United Kingdom

Welcome to the high-level summary of Covid-19 related actions by the UK Government. The details and links below have been split between “Tax Filings Affected”, “Government Employee Wages Benefits Programs” and “Government Loan Programs”; and are extracts from the more detailed information available on the websites of the UK Praxity Participant firms’ websites, links to which are available at the bottom of this page. Praxity Participant Firms in the UK are Albert Goodman, Forrester Boyd, Garbutt + Elliott, Mazars, PM+M Solutions for Business, Rouse Partners and Shorts

Tax Filing Affected

VAT Deferment Scheme

  • There will be a VAT payment deferral for 3 months. The deferral will apply to VAT payments due from 20 March 2020 to 30 June 2020. This will apply to all UK businesses. - VAT returns need to be submitted to HMRC on time. - VAT payments due following the end of the deferral period will have to be paid as normal. - The VAT deferred due to COVID-19, must be paid to HMRC or before March 31, 2021
  • Instead of having to repay the full amount by March 2021, business are no able to make smaller interest-free payments during the 2021-22 financial year, providing the VAT due is cleared by 31 March 2022. Businesses must opt-in to utilize this new scheme, and any businesses who are able to pay their deferred VAT by 31 March 2021 can still do this.
  • March 3, 2021 Budget Update- VAT reduction in hospitality and leisure- The reduced rate of 5% will continue until 30 September, after which the rate will become 12.5% for a further 6 months, before returning to the Standard Rate, which is currently 20%, in April 2022.

Income Tax Payments

  • If you are self-employed, Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.This is an automatic offer with no applications required. No penalties or interest for late payment will be charged in the deferral period.
  • September 24th Announcement - For payments due in January, taxpayers who need help have the option of spreading the cost over 12 months if required.
  • It was announced in the Winter Economy Plan that self-assessment taxpayers can benefit from an additional 12-month extension from HMRC on the ‘Time to Pay’ self-service facility. This means that payments already deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022. You can defer these payments without penalties and any Income Tax refunds will be paid to you as normal.
  • See further guidance: Government Guidance

Working from Home Tax Relief Employees working from home due to the coronavirus pandemic can continue to claim tax relief on costs not reimbursed by their employer, but a new claim will need to be made for the 2021/22 tax year, HMRC has recently confirmed. Some detail on the working from home tax relief can be found below. A flat rate of £6 per week or £26 per month can be paid tax free to employees to cover the increased costs of heat, light, phone calls and broadband usage due to home working through the coronavirus pandemic (the rate was £4 per week or £18 per month prior to 6 April 2020). This expense can be paid to the employee by their employer without the submission of any records. Higher amounts can be claimed by agreement but must be supported by receipts or other evidence. In practice, most people find the flat rate allowance enough to cover these costs. If employers choose not to make this £6 per week payment , the employee can make a claim for the additional tax allowance of the same amount themselves. HMRC changed its systems in 2020 so that employees only need to claim once to automatically claim the relief for ALL of this tax year. This tax relief of £6 per week equates to a saving of £1.20 per week for a basic 20% rate taxpayer and £2.40 per week for a higher 40% rate taxpayer.

Time to Pay (TTP) Arrangements

  • All businesses and self-employed people who find themselves in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HRMC's 'Time to Pay' service. Arrangements will be agreed on a case-by-case basis. HMRC will discuss your specific circumstances to explore: - Agreeing an installment arrangement - Suspending debt collection proceedings - Cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately
  • Please note that HMRC have issued a helpline for businesses who have concerns and worries about complying with their tax obligations due to the Coronavirus pandemic. Visit the HMRC page here for more details or call HMRC on 0800 0159 559
  • HMRC have stated that this helpline can be used to: - Agree installment arrangements - Suspend debt collection proceedings - Avoid penalties and interest

See member firm guides: links are below

Returns filed late due to COVID-19 HMRC has said it will waive the penalty fines for the filing of some late self-assessment tax returns, if the individual can demonstrate they have been ‘adversely affected’ by COVID-19. For example, parents who are home-schooling children due to the current lockdown are considered to have a ‘reasonable excuse’ for missing the filing deadline of 31 January if they can show this has affected their ability to complete their accounts on time. Usually, late filing leads to a fine of at least £100 so this recent news is welcome for the many self-employed individuals who have been heavily impacted by the latest lockdown and the closure of businesses. Individuals who decide not to file their tax returns on time are required to fill out a COVID excuse form and complete and submit their self-assessment return as soon as possible after that. The tax payment date remains at 31 January, however, and interest will be charged on any late payments. Update: Self-assessment customers who cannot file their tax return by the 31 January 2021 deadline will not receive a late filing penalty if they file online by 28 February. HMRC is encouraging anyone who has not yet filed their tax return to do so by 31 January, if possible. Anyone who cannot file their return by the 31 January deadline will not receive a late filing penalty if they file online by 28 February. Taxpayers are still obliged to pay their tax bill by 31 January. Interest will be charged from 1 February on any outstanding liabilities and late payment penalties of 5% of the outstanding tax will apply to unpaid 2019/20 tax from 28 February as normal. Customers can pay online, or via their bank, or by post before they file. Taxpayers who cannot afford to pay their tax bill on time can apply online to spread their bill over up to 12 months. But they will need to file their 2019 to 2020 tax return before they will be permitted to set up such a time to pay arrangement. We also understand that those wishing to claim the next Self Employed Income Support Scheme grant will not be able to do so unless their return has been submitted by 31 January.

Government Employee Wages Benefits Programs

The Small Business Grant Fund and Retail, Hospitality, and Leisure Grant Fund

  • Although Government announced that local authorities will contact you if you are eligible and stated 'you don't need to do anything', you can apply online if you think that you are eligible. See listing here.

Coronavirus Job Retention Scheme (CJRS)

  • The Government has announced a new scheme called “Coronavirus Job Retention Scheme”. Under this Scheme, all UK employers may be able to access support to continue paying part of the salary for those employees that would otherwise have been made redundant during this crisis. To access the scheme employers will have to do the following: - Designate affected employees as ‘furloughed workers’, and notify your employees of this change - changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation -Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

-The eligibility cut-off date has been extended from 28 February to 19 March 2020. This means employers are now able to claim for furloughed employees that were employed and on their PAYE payroll on or before 19 March 2020. -The employee must have been notified to HMRC through an RTI submission on or before 19 March 2020. If you made employees redundant or they stopped working for you on or after 28 February 2020, you can re-employ them, put them on furlough and claim for their wages through the furlough scheme. This applies to employees that were made redundant or stopped working for you after February, even if you do not re-employ them until after 19 March.

  • From 1 July the scheme will allow part-time working, but staff must have been furloughed by 10 June to be eligible. The scheme will close on 30 June to new furloughed employees.
  • Claims for the period to 30 June will need to be made by 31 July.
  • From 1 July, claim periods will no longer be able to overlap months.
  • From 1 August, the furlough scheme will no longer cover employers NIC or pension contributions.
  • From September, employers will be asked to contribute at least 10% to furloughed wages, with 70% byt the grant (up to 2187 euros).
  • From October, employers will be asked to contribute at least 20% to furloughed wages, with 60% covered by the grant (up to 1875 euros). .
  • The scheme will end on 31 October.
  • The Government issued further clarification about this scheme Read the guidance here.
  • Government Guidance; See further firm member guidance: links are below
  • To replace the current furlough scheme (which ends in October), this brand new scheme will come into effect in November for 6 months. The principles are:
  • To support viable jobs. Employees must work at least one third of normal hours and be paid for that as normal. The Government will then cover one third of the pay lost by the hours reduction and the employer must fund a further 1/3rd. It is our understanding that out of overall pay, this should calculate as the employee receiving just over 77% of their normal pay of which 55% is funded by the employer and 22% by the Government. The Government contribution will be capped at £697.92 per month.
  • SMEs are all eligible. Large companies will only be eligible if their turnover has fallen during the crisis – no details as yet to define ‘large’ or how much turnover needs to have fallen to be eligible, although the Government have said they expect that large employers will not be making capital distributions such as dividends while using the scheme.
  • All UK employers will be eligible, even if they have not previously used the furlough scheme, providing they have a UK bank account and PAYE scheme.
  • Employers can use this scheme AND claim the Coronavirus Job Retention Scheme bonus as well.
  • Government Guidance; See further firm member guidance: links are below
  • DEADLINE ANNOUNCED: All claims relating to the period up to and including 31 October 2020 must be submitted no later than 30 November.

Job Support Scheme To replace the current furlough scheme (which ends in October), this brand new scheme will come into effect in November for 6 months. The principles are:

  • To support viable jobs. Employees must work at least one third of normal hours and be paid for that as normal. The Government will then cover one third of the pay lost by the hours reduction and the employer must fund a further 1/3rd. It is our understanding that out of overall pay, this should calculate as the employee receiving just over 77% of their normal pay of which 55% is funded by the employer and 22% by the Government. The Government contribution will be capped at £697.92 per month.
  • SMEs are all eligible. Large companies will only be eligible if their turnover has fallen during the crisis – no details as yet to define ‘large’ or how much turnover needs to have fallen to be eligible, although the Government have said they expect that large employers will not be making capital distributions such as dividends while using the scheme.
  • All UK employers will be eligible, even if they have not previously used the furlough scheme, providing they have a UK bank account and PAYE scheme.
  • Employers can use this scheme AND claim the Coronavirus Job Retention Scheme bonus as well.
  • Government Guidance; See further firm member guidance: links are below

October 22 Update The Job Support Scheme, which is due to launch at the beginning of November, is based on employees working reduced hours due to lower demand. Amendments to the scheme were today announced as follows: – Government will now pay at least 62% (almost two thirds) of wages for the hours not worked by the employee (in comparison to the original plan, in which the Government confirmed they would fund only one third) – The employer contribution towards these hours not worked has been cut from 33% to 5% – Employees will now take home at least 73% of pay for working the new minimum of 20% of their normal working hours (rather than working a minimum of one third of normal hours, as previously announced) Support for Business Legally required to close: Employers are required to pay employees two thirds of their normal salary (where they can’t work for a week or more) and the Government will cover 100% of those costs.

On Saturday 31 October (the eve of the Job Support Scheme launch date), Boris Johnson announced another period of lockdown in England. This next lockdown is expected to become effective on 5 November and last for four weeks. To support businesses through this period, the Government has decided to extend the Coronavirus Job Retention Scheme (CJRS), or more commonly known as the furlough scheme. Following discussions around support for businesses through the winter in light of a second national lockdown, Chancellor Rishi Sunak has announced that the Government will be extending the furlough scheme until the end of March 2021. The extended Coronavirus Job Retention Scheme will be slightly different from the version of the scheme which employers were using up to the end of October, and employers should note the following key points: – The level of the grant will mirror levels available under the CJRS previously seen in August. The Government will pay 80% of wages up to a cap of £2,500. – Employers will pay employer NICs and pension contributions, and should continue to pay the employee for hours worked in the normal way. – To be eligible to claim under the extension, employees must be on an employer’s PAYE payroll by 23:59 on 30 October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30 October 2020. – Neither the employer nor the employee needs to have previously used the CJRS. – Flexible furloughing will be allowed in addition to full-time furloughing. – Employees can be on any type of contract – full time, part time, zero hours etc. – Employers will be able to agree any working arrangements with employees. – Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. Such calculations will broadly follow the same methodology as the original CJRS. – Employers will need to report and claim for a minimum period of 7 consecutive calendar days. – Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period. – All employers with a UK bank account and a UK PAYE scheme are eligible, however, there are restrictions for publicly funded organisations, as per the original scheme, but with some relaxations for partially public funded organisations whose private revenues have been disrupted.

– An employee who hasn’t previously been on furlough can be furloughed as long as they were on a submitted payroll before midnight on 30 October 2020 – The following deadlines apply: claims in respect of November 2020 must be submitted by 14 December 2020 and must be amended by 29 December 2020; claims in respect of December 2020 must be submitted by 14 January 2021 and must be amended by 28 January 2021; and claims in respect of January 2021 must be submitted by 15 February 2021 and must be amended by 1 March 2021 – You cannot make a claim for notice periods being served between 1 December 2020 and 31 January 2021 (this is applicable to both contractual and statutory notice)

December Update Following discussions around support for businesses through the winter in light of a second national lockdown, Chancellor Rishi Sunak has announced that the Government will be extending the furlough scheme until the end of April 2021. The scheme will pay up to 80% of an employee’s wages up to £2,500 per month and is set to be reviewed in January to decide whether employers should contribute, as they did towards the end of the original furlough scheme. The extended Coronavirus Job Retention Scheme will be slightly different from the version of the scheme which employers were using up to the end of October, and employers should note the following key points:

  • The level of the grant will mirror levels available under the CJRS previously seen in August. The Government will pay 80% of wages up to a cap of £2,500.
  • Employers will pay employer NICs and pension contributions, and should continue to pay the employee for hours worked in the normal way.
  • To be eligible to claim under the extension, employees must be on an employer’s PAYE payroll by 23:59 on 30 October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30 October 2020.
  • Neither the employer nor the employee needs to have previously used the CJRS.
  • Flexible furloughing will be allowed in addition to full-time furloughing.
  • Employees can be on any type of contract – full time, part time, zero hours etc.
  • Employers will be able to agree any working arrangements with employees.
  • Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. Such calculations will broadly follow the same methodology as the original CJRS.
  • Employers will need to report and claim for a minimum period of 7 consecutive calendar days.
  • Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
  • All employers with a UK bank account and a UK PAYE scheme are eligible, however, there are restrictions for publicly funded organisations, as per the original scheme, but with some relaxations for partially public funded organisations whose private revenues have been disrupted.

Update- Extension of CJRS Chancellor, Rishi Sunak, announced in the Spring Budget the extension of the Coronavirus Job Retention Scheme (CJRS) until 30 September 2021. This is welcome news for many businesses who have been forced to close or seen reduced demand due to COVID-19. The extension means that the CJRS scheme will remain in place for several months after the planned full reopening of the economy in England on 21 June 2021. WHAT’S CHANGED? The scheme will continue to pay up to 80% of an employee’s wages, up to £2,500 per month. However, from 1 July, employer contributions will gradually increase: –From 1 July to 31 July 2021 – employers will need to contribute 10% of wages, with the Government paying the remaining 70%. – From 1 August to 30 September – employers will be required to pay 20% of wages, with the Government paying the remaining 60%. As with the current rules governing the CJRS scheme, employers will continue to be required to pay employer National Insurance Contributions as well as pension contributions on furlough payments. Employers can also choose to ‘top-up’ employees wages to 100%, however, they are under no obligation to do so. Flexible furlough will also continue, whereby employees can work part time and receive a part-payment from the CJRS scheme for their unworked hours – allowing businesses to gradually bring their employees back to work progressively as the economy reopens. A further notable point is that employers can claim for new employees who started working for them between 31 October 2020 and 2 March 2021 but will need to wait until May 2021 before they are able to furlough them. However, the guidance indicates that employers cannot claim for any new employee who is recruited on, or after, the 3 March 2021. DATES FOR CLAIMING UP TO APRIL 2021 Deadlines to claim CJRS between now and April are: –15 March 2021 by 11.59pm for February claims –14 April 2021 by 11.59pm for March claims –14 May 2021 by 11.59pm for April claims What will happen to the Job Retention Bonus and Job Support Scheme? The previously announced Job Retention Bonus and Job Support Scheme (which the Government had intended to follow on from the furlough scheme) seem to have been postponed indefinitely and now look unlikely to be introduced, but we will provide updates as further guidance is announced. Cash Grants The Government will also increase the grants it pays to businesses in England legally required to close in local or national lockdowns as recognition of their ongoing fixed costs and overheads which need to be met. These grants will be linked to rateable values, with up to £3,000 per month payable every two weeks, compared to the previous grants that were available of up to £1,500 every three weeks. The breakdown is as follows: – Small businesses with a rateable value of or below £15,000 can claim £1,300 per month; – Medium sized businesses with a rateable value between £15,000 and £51,000 can claim £2,000 per month; and – Larger businesses can claim £3,000 per month

Apprenticeships In addition to the Government rewarding employers bringing existing workers back from furlough, from August 2020 to January 2021, any business that hires a new young apprentice aged 16 to 24 will receive £2,000, while those that hire new apprentices aged 25 and over will be paid £1,500. This is in addition to the £1000 incentive the Government already provides for employers taking on an apprentice aged between 16-18 or under 25 with an Education, Health and Care Plan. They must hire between 1st August 2020 and 31st January 2021. This means that employers could receive up to £3,000 for hiring 16 to 18-year-old apprentices from August to January

Self-Employed Income Support Scheme

  • If you are self-employed or a member of a partnership you may be entitled to claim a taxable grant worth 80% of your trading profits, up to a maximum of £2,500 per month for the next 3 months. To qualify you should have trading profits in 2018/19 of less than £50,000 and more than half of your income.
  • This is determined by at least one of the following conditions being true: - Having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income - Having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period - Government Guidance, See further guidance: links are below
  • The Chancellor has announced an extension that will allow those eligible to claim for a second and final taxable grant in August 2020. The final grant will be worth 70% of average monthly trading profits, again paid out in a single instalment covering 3 months’ worth of profits and capped at £6,570 in total.

The Chancellor confirmed that this existing scheme will be extended to 30 April 2021. The Chancellor has announced an extension that will allow those eligible to claim for a second taxable grant in August 2020.

  • Applications for the second grant opened on 17 August 2020.
  • The eligibility criteria are the same for the second grant, as for the first. Also, you can claim for the second grant even if you did not make a claim for the first grant.
  • However, the value is slightly reduced. Those eligible for the second grant will be able to receive a grant worth 70% of their average monthly trading profits up to £6,750 in total for the second three month period.
  • The first grant is for those whose business was impacted by COVID-19 before 13 July and the second, for those impacted by COVID-19 on or after 14 July. If impacted before and after the dates, you are due both.
  • HMRC will contact potentially eligible taxpayers to advise them that they can claim for a second and final SEISS grant. Eligibility
  • According to HMRC’s factsheet (see here), to be eligible for the further grants, taxpayers must meet the following criteria: Be currently eligible for the SEISS (although it is not necessary to have claimed the previous grants, Be actively trading at the time the grant is claimed and intend to continue to trade, Be impacted by reduced demand due to COVID-19 in the qualifying period
  • The qualifying period for the third grant runs from 1 November to the date of claim and the qualifying period for the fourth grant is expected to run from 1 February 2021 to the date of that claim.
  • The requirements to be “actively trading” and to be “impacted by reduced demand” are new adjustments to the scheme, and HMRC is expected to publish further guidance to clarify the meaning of these terms.
  • actively trading will mean that businesses that have had to close during the pandemic will not be able to claim if they have not already restarted during the qualifying period. Grants
  • The grants will be based on the same tax years as the previous grants, which means information on 2019/20 self-assessment tax returns that have been filed will not be considered.
  • HMRC have confirmed that the third SEISS grant will provide a taxable sum calculated as 20% of average monthly trading profits paid out in a single instalment covering three months’ worth of profits, capped at £1,875. This level has been set so as to offer broadly the same level of government support that is being provided to employees through the Job Support Scheme (see our recent blog for more on this).
  • October 22 update - Self-employed grants are being doubled from 20% to 40%, meaning that the maximum grant will go up from £1,875 to £3,750.

Third Installment SEISS The Government has confirmed it will increase the third instalment of the UK-wide Self-Employed Income Support Scheme (SEISS). Self-employed individuals will now receive 80% of their average trading profits for November, December and January (rather than just 40% in December and January as originally announced). This means that the new maximum grant for the third instalment of the scheme stands at £7,500. The speed at which the grant will be delivered is also being improved. The original roll-out date for the third SEISS grant was 14 December 2020, however, this is now being fast-tracked to 30 November 2020. To be eligible for the SEISS grant, self-employed individuals must: – Have been previously eligible for the Self-Employment Income Support Scheme’s first and second grants (however, you do not have to have claimed either of the previous two phases to bank monies now) – Declare that they intend to continue trading and either: >Are currently actively trading but are impacted by reduced demand due to coronavirus; or >Were previously trading but are temporarily unable to do so due to coronavirus Although the self-employed individual must submit the claim themselves, our team of specialists are on hand to help with the calculation of the submission and can provide tailored advice.

Fifth SEISS Grant will be open for claims from late July 2021 n the Spring Budget 2021, the Government confirmed that the Self-Employment Income Support Scheme (SEISS) would be extended to provide a fourth and fifth grant. HMRC have now confirmed the fifth grant will cover the period from May 2021 to September 2021 and applications will open from late July 2021. WHO CAN CLAIM THE FIFTH SEISS GRANT? To be eligible for the fifth grant you must be self-employed or a member of partnership, and you are unable to claim the grant if you trade through a limited company or trust. Additionally, you must have traded in the tax year 2019 to 2020, the tax year 2020 to 2021 and submitted your 2019-2020 tax return on or before 2 March 2021. You must also either: be currently trading but impacted by reduced demand due to coronavirus; or have been trading but are temporarily unable to do so due to coronavirus Regarding the second point, in order to claim, you must ‘reasonably believe’ that you will suffer a significant reduction in trading profits, due to reduced business activity, capacity, demand or inability to trade as a result of coronavirus between May 2021 and September 2021. You do not have to consider any other coronavirus scheme support payments which you may have received previously when deciding whether the reduction in profit is significant. Remember to keep evidence that illustrates how your business has been impacted by coronavirus. HMRC have confirmed that they expect claimants to make an honest assessment about whether you ‘reasonably believe’ your business will have a significant reduction in profits. HOW DOES THE FIFTH GRANT DIFFER FROM PREVIOUS GRANTS? Unlike previous grants, the amount you are able to claim under the fifth grant is determined by the extent to which your turnover has reduced between April 2020 and April 2021. If turnover has reduced by 30% or more, business owners are able to claim 80% of 3 months’ average trading profits, capped at £7,500, which will be paid in a single instalment. If turnover has reduced by less than 30%, claimants will receive 30% of 3 months’ average trading profits, capped at £2,850, which will also be paid in a single instalment. HMRC are due to release more detailed guidance regarding the above by the end of June 2021, therefore we will update our blog in due course. HOW TO CLAIM The online claims service for the fifth grant will be available from late July 2021. Those who are deemed as eligible based on tax returns will be contacted by HMRC in mid-July 2021 with a confirmed date on which they can submit their claims.

HMRC Amnesty Periods HMRC now has the task of tackling incorrect and fraudulent claims for COVID-19 support payments through both schemes. Under new rules passed in the Finance Act 2020, HMRC have begun to check claims made by businesses and where claims have been made incorrectly for any reason, they can impose hefty penalties, and fines, in addition to reclaiming the amounts paid to them. We understand that HMRC have already identified 27,000 claims where they believe incorrect or fraudulent claims have been made.

The window to apply for the third grant under the Self-Employed Income Support Scheme (SEISS) is set to close on 29 January 2021. Claims for the third grant under the scheme relate to the period between 1 November 2020 and 31 January 2021, with claimants being required to answer a “significant reduction in trading profits” test with regards to their income during this period.

Fourth Installment SEISS As confirmed in the Budget on 3 March 2021, the fourth SEISS grant will be open to some taxpayers who became newly self-employed in the tax year 2019/2020. In order to protect the scheme from fraud, HMRC is writing to 100,000 taxpayers asking them to complete pre-verification checks before they can make a claim. ICAEW have released the following details to highlight how the pre-verification checks will work: – Taxpayers will receive a letter between 8 March and mid-April 2021, notifying them that they will receive a phone call from HMRC within 10 working days. HMRC has confirmed that it will make three attempts to contact the taxpayer, therefore, if they receive a letter, it is important that they ensure HMRC holds the correct telephone number for them. If not, contact 0800 024 1222 (this line is for updating telephone numbers only and will not be able to deal with any other queries). – During the call, HMRC will ask the taxpayer to confirm their email address and agree to receive a link to a secure Dropbox, where they will be asked to upload one form of identity and three months’ worth of bank statements to demonstrate their business activity. The link will expire after two days, so it is important this is done as quickly as possible. – If HMRC is unsuccessful in reaching the taxpayer, they will write a further letter. If they are unable to reach them, or they do not complete the checks, they will be unable to claim the SEISS grant.

The online service to claim the fourth Self-Employment Income Support Scheme (SEISS) grant will be available from late April 2021. Unlike previous instalments of the grant, however, HMRC have confirmed that they will contact those who are eligible (based on previously submitted tax returns), to provide individuals with a date from which they can make their applications. AMNESTY PERIOD HMRC has extended the time in which employers can correct any mistakes and amend their claims without incurring penalties: CORONAVIRUS JOB RETENTION SCHEME HMRC must be notified by the latest of:

  • 90 days after the date they received the grant they were not entitled to
  • 90 days after the date they received the grant that they were no longer entitled to keep because their circumstances changed
  • 20 October 2020

SELF-EMPLOYMENT INCOME SUPPORT SCHEME HMRC must be notified by the latest of:

  • 20 October 2020
  • 90 days after they received the grant
  • Payment of the outstanding balance of any overclaim is to be made in full by 31 January 2022

Government Loan and Support Programs

Coronavirus Business Interruption Loan Scheme (CBILS)

  • Program available to business with turnover under £45 million and can receive loans of up to £5 million. - The Government will cover the first 12 months of interest payments, so businesses will benefit from lower initial repayments but the business will remain liable for the repayment of the capital. - See lenders and further information: CBILS Lenders
  • Government guarantee to be extended for up to 10 years. Coronavirus Large Business Interruption Loan Scheme (CLBILS)
  • The Government announced a new initiative to support businesses with turnover between £45 million and £500 million.
  • This scheme will allow these large businesses to borrow up to £25 million and these loans will largely be guaranteed by the Government.
  • The application deadline for the Coronavirus Business Interruption Loan Scheme (CBILS), the Bounce Back Loan Scheme and the Future Fund Scheme has been extended from 30 November 2020 to 31 January 2021.

Statutory Sick Pay (SSP) relief package

  • The government is supporting SME's and employers to cope with the extra costs of paying COVID-19 related Statutory Sick Pay (SSP) by refunding eligible SSP costs. This will enable staff to get Statutory Sick Pay (SSP) from the first day they self-isolate and cannot work, rather than waiting 3 days.
  • The eligibility criteria for the scheme will be as follows: - This refund will cover up to 2 weeks' SSP per eligible employee who has been off work because of COVID-19 - Employers with fewer than 250 employees will be eligible - the size of an employer will be determined by the number of people they employed as of 28 February 2020 - Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19 - Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note - Eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to those staying at home comes into force - The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.
  • The online service you’ll use to reclaim Statutory Sick Pay will be available from 26 May 2020, for more information please follow the link to HMRC guidance.

Charity Support Package Chancellor Rishi Sunak has announced that Charities across the country will receive a support package worth £750million ensuring that the vital support the sector provides is supported through the COVID-19 pandemic. This will be funded by £360m from Government departments directly to those providing key services and charities supporting vulnerable individuals. These will include:

  • Up to £200m to Hospices to increase capacity and give stability to the sector
  • A grant St Johns Ambulance to support the work of the NHS.
  • Support for victims charities, including domestic abuse, to help with potential increase in demand due to the lock down.
  • Financial support for vulnerable children charities so they can continue to deliver services on behalf of local authorities.
  • Grants to Citizens Advice to increase the number of staff providing advice during this difficult time.

A further £370m will be awarded by the National Lottery Community Fund. This will support small and medium charities who operate at the heart of local communities, including those delivering food, essential medicines and providing financial advice to those in need. The National Lottery Community Fund working with Government and other stakeholders to ensure these new funds have the biggest possible impact in communities across the country. As yet there are no details of how this funding will be made available. Small Business Bounce Back Loans This scheme will help small and medium-sized businesses affected by coronavirus (COVID-19) to apply for loans of up to £50,000. The scheme is not available yet, it will launch on 4 May 2020. The government will guarantee 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. Loan terms will be up to 6 years. No repayments will be due during the first 12 months. The government will work with lenders to agree a low rate of interest for the remaining period of the loan. The scheme will be delivered through a network of accredited lenders. You can apply for a loan if your business:

  • is based in the UK
  • has been negatively affected by coronavirus
  • was not an ‘undertaking in difficulty’ on 31 December 2019

The following businesses are not eligible to apply:

  • banks, insurers and reinsurers (but not insurance brokers)
  • public-sector bodies
  • further-education establishments, if they are grant-funded
  • state-funded primary and secondary schools
  • You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS).

Loan Scheme (CBILS). A new ‘pay as you grow’ flexibility was announced meaning that businesses can extend payment terms up to 10 years. Businesses can choose a period of interest only repayments and also, if struggling, suspend all repayments for up to 6 months.

November 3rd update -If a business has not claimed the maximum under the Bounce Back Loan Scheme (i.e. less than 25% of their turnover, up to a maximum borrowing of £50,000) then, from next week, they will be able to top up their loan.

The application deadline for the Coronavirus Business Interruption Loan Scheme (CBILS), the Bounce Back Loan Scheme and the Future Fund Scheme has been extended from 30 November 2020 to 31 January 2021. If a business has not claimed the maximum under the Bounce Back Loan Scheme (i.e. less than 25% of their turnover, up to a maximum borrowing of £50,000) then, from next week, they will be able to top up their loan.

February 17th Update - The Chancellor has announced that Bounce Back Loan borrowers will now have the option to tailor repayments according to their individual circumstances. Over 1.4 million businesses who collectively took out nearly £45bn through the Bounce Back Loan Scheme now have the option of using a new and more flexible ‘Pay as You Grow’ scheme. Pay as You Grow (PAYG) provides businesses who received funding via the Bounce Back Loan scheme with the opportunity to delay all repayments for a further six months, meaning borrowers can choose to make no payments on their loans until 18 months after they originally took them out. PAYG will provide borrowers with further flexibility such as: – The ability to extend the length of their loans from six to ten years, which reduces monthly repayments by almost half. – Being able to make interest-only payments for six months (an option that can be used up to three times) to tailor their repayment schedule to suit their individual circumstances. These new options are provided in addition to the original details of the scheme, in which the Government confirmed it would cover the cost of interest for the first year of the loan. The Government has announced that lenders will reach out to borrowers to provide information on repayment schedules and how to access flexible repayment options. Lenders will directly inform their customers of PAYG opportunities, and borrowers should only expect to hear from them three months before their first repayment is due. The Government has made clear that lenders are expected to offer PAYG options to all borrowers under the Bounce Back Loan scheme. Recovery loan scheme With the BBLS and CBILS scheme coming to an end, the Chancellor has announced that a new ‘Recovery Loan Scheme’ will be rolled out from 6th April 2021 and stay in place until the end of the year. The new scheme is very similar to the CBILS offering in terms of eligibility, finance terms and the 80% government guarantee, however businesses will be required to meet the costs of interest payments and any fees associated with the facility. Businesses can apply for between £25,001 to £10 million for term loans and £1,000 to £10 million for asset finance. No Personal Guarantees will be needed for loans up to £250,000.

The Recovery Loan Scheme (RLS) is now live, and will run to 31 December 2021, as announced in the recent Budget. Business Grants – £617m of additional grants to be released by local authorities to small businesses The government have announced additional funding to help small business (with fewer than 50 employees) with fixed property costs (such as rent) which have experienced a drop in income due to the Covid-19 restriction measures. Three grants of (1) up to £10k, (2) £10k or (3) £25k will be provided by local authorities and will cover businesses that are not subject to Business Rates. Priority will be given to businesses operating in shared spaces, market traders and bed and breakfast (that pay Council Tax instead of Business Rates). Restart Grants (March 3 2021 Budget) A further £5bn will be provided to businesses in England to help them ‘relaunch trading’ as restrictions are lifted through the coming months. Non-essential retail businesses will be provided up to £6,000 per premises, whilst up to £18,000 per premises will be provided for hospitality, accommodation, leisure, personal care and gym businesses. In line with previous grants, these will be made available by local councils and will be in addition to support grants which continue to be provided for certain closed businesses (lasting until the end of March). Business Grants – £617m of additional grants to be released by local authorities to small businesses The government have announced additional funding to help small business (with fewer than 50 employees) with fixed property costs (such as rent) which have experienced a drop in income due to the Covid-19 restriction measures. Three grants of (1) up to £10k, (2) £10k or (3) £25k will be provided by local authorities and will cover businesses that are not subject to Business Rates. Priority will be given to businesses operating in shared spaces, market traders and bed and breakfast (that pay Council Tax instead of Business Rates).

Innovate UK/UK Research and Innovation new grants and loans

  • £210m of new grants and loans for Innovative Businesses – grants and loans for 1,200 businesses of all sizes seeking to fund an innovative project or activities. There are expected to be various ‘Calls’ from Innovate UK and when they are launched the application process is expected to take around one-month. Businesses that currently claim R&D tax reliefs are likely to have projects or activities that would likely make them suitable for this support.
  • £200m of brought forward payments for grants and loans for in progress Innovate UK projects Innovate UK representatives have been in touch with their existing 2,500 ‘customers’. Three-month deferrals to existing projects have also already been offered.
  • £210m of continuity loans SMEs and third sector organisations whose existing Innovate UK projects are at risk due to the impact of Covid-19. Loans between £250k and £1.6m (available until 31 December 2020 or until all of the funds are allocated).
  • Business advice and support Support for 6,000 innovative SMEs in the form of up to five days of specialist growth adviser support from the European Enterprise Network.
  • UK Research and Innovation’s call for short-term innovative projects relating to Covid-19 Projects of up to 18-months long that mitigate the health, social, economic, cultural and environmental impacts of the Covid-19 outbreak. Companies can receive funding of 80% for projects aimed at furthering ‘the understanding of, and response to, the Covid-19 pandemic and its impacts.’

Future Fund Further details have now emerged of the Governments Coronavirus Future Fund scheme. The scheme provides government loans from £125,000 to £5 million, subject to at least equal match funding from private investors to eligible businesses. The main eligibility criteria is that the business must a UK incorporated company and has raised at least £250,000 in equity investment from third-party investors in the last 5 years Unlike a typical bank loan, the interest is not payable on a monthly basis and instead will accrue until the loan converts. At this point, the interest and capital will either be repaid or may be converted into equity.

SMES COVID Recovery Boosted by £20 Million in New Grants The Government has announced new grants aimed at smaller businesses in England worth £20 million to help them obtain the support they need to recover from the effects of the coronavirus pandemic. Under the new initiative, small and medium-sized businesses will be able to obtain grants of between £1,000 – £5,000 that can be used to help them gain access to new technology and equipment and/or professional, legal, financial, or other advice, including additional support from an accountant. The grants on offer will be fully funded by the Government and businesses that use the funding will have no obligation to provide financial contributions. A minimum of £250,000 for all LEP areas is being allocated and the provision of resources will be further reviewed as the grant fund is delivered.

Resilience & Recovery Loan Fund For organisations requiring loans and investment, Big Society Capital has worked with social investors and the Department for Digital, Culture, Media and Sport (“DCMS”) to create a £100 million emergency response. The measures include a new £25million Resilience and Recovery Loan Fund, alongside changes to the Community Investment Enterprise Facility (“CIEF”) to allow loans under CBILS and the repurposing of up to £50 million of existing capital. So far RRLF has approved funding of almost £10millon to 25 charities and social enterprises, this includes grant funding of almost £0.5m of grant funding. This leaves a further £15m to be applied for from the RRLF fund. The RRLF is being operated by Social Investment Business (“SIB”) and is working with experienced social investor partners on delivery of the fund. The Resilience and Recovery Loan Fund enables social lenders to provide emergency loans to social enterprises and charities who are experiencing disruption as a result of COVID-19. Loans can be used to provide working capital until normal business resumes, cover delays in trade payments, or meet the increased demand for services, without requiring personal guarantees and charging no fees or interest for 12 months. Applications for the RRLF close on 30 September and information on criteria and how to apply is available on SIB’s site. Grants for Business Hit by Local Lockdowns Government ministers have announced (9 September 2020) new grants of up to £1,500 to help businesses shut down by local lockdowns or targeted restrictions. Businesses in England required to close due to localised COVID-19 interventions will now be able to claim up to £1,500 per property every three weeks. This will be of particular interest for businesses in the North West hit by new local restriction rules. To qualify for the grant, a business must have been required to close due to local COVID-19 restrictions. Announcements made by government indicate the eligible business will receive cash grants based on their rateable value as set out below: – If a business occupies premises with a rateable value less than £51,000 or occupy a property or part of a property subject to an annual rent or mortgage payment of less than £51,000, it will receive £1,000 for every three weeks it is required to close. – If a business has a rateable value more than £51,000 or part of a property subject to an annual rent or mortgage payment of more than £51,000, it will receive £1,500. Payments are triggered by a national decision to close businesses in high-risk areas and it has been reported that there is are currently an ongoing trial scheme available in Blackburn with Darwen, Pendle, and Oldham. Full details of this latest announcement can be found on the government site here.

NEW CASH GRANT SCHEME FOR HOSPITALITY BUSINESSES IN TIER 2 Specific help for businesses in the hospitality, leisure and accommodation sectors impacted by Tier 2 restrictions was also announced (these businesses are not required to close under Tier 2 rules, but of course may see a reduction in income). Councils in England will be given funding to provide grants of up to £2,100 to 150,000 hotels, restaurants and Bed & Breakfast accommodation for each month that Tier 2 restrictions apply. These are additional to the grants of up to £3,000 available for businesses who have been legally required to close. This will also be a retrospective grant with businesses able to backdate claims to August, if they’ve been operating in areas with enhanced restrictions since then.

MORTGAGE PAYMENT HOLIDAYS The COVID-19 mortgage payment holiday has been extended beyond 31 October 2020. Individuals who have yet to claim a mortgage holiday can now do so for up to 6 months, without affecting their credit rating. Those who have already started a mortgage holiday will be able to extend this to 6 months, again without affecting their credit rating. ENGLISH BUSINESS GRANTS Properties required to close under national or local COVID-19 restrictions will be eligible for a grant based upon rateable value: – Properties with rateable value of £15,000 or under – eligible for a grant of £1,334 per month or £667 per two weeks – Properties with rateable value of £15,000 to £51,000 – eligible for a grant of £2,000 per month or £1,000 per two weeks – Properties with rateable value of £51,001 or more – eligible for a grant of £3,000 per month or £1,500 per two weeks One-Off Grants - Retail, Hospitality, and Leisure Sectors As we enter a third lockdown the Chancellor has announced businesses in the retail, hospitality and leisure sectors are to receive a one-off grant worth up to £9,000 per property to help businesses through to the Spring. The one-off top-ups will be granted to closed businesses as follows: – £4,000 for businesses with a rateable value of £15,000 or under – £6,000 for businesses with a rateable value between £15,000 and £51,000 – £9,000 for businesses with a rateable value of over £51,000

Business Interruption Policyholders On 15 January, the UK Supreme Court ruled that business interruption losses resulting from the COVID-19 pandemic are recoverable under a variety of insurance policies after appeals by both the Financial Conduct Authority and various insurance companies.

The current Stamp Duty Land Tax (SDLT) holiday has been extended beyond the original deadline of 31 March 2021 in England and Northern Ireland. The tax break, introduced in July 2020, has caused a rise in demand of home movers looking to take advantage of the potential savings, which was creating delays in the buying process. The SDLT extension will therefore be a welcome announcement for homebuyers who were unsure if their property purchase would complete before the March deadline.

Government Restart Grant The Government has announced a £5 billion grant scheme for England to help businesses reopen after lockdown. Over 700,000 businesses will be eligible for the grant, including shops, salons, gyms and restaurants. The grants will be available on a per premises basis. Non-essential retail will be entitled to grants under the scheme, which will be limited to £6,000, to reflect the fact that the sector will be able to open earlier under the Government’s roadmap out of lockdown. With hospitality due to open later, individual businesses could receive between £8,000 and £18,000,with the grants being allocated based on the value of their property. The Restart Grant Scheme will be administered directly by local councils in April and will replace the monthly Local Restrictions Support Grants which will close at the end of March 2021. Local authorities in England will also be given an additional £425 million of discretionary business grant funding for businesses which do not meet the restart grant criteria. Support Scheme Help to Grow: Open for registration mall and medium sized businesses are now able to register their interest in joining ‘Help to Grow’, the Government’s £520 million scheme to help SMEs recover and prosper post-pandemic. Following the Chancellor’s announcement of the scheme in the recent Budget, managers of small and medium-sized businesses are able to register their interest in two new programmes: ‘Help to Grow: Management’ and ‘Help to Grow: Digital’. WHAT IS ‘HELP TO GROW’ MANAGEMENT? As part of the ‘Plan for Jobs’ campaign announced in July 2020, the ‘Help to Grow: Management’ initiative will launch in June and support small businesses to achieve their growth goals and boost productivity. The new scheme involves a 12-week-programme delivered by business schools across the UK and is aimed at leaders who want to improve their management and strategic skills to drive their business forward. The programme, which is 90% subsidised by the Government, aims to help 30,000 businesses over the next three years to: – develop a growth plan – improve resilience – learn how to innovate – inspire employee engagement – build marketing and financial strategies – adopt digital technologies Business leaders will be able to access the training from leading business schools across the country, through a mix of online and face-to-face tuition, as well as support from a mentor. The scheme comes at a cost of £750 to participants, with the remaining 90% funded by the government. HOW DO I APPLY? Although the programme isn’t yet open for applications, you are able to register your interest online now. In order to join the programme, you must be a senior manager or key decision maker in your business. Additionally, your business must: – have been operating for more than one year – be based in the UK – have between five and 249 employees – not be a charity WHAT IS ‘HELP TO GROW: DIGITAL’? ‘Help to Grow: Digital’ is expected to help 100,000 SMEs and is due to launch in the Autumn. It is expected to include an online platform on which businesses can gain advice on how technology can improve their performance. Additionally, some businesses will be eligible for a discount of up to 50% on the costs of approved software, worth up to £5,000. The Government has confirmed that the discounts will be available on packages which will help businesses: – build customer relationships and increase sales; – make the most of selling online; and – manage their accounts and finances digitally The ‘Help to Grow: Digital’ scheme, in particular the approved software discount, may be useful to businesses preparing for Making Tax Digital (MTD) for income tax and MTD for corporation tax. Full details of eligibility have yet to be announced, but in order to register interest, you must be a limited company. Businesses can register their interest for the ‘Help to Grow: Digital’ scheme by following this link. The Government expects the voucher will be open to businesses who: – have between five and 249 employees; – have been operating for more than one year; and – are registered at Companies House 

Links to Our Member Firms

Further Covid-19 advice

Albert Goodman

Garbutt + Elliot LLP

PM+M Solutions for Business

Rouse Partners LLP

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Pirola Pennuto Zei & Associati UK LLP, ShineWing

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The information contained herein on Covid-19 government measures within the G8, consists solely of information that can be found on the websites of one or more Praxity Participant firms, and has not been written, modified or verified by Praxity, it’s staff, officers or directors.