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Mel’s COVID-19 Update: 15th October 2020
Deferral of VAT Payments due to Coronavirus (COVID-19)
Businesses who deferred VAT due from 20 March to 30 June 2020 will now have the option to pay in smaller payments over a longer period.
Instead of paying the full amount by the end of March 2021, HMRC have confirmed businesses can make smaller payments up to the end of March 2022, interest free.
You will need to opt-in to the scheme, and for those who do, this means that your VAT liabilities due between 20 March and 30 June 2020 do not need to be paid in full until the end of March 2022.
Those that can pay their deferred VAT can do so by 31 March 2021.
If you are still unable to pay the VAT due and need more time, you can contact HMRC by phoning: 0300 200 3835.
More information on the scheme will be available in the coming months and we will keep you up to date when changes occur.
Please take a look here: https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19?utm_source=cad7c1fc-6225-4a8b-97b6-66507f6182c0&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate
Is your business eligible for the Coronavirus local lockdown restrictions support grant?
Published 24 September the Local Restrictions Support Grant (LRSG) supports businesses that have been required to close due to temporary COVID-19 local lockdown restrictions imposed by the government.
The Local Restrictions Support Grant (LRSG) supports businesses that were open as usual, providing services in person to customers from their business premises, but which were then required to close for at least 3 weeks due to local lockdown restrictions imposed by government.
It is for businesses that pay business rates on their premises. Local councils may at their discretion also provide funding for businesses that don’t pay business rates.
Your business may be eligible if it:
- Occupies property on which it pays business rates
- Is in a local lockdown area and has been required to close because of the formal publication of local restrictions guidance that resulted in a first full day of closure on or after 9 September. This funding is not retrospective
- Has been required to close for at least 3 weeks because of the lockdown
- Has been unable to provide its usual in-person customer service from its premises
For example this could include non-essential retail, personal services or cafes/restaurants that operate primarily as an in-person venue, but which have been forced to close those services and provide a takeaway-only service instead.
Eligible businesses will get one grant for each property liable for business rates within the lockdown zone.
Businesses that are required to close but do not pay business rates may be eligible for funding at the discretion of the local council, as may businesses not required to close but which are severely impacted.
If your business is eligible and has a property with a rateable value of less than £51,000, you will receive a cash grant of £1,000 for each 3-week period your business is closed.
If your business is eligible and has a property with a rateable value of £51,000 or above, you will receive a cash grant of £1,500 for each 3-week period your business is closed.
The grant will be extended to cover each additional 3-week period, so if your business is closed for 6 weeks it will receive £2,000 or £3,000, depending on the rateable value of the property.
Grants will be based on the rateable value of the property on the first full day of local lockdown restrictions.
You may receive a grant of up to £1,500 at the discretion of your local council if:
- Your business is required to close but you do not pay business rates
- If your business is not required to close, but has been severely affected, for example as a result of customer businesses being closed
- Your local council will publish details of discretionary funding on their website
- Businesses which are able to continue to operate during the lockdown because they do not depend on providing direct in-person services from their premises
- Businesses that have chosen to close, but have not been required to close as part of a local lockdown
- Businesses that are still subject to national closures such as nightclubs
- Businesses that have reached the state aid limit
If you already get state aid
The Local Restrictions Support Grant counts towards state aid.
Payments count towards the total de minimis State aid you’re allowed to get over a 3-year period - €200,000. If you have reached that threshold, you may still be eligible for funding under the COVID-19 Temporary Framework. The limit for the framework is €800,000.
Your local council will ask you to complete a declaration confirming that:
- You will not exceed the relevant State aid threshold
- You were not an ‘undertaking in difficulty’ on 31 December 2019. This applies only to the COVID-19 Temporary Framework
The undertaking in difficulty test does not apply to small and micro undertakings (less than 50 employees and less than EUR 10 million of annual turnover and/or annual balance sheet) unless they were already in insolvency proceedings, have received rescue aid that has not been repaid, or are subject to a restructuring plan under State aid rules.
How to apply
Visit your local council’s website to find out how to apply:
Can you claim the Job Retention Bonus from 15 February 2021?
You can claim the bonus if you are an employer who has furloughed employees and made an eligible claim for them through the Coronavirus Job Retention Scheme. Your employee must have been eligible for the Coronavirus Job Retention Scheme grant for you to be eligible for the bonus.
You can still claim the bonus if you make a claim for that employee through the Job Support Scheme.
If you have repaid Coronavirus Job Retention Scheme grant amounts to HMRC then you cannot claim the bonus for any employees that you have not paid using the Coronavirus Job Retention Scheme grant because you have repaid all the grant amounts you claimed for them. This applies regardless of the reason why you repaid the grant amounts.
Employees you can claim for
You can claim for employees that:
- You made an eligible claim for under the Coronavirus Job Retention Scheme
- You kept continuously employed from the end of the claim period of your last Coronavirus Job Retention Scheme claim for them, until 31 January 2021
- Are not serving a contractual or statutory notice period for you on 31 January 2021 (this includes people serving notice of retirement)
- You paid enough an amount in each relevant tax month and enough to meet the Job Retention Bonus minimum income threshold
If HMRC are still checking your Coronavirus Job Retention Scheme claims, you can still claim the Job Retention Bonus, but your payment may be delayed until those checks are completed.
HMRC will not pay the bonus if you made an incorrect Coronavirus Job Retention Scheme claim and your employee was not eligible for the Coronavirus Job Retention Scheme.
For employees who have been transferred to you under TUPE or due to a change in ownership - You may be eligible to claim the Job Retention Bonus for employees of a previous business which were transferred to you if:
- TUPE rules applied
- The PAYE business succession rules applied
- The employees were associated with the transfer of a business from the liquidator of a company in compulsory liquidation where TUPE would have applied if the company was not in compulsory liquidation
To claim the Job Retention Bonus for employees that have been transferred to you, you must have furloughed and successfully claimed for them under the Coronavirus Job Retention Scheme, as their new employer. The employees must also meet all the relevant eligibility criteria for the Job Retention Bonus.
This means that you will not be able to claim the Job Retention Bonus for any employees who are transferred to you after the Coronavirus Job Retention Scheme closes on 31 October 2020.
Claiming for an individual who’s not an employee - You can claim the Job Retention Bonus for individuals who are not employees, such as office holders or agency workers, as long as you claimed a grant for them under the Coronavirus Job Retention Scheme and the other Job Retention Bonus eligibility criteria are met.
The minimum income threshold
To be eligible for the bonus you must make sure that your employees have been paid at least the minimum income threshold.
To meet the minimum income threshold you must pay your employee a total of at least £1,560 (gross) throughout the tax months:
- 6 November to 5 December 2020
- 6 December 2020 to 5 January 2021
- 6 January to 5 February 2021
You must pay your employee at least one payment of taxable earnings (of any amount) in each of the relevant tax months.
The minimum income threshold criteria apply regardless of:
- How often you pay your employees
- Any circumstances that may have reduced your employee’s pay in the relevant tax periods, such as being on statutory leave or unpaid leave
What payments are included in the minimum income threshold?
Only payments recorded as taxable pay will count towards the minimum income threshold. Taxable pay is reported to HMRC as a single figure through Full Payment Submissions via Real Time Information (RTI).
If you are making redundancies
If you make redundancies, you must comply with the normal rules for redundancy, which include using fair redundancy criteria. These rules apply even if this means that fewer of your employees are eligible for the Job Retention Bonus.
Further information can be found on GOV.UK by searching ‘Job Retention Bonus Guidance’.
What you need to do now
If you intend to claim the Job Retention Bonus, you must:
- Keep your PAYE submissions up-to-date and on time, with Real Time Information (RTI) reporting for all employees, including reporting the leaving date for any employees that stop working for you in the month they leave or the next Full Payment Submission
- Use the irregular payment pattern indicator in RTI for any employees not paid regularly
- Provide any employee data for past CJRS claims that HMRC has requested
- Make sure all your CJRS claims have been accurately submitted and you have told HMRC about any changes needed (for example if you have received too much or too little)
Tax Treatment of the Job Retention Scheme
You must include money that your business has received under this scheme as income when you calculate your taxable profits for Income Tax and Corporation Tax purposes, so yes this money is taxable…
The payroll costs of your employees will then be deducted from your profits as normal.
When the Government ends the scheme
You will have until 31 March 2021 to make a Job Retention Bonus claim after which the scheme will close. No further claims will be accepted after this date.
You will not be able to claim until 15 February 2021 and this guidance will be updated by the end of January 2021 with details on how to access the online claim service.
If you use our firm as your tax and payroll agent, we are authorised to do PAYE online, and we will be able to claim the Job Retention Bonus on your behalf. Please contact us for more information.
Self-assesment customers can now apply online to spread the cost of their tax bill into monthly payments
Self-Assessment customers can now apply online to HMRC to spread the cost of their tax bill into monthly payments without the need to call them.
The online self-serve 'Time to Pay' service, has been increased to £30,000 for Self-Assessment customers, to help ease any potential financial burden they may have due to the coronavirus pandemic.
Once you have completed your tax return for the 2019-20 tax year, you can use the online self-serve 'Time to Pay' service through GOV.UK to set up a direct debit and pay any tax that is owed in monthly instalments, up to a 12-month period.
If you wish to set up your own self-serve 'Time to Pay', you must meet the following requirements:
- No outstanding tax returns
- No other tax debts
- No other HMRC payments set up
- your Self-Assessment tax bill is between £32 and £30,000
- It is no more than 60 days since the tax was due for payment.
If you do not meet these requirements, you might still qualify for Time to Pay, but you will need to call HMRC to set this up.
If you set up a 'Time to Pay' arrangement, you will have to pay interest on the tax paid late. Interest will be applied to any outstanding balance from 1 February 2021.
Please note that the link to the Government's article on this section was removed on the 12th January 2022 as it's no longer accessible.
Coronavirus Job Retention and Job Support Scheme
Coronavirus Job Retention Scheme - The 30 November 2020 is the last day you can submit CJRS claims for periods ending on or before 31 October 2020. After this date you will not be able to submit any further claims or add to existing claims.
Coronavirus Job Retention Scheme – changes from 1 October
From 1 October, HMRC will pay 60% of usual wages up to a cap of £1,875 per month for the hours furloughed employees do not work.
Employers will continue to pay furloughed employees at least 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. You will need to fund the difference between this and the CJRS grant yourself.
The caps are proportional to the hours not worked. For example, if your employee is furloughed for half their usual hours in October, you are entitled to claim 60% of their usual wages for the hours they do not work, up to £937.50 (half of £1,875 cap). You must still pay your employee at least 80% of their usual wages for the hours they don’t work, so for someone only working half their usual hours you’d need to pay them up to £1,250 (half of £2,500 cap), funding the remaining portion yourself. For help with calculations, search ‘Calculate how much you can claim using the Coronavirus Job Retention Scheme’ on GOV.UK.
You will also continue to pay furloughed employees’ National Insurance and pension contributions from your own funds.
The scheme closes on 31 October and you will need to make any final claims on or before 30 November. You will not be able to submit or add to any claims after 30 November.
Claimed too much in error?
It is important that you continue to check each claim is accurate before submitting it, and HMRC recommend checking previous claims so you can avoid any penalties for claiming too much.
If you have claimed too much CJRS grant and have not repaid it, you must notify HMRC and repay the money by the latest of whichever date applies below:
- 90 days from receiving the CJRS money you are not entitled to
- 90 days from the point circumstances changed so that you were no longer entitled to keep the CJRS grant
- 20 October 2020, if on or before 22 July you received CJRS money you were not entitled to, or if your circumstances changed.
If you do not do this, you may have to pay interest and a penalty as well as repaying the excess CJRS grant. For more information on interest search 'Interest rates for late and early payments' on GOV.UK.
How to let HMRC know if you have claimed too much
You can let HMRC know as part of your next online claim without needing to call them. If you claimed too much but do not plan to submit further claims, you can let HMRC know and make a repayment online through the new card payment service – go to 'Pay Coronavirus Job Retention Scheme grants back' on GOV.UK.
Guidance and live webinars offering you more support on changes to CJRS and how they impact you are available to book online – go to GOV.UK and search 'help and support if your business is affected by coronavirus'.
If we submit your claims we will keep you up to date with the information we require and when we get details of the Jog Support Scheme we can use our JSS calculator to estimate your claims. Please talk to us about how we can help.
The job support scheme (JSS) will open on 1 November 2020 and run for 6 months.
The company will continue to pay its employee for time worked, but the cost of hours not worked will be split between the employer, the Government (through wage support) and the employee (through a wage reduction), and the employee will keep their job.
The Government will pay a third of hours not worked up to a cap, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped.
Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.
A step by step guide is available for employers here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/923875/Coronavirus_Job_Retention_Scheme_step_by_step_guide_for_employers.PDF
We will keep you informed of how the JSS will work as soon as we get details. If we make the claims for you then we will also be able to estimate the amounts of the claims in advance using our calculators. Please talk to us about how we can help.
The government’s Job Support Scheme (JSS) will be expanded to protect jobs and support businesses required to close their doors as a result of coronavirus restrictions, the Chancellor announced 9 October.
Under the expansion, firms whose premises are legally required to shut for some period over winter as part of local or national restrictions will receive grants to pay the wages of staff who cannot work The Government’s aim is to protect jobs and enable businesses to reopen quickly once restrictions are lifted.
The government will support eligible businesses by paying two thirds of each employees’ salary (or 67%), up to a maximum of £2,100 a month.
Under the scheme, employers will not be required to contribute towards wages and only asked to cover NICS and pension contributions, a very small proportion of overall employment costs. It is estimated that around half of potential claims are likely not to incur employer NICs or auto-enrolment pension contributions and so face no employer contribution.
Businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of seven consecutive days.
The scheme will begin on 1 November and will be available for six months, with a review point in January. In line with the rest of the JSS, payments to businesses will be made in arrears, via a HMRC claims service that will be available from early December. Employees of firms that have been legally closed in the period before 1 November are eligible for the CJRS.
The scheme is UK wide and the UK Government will work with the devolved administrations to ensure the scheme operates across all four nations.
In addition to expansion of the JSS, the government is increasing the cash grants to businesses in England shut in local lockdowns to support with fixed costs. These grants will be linked to rateable values, with up to £3,000 per month payable every two weeks, compared to the up to £1,500 every three weeks which was available previously. This could benefit hundreds of thousands of businesses, including restaurants, pubs, nightclubs, bowling alleys and many more.
Businesses can apply for the JSS including the new expansion even if they haven’t previously used the Coronavirus Job Retention Scheme (CJRS). JSS is available for six months, from 1 November, with payment of grants in arrears from early December. The scheme will be reviewed in January.
Search 'Job Support Scheme expanded to firms required to close due to COVID Restrictions’ and ‘Job Support Scheme factsheet’ on GOV.UK for more details. Further information will be published in the coming weeks.
Self-Employed and Sole Traders - Update
The Self-Employment Income Support Scheme (SEISS) allowed you to claim a first taxable grant. Applications for the first grant closed on 13 July 2020.
The second taxable grant is worth 70% of your average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £6,570 in total.
Applications for the second grant are now open. Make your claim from the date HMRC give you. If you are eligible and your business has been adversely affected on or after 14 July 2020, you must make your claim for the second grant on or before 19 October 2020.
The scheme is being extended from 1 November. The grant extension is for self-employed individuals who are currently eligible for the Self-Employment Income Support Scheme and are actively continuing to trade but are facing reduced demand due to coronavirus (COVID-19).
The extension will provide two grants and will last for six months, from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a three-month period.
The first grant will cover a three-month period from the start of November until the end of January. HMRC will provide a taxable grant covering 20 per cent of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £1,875 in total.
HMRC are providing broadly the same level of support for the self-employed as is being provided for employees through the Job Support scheme.
The second grant will cover a three-month period from the start of February until the end of April. HMRC will review the level of the second grant and set this in due course.
Again, please remember that the grants are subject to Income Tax and National Insurance Contributions.
Protect yourself from scams
They have provided further information on the support schemes available to help you through the pandemic:
- Job Support Scheme
- Expansion of Job Support Scheme
- Job Retention Bonus
- Coronavirus Job Retention Scheme
- VAT Deferral New Payment Scheme
Find a Kickstart Gateway to Apply for a Kickstart Scheme Grant on your Behalf
The Kickstart Scheme provides funding to employers to create job placements for 16 to 24-year olds on Universal Credit who are at risk of long-term unemployment.
Employers of all sizes can apply for funding which covers:
- 100% of the National Minimum Wage (or the National Living Wage depending on the age of the participant) for 25 hours per week for a total of 6 months
- Associated employer National Insurance contributions
- Employer minimum automatic enrolment contributions
Employers can spread the start date of the job placements up until the end of December 2021.
A Kickstart Scheme application must be for a minimum of 30 job placements. If a single employer cannot provide this many job placements, they can find an existing Kickstart gateway, such as a local authority, charity or trade body for help applying.
Further funding is available for training and support so that young people on the scheme can get a job in the future.
The Department for work & Pensions have announced new entries of organisations who can help employers with the Kickstart scheme across all regions of the UK So you can find a Kickstart gateway in England, Scotland or Wales who have expressed interest in helping employers get a Kickstart Scheme grant.
Apply for a Kickstart Scheme Grant: 29 or Less Job Placements
If you are an employer looking to create 29 or less jobs placements for young people, apply for funding as part of the Kickstart Scheme.
As an employer with 29 or less job placements you need to find an existing Kickstart gateway, such as a local authority, charity or trade body.
Whoever represents you will apply on your behalf. You will need to give them information about the job placements.
The job placements must not:
- Replace existing or planned vacancies
- Cause existing employees, apprentices or contractors to lose work or reduce their working hours
Tell your Kickstart gateway:
- How many employees you have
- About changes to your workforce in the last 6 months and why (for example redundancies and changes to hours worked by existing staff)
- The number of people affected by changes to your workforce in the last 6 months
- About the kinds of roles, functions and average salary of those who were made redundant or who had their hours reduced in the last 6 months
- If you would be able to create these job placements without Kickstart Scheme funding and what funding source you would use
- What recruitment you have completed, started or paused in the last 6 months, including how similar these vacancies are or were to the roles you are creating for the Kickstart Scheme
- If the job placements will be similar to existing or planned roles or the roles previously done by those made redundant or with fewer working hours, why you are using Kickstart Scheme funding to create similar roles
- if you have engaged with any relevant trade unions and any advice the unions have given
NHS Test and Trace in the Workplace
The guidance on NHS Test and Trace for employers, businesses and workers has changed and updated to reflect the launch of the COVID-19 app and how it should be used in the workplace. The guidance has corrected the period that people are infectious to say: “from 2 days before the person was symptomatic up to 10 days from onset of symptoms”.
During COVID-19 I want to ensure that everyone is as up to date as possible with regards to Government changes and support that impacts businesses. Please note that this update is correct as of date of publishing (15th October 2020).