On 24 September 2020, the Chancellor Rishi Sunak unveiled the Winter Economy Plan, a number of measures designed to help businesses still struggling with the effects of Covid-19. It appears that they not as generous as the help provided in March and April 2020 (principally the Self Employment Income Support Scheme – SEISS - and the Coronavirus Job Retention Scheme - CJRS). However, they may be worth considering in your individual business if you think that they are relevant.
Important - the Job Support Scheme has subsequently changed, see our later article.
The Job Support Scheme (JSS) is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce. The scheme will open on 1 November 2020 and run for 6 months.
The company will continue to pay its employee for time worked. However, the cost of hours not worked will be split between the employer, the Government (through wage support) and the employee (through a wage reduction), and the employee will keep their job.
The Government will pay a third of hours not worked up to a cap, with the employer also contributing a third. This will ensure employees earn a minimum of 77% of their normal wages, where the Government contribution has not been capped.
Employers using the JSS will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.
More detailed information should become available in due course.
The following is an example of how the cost of an employee working will be split between the Government and the employer, depending upon how many hours the employee works.
If you had a VAT bill due between 20 March 2020 and 30 June 2020, you had the ability to defer payment until 31 March 2021. The government will give taxpayers the option to spread their payments over 11 interest free payments between 1 April 2021 and 31 March 2022, known as the New Payment Scheme. Taxpayers which took advantage of the VAT deferral will need to opt in, and HMRC will put in place an opt-in process in early 2021.
The government has announced it is extending the temporary reduced rate of VAT (5%) to 31 March 2021 for this sector. The VAT reduction of 5% for this sector was originally due to be in place for a fixed period of 15 July 2020 to 12 January 2021. This is now being extended to 31 March 2021.
Under a new ‘Pay As You Grow’ flexible repayment system, businesses will be able to:
The government guarantee for qualifying loans will be extended from six years to up to 10 years.
The deadline for applying for the Coronavirus Business Interruption Loan Scheme, Coronavirus Large Business Interruption Loan Scheme, Bounce Back Loan Scheme and Future Fund will be extended to the end of November 2020.
HMRC previously announced that taxpayers could opt to defer their second self-assessment payment on account for the 2019/20 tax year if they were finding it difficult to make their second payment on account by the 31 July 2020 deadline. This was due to be paid by 31 January 2021. However, taxpayers with up to £30,000 of Self-Assessment liabilities will be able to agree a plan to pay their tax liabilities over an additional 12 months, i.e. up to 31 January 2022.
For self-employed individuals who are still suffering from a loss of business as a result of Covid-19, The Winter Economy Plan contains another two payments of grants under the Self Employment Income Support Scheme (SEISS). To qualify, individuals (sole traders and partners in partnerships) must:
The first new payment of grant will cover the three months from 1 November 2020 to 31 January 2021, and the maximum lump sum payment will be limited to 20% of the individual’s average monthly trading profits for the period, up to a maximum of £1,875. The level of support and cap for the next payment has not yet been set. It is expected that claims for the new rounds of grant will be made through the same HMRC portal as previous grants but HMRC will provide full details about claiming and applications in due course.
Details on the Winter Economy Plan are here.
On Friday 29 May 2020, the Chancellor announced plans to extend the Self-Employment Income Support Scheme (SEISS) for those people whose trade continues to be, or is newly, adversely affected by the Coronavirus (COVID-19). Eligible self-employed people will be able to claim a second and final SEISS grant in August; this will be a taxable grant worth 70% of their average monthly trading profits for three months, paid out in a single instalment and capped at £6,570 in total.
The eligibility criteria for the second grant will be the same as for the first grant. People do not need to have claimed the first grant to claim the second grant: for example, their business may have been adversely affected by the Coronavirus more recently.
As with the first grant the claims process is simple: HMRC will calculate the amount of self-employment support individuals will receive, they don’t need to do this themselves.
More information about the second SEISS grant should be available on GOV.UK on 12 June.
Claims for the first SEISS grant, which opened on 13 May, must be made no later than 13 July. Eligible self-employed people must make a claim before that date to receive the first SEISS grant (a taxable grant of 80% of their average monthly trading profits, paid out in a single instalment covering 3 months' worth of profits, and capped at £7,500 in total). So far, HM Revenue and Customs (HMRC) have seen over 2.3 million claims worth £6.8 billion.
We first reported on the SEISS on 5 May 2020. More information can be found here.
Post dated 5 May 2020
If you are self employed, you could benefit from the Self Employment Income Support Scheme (SEISS), which is the Government support for those sole traders and partnerships affected by the Coronavirus pandemic.
HM Revenue and Customs (HMRC) have been refining the advice and support in respect of the SEISS, so you should revisit and review the guidance. As with a lot of the support, it is unprecedented, so in many cases, we (as accountants) are supporting our clients based on the limited information available.
Please revisit the guidance here.
There are a couple of points which you should be aware of, which may affect whether you can claim or not.
Although we cannot make SEISS claims for clients, we can provide help and support. If you need this, please don’t hesitate to contact us.
