Coronavirus - Further Update
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Click here for government updates on the guidance for employees, employers and businesses about the novel coronavirus, COVID-19.
Help for Businesses. Update: re Winter Economy Plan
Job Support Scheme
Starting from November, the Government’s new Job Support Scheme will cover up to 22% of pay for workers in ‘viable’ jobs for the next 6 months ending on 30th April 2021. The scheme is designed to protect businesses that are facing a lower demand over the winter months due to Covid-19.
This scheme replaces the current Coronavirus Job Retention Scheme which will end of 31st October 2020.
Employees will need to work at least a third of their normal hours to qualify and must have been on the employer’s PAYE payroll on or before 23rd September 2020.
Employers will pay staff for the hours they work in full. For the hours they don’t work of their normal hours, the Government and the employer will each cover one-third of the lost pay, resulting in the employee receiving two-thirds of their pay for normal hours not worked.
There is a cap on the Government contribution which is £697.92 per month.
As with the Coronavirus Job Retention Scheme we will be able to assist with the claims on your behalf. There will be a fee for this service which we will advise on once further details of the scheme are published.
Job Retention Bonus
The Job Retention Bonus (JRB) forms part of the UK government's support package for organisations during the COVID-19 pandemic and is:
- a one-off payment to employers of £1,000, for every employee for whom the employer has made a valid claim under the CJRS and who remains continuously employed through to 31 January 2021.
- Eligible employees must earn at least £1,560 in total for the period between 1 November 2020 and 31 January 2021, with at least one payment being reported through RTI in each month.
The bonus will be taxable, so the business must include the whole amount as income when calculating its taxable profits for corporation tax or income tax.
Employers will be able to claim the JRB through gov.uk after they have filed their RTI returns for January.
Payments will be made to employers from February 2021.
Rules for employers
All employers are eligible for the scheme including recruitment agencies and umbrella companies. The employer must:
- have a UK bank account;
- have complied with their obligations to pay and file PAYE accurately and on time under the RTI reporting system for all employees to the end of January 2021; and
- be up-to-date with payroll obligations and have addressed all requests from HMRC to provide missing employee data in respect of historic CJRS claims.
Rules for employees
Each employee must have been:
- furloughed and the subject of an eligible Coronavirus Job Retention Scheme claim;
- continuously employed by the relevant employer from the time of the employer’s most recent CJRS claim for them, to 31 January 2021; and
- paid a total of at least £1,560 for the period 1 November 2020 to 31 January 2021. The employee does not have to be paid £520 in each month, but must have received some earnings in each of the three calendar months that have been paid and reported to HMRC via RTI.
SEISS Extension
The self-employed income support scheme will also be extended from November 2020 to April 2021. This is for self-employed individuals who complete a self-assessment tax return each year and trade through a sole trade / partnership structure. This is not applicable if you trade through a Limited company.
The extension will be in the form of two taxable grants.
Grant 1:
- Covers businesses affected after 1st November 2020, covering 20% of average monthly trading profits.
- This will be paid in a single instalment covering three months’ worth of profits.
The grant will be capped at £1,875
Grant 2:
- We are awaiting further information
Deferred VAT and self-assessment payments
VAT
Any VAT liabilities that were deferred between March and June 2020 will be able to use a new payment scheme.
Businesses will have the option to spread the outstanding VAT payments from this time period over 11 equal interest free instalments over the 2021/22 tax year.
This is instead of paying the full outstanding liabilities at the end of March 2021 as was previously the case.
Businesses will need to opt in, but all will qualify.
Additionally, the extension of the temporary VAT reduced rate of 5% for hospitality and tourism will now run until 31 March 2021.
Self-assessment
There will be more time to pay for the self-employed and other self- assessment tax payers regarding taxes due in January 2021.
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.
Loan Extensions
The deadline for new applications to the government’s loan schemes will be extended to 30 November 2020.
There will also be a ‘Pay as you Grow’ initiative to help companies repay state- backed business loans.
All businesses who borrowed under the Bounce Back Loan Scheme will have the option to repay their loan over a period of up to ten years, reducing their average monthly repayments on the loan by almost half.
UK businesses will also have the option to move temporarily to interest-only payments for period of up to six months, this option can be used up to 3 times.
Additionally, businesses will have the option to pause their repayments entirely for up to 6 months. This option can only be used once and only after having made 6 payments.