During the festive break there were a number of updates made to the different Government support packages, and following Boris Johnson's national lockdown announcement on Monday, we have had further details on financial support announced by Rishi Sunak. Our blog below details everything you need to know as an individual or business:
- Extension of the Coronavirus Job Retention Scheme (CJRS) to the end of April 2021 (also known as the Furlough Scheme)
- Claiming the Self-Employed Income Support Scheme
- Mortgage holidays
- Deadline extensions for
- Coronavirus Business Interruption Loan Scheme (CBILS)
- Bounce Back Loan Scheme (BBLS)
- Local authority grants
- VAT payment support
- Self-assessment payment support
CORONAVIRUS JOB RETENTION SCHEME (CJRS)
As announced on 17th December, the CJRS will now be extended until 30th April 2021, below are the details from Gov.uk:
- 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 31st March 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.
- 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 for furlough days in December 2020 must be made by 14 January 2021.
- Claims can be made by employers across the UK that meet the eligibility criteria:
- Employers do not need to have used the CJRS previously
- For periods from 1 November onwards, you can claim for employees who were employed on 30 October 2020, as long as you have made a PAYE Real Time Information (RTI) submission to HMRC between 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.
- You can no longer submit claims for claim periods ending on or before 31 October 2020.
- You can claim for employees on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts.
- 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 hoursmust be used. For all other employees,
- employers must use the CJRS calculations for calculating reference pay and usual hours.
- Foreign Nationals - Foreign nationals are eligible to be furloughed. Grants under the scheme are not counted as ‘access to public funds’, and you can furlough employees on all categories of visa.
- Employees that were made redundant:
- For claim periods starting on or after 1 December 2020, you cannot claim for any days on or after 1 December 2020 during which the furloughed employee was serving a contractual or statutory notice period for the employer (this includes people serving notice of retirement or resignation).
- For claim periods after 1 November 2020, if you made employees redundant, or they stopped working for you on or after 23 September 2020 you can re-employ them and put them on furlough. This applies as long as the employee was employed by you on 23 September 2020 and you made a PAYE RTI submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
- 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.
- Other types of employees that can be furloughed:
- office holders (including company directors)
- salaried member of Limited Liability Partnerships (LLPs)
- agency workers (including those employed by umbrella companies)
- limb (b) workers
- contingent workers in the public sector
- contractors with public sector engagements in scope of IR35 off-payroll working rules (IR35)
- HMRC will publish details of employers who make claims under the extended CJRS starting from December.
- Please click the links below for further information:
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 furlough workers, then we're here to help - please contact our Payroll Services team on 0161 905 1801.
UPDATE ON SELF-EMPLOYED INCOME SUPPORT SCHEME (SEISS)
Whilst there has been no mention of an extension to SEISS as part of the £4.6 billion funding announcement yesterday, below we have set out a reminder of the support announced for self-employed workers as part of the Winter Economy Plan:
- 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.
- Many people will have contacted HMRC to claim this grant as the portal for claiming was opened on 30th November.
- If you have not yet claimed, self-employed claimants must make their claim on or before January 29, 2021.
- The Government has confirmed there will be a fourth SEISS grant, which will cover the three-month period of February to April 2021, however it is not yet known when the grant will open for applications, or when it will be paid. We will bring you further details of this once they are announced.
- If you qualified for the first and second SEISS grants, you can claim for the third grant here if you are still eligible.
As previously with SEISS, LWA 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 on your self-assessment income tax returns.
In addition, keep in mind there are strict eligibility criteria that must be declared when applying for the grant. While you will not be asked to prove your eligibility for the SEISS grant at the application stage, you must keep evidence that your business has been adversely affected by the pandemic in the event that HMRC ask you to prove your eligibility. If you are unable to prove this, HMRC will require the grant to be repaid plus any penalties and/or interest.
The 6-month mortgage holiday (initially 3) that was due to end on 31st October 2020 was extended for a further 6 months as announced in November, 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 is currently 31st January 2021.
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 firstname.lastname@example.org.
GOVERNMENT LOAN SCHEMES
- Coronavirus Business Interruption Loan Scheme (CBILS) - On 17th December 2020, the Government announced that the CBILS will be extended until 31st March 2021 giving a further 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 extended to 31st March 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.
As Futrli Certified Advisors, we can help your business with forecasting, speeding up the process into just a few hours, which has helped many of our clients achieve success with their loan applications. Contact Matt Jones on 0161 905 1801 or email email@example.com to find out more.
NEW LOCAL AUTHORITY CASH GRANTS
- Retail, Hospitality and Leisure businesses that have been forced to close due the national lockdown will receive a top-up grant up to £9,000 per property.
- This is in addition to the previously announced grants worth up to £3,000 for closed businesses, and up to £2,100 per month for impacted businesses once they reopen.
- The grants will be available through your local authority as follows
- £4,000 for businesses with a rateable value of £15,000 or under
- £6,000 for businesses with a rateable value between £15,000 and £51,000
- £9,000 for businesses with a rateable value of over £51,000
- any business which is legally required to close, and which cannot operate effectively remotely, is eligible for a grant.
- A £594 million discretionary fund is also being made available via local authorities to support other impacted businesses.
Find out more on these additional grants by visiting Gov.uk here.
VAT NEW PAYMENT SCHEME
The Government has now announced details of the new payment scheme for deferred VAT payments if you have not yet paid your deferred VAT bill (due for payment by 31st March 2021). Please see details below:
- Business who deferred their VAT bills between 20th March and 30th June 2020 will be given more breathing space through the new payment scheme, which gives you 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.
- You must opt in to the new VAT deferral new payment scheme when it launches.
- You must opt in yourself, your agent cannot do this for you.
- To use this scheme you must:
- still have deferred VAT to pay
- be up to date with your VAT returns
- opt in before the end of March 2021
- pay the first instalment before the end of March 2021
- be able to pay the deferred VAT by Direct Debit
SELF-ASSESSMENT PAYMENT SUPPORT
The self-assessment tax return submission and payment deadline is 31st January 2021. HMRC have not agreed to extend this deadline.
- If you think you might struggle to make the payment of your personal tax bill of up to £30,000 by the deadline, then you can apply for a 12 month extension via the self-service 'Time to Pay' facility online at HMRC.
- This means 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.
For further information, please speak to one of our Tax team on 0161 905 1801 in Manchester or 01925 830 830 in Warrington, or you can email firstname.lastname@example.org.
THE LWA TEAM ARE HERE TO HELP
Please be assured that myself and my team are working as normal, following safety guidelines and are able to speak to clients over the phone or via Zoom / Teams.
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 keep safe and well.