Coronavirus Crisis - Financial Support

updated 6 November 2020

You may be concerned about your cashflow during the Coronavirus crisis, so below are some details about getting financial support for businesses and individuals, and other tips about how you could improve your cashflow during the crisis.

If you have any questions, it’s likely that those details have not been announced yet. As soon as we can, we’ll update this page with any additional details about the announcements to date, and any further announcements as and when they are released. So you may want to bookmark this page and check it regularly.

 

Also, as ever, Martin Lewis The Money Saving Expert has some great guidance summarised into clear sections here.

 

Updates 6 November 2020…

Support Extended Further

The Job Retention Scheme will now last until the end of March 2021 and is expected to pay 80% of wages for hours not worked, subject to a review in January. The Self Employed Income Support Scheme will pay out at 80% of profits for the full third grant which covers November, December and January.

 

Updates 2 November 2020…

Job Schemes Retained/Deferred

With just over 5 hours of notice before the end of 31st October 2020 and the switch from one job scheme to another, it was announced that the Job Retention Scheme would continue until 2nd December 2020 (at least) and the Job Support Scheme would be deferred until the Job Retention Scheme ends. The retained JRS will be at 80% of wages so employers will only need to pay for any top up pay (over 80%) and any employers NIC and employers pension. The retained JRS can be claimed for employees included in a payroll submission on or before 30th October 2020, even if they have not been included on a JRS claim before.

SEISS Improved

The SEISS grant will be increased from 40% to 80% for November. As it is paid over 3 months, this works out as an increase from 40% to 55% for November to January and the maximum grant will be £5,160. Claims for the  third SEISS grant will be open from 30th November.

Bounce Back Loan Top Ups

If you have taken a BBL but not used up your maximum allowance of 25% annual sales, you can apply for a top up to take you up to that maximum 25% (or less). Applications for new and top up BBLs will be available until 31st January 2021.

 

Updates 23 October 2020…

Job Support Scheme Improved

Improvements were announced to the JSS amounts announced on 24 September. The new JSS Open is available to anyone employed as of 23 September 2020 (payslips submitted to HMRC by then) unless the employee is on a redundancy notice. Employees must work at least 20% of their usual hours and be paid the full rate for the hours worked. The hours not worked are split into 61.67% which will be paid by the government (capped at £1,541.75pcm), 5% will be paid by the employer, the remaining 33.33% is optionally paid by the employer or not paid. This effectively means the government will contribute up to 49.3% of normal wages (61.67% of 80%). The employer pays at least 24% of normal wages, plus any employers NIC and pension.

 

Self Employed Income Support Scheme Improved

Improvements were announced to the SEISS amounts announced on 24 September. For self employed individuals (i.e. not trading as a company) the SEISS has been extended on a reduced basis. If your business is still impacted by Covid19, a grant of 40% average monthly trading profits (capped at £3,750) will be paid to cover November 2020 to January 2021. Another grant will be available to cover February 2021 to April 2021 but the details have not been announced.

 

Grants for open businesses

Cash grants of up to £2,100 per month for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert level areas. These grants will be available retrospectively for areas who have already been subject to restrictions. Businesses will need to apply to their local authority for the grant.

 

Updates 9 October 2020…

Job Support Scheme Expanded

The new JSS will be expanded for businesses legally required to close due to Coronavirus restrictions. The government will pay two thirds of employees salaries (up to £2,100 per month). Employers will only be required to pay Employers NIC and Employers pension on the salary paid. Employees must be off work for a minimum of 7 days. The JSS will start on 1st November 2020 and will be available for 6 months.

Grants for closed businesses

Cash grants are available to businesses in England who are legally required to close. The grants will be based on the rateable value of the business premises and will range from £1,300 per month to £3,000 per month. Local councils should have more details on how to claim.

Updates 24 September 2020…

Job Support Scheme

NB: these amounts were improved by the announcements on 22nd October 2020.  The new JSS is open to anyone employed as of 23 September 2020 (payslips submitted to HMRC by then) unless the employee is on a redundancy notice. Employees must work at least 33% of their usual hours and be paid the full rate for the hours worked. The hours not worked are split equally into three parts: one part will be paid by the government (capped at £697.92pcm), the second part must be paid by the employer, the third part is optionally paid by the employer or not paid. This effectively means the government will contribute up to 22% of normal wages (one third of two thirds). The employer pays at least 55% of normal wages, plus any employers NIC and pension.

Self Employed Income Support Scheme Extension

NB: these amounts were improved by the announcements on 22nd October 2020. For self employed individuals (i.e. not trading as a company) the SEISS has been extended on a reduced basis. If your business is still impacted by Covid19, a grant of 20% average monthly trading profits (capped at £1,875) will be paid to cover November 2020 to January 2021. Another grant will be available to cover February 2021 to April 2021 but the details have not been announced.

Loans

The Bounce Back Loan repayment term can be extended to 10 years. You can request an interest only repayment period for 6 months (up to three times), or no repayment for 6 months (once only).  Existing loans applications will close on 30 November 2020. A new loan scheme is expected by January 2021.

Deferred Tax Payments

VAT payments deferred until 31 March 2020 can be paid back in 11 interest-free instalments. Self-assessment tax second payments on account deferred until 31 January 2021 can be paid over 12 months.

VAT

The 5% VAT rate for the hospitality sector will be extended to 31st March 2021.

 

Updates 5 June 2020…

Job Retention Scheme Closing For New Entrants

The JRS closes to new entrants (eligible employees) on 30th June 2020 and there is still a 3 week minimum furlough period. This means the last date you can start an employee’s first furlough period is the 10th June 2020 – so that the 3 week furlough period ends on 30th June 2020. Read More

Job Retention Scheme From July

The JRS will run beyond 30th June 2020 but will be tapered as follows to encourage the return to work:

  • July – the minimum furlough period reduces to 1 week and employees can work part-time. The JRS grant will be the same as before except for workers returning part-time where it will be based on the proportion of hours not worked compared to the hours usually worked.
  • August – as July except employers will no longer be able to claim employer’s NIC and pension.
  • September – As August except the grant will reduce from 80% (or £2,500pcm) to 70% (or £2,187.50pcm)
  • October – As before except the grant will reduce to 60% (or £1,875pcm). Read More

Self Employed Income Support Scheme Extended

The SEISS is being extended for a second 3 month period covering June to August. The second grant will be based on 70% of taxable profits capped at £6,570 (instead of 80% capped at £7,500). The second grant is expected to be claimed and paid in August. Read More

Also, the first grant period must be claimed by 13th July 2020.

Updates 7 May 2020…

Grants for more businesses

Businesses that missed out on the original grants scheme may be able to apply for a discretionary grant. It is aimed at businesses affected by coronavirus, with ongoing fixed property costs, that didn’t qualify for a grant. That could be because they rent a shared space, or a market stall, are a small charity, or a bed and breakfast paying council tax rather than business rates. It sounds like those businesses will need to contact their local authority. Read More

Self Employed Income Support Scheme Ready

The SEISS will be open for applications from 13th May 2020 but will be staggered over that week.  If you think you qualify, you should check that HMRC have assessed you as eligible, then enter your contact details. You can do that here and you’ll need your personal tax reference (UTR) and your NI number. If it says you’re not eligible you should check the rules here and if you still think you are eligible, you can appeal using the link at the end of the eligibility checker. If you are eligible you will be given a date and time from when you can apply for the grant, and you will be asked to provide contact details and your government gateway ID (or to set one up you’ll need scanned identification).

On the actual claim, you will just be asked some simple questions such as your bank details – accountants can’t make this claim for their clients. HMRC will determine the amount to pay based on the submitted tax returns. The grant should be with you within 1 week.

Accounting for Loans and Grants

With loans, the amount borrowed should be accounted for as a ‘loan’ (liability). It only affects the Balance Sheet (the bank and loan balances) and has no effect on sales, profits, tax, or dividends. A company director taking a loan to pay themselves can only do so as a dividend if there will be positive profit reserves left in the business after paying the dividend. If not, they will need to pay themselves a higher salary to replace dividends, which will increase the overall tax payable.

Grants are not repayable, should be accounted for as ‘other income’, and are taxable but not subject to VAT. They increase the profit available to pay dividends/drawings/wages.

Updates 4 May 2020…

Bounce Back Loan Scheme

The BBLS launched today and is available from the banks that are offering it. There are more details about the scheme in the ‘Type’ section.

Updates 27 April 2020…

Bounce Back Loan Scheme

From 4th May 2020, small businesses affected by Coronavirus may be able to apply for a loan of up to £50,000 or 25% of annual sales. The government will guarantee 100% of the loan and there won’t be any repayments, fees, or interest to pay for the the first 12 months. Loan terms will be up to 6 years and lenders will be persuaded to agree a low rate of interest for the remaining period of the loan. Read more.

Updates 17 April 2020…

Job Retention Scheme

The JRS claim system is expected to be available from 20 April 2020. Claims must be made online and paid directly into a UK bank account. Only the employer or an authorised agent can apply. The date by when employees must have had wages submitted has been extended to 19 March 2020.  The scheme has been extended by 1 month so will run until at least 30th June 2020. Furloughed directors are only allowed to carry out statutory obligations (e.g. bookkeeping, accounts, paying bills etc), and they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provide services to or on behalf of the company.

Updates 27 March 2020 am…

Job Retention Scheme Further Details

The JRS is available to employers who had created and started a PAYE payroll scheme on or before 28 February 2020. It can be claimed for employees on any type of contract but they must not be working for the employer due to the crisis. If an employee is doing any work, even if on reduced hours and pay, they are completely excluded from the JRS. Employees starting on or after 29 February are excluded. The grant will be 80% of the actual monthly pay as at 28 February 2020 for furloughed employees, plus the associated employers national insurance, plus the minimum employers pension contributions. An employer can choose to top up the salary to 100% but is not obliged to under JRS, however, the employer must still comply with employment law so will legally have to top up the pay in some circumstances. National Living/Minimum Wage only applies to hours worked, so doesn’t apply. However, if the contract does not allow a reduction in pay employers and employees will both need to agree reduced pay. The application scheme is expected to be ready by the end of April. Read More.

There is further guidance, an example employer letter, and an example employee response here.

Updates 26 March 2020 pm…

Self Employed Income Support Scheme

The self employed (individuals and partners of a partnership, but not company directors/shareholders) are to receive a taxable grant up to 80% of average monthly profit based on the last 3 years (or less if you have less), up to £2,500pcm for 3 months (initially). It’s restricted to the self employed who have an annual trading profit of less than £50k, to those whose majority of income comes from self employment, and only to those who have submitted a 2019 tax return with their self employment income. Anyone who hasn’t yet submitted their 2019 tax return have been given 4 weeks from today to submit it. HMRC will contact those who are eligible. Payments are expected to be made by June – in the meantime or if you are not eligible (e.g. you started trading in the past year or so) seek other help e.g. universal credit and loans. More details.

Updates 26 March 2020 am…

VAT Payment Deferral

If you pay by direct debit and want to defer your next payment you will need to cancel the direct debit via your bank. See here.

Business Rates Retail Discount Expanded

The list of businesses that qualify for a business rates discount has been expanded following the latest lockdown measures. Read More.

Updates 25 March 2020 am…

Self Employed Support

More measures to help the self employed are expected within the next 2 days.

Company Accounts Extra 3 Months

Companies need to apply if they want an extra 3 months to submit their accounts. Read more.

Grants Details Released

More details about the grants (see below) aimed at local authorities have been released here.

Business Closure Updates

More guidance on work carried out in peoples homes and the list of businesses that must remain closed. Read More.

Evictions For Commercial Tenants

More details about the banning of evictions for commercial tenants. Read More.

Updates 24 March 2020 am…

Businesses That Must Close

The list of businesses that must close has been updated. See here.

Universal and Working Tax Credit

The Universal Credit and the Working Tax Credit will increase by an extra £20 per week from 6th April 2020 for 1 year.

Guidance For Other UK Countries

Some elements of support is for England only. For other countries see Scotland, Wales, and Northern Ireland

Evictions For Commercial Tenants Banned

No business will be forced out of their premises if they miss a rent payment in the next 3 months. The rent will still be payable after this period. The government is monitoring the impact on landlords. Read More.

Extra Time For Company Accounts

Companies can apply for more time to submit accounts to Companies House and avoid late filing penalties if they have been prevented from doing so due to the crisis. Read More.

Updates 23 March 2020

Job Retention Scheme

Support is available for UK businesses who would have to make one or more employees redundant for that business to survive due to the crisis. These employees are known as furloughed workers – they should be notified of their change in status and they should not work while furloughed. A new HMRC portal will be set up to submit details of furloughed workers. HMRC will reimburse 80% of furloughed workers wage costs up to £2,500 per month (per employee). The employer could choose to pay the other 20% of wages, but doesn’t have to. The scheme will be backdated to 1st March 2020 and will run for at least 3 months. We await more details.

VAT Payment Deferral

Businesses will not need to make a VAT payment to HMRC between 20 March 2020 until 30 June 2020. For most businesses, that means their next VAT payment will be deferred from either 7th April, 7th May, or 7th June, until the 5th April 2021. VAT refunds will be paid as normal. As far as we know VAT returns still need to be submitted as normal. It is not clear how that will affect direct debits.

Income Tax Payment Deferral

Individuals who are due to pay a second payment on account for self assessment tax returns by 31st July 2020, will now have until 31st January 2021 to make that payment.

Rental Cost Support

Individuals and families who will struggle to pay the rent may be eligible for Universal Credit. Local Housing Allowance rates are also being increased.

New And Updated Government Webpages

There is a new page for support for individuals and an updated one for support for businesses. Other official information about the Coronavirus can be found from here.

Updates 19 March 2020 (updated 23 March 2020)

Loans

Small businesses will soon be able to contact most high street and online banks and ask for a loan under the Coronavirus Business Interruption Loan Scheme. You are not guaranteed to be offered a loan, however, it is government backed so your chances of getting a loan should be higher than obtaining a normal loan. Also, the CBILS loan should be interest-free for the first 12 months followed by a competitive rate. More details about the loan and the banks that should offer them can be found here. Alternatively, you may be able to secure a normal bank loan or an overdraft.

Grants and Business Rates

Grants are only available to businesses that are eligible for Small Business Rates Relief. That is, businesses with small commercial properties that pay rates at a reduced amount. Grants of £10,000 are available to the businesses described above in any industry, or £25,000 for the businesses described above in the retail, hospitality, and leisure industry with a rateable value of between £15,000 and £51,000. Local councils will contact these businesses to offer grants. In addition, all businesses in the retail, hospitality, and leisure industry, will not need to pay business rates for 12 months.

Update 23 March 2020: Nurseries in England also don’t have to pay business rates for 12 months. Businesses described above in the retail, hospitality, and leisure industry with a rateable value of under £15,000, qualify for a grant of £10,000.

Extra Time To Pay Your Taxes

A dedicated helpline has been set up to help businesses and self-employed individuals in financial distress and with outstanding tax liabilities receive support with their tax affairs. Through this, businesses may be able to agree a bespoke Time to Pay arrangement. If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559. You will need your relevant tax reference number to hand when calling which should be on one of the reports we provide you for that tax.

Mortgage Holiday

If your personal finances are affected by the crisis, you should be able to ask your mortgage lender for a 3 month holiday. If you are renting, it has been suggested that you could talk to your landlord to see if they can help in any way. The government have announced that they will ban evictions during the crisis.

Sick Pay

If you are employed (including directors) and you have to take time off ill or in isolation, you can claim statutory sick pay from day 1 of your time off. Normally employers can’t claim this back but during the crisis, up to 14 days of statutory sick pay per person can be reclaimed from HMRC if the employer has fewer than 250 employees. The current weekly statutory sick pay rate is £94.25. Employees may be entitled to more than the statutory rate if it is included in the employment contract.

State Benefits

If you are self-employed or employed and fall ill or need to go into isolation, you may be able to claim Employment Support Allowance. Anyone whose income is low enough may be able to claim Universal Credit. The government has temporarily removed some restrictions and delays to these benefits to make them available to more people and sooner. See here. A hardship fund has been made available to the most worse off.

Cashflow Tips

  • Get paid cash upfront or on completion
  • Invoice customers promptly with short or no terms of credit
  • Find new customers or new sales to existing customers
  • Diversify by offering different services/products
  • Make use of credit card to delay bank payments
  • Pay suppliers on the due date or ask for longer or to pay by instalments
  • Look for cheaper suppliers
  • Offer suppliers your services instead of paying them
  • Pay PAYE/NIC quarterly instead of monthly
  • Ask HMRC for more time to pay tax

For further details of the support provided by the government, click here or go the HMRC website and follow the links for Coronavirus and Support For Businesses. If you have any particular concerns let us know and we’ll try to help.

Bounce Back Loan Scheme

Small businesses affected by Coronavirus may now be able to apply for a loan of up to £50,000 or 25% of annual sales, whichever is lower. The government will guarantee (to the banks) 100% of the loan and will pay the interest in the first year. Borrowers will not have to pay any repayments, fees, or interest in the first 12 months. Loan terms will be 6 years and interest will be payable at 2.5%. A business owner or director can apply if their business has an account with one of the participating banks. If your bank isn’t on the list, it may be added soon. There will be a series of questions to check the business is eligible, including the businesses turnover (sales) for the 2019 calendar year, whether it was already a ‘business in difficulty‘ as at 31 December 2019, and whether it has been adversely affected by the Coronavirus. If a business has already applied for or received a CBILS loan of up to £50,000 it can transfer it to a Bounce Back loan. You should be able to find your bank’s application by searching “[your bank] Bounce Back Loan Scheme”.    Read more.

The amount borrowed only affects the Balance Sheet (bank and loan balances) and has no effect on sales, profits, tax, or dividends. A company director taking a loan to pay dividends can only do so if there will be positive profit reserves left in the business after paying the dividend. If not, they will need to pay themselves a higher salary to replace dividends, which will increase the overall tax payable.

The Bounce Back Loan repayment term can be extended to 10 years. You can request an interest only repayment period for 6 months (up to three times), or no repayment for 6 months (once only).  Existing loans applications will close on 30 November 2020. A new loan scheme is expected by January 2021.

Bounce Back Loan Top Ups

If you have taken a BBL but not used up your maximum allowance of 25% annual sales, you can apply for a top up to take you up to that maximum 25% (or less). Applications for new and top up BBLs will be available until 31st January 2021.

 

Businesses That Must Close

The list of businesses that must close has been updated. See here.

Cashflow Tips

  • Get paid cash upfront or on completion
  • Invoice customers promptly with short or no terms of credit
  • Find new customers or new sales to existing customers
  • Diversify by offering different services/products
  • Make use of credit card to delay bank payments
  • Pay suppliers on the due date or ask for longer or to pay by instalments
  • Look for cheaper suppliers
  • Offer suppliers your services instead of paying them
  • Pay PAYE/NIC quarterly instead of monthly
  • Ask HMRC for more time to pay tax

Company Accounts

Companies can apply for more time to submit accounts to Companies House and avoid late filing penalties if they have been prevented from doing so due to the crisis. Read More.

Companies need to apply if they want an extra 3 months to submit their accounts. Read more.

Grants and Business Rates

Grants are only available to businesses that are eligible for Small Business Rates Relief. That is, businesses with small commercial properties that pay rates at a reduced amount. Grants of £10,000 are available to the businesses described above in any industry, or £25,000 for the businesses described above in the retail, hospitality, and leisure industry with a rateable value of between £15,000 and £51,000. Local councils will contact these businesses to offer grants. In addition, all businesses in the retail, hospitality, and leisure industry, will not need to pay business rates for 12 months.

Update 23 March 2020: Nurseries in England also don’t have to pay business rates for 12 months. Businesses described above in the retail, hospitality, and leisure industry with a rateable value of under £15,000, qualify for a grant of £10,000.

More details about the grants (see below) aimed at local authorities have been released here.

Grants are not repayable, should be accounted for as ‘other income’, and are taxable but not subject to VAT. They increase the profit available to pay dividends/drawings/wages.

Grants for more businesses

Businesses that missed out on the original grants scheme may be able to apply for a discretionary grant. It is aimed at businesses affected by coronavirus, with ongoing fixed property costs, that didn’t qualify for a grant. That could be because they rent a shared space, or a market stall, are a small charity, or a bed and breakfast paying council tax rather than business rates. It sounds like those businesses will need to contact their local authority. Read More

Grants are not repayable, should be accounted for as ‘other income’, and are taxable but not subject to VAT. They increase the profit available to pay dividends/drawings/wages.

Grants for closed businesses

Cash grants are available to businesses in England who are legally required to close. The grants will be based on the rateable value of the business premises and will range from £1,300 per month to £3,000 per month. Local councils should have more details on how to claim.

Grants for open businesses

Cash grants of up to £2,100 per month for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert level areas. These grants will be available retrospectively for areas who have already been subject to restrictions. Businesses will need to apply to their local authority for the grant.

 

Guidance For Other UK Countries

Some elements of support is for England only. For other countries see Scotland, Wales, and Northern Ireland

 

 

Job Retention Scheme

Support is available for UK businesses who would have to make one or more employees redundant for that business to survive due to the crisis. These employees are known as furloughed workers – they should be notified of their change in status and they should not work while furloughed. A new HMRC portal will be set up to submit details of furloughed workers. HMRC will reimburse 80% of furloughed workers wage costs up to £2,500 per month (per employee). The employer could choose to pay the other 20% of wages, but doesn’t have to. The scheme will be backdated to 1st March 2020 and will run for at least 4 months.

The JRS is available to employers who had created and started a PAYE payroll scheme on or before 19 March 2020. It can be claimed for employees on any type of contract but they must not be working for the employer due to the crisis. If an employee is doing any work, even if on reduced hours and pay, they are completely excluded from the JRS. Employees starting on or after 20 March 2020 are excluded. The grant will be 80% of the actual monthly pay as at 28 February 2020 (or an average – see guidance) for furloughed employees, plus the associated employers national insurance, plus the minimum employers pension contributions. An employer can choose to top up the salary to 100% but is not obliged to under JRS, however, the employer must still comply with employment law so will legally have to top up the pay in some circumstances. National Living/Minimum Wage only applies to hours worked, so doesn’t apply. However, if the contract does not allow a reduction in pay employers and employees will both need to agree reduced pay. The application scheme is expected to be ready by the 20th of April. 

Claims must be made online and paid directly into a UK bank account. Only the employer or an authorised agent can apply.  Furloughed directors are only allowed to carry out statutory obligations (e.g. bookkeeping, accounts, paying bills etc), and they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provide services to or on behalf of the company. Read More.

JRS income is a grant. Grants are not repayable, should be accounted for as ‘other income’, and are taxable but not subject to VAT. They increase the profit available to pay dividends/drawings/wages.

Job Retention Scheme Closing For New Entrants

The JRS closes to new entrants (eligible employees) on 30th June 2020 and there is still a 3 week minimum furlough period. This means the last date you can start an employee’s first furlough period is the 10th June 2020 – so that the 3 week furlough period ends on 30th June 2020. Read More

Job Retention Scheme From July

The JRS will run beyond 30th June 2020 but will be tapered as follows to encourage the return to work:

  • July – the minimum furlough period reduces to 1 week and employees can work part-time. The JRS grant will be the same as before except for workers returning part-time where it will be based on the proportion of hours not worked compared to the hours usually worked.
  • August – as July except employers will no longer be able to claim employer’s NIC and pension.
  • September – As August except the grant will reduce from 80% (or £2,500pcm) to 70% (or £2,187.50pcm)
  • October – As before except the grant will reduce to 60% (or £1,875pcm).
  • November to March 2021 – Same as August Read More

Job Support Scheme Improved

The new ‘JSS Open’ is available to anyone employed as of 23 September 2020 (payslips submitted to HMRC by then) unless the employee is on a redundancy notice. Employees must work at least 20% of their usual hours and be paid the full rate for the hours worked. The hours not worked are split into 61.67% which will be paid by the government (capped at £1,541.75pcm), 5% will be paid by the employer, the remaining 33.33% is optionally paid by the employer or not paid. This effectively means the government will contribute up to 49.3% of normal wages (61.67% of 80%). The employer pays at least 24% of normal wages, plus any employers NIC and pension. The JSS will replace the JRS.

Job Support Scheme Expanded

The new ‘JSS Closed’ will be expanded for businesses legally required to close due to Coronavirus restrictions. The government will pay two thirds of employees salaries (up to £2,100 per month). Employers will only be required to pay Employers NIC and Employers pension on the salary paid. Employees must be off work for a minimum of 7 days. The JSS will start on 1st November 2020 and will be available for 6 months. The JSS will replace the JRS.

Loans

Small businesses will soon be able to contact most high street and online banks and ask for a loan under the Coronavirus Business Interruption Loan Scheme. You are not guaranteed to be offered a loan, however, it is government backed so your chances of getting a loan should be higher than obtaining a normal loan. Also, the CBILS loan should be interest-free for the first 12 months followed by a competitive rate. More details about the loan and the banks that should offer them can be found here. Alternatively, you may be able to secure a normal bank loan or an overdraft.

The amount borrowed only affects the Balance Sheet (bank and loan balances) and has no effect on sales, profits, tax, or dividends. A company director taking a loan to pay dividends can only do so if there will be positive profit reserves left in the business after paying the dividend. If not, they will need to pay themselves a higher salary to replace dividends, which will increase the overall tax payable.

Mortgage Holiday

If your personal finances are affected by the crisis, you should be able to ask your mortgage lender for a 3 month holiday. If you are renting, it has been suggested that you could talk to your landlord to see if they can help in any way. The government have announced that they will ban evictions during the crisis.

Self Employed Income Support Scheme

The self employed (individuals and partners of a partnership, but not company directors/shareholders) are to receive a taxable grant up to 80% of average monthly profit based on the last 3 years (or less if you have less), up to £2,500pcm for 3 months (initially). It’s restricted to the self employed who have an annual trading profit of less than £50k, to those whose majority of income comes from self employment, and only to those who have submitted a 2019 tax return with their self employment income. Anyone who hasn’t yet submitted their 2019 tax return have been given 4 weeks from today to submit it. HMRC will contact those who are eligible. Payments are expected to be made by June – in the meantime or if you are not eligible (e.g. you started trading in the past year or so) seek other help e.g. universal credit and loans. More details.

The SEISS will be open for applications from 13th May 2020 but will be staggered over that week.  If you think you qualify, you should check that HMRC have assessed you as eligible, then enter your contact details. You can do that here and you’ll need your personal tax reference (UTR) and your NI number. If it says you’re not eligible you should check the rules here and if you still think you are eligible, you can appeal using the link at the end of the eligibility checker. If you are eligible you will be given a date and time from when you can apply for the grant, and you will be asked to provide contact details and your government gateway ID (or to set one up you’ll need scanned identification).

On the actual claim, you will just be asked some simple questions such as your bank details – accountants can’t make this claim for their clients. HMRC will determine the amount to pay based on the submitted tax returns. The grant should be with you within 1 week.

SEISS income is a grant. Grants are not repayable, should be accounted for as ‘other income’, and are taxable but not subject to VAT. They increase the profit available to pay dividends/drawings/wages.

Self Employed Income Support Scheme Extended 1

The SEISS is being extended for a second 3 month period covering June to August. The second grant will be based on 70% of taxable profits capped at £6,570 (instead of 80% capped at £7,500). The second grant is expected to claimed and paid in August. Read More

Also, the first grant period must be claimed by 13th July 2020.

Self Employed Income Support Scheme Extension 2

For self employed individuals (i.e. not trading as a company) the SEISS has been extended on a reduced basis. If your business is still impacted by Covid19, a grant of 40% average monthly trading profits (capped at £3,750) will be paid to cover November 2020 to January 2021. Another grant will be available to cover February 2021 to April 2021 but the details have not been announced.

SEISS Improved

The SEISS grant will be increased from 40% to 80% for the third grant covering November, December and January. Claims for the third SEISS grant will be open from 30th November.

 

Sick Pay

If you are employed (including directors) and you have to take time off ill or in isolation, you can claim statutory sick pay from day 1 of your time off. Normally employers can’t claim this back but during the crisis, up to 14 days of statutory sick pay per person can be reclaimed from HMRC if the employer has fewer than 250 employees. The current weekly statutory sick pay rate is £94.25. Employees may be entitled to more than the statutory rate if it is included in the employment contract.

State Benefits

If you are self-employed or employed and fall ill or need to go into isolation, you may be able to claim Employment Support Allowance. Anyone whose income is low enough may be able to claim Universal Credit. The government has temporarily removed some restrictions and delays to these benefits to make them available to more people and sooner. See here. A hardship fund has been made available to the most worse off.

Individuals and families who will struggle to pay the rent may be eligible for Universal Credit. Local Housing Allowance rates are also being increased.

The Universal Credit and the Working Tax Credit will increase by an extra £20 per week from 6th April 2020 for 1 year.

Tenants Evictions Banned

No business or individual will be forced out of their premises if they miss a rent payment in the next 3 months. The rent will still be payable after this period. The government is monitoring the impact on landlords. Read More.

More details about the banning of evictions for commercial tenants. Read More.

Time To Pay Your Taxes

A dedicated helpline has been set up to help businesses and self-employed individuals in financial distress and with outstanding tax liabilities receive support with their tax affairs. Through this, businesses may be able to agree a bespoke Time to Pay arrangement. If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559. You will need your relevant tax reference number to hand when calling which should be on one of the reports we provide you for that tax.

Individuals who are due to pay a second payment on account for self assessment tax returns by 31st July 2020, will now have until 31st January 2021 to make that payment.

Self-assessment tax second payments on account deferred until 31 January 2021 can be paid over 12 months.

VAT Payment Deferral

Businesses will not need to make a VAT payment to HMRC between 20 March 2020 until 30 June 2020. For most businesses, that means their next VAT payment will be deferred from either 7th April, 7th May, or 7th June, until the 5th April 2021. VAT refunds will be paid as normal. As far as we know VAT returns still need to be submitted as normal. It is not clear how that will affect direct debits.

If you pay by direct debit and want to defer your next payment you will need to cancel the direct debit via your bank. See here.

VAT payments deferred until 31 March 2020 can be paid back in 11 interest-free instalments.

 

VAT

The 5% VAT rate for the hospitality sector will be extended to 31st March 2021.

See below the support that each type of person may be entitled to – you may be in more than one section. See the link or find that section in ‘By Type’ for more details.

All

All individuals may be entitled to benefits, such as Universal Credit, and Employment Support Allowance. They should also be able to ask for a 3 month holiday from their mortgage payments and other loan/credit facilities. The personal tax payments due by 31 July 2020 have been deferred until 31 January 2021. All taxes can potentially be deferred under via the Time To Pay support.

Businesses

All businesses can apply for loans via the Coronavirus Business Interruption Loan Scheme or the Bounce Back Loan Scheme.

Company Director/Shareholder

Company directors/shareholders, even if they are the only person in the business are not self employed. They are employed as directors and receive a salary, and they are owners of the company and receive dividends as investment income. The only potential support for this income, is if the director stops working for the company completely (is furloughed) except for statutory duties. In which case that director can claim Job Retention Scheme (see by type). There is no support for dividend income.

Self Employed

Self employed only includes individuals trading and being taxed under their own name (not within a limited company) and partners of a trading partnership. They may be able to claim support via the Self Employment Income Support Scheme.

Employers

Employers with employees who have stopped working for their employer due to the crisis may be able to claim part of employees wages via the Job Retention Scheme or the Job Support Scheme. If employees are ill or are self isolating, they are entitled to Statutory Sick Pay from day 1 and you can claim up to 2 weeks of SSP back from HMRC.

Employees

Employees who have had to stop working for their employer should be entitled to some of their usual pay via the Job Retention Scheme or the Job Support Scheme. Employees who are ill or who need to self isolate due to the Coronavirus, are entitled to Statutory Sick Pay from day 1 of their leave. Contracts of employment may increase these entitlements.

VAT Registered

VAT registered businesses can defer their payment due between 20 March 2020 and 30 June 2020 until 5 April 2021. Hospitality sector VAT has been temporarily cut to 5%.

Business Properties – Retail, Hospitality, or Leisure Industries

If you are in the above industries and your business property has a rateable value of between £15,000 and £51,000 you are entitled to a taxable grant of £25,000. No businesses in the above industries will have to pay business rates for the 2020 to 2021 tax year. Read More.

Business Properties – Other

Nurseries won’t have to pay business rates for the 2020 to 2021 tax year. Other businesses that benefit from the Small Business Rate Relief or Rural Rate Relief so pay little or zero business rates, are entitled to a grant of £10,000. Read More. Other businesses with properties not covered by the above may be able to apply to their local authority for a ‘top up grant’ – read here.

Tenants

All tenants are protected from eviction if they miss a rent payment in the 3 months to 30 June 2020. Read more for businesses and individuals.