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
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.
- See further guidance: Government Guidance
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
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
- Employers that have previously made claims for furloughed workers will be eligible for a grant of £1,000 for every worker that is continuously employed up to 31 January 2021. Further details of the claim process are expected in September, but the main condition announced so far is that the employee must have been paid an average of at least £520 a month between 1 November 2020 and 31 January 2021.
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 has announced an extension that will allow those eligible to claim for a second and final 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.
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. 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
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.
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).
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.
Links to Our Member Firms
Further Covid-19 advice
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.