Guiding you through the COVID-19 crisis
This page has been designed to provide you with a one stop reference point to find out about and access the temporary and targeted measures introduced by the UK Government to support public services, people and businesses through this period of disruption caused by COVID-19.
This page was last updated on 6th November 2020, following the Chancellor’s latest announcement about the extension of the Job Retention Scheme, which will now run to March 2021.
Whilst we endeavour to ensure this page remains current and accurate, please speak to a member of our team regarding your specific circumstances or visit the Gov.uk website for the most up to date information direct from the UK Government.
Job Retention and Self-Employment Scheme Updates
The Local Restrictions Support Grant will pay up to £3k per month for businesses forced to close due to lock down
The Coronavirus Job Retention Scheme (Furlough) has been extended. Due to finish on 31/10/20 it will now run until March 2021 at the original rate
The Job Support Scheme has been postponed and will come into force when the retention scheme ends
Self-employed Income Support Scheme has been extended for 6 months from November 20 to April 21 and the rate of grant increased
The Job Retention Bonus Scheme has been cancelled as a result of the Retention scheme being extended to March 2021
Other Support and Announcements
Reduction in VAT for hot served food, accommodation and attractions to 5% continues until 31 March 2021
The 0% (Nil rate) Stamp Duty threshold increases to £500,000 from 8 July 2020 until 31 March 2021
Business Bounce Back Loan Scheme and Business Interruption Loans can be paid back over longer periods (up to 10 yrs.) and payment holidays or interest only payments may be an option
Businesses are able to apply for an additional 3 months to file accounts
The ICAEW is urging firms to keep track of any losses resulting from the Covid-19 crisis to ensure they can claim maximum relief
Deferred VAT and Self-Assessment Payment on Account monies can now be repaid in instalments across the 21/22 tax year
*Full details and relevant links to individual announcements can be found below:
Key points and actions for:
Businesses / Employers:
- The Job Retention Scheme will now run until the end of March 2021 and has reverted to the original 80% rate for hours not worked
- The Local Restrictions Support Grant will pay up to £3k per month for businesses forced to close due to lock down
- The Job Support Scheme announced on 24 September has been postponed
- Business Bounce Back loans and Coronavirus Business Interruption Loans can now be paid back over a period of up to 10 years with some opportunities for payment holidays or interest only payments.
- Speak to your rates collecting local authority about Small Business Discretionary Grant Payments
- VAT payments due for the period to 30th June have been deferred and can now be repaid in instalments in the 21/22 tax year
- Year-end accounts and tax returns must still be filed but businesses can apply for an additional 3 months to file accounts
- Keep track of any losses resulting from Covid-19 crisis
Employees / Individuals
- 3-Month Mortgage holidays are still available for those most in need. This is not 3 free months and interest will continue to accrue during the holiday period
- Private landlords are now eligible for a 3 month buy-to-let mortgage holiday if their tenants are experiencing financial difficulties. Individuals should speak to lenders at the earliest opportunity if they think they may be affected.
- Loans – speak to the lender about capital (& Interest) repayment holiday
- Credit cards – reduce repayments to the minimum payment period but be aware that interest will continue to accrue on outstanding amounts
- Most local councils are offering to defer council tax payments for those in financial difficulty, as are most water and energy suppliers. Individuals should speak to their providers as early as possible to set up a deferral plan
- HMRC confirms that the exceptional circumstances clause can be applied for UK residence tax
- The SEISS support has been extended for a further 6 months from November 20 to April 21 and the grant level increased to 80% of historic profit
- The rules for the scheme extension are slightly different to the first phase, please see below
- Self-Assessment taxes and payments on account to HMRC, can be deferred and repaid in instalments in the 21/22 tax year – see below
- Those with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. Call HMRC on 0800 0159 559
Coronavirus Job Retention Scheme (Furlough)
On 5 November, The Chancellor announced that the Job Retention Scheme would not close as planned and would now be extended through to the end of March 2021.
The Coronavirus Job Retention Scheme (CJRS) – also known as the Furlough scheme – will be extended until the end of March??? 2021 for all parts of the UK. For claim periods running to 31??? January 2021, the UK Government will pay 80% of employees’ usual wages for hours not worked, up to a cap of £2,500 per month. The UK Government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.
Under the extended scheme, the cost of retaining workers will be reduced compared to the tapered scheme which ran from August to October 2020. This means the extended furlough scheme is reflective of the original scheme introduced in March 2020.
Employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer afterwards 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.
Similarly, an employee who was on a fixed term contract, on payroll on 23 September, and that contract expired after 23 September can be re-employed and claimed for, provided that the other eligibility criteria are met.
Employers small or large, charitable or non-profit, are eligible for the extended Job Retention Scheme, which will now cover the second lockdown in England and what is anticipated to be a difficult trading period for many into 2021.
Businesses will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time, and will only be asked to cover National Insurance and employer pension contributions which, for the average claim, accounts for just 5% of total employment costs.
The Job Support Scheme, which was scheduled to come into effect on Sunday 1st November, has been postponed indefinitely and the Job Retention Bonus of £1,000 per employee has been cancelled.
Full details regarding the revised scheme can be found here:
Local Restrictions Support Grant
The Local Restrictions Support Grant will pay up to £3k per month for businesses forced to close due to lock down.
Businesses required to close in England due to local or national restrictions will be eligible for the following:
- For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;
- For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;
- For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.
Grants will be managed/paid via your local (rate collecting) authority.
Temporary VAT Cut for Hospitality and Tourism – EXTENDED
The rate of VAT for most aspects of hospitality and tourism has been reduced from the prevailing rate of 20% to just 5%. The reduced rate of VAT will apply to:
- supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises across the UK
- supplies of accommodation and admission to attractions across the UK
On 24 September The Chancellor announced that the government is extending the temporary reduction period to 31 March 2021.
Self-employment Income Support Scheme (SEISS) – EXTENDED
The Self-employment Income Support Scheme (SEISS) was set up to support self-employed individuals (including members of partnerships) whose income has been negatively impacted by COVID-19. On 5 November 2020, The Chancellor announced an extension and revision to the scheme.
he extension will last for 6 months, from November 2020 to April 2021. Grants will be paid in 2 lump sum instalments each covering a 3 month period.
The third grant will cover a 3 month period from 1 November 2020 until 31 January 2021. The Government will provide a taxable grant calculated at 80% of 3 months average monthly trading profits, paid out in a single instalment and capped at £7,500 in total. This is an increase from the previously announced amount of 55%.
The Government are providing the same level of support for the self-employed as is being provided for employees through the Coronavirus Job Retention Scheme which has also been extended until March 2021.
The Government has already announced that there will be a fourth grant covering February 2021 to April 2021.
HMRC will check all claims under the SEISS and take appropriate action to withhold or recover payments found to be dishonest or inaccurate.
We cannot make claims on your behalf, but please contact us if you need any help or support.
Find out more about the revised, extended scheme here:
Deferred VAT Payments Repayment Plan
The government will give businesses which deferred VAT due in March to June 2020 the option to spread their payments over the financial year 2021-2022.
Rather than paying in full at the end of March 2021 as previously announced, businesses will be able to choose to make 11 equal instalments over the 2021-22 tax year. All businesses which took advantage of the VAT deferral can use the New Payment Scheme. Businesses will need to opt in, but all are eligible. HMRC will put in place an opt-in process in early 2021.
Please note this is available as a deferment of the VAT due ONLY, the liability will still need to be paid eventually. If you can still pay, we would recommend doing so.
Self-Assessment Payments Deferred
The government will give the self-employed and other taxpayers more time to pay taxes 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 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 taxpayer not able to pay their tax bill on time, including those who cannot use the online service, can continue to use HMRC’s Time to Pay Self-Assessment helpline to agree a payment plan.
Please note this is a deferment ONLY.
Small Business Focused Schemes:
Small Business Discretionary Grant Payments
The Government set up a discretionary fund to accommodate certain small businesses previously outside the scope of the business grant funds scheme.
This is in addition to the funding previously announced for the Small Business Grants Fund (SBGF) and the Retail, Hospitality and Leisure Grants Fund (RHLGF). The grant fund will be run through local authorities.
This additional fund is aimed at small businesses with ongoing fixed property-related costs. The Government asked local authorities to prioritise businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for Small Business Rates Relief, and bed and breakfasts that pay council tax rather than business rates. But local authorities may choose to make payments to other businesses based on local economic need. The allocation of funding will be at the discretion of local authorities.
To be eligible:
- businesses must be small
- under 50 employees
- and they must also be able to demonstrate that they have seen a significant drop of income due to Coronavirus restriction measures.
There will be three levels of grant payments. The maximum will be £25,000. There will also be grants of £10,000. Local authorities will have discretion to make payments of any amount under £10,000. It will be for councils to adapt this approach to local circumstances.
Contact your local authority (rates collecting) for more information.
Business ‘Bounce Back’ Loans
Business Bounce Back Loans will be 100% guaranteed by the taxpayer and will provide firms with up to 25% of their turnover up to £50,000 with no interest payable in the first year.
Businesses will be able to borrow between £2,000 and £50,000 with access to the cash within a matter of days.
About the loans:
- Will be interest free for the first 12 months
- Will be capped at no more than 25% of turnover
- Are repayable over periods up to 6 years
- May not have any repayments due during the first 12 months
You can apply for the loan if your business:
- is based in the UK
- has been negatively affected by coronavirus
- was not in financial difficulty as at 31 December 2019
The Bounce Back Loan Scheme was updated on 24th September 2020:
The government will give all businesses that borrowed under the BBLS the option to repay their loan over a period of up to ten years.
UK businesses will also have the option to move temporarily to interest-only payments for periods of up to six months (an option which they can use up to three times), or to pause their repayments entirely for up to six months (an option they can use once and only after having made six payments). These changes will provide greater flexibility to repay these loans over a longer period and in a way that better suits businesses’ individual circumstances.
Business Interruption Loan Scheme
The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website. All the major banks will offer the Scheme once it has launched. There are 40 accredited providers in all.
You should talk to your bank or finance provider (not the British Business Bank) as soon as possible and discuss your business plan with them. This will help your finance provider to act quickly once the Scheme has launched. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.
Please note that as of 24 September, the Chancellor of the Exchequer has announced the Coronavirus Business Interruption Loan Scheme (CBILS) will be extended until 30 November 2020
Exceptional circumstances confirmed for UK residence test
An individual’s residence in the UK for tax purposes is determined by a statutory residence test and the number of days spent in the UK is a key factor. The rules for counting days take account of situations where an individual’s presence in the UK is due to exceptional circumstances beyond their control.
**HMRC has confirmed that the exceptional circumstances clause can be applied for any individual case where the pandemic has caused difficulties**
Do bear in mind, the 60 day annual limit will otherwise continue to apply.
Businesses can apply for an additional 3 months to file accounts
A joint initiative between the government and Companies House means that businesses will, (from 25.03.20), be able to apply for an additional 3 months to file accounts. The move is designed to help companies avoid penalties as they deal with the impact of COVID-19. As part of the agreed measures, those citing issues around COVID-19 will be automatically and immediately granted an extension.
The application needs to be completed online via the Companies House online filing system.
However, companies that have already extended their filing deadline, or shortened their accounting reference period, may not be eligible for an extension.
We would strongly recommend that all companies keep reporting on time where possible and we will make every effort to support you in this regard.
Business rates holiday for retail, hospitality and leisure businesses
There will be a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.
Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.
There is no action for you. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible.
IR35 Private Sector Rollout Postponed
On 17th March Chief Secretary to the Treasury, Steve Barclay, announced that the extension of the more rigorous compliance regime for the IR35 rules to the private sector will now be delayed until 6 April 2021.
Stamp Duty Threshold Lifted
The nil-rate threshold for stamp duty (SDLT) on residential property transactions has been increased to £500,000. The increased threshold applies from the 8 July 20 until 31 March 2021.
The nil-rate threshold previously sat at £125,000. The increase means that nine-out-of-ten residential property transactions will not attract any stamp duty.
Support for Businesses and the Self-employed paying tax
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.
These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline:
0800 0159 559
Businesses must keep track of losses resulting from coronavirus to ensure they can claim maximum reliefs and survive the pandemic, says the Institute of Chartered Accountants in England and Wales (ICAEW). The faculty is urging firms to keep track of any losses accumulated as a result of COVID-19 and to take action to find out what reliefs are available to them
- Lost business
- Sickness payments
- Lost income – e.g. rents
- Exceptional payments & costs
Continue Tax Planning
Even in volatile times like these and with market turmoil, maximising your tax allowances continues to make financial sense. So, with under 3 weeks to go before the end of the tax year, it could be a good idea to make the most of your ISA and SIPP allowances before you miss out.
Here is a reminder of some of the reliefs available in the run up to 5th April:
- Secure your valuable £20,000 income and capital gains tax-free ISA allowance.
- Make use of any remaining pension allowance (up to £40,000 for this tax year). You will get a 20% tax relief boost (increasing up to 60% for higher earners) on any contributions you make.
- Check to see if you could ‘carry forward’ any unused pension annual allowances from the previous three tax years.