Government support for small businesses and the self-employed
The Coronavirus (COVID-19) crisis has impacted us all. And, whether you run a small business, are a contractor, or are self-employed, there’s no doubt you’ll be facing a mountain of new challenges.
On the 20th March the government announced support measures designed to protect the UK economy. Since then, further announcements have been made, and more are expected. To help make it easier to navigate this constantly changing information we’ve put together this COVID-19 hub.
5th November: Extensions to Coronavirus Job Retention Scheme and the Self-Employed Income Support Scheme
The Coronavirus Job Retention Scheme and the Self-Employed Income Support Scheme will remain open until 31st March 2021 and 80% cover for usual salary capped at £2,500 per month will be in place until January 2021 when Chancellor Sunak will review the level of support available.
31st October: Coronavirus Job Retention Scheme (CJRS) extended
As a result of England’s second lockdown, the Coronavirus Job Retention Scheme (CJRS) will be extended with employees receiving 80% of their current salary for hours not worked.
5th October: ‘Time to Pay’ Scheme for Self-Assessment Tax Bills
Government announces details of ‘Time to Pay’ scheme for Self-Assessment tax bills – we have shared details to help if you have missed the deadline in our recent blog article.
2nd October: Coronavirus Job Retention Scheme (CJRS) Existing Claims
The Government has confirmed that the final day for making or amending existing Coronavirus Job Retention Scheme (CJRS) claims will be 30th November 2020. This covers claims for periods ending on or before 31st October 2020.
10th October: Companies House resumes compulsory strike-off process
1st October: CJRS 60% OF Usual Wages Update
Coronavirus Job Retention Scheme (CJRS) changes mean HMRC will pay 60% of usual wages up to a cap of £1,875 per month for the hours furloughed employees do not work.
24th September: Winter Economy Plan
Chancellor Sunak has announced a raft of measures to support businesses including,
- ‘Pay as you Grow’ to help firms repay state backed business loans
- Business loans extended from 6 to 10 year terms. Firms in ‘real trouble’ can suspend repayments
- Plans for a new guarantee loan scheme due to be announced in January 2021
- Firms will be able to spread VAT bills over 11 seperate payments
17th August: SEISS Second Claim
Now is the time to claim the 2nd Self-Employment Income Support Scheme (SEISS) grant (if you are eligible).
10th July: Companies House to restart the voluntary strike-off process
In March 2020, Companies House granting a temporary measure, suspending voluntary strike-off action. From 10th September this temporary measure will end and the process to dissolve companies that have applied for voluntary dissolution will restart.
For those companies that had previously filed an application to strike-off – using Form DS01 – expect the process to be restarted from 10th September by Companies House.
27th June: Temporary changes to Companies House filing requirements
The government has granted temporary extensions to the deadlines for filing information about your limited company with Companies House. This means you will have more time to file certain information.
- Annual accounts – From 27th June HMRC has granted companies an extension to their statutory accounts filing deadline. The deadline is extended if it falls between 27th June 2020 and 5th April 2021.
- Confirmation statement – The current confirmation statement 14-day deadline (from the end of the review period) has been extended to 42 days. The limited company extension is automatic.
- Event-driven filings – If your company is required to update records before filing a confirmation statement, or needs to change details of directors / company secretaries etc, you now have more time to file. The period allowed has increased to 42 days.
17th June:The government’s scheme to defer VAT payments ends on 30th June. You will need to restart your direct debit to pay the VAT due
The government had allowed for temporary deferral of VAT payments due between 20th March 2020 and 30th June 2020 – this deferral ends on 30th June. This means you must restart your VAT direct debit and begin paying VAT due from 1st July 2020 as normal.
You will have until 31st March 2021 to pay the amount of VAT you deferred.
12th June: Updated guidance to claim for wages through the Coronavirus Job Retention Scheme
There are new government guidelines regarding any CJRS claim you make from 1st July. Most important to note is that from 1st August 2020, you will be asked to contribute towards the cost of your furloughed employees’ wages.
You should now start your flexible furloughing of employees from 1st July onwards.
Consider which hours and shift patterns they work to suit the needs of your business. You will pay their wages for the time they work and can then apply for a CJRS grant to cover any of their usual hours they remain furloughed for. You can still keep employees on full furlough if you choose to.
You should also now claim for periods ending on or before 30th June. Do this by 31st July – this is the last date you are able to make those claims.
You should now claim for further furlough periods. The first time you will be able to make a claim for work days in July will be 1st July.
12th June: How to claim a further grant under the Self-Employed Income Support Scheme (SEISS)
It is now possible to check online via the HMRC SEISS eligibility checker to find out whether you can claim for your first grant. Your tax agent or adviser can also check your eligibility on your behalf.
You’ll need:
- Self Assessment Unique Taxpayer Reference (UTR) number
- National Insurance number.
29th May: Changes to the Coronavirus Job Retention Scheme (CJRS)
The government has announced that from 1st July the CJRS will be made more flexible. Employers will be able to bring previously furloughed employees back to work part time and still receive a grant for the time when they are not working. This is known as ‘part time furloughing’. In addition, from 1st August, employers will have to start contributing to the wage costs of paying their furloughed staff. The amount of employer contribution will increase in September and October. The scheme will close to new entrants from 30th June.
29th May: Extension of the Self-Employed Income Support Scheme (SEISS)
The government has announced that it will extend the Self-Employed Income Support Scheme for people whose trade continues to be, or is newly, adversely affected by COVID-19.
If you are eligible (same criteria as before) and self-employed, you will be able to claim a second and final SEISS grant in August. This will be a taxable grant worth 70% of your average monthly trading profits for three months. As before, this will be paid out in a single instalment, capped at £6,570 in total.
You do not need to have claimed the first grant to claim the second grant. It may be that your business was not affected initially, but now trading is slowing.
Claims for the first SEISS grant (opened 13th May) must be made no later than 13th July.
We expect the government to publish further detailed guidance on the revised scheme by 12th June. We will update here at that time.
HMRC does not allow agents such as Oscar Fairchild to make an application for SEISS on your behalf. You must apply yourself.
26th May: Statutory Sick Pay Claim Back goes live
The Coronavirus Sick Pay Rebate Scheme for small and medium-sized businesses was launched by government on 26th May. Now, employers with fewer than 250 employees are able to apply to claim coronavirus-related Statutory Sick Pay (SSP).
Check if you can claim back Statutory Sick Pay paid to employees due to coronavirus (COVID-19) via Gov.uk website.
12th May: Job Retention Scheme Extension
The government announces the Coronavirus Job Retention Scheme will be extended for a further 4 months, with new flexibility promised from August onwards.
5th May: Top up to Local Business Grant Funds Scheme
A discretionary fund (Bounce Back Loan Scheme) has been set up to accommodate certain small businesses previously outside the scope of the business grant funds scheme. Full details are yet to be released, however we understand it will provide an additional £617 million via local authorities. The government details have disclosed that this additional fund is aimed at small businesses with ongoing fixed property-related costs. The fund will prioritise businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for Small Business Rates Relief, and bed and breakfasts that pay council tax rather than business rates. But local authorities may choose to make payments to other businesses based on local economic need. The allocation of funding will be at the discretion of local authorities.
Businesses must be small, under 50 employees, and they must also be able to demonstrate that they have seen a significant drop of income due to Coronavirus restriction measures.
We will share more details on how to apply once they are made available by local authorities.
4th May: Bounce Back Loan Scheme
The Chancellor has launched the ‘Bounce Back Loan Scheme’ and initiative that is designed to get cash to SME owners quickly.
Key details are as follows;
- Simple application process and access to funds within 24 hours
- Loans of 25% of turnover (subject to a maximum of £50k)
- A repayment holiday AND interest covered by the Government for 12 months
- The loan can be repaid over 6 years at a low rate of interest
- The loans will be guaranteed by the Government so no security should be needed AND the lender is protected
- A network of accredited lenders
If you need any help preparing your application, or would like some advice on your cash flow in these difficult times, get in touch…
17th April: Coronavirus Job Retention Scheme
Rishi Sunak has today announced that the Coronavirus Job Retention Scheme (CJRS) will be open until the end of June – providing businesses with the certainty they need.
8th April: Coronavirus Job Retention Scheme
The government’s Coronavirus Job Retention Scheme (CJRS) will be launched 20th April 2020 and businesses will be contacted regarding what they need to do to access the scheme.
We await further details but understand the following information will be required for each furloughed employee:
- National Insurance number, salary, National Insurance and pension contribution information
The details we currently have are as follows:
- CJRS goes live on 20th April
- HMRC is anticipating a spike in requests following launch and it may take longer for the initial payments to be made
- Current government gateway logins will be used to access the online, self-service system
- One initial backdated claims have been made, claims can then be made no more than 14 days before payrolls are run (claims will be accepted for different pay periods)
- Tax agents who are authorised to act for PAYE matters will be able to assist with claims, file-only agents and payroll bureaus will not be able to access the service
4th April: Company director – updated furlough information
The government has clarified the support available to company directors by the Coronavirus Job Retention Scheme. According to the government guidance:
As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme. Company directors owe duties to their company which are set out in the Companies Act 2006. Where a company (acting through its board of directors) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed.
Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would be judged reasonably necessary for the purposes, such as, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.
This also applies to salaried individuals who are directors of their own personal service company (PSC).
Company directors still require further clarification on what is deemed ‘‘reasonably necessary’. We will provide updates on this, and any other measures announced by the government to support company directors over the coming weeks.
3rd April: Coronavirus Business Interruption Loan Scheme – Version 2.0
Government has announced changes to the Coronavirus Business Interruption Loan Scheme (CBILS) and hopes to help more ‘viable’ businesses. So, what’s new?
- The scheme has been expanded to allow more smaller businesses to access the COVID-19 funding they need
- Insufficient security is no longer a condition to access the scheme
- Access has been relaxed to include smaller businesses who may have previously met requirements for a commercial facility but would not have been eligible for CBILS.
How do you prove you’re ‘viable’ and what information will you need to provide?
- Each lender in the scheme has its own process (often an online application). The information your lender will typically require includes:
- Previous years accounts, management accounts, cash flow forecast, a business plan and details of any assets you can use to secure the lending (if applicable).
- These requirements will vary from lender to lender, but one thing will remain consistent; you’ll need to prove that you had a profitable business before, and that you’ll bounce back.
It’s important to note that, as with any other bank loan, you will need to be up to date with all HMRC submissions and payments (prior to the Covid 19 crisis).
If you’d like help or would like to discuss these arrangements in more detail, or need assistance with an application, please contact us.
28th March: Wrongful trading rules suspended to help companies trade
Alok Sharma MP (Business Secretary) announced a series of changes to the insolvency rules enabling businesses going through a restructure to continue trading and avoid insolvency. The new rules mean that businesses seeking a rescue package cannot be put into administration by creditors and can continue to trade without the threat of personal liability to company directors. The legislation will apply retrospectively from the beginning of March, with all other checks and balances that help to ensure directors fulfil their duties properly remaining in force.
26th March: Self-employed financial support
The Chancellor Rishi Sunak announced a further package of support expected to help 95% of self-employed people (including partnerships). The package includes:
- Self-employed taxable grant. Up to 80% of trading profits up to a maximum of £2,500 per month for at least three months
- Trading profits averaged over (up to) last three years
- Unlike furlough, you’ll be able to claim these grants and continue to do business
- The scheme is expected to be open for at least three months
- Eligible to those who have lost trading profits due to COVID-19, and specifically:
- File a tax return for 2018/19 tax year as self-employed or as a member of a partnership. *Those who have not yet filed for 2018/19 will have an additional 4 weeks from 27th March 2020 to do so*
To be eligible you:
- Must have traded in the 2019/20 tax year, be currently trading at the point of application (or would have expected to be trading were it not for COVID 19) and intend to carry on trading in the tax year 2020/21
- Have profits of less than £50,000 with more than half of total income coming from self-employment. This can be with reference to at least one of the following conditions: Trading profits and total income in the 2018/19 tax year, Average trading profits and total income across up to the three years between 2016/17, 2017/18, and 2018/19.
*The scheme is not designed to support limited company directors who pay themselves through a combination of salary and dividends.
HMRC has advised that the scheme should be set up and providing payments by early June 2020. These payments are expected as a lump sum, covering the three applicable months, paid directly into bank accounts.
HMRC will contact eligible businesses and we expect initial letters to land from 15th April onward.
25thMarch: Three-month extension to file accounts
Businesses down on resources and struggling to file accounts with Companies House due to COVID-19 can apply for a three-month extension.
If you’re worried you won’t meet the statutory deadline apply online (before the deadline date) to arrange an extension of up to three months. This will be granted automatically in these circumstances.
However, if firms that have already extended the filing deadline, or shortened the accounting reference period, may not be eligible.
Late filing penalties will still apply if you don’t apply for an extension and are late.
20th March: Deferred VAT & Income Tax Payments
The government has announced it will defer Valued Added Tax (VAT) payments for 3 months. This means that if you are self-employed, your Income Tax payments (due in July 2020) will be deferred to January 2021.
VAT
All UK businesses are eligible for an automatic VAT deferral, which will apply from 20th March 2020 until 30th June 2020. All UK businesses are eligible. This means that your business will not need to make a VAT payment until after 30th June 2020.
You have until end of the 2020/21 tax year (5th April 2021) to pay liabilities that have accumulated during the deferral period.
All VAT refunds and reclaims will be paid by the government in the usual way.
The government is yet to publish a full list of the VAT periods covered, and we are yet to receive guidance on how the deferral process will be managed by HMRC. Our advice as of right now is:
- submit VAT returns on time – it’s likely HMRC’s late submission process will still apply
- set sufficient cash aside to settle any deferred payments by the end of the tax year (this may be an alternative date HMRC specifies, as yet this is unknown)
- if you are due a refund, no action needed, we expect this to be provided in the usual way
- if you pay by direct debit, intend to defer, cancel your direct debit (remember to reinstate it after 30th June 2020)
You don’t have to defer. We understand that you can keep paying VAT during the deferral period
Income Tax
31st July 2020 Income Tax Self Assessment payments will be automatically deferred until 31st January 2021 and you do not need to be self-employed to be eligible for the deferment.
No penalties or interest for late payments will be charged in the deferral period, however the deferral is optional. If you wish, you may still pay your account on 31st July if you’re able to do so.
We recommend Self Assessments are submitted by the deadline date. If you are yet to submit for 2018/19 tax year (which was due 31st January 2020) then you are already incurring fines and penalties. Do not allow these to mount up. The Self Assessment for the 2019/20 tax year (due on 31st January 2021) should be submitted as normal.
20th March: Coronavirus Job Retention Scheme
The government has announced a ‘Coronavirus Job Retention Scheme’. The scheme is available from 1st March 2020 and will last at least three months. It’s designed to support all UK employers, and means that , if you’re an employer, you’ll be able to continue part paying employees’ salary for employees that would otherwise have been made redundant during this time of crisis.
To be eligible businesses will need:
- an operational PAYE payroll scheme (since 28th February 2020)
- to re-designate any affected employees as ‘furloughed workers,’ making sure to notify each of the change
- to provide information about furloughed employees and their earnings through a new HMRC portal (we anticipate details of this in the coming weeks).
The Chancellor also confirmed the following:
80% of an employee’s regular wage or £2,500 per month (whichever is lower), will be covered by the government, in addition to Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on the subsidised wage.
This does not include any fees, bonuses or commission.
Employers can choose to ‘top up’ an employee’s salary but are not obliged to do so.
Furloughed works must not carry out any duties during the furlough period.
The government will make the scheme available for at least three months, and it will be expanded if necessary.
HMRC is still developing a system for reimbursement. We expect this by end of April 2020 and will share more details once we receive them.
A full list of the business support measures available can be found on the gov.uk website.
If your business as been impacted by the Coronavirus (COVID-19) outbreak and you are now struggling financially and operationally to deal with the increasing pressure of debtor, supplier and cash flow management, then we are here to help.
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About Oscar Fairchild:
Oscar Fairchild (incorporating Redwood Clarke since 01.09.18) is an ACCA chartered and certified and AAT qualified accountancy, financial consultancy & bookkeeping practice with offices in The City of London, and Billericay, Essex. Offering a wide range of services including Self-Assessment Services, Annual Returns, VAT Returns, Credit Control, Payroll, Auto Enrolment Pension and Management Account services to high growth businesses and licensed London taxi drivers across London, Essex and Hertfordshire.
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