be asked to cover employer national insurance contributions (NICS) and employer pension contributions.
  • Employers will have to pay the employee’s wages for the hours they work as normal, as well as employer NICS and employer pension contributions.
  • Claims can be made by employers across the UK that meet the eligibility criteria:
    • Employers do not need to have used the CJRS previously
    • Employers can claim for employees who were employed and on their PAYE payroll on 30 October 2020.
    • The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
    • Employers will have flexibility to use the scheme for employees for any amount of time or shift pattern, furloughing employees on either a full-time or part-time basis, and will be able to vary the hours worked in agreement with the employee.
    • Employees do not need to have been furloughed under the CJRS previously.
  • Previously furloughed employees - For employees that meet the eligibility criteria, and were previously furloughed, employers must use the same calculations for calculating reference pay and usual hours as CJRS.
  • Employees that haven't been furloughed before - For an employee who meets the criteria of the extended scheme but was not previously eligible for CJRS, the alternative calculations of reference pay and usual hours must be used. For all other employees, employers must use the CJRS calculations for calculating reference pay and usual hours.
  • Partially publicly funded organisations may be eligible where their private revenues have been disrupted - all other previous CJRS eligibility requirements still apply to these employers.
  • HMRC will publish details of employers who make claims under the extended CJRS starting from December.
  • Employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer can be re-employed and claimed for. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees.
As the CJRS is now being extended to 31 March 2021, the policy intent of the Job Retention Bonus (JRB) no longer applies and will not be paid in February 2021. The Government has stated that a retention incentive will be deployed at the appropriate time.

SUPPORT FROM LWA FOR OUR PAYROLL SERVICES CLIENTS
We have been able to support our Payroll Services clients throughout the pandemic by calculating and managing their Job Retention Scheme furlough grant claims from HMRC.

If you are currently one of our Payroll Services clients and will be continuing to make furlough workers, then we're here to help - please contact our team on 0161 905 1801.


UPDATE ON SELF-EMPLOYED INCOME SUPPORT SCHEME (SEISS)

Following the uproar after the SEISS extension plans revealed as part of the Winter Economy Plan, Rishi Sunak has also announced further support if you are self-employed and eligible to claim from the SEISS:
  • The third taxable grant that will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus will cover the period from 1st November 2020 to 31st January 2021.
  • It has increased from 55% to 80% of average trading profits, up to a maximum of £7,500.
  • HMRC will pay this grant sooner than planned and before Christmas – the window for claiming a grant will open on 30 November, two weeks earlier than previously announced.
  • An additional grant, which may be adjusted to respond to changing circumstances, will be available for self-employed individuals to cover the period from 1st February to 30th April 2021. Details of this grant have yet to be announced.
As previously with SEISS, LWA or any agent unfortunately won't be able to make the claim on your behalf in accordance with the Government guidelines. It must also be kept in mind that the SEISS grant is taxable so is reported


MORTGAGE SUPPORT
The 6-month mortgage holiday (initially 3) that was due to end on 31st October 2020 has been extended for a further 6 months, however this is mostly applicable if:
  • you have not yet requested a mortgage holiday from your lender
  • you have had your payments deferred already for less than 6 months, in which case you can extend your mortgage holiday until you reach the 6-month limit
  • you are in genuine financial difficulty as lenders will check your paperwork to ensure this is the case.
If you have already reached the maximum 6 month mortgage holiday and are still facing difficulty making repayments, the Financial Conduct Authority (FCA) have advised borrowers to speak to their lender about a tailored support plan.

The deadline for deferral applications will also be extended to 31st January 2021.

During the mortgage holiday period, interest will still accrue on what borrowers owe, however your credit score and future borrowings should not be affected.

As the FCA have advised not to contact your mortgage lender directly and to wait for information, our colleagues over at Mortgages Made Simple are available to discuss any options or concerns you may have about your mortgage with details of which lenders can offer support. You can contact Mortgages Made Simple on 01925 357 060 or email info@mortgagesmadesimple.me.uk.












GOVERNMENT LOAN SCHEMES
  • Coronavirus Business Interruption Loan Scheme (CBILS) - On Monday 2nd November, the Government announced that the CBILS will be extended until 31st January 2021 giving an extra 2 months for businesses to apply. CBILS lenders will be given the ability to extend the length of loans from a maximum of six years to ten years if it will help businesses to repay the loan.
  • The Bounce Back Loan Scheme (BBLS) has also been extented to 31st January 2021. If you have previously taken out a BBL, you will be eligible for the new Pay as You Grow flexible repayment system by extending the length of the loan from six years to ten. Interest-only and payment holidays will also be available to businesses for periods of up to six months.
  • The Future Fund, and Coronavirus Large Business Interruption Loan Scheme will also be extended to 31st January 2021.







LOCAL AUTHORITY CASH GRANTS
  • Businesses in England that are forced to close due to national or local restrictions will receive up to £3,000 per month. This means that 90% of small and medium sized business premises in the closed Retail, Hospitality and Leisure sectors should have their monthly rent covered by these grants.
  • Local Authorities in England will receive one off funding of £1.1 billion to support businesses at their discretion, on the basis of c.£20 per head of population.
  • Businesses in the hospitality, leisure and accommodation sectors that suffered from reduced demand due to local restrictions introduced between 1 August and 5 November will receive backdated grants at 70% of the value of closed grants up to a maximum of £2,100 per month for this period.






TAX CUTS AND DEFERRED TAX PAYMENTS

As a reminder, options to delay VAT and Self-assessment tax payments have also been announced as follows:
  • The government has confirmed it will extend the temporary 15% VAT cut for the tourism and hospitality sectors to the end of March next year.
  • Business who deferred their VAT bills will be given more breathing space through the New Payment Scheme, which gives them the option to make 11 smaller interest-free payments during the 2021-22 financial year rather than paying the full lump sum by 31st March 2021.
  • A separate additional 12-month extension from HMRC has been applied on the “Time to Pay” self-service facility for self-assessment tax payments, meaning payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.
  • Take a look at our recent blog on further changes to the Time to Pay platform by clicking here.








THE LWA TEAM ARE HERE TO HELP

Please be assured that myself and my team are working as normal, following safety guidelines and able to speak to clients over the phone or via Zoom meeting.

Please note, Government information is being updated and changed regularly, however we will continue to keep you informed with any additional guidance as soon as possible after they are issued.

If you have any specific concerns, please do not hesitate to contact a member of our team on 0161 905 1801 in Manchester, or 01925 830 830 in Warrington.

In the meantime, for all of LWA's previous updates on the Coronavirus Job Retention Scheme, please visit the dedicated Coronavirus Guidance section on our website.

We hope that you, your staff and your families are safe and well.

Kind regards,

Les & the team
T : 0161 905 1801
F : 0161 610 1801
E : les@lwaltd.com
W: www.lwaltd.com