Last updated: 5 November 2020, 15:55.
Update: On 5 November 2020, UK Government announced it will extend the Coronavirus Job Retention Scheme until the end of March 2021, not pay the Job Retention Scheme Bonus in February (instead redeploy a retention incentive "at the right time"), and increase the third self-employed grant - covering November to January - from 55% to 80% (of average monthly trading profits).
Update: on 1 November 2020, UK Government have postponed the Job Support Scheme and extended the Coronavirus Job Retention Scheme (more detail here). UK Government have also increased SEISS Grant Extension (more detail here). The application deadlines for Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBLS) have been extended to 31 January 2021.
Update: on 22 October 2020, UK Government announced further expansion details for the Job Support Scheme - there are now two variations to JSS - JSS Open and JSS Closed. UK Government also increased support available under the SEISS Grant Extension - doubling the value of the first grant.
Update: On 9 October 2020, UK Government expanded the Job Support Scheme to support businesses across the UK required to close their premises due to coronavirus restrictions. In addition, the Local Restrictions Support Grant was increased up to £3,000 per month (based on rateable value) and eligibility for payment after every two weeks of closure for businesses which are legally required to close due to a nationally-imposed local lockdown.
A summary of the UK Government's Winter Economy Plan 2020 can be found on our website page.
Update: On 24 September 2020 , the Chancellor announced several measures as part of the UK Government's Winter Economy Plan including a new Job Support Scheme (UK Government factsheet (external) found here), an extension to the SEISS for self-employed, a facility to extend bounce back loans from 6 to 10 years, the Government guarantee on CBILS extended to 10 years and a new successor loan guarantee programme will be announced in January 2021. Further guidance is expected to be published shortly.
Update: On 8 July 2020, the Chancellor announced new measures including the Job Retention Bonus (link here), a VAT reduction on tourism and hospitality related businesses (link here) as well as the "Eat Out to Help Out" scheme (external GOV.UK link here) and an increase in Stamp Duty Land Tax on the purchase of a main home (external GOV.UK link here).
Here’s a quick summary of practical help notified by the Chancellor.
You can read the latest advice and guidance from HM Government covering financial support for business on its coronavirus pages here and here.
Guidance and good practice for employers and businesses on coronavirus (COVID-19) found here.
Read government's Frequently Asked Questions according to the latest advice and guidance.
On 20 April 2020, HM Government launched a coronavirus business 'support finder' tool to help businesses and self-employed people across the UK quickly and easily determine what financial support is available to them during the coronavirus pandemic.
Local Authority Discretionary Grant Scheme
An additional fund to Small Business Grant Fund and Retail, Hospitality and Leisure Grant Fund may still be available. More details here.
However, applications for most local authorities closed in the first week of June 2020 (contact your local authority for application window dates).
Coronavirus Statutory Sick Pay Rebate Scheme
From 26 May 2020, employers with fewer than 250 employees can now claim for coronavirus related Statutory Sick Pay (SSP).
Employers are eligible to use the scheme if they meet the following criteria:
The repayment will cover up to two weeks of the applicable rate of SSP and is payable if an employee was unable to work on or after 13 March 2020 and entitled to SSP because they either:
Tax agents can make claims on behalf of their payroll clients.
Records (including but not restricted to: amounts paid and claimed, dates, symptoms, NI numbers) must be kept for 3 years after the date payment is received for the claim.
Note the danger of duplicated claims as claims can be made from both the coronavirus job retention scheme and the coronavirus statutory sick pay rebate scheme for the same employee but not for the same period of time for that employee.
Coronavirus Bounce Back Loan scheme
On 27 April 2020, HM Government announced further support for small business in the form of the Bounce Back Loan Scheme.
The main points of the scheme are as follows:
Businesses are eligible where they have been negatively affected by coronavirus and was not an “undertaking in difficulty” on 31 December 2019.
You cannot apply if you are already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS). However, if you’ve already received a loan of up to £50,000 under CBILS, you can arrange with your lender to transfer it into the Bounce Back Loan scheme until 4 November 2020.
Coronavirus Job Retention Scheme
Click here to view Coronavirus Job Retention Scheme updates.
All UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salary for those who would otherwise have been laid off during this crisis.
Under the new Coronavirus Job Retention Scheme, government grants will cover 80% of the salary of PAYE employees who would otherwise have been laid off during this crisis. The scheme, open to any employer in the country, will cover the cost of wages backdated to 1 March 2020 and will be open before the end of April. It will continue for at least three months, and can include workers who were in employment on 19 March 2020 (originally 28 February 2020).
HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.
To claim under the scheme employers need to:
The online claim service was launched on GOV.UK on 20 April 2020 and claims are usually paid within 6 working days. Business that need short-term cash flow support, may benefit from the VAT deferral (see below) and may also be eligible to apply for a Coronavirus Business Interruption Loan (CBILS).
Self-employment Income Support Scheme (SEISS)
Click here to view Self-Employment Income Support Scheme updates
The scheme provides taxable grants to self-employed individuals or partners negatively impacted by the coronavirus, worth 80% of their average trading profits for three months, capped at £2,500 per month.
HM Government confirmed on 29 May 2020 that the SEISS will be extended beyond the end of June 2020 - with those eligible able to claim a second and final grant capped at £6,570. More details on the extension can be found here.
A SEISS grant is based, for each taxpayer, on the average of their trading profits as reported in their last three tax returns for the tax years: 2015/16 to 2018/19. If the taxpayer started trading within this three year period the monthly average of profits will be calculated from the periods in which they were trading.
The SEISS grant will not be payable to anyone who meets any of these conditions:
Those who started trading after 6 April 2019 are not eligible for the SEISS grant. This date is the 'line in the sand' for eligibility purposes.
Landlords will not qualify for the SEISS grant as property letting businesses are not regarded as a trade. Similarly, HMRC are unlikely to consider income from furnished holiday lets as qualifying for the SEISS grant.
How do I apply?: HMRC will contact those taxpayers who are eligible for this grant and will invite them to apply for the payment online. The SEISS grant will be payable into the taxpayer's bank account in one lump sum.
The grant will be treatable as taxable income and will have to be reported on tax returns for 2020/21.
Find out more and here.
VAT payment deferral
VAT payments for quarters ended 29 February, 31 March & 30 April 2020 can be deferred, meaning businesses will not need to make VAT payments until the end of June 2020. Businesses will then have until the end of the 2020-21 tax year (ie 31 March 2021) to settle any liabilities that have accumulated during the deferral period.
The deferral applies automatically and businesses do not need to apply for it. VAT refunds and reclaims will be paid by the government as normal.
See also our VAT Updates page here
Income Tax self-assessment payment deferral
Income Tax payments ordinarily due by 31 July 2020 under the Self-Assessment system may now be deferred to January 2021 including the Self-Employed.
The deferment is optional and any persons still able to pay their second self-assessment payment on account by 31 July 2020 should still do so.
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.
Find out more.
Universal Credit
If you are self-employed and want to know if you are eligible for Universal Credit, please visit the gov.uk Universal Credit page.
Find out more.
HMRC Time to Pay
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC's Time to Pay Service.
HMRC’s Time to Pay scheme can enable firms and individuals in temporary financial distress as a result of Covid-19 to delay payment of outstanding tax liabilities.
HMRC’s dedicated Covid-19 helpline provides practical help and advice on 0800 0159 559.
Find out more here and here.
Business Rates holidays and cash grants
A business rates holiday for the 2020-2021 tax year applies for any business in the retail, hospitality or leisure sectors.
In those sectors, if your rateable value is between £15K and £51k, you'll also receive a cash grant of up to £25,000 per property. Find out more.
Find out more information for retail, hospitality and leisure businesses.
Any business which gets small business rates relief, including those in the retail, hospitality or leisure sectors, will receive a cash grant of £10,000 (increased from £3,000 announced in the 11 March Budget). Find out more here and here.
The rates holiday and cash grants will be administered by local authorities and should be delivered automatically, without businesses needing to claim.
Coronavirus Business Interruption Loan Scheme (CBILS)
The Coronavirus Business Interruption Loan Scheme (CBILS) provides support for businesses to access funding if certain eligibility criteria are met.
For small and medium-sized businesses, a new Coronavirus Business Interruption Loan Scheme (CBILS), delivered by the British Business Bank, provides support for businesses to access a wide range of funding facilities including: overdrafts, loans, asset finance and invoice finance.
Key features of the scheme find out more.:
To be eligible for the scheme the business must be based in the UK, with turnover on no more than £45 million per year and meet certain other criteria.
There is a quick eligibility checklist on the British Business Bank website to help businesses understand if they are eligible to apply for a CBILS-backed facility.
More information on the scheme can be found on the website of the British Business Bank.
COVID-19 corporate financing facility
The Coronavirus Business Interruption Loan Scheme (CBILS) provides support for businesses to access funding if certain eligibility criteria are met.
To support larger firms, the Bank of England has announced a new COVID-19 Corporate Financing Facility to provide a quick and cost-effective way to raise working capital via the purchase of short-term debt.
This supports companies which are fundamentally strong, but have been affected by a short-term funding squeeze, enabling them to continue financing their short-term liabilities. It will also support corporate finance markets overall and ease the supply of credit to all firms.
HM Government updates on this facility can be found here.
Mortgage and rent holiday
Mortgage borrowers can apply for a three month payment holiday from their lender. Both residential and buy-to-let mortgages are eligible for the holiday. It is important to remember that borrowers still owe the amounts that they don't pay as a result of the payment holiday. Interest will continue to be charged on the amount they owe.
Tenants can apply for a three-month payment holiday from their landlord. No one can be evicted from their home or have their home repossessed over the next three months.
Insurance claims
Businesses that have cover for both pandemics and government-ordered closure should be covered. The government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres, etc., is sufficient to make a claim as long as all other terms and conditions are met. Insurance policies differ significantly, so businesses should check the terms and conditions of their specific policy and contact their providers.
Nursery businesses
Business rates holiday for nurseries in England for the 2020/21 tax year. Find out more.
Changes to insolvency rules to help companies trade
The UK government announced that changes will be carried out to include: key safeguards for creditors and suppliers to ensure they are paid while a solution is sought, enabling businesses to buy supplies while attempting a rescue, and temporarily suspending wrongful trading provisions retrospectively from 1 March 2020 for three months for company directors so they can keep their businesses going without threat of personal liability.
Find out more here and here.
Update: On 5 November 2020, UK Government announced it will extend the Coronavirus Job Retention Scheme until the end of March 2021, not pay the Job Retention Scheme Bonus in February (instead redeploy a retention incentive "at the right time"), and increase the third self-employed grant - covering November to January - from 55% to 80% (of average monthly trading profits).
Update: on 1 November 2020, UK Government have postponed the Job Support Scheme and extended the Coronavirus Job Retention Scheme (more detail here). UK Government have also increased SEISS Grant Extension (more detail here). The application deadlines for Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBLS) have been extended to 31 January 2021.
Update: on 22 October 2020, UK Government announced further expansion details for the Job Support Scheme - there are now two variations to JSS - JSS Open and JSS Closed. UK Government also increased support available under the SEISS Grant Extension - doubling the value of the first grant.
Update: On 9 October 2020, UK Government expanded the Job Support Scheme to support businesses across the UK required to close their premises due to coronavirus restrictions. In addition, the Local Restrictions Support Grant was increased up to £3,000 per month (based on rateable value) and eligibility for payment after every two weeks of closure for businesses which are legally required to close due to a nationally-imposed local lockdown.
A summary of the UK Government's Winter Economy Plan 2020 can be found on our website page.
Update: On 24 September 2020 , the Chancellor announced several measures as part of the UK Government's Winter Economy Plan including a new Job Support Scheme (UK Government factsheet (external) found here), an extension to the SEISS for self-employed, a facility to extend bounce back loans from 6 to 10 years, the Government guarantee on CBILS extended to 10 years and a new successor loan guarantee programme will be announced in January 2021. Further guidance is expected to be published shortly.
Update: On 8 July 2020, the Chancellor announced new measures including the Job Retention Bonus (link here), a VAT reduction on tourism and hospitality related businesses (link here) as well as the "Eat Out to Help Out" scheme (external GOV.UK link here) and an increase in Stamp Duty Land Tax on the purchase of a main home (external GOV.UK link here).
Here’s a quick summary of practical help notified by the Chancellor.
You can read the latest advice and guidance from HM Government covering financial support for business on its coronavirus pages here and here.
Guidance and good practice for employers and businesses on coronavirus (COVID-19) found here.
Read government's Frequently Asked Questions according to the latest advice and guidance.
On 20 April 2020, HM Government launched a coronavirus business 'support finder' tool to help businesses and self-employed people across the UK quickly and easily determine what financial support is available to them during the coronavirus pandemic.
Local Authority Discretionary Grant Scheme
An additional fund to Small Business Grant Fund and Retail, Hospitality and Leisure Grant Fund may still be available. More details here.
However, applications for most local authorities closed in the first week of June 2020 (contact your local authority for application window dates).
Coronavirus Statutory Sick Pay Rebate Scheme
From 26 May 2020, employers with fewer than 250 employees can now claim for coronavirus related Statutory Sick Pay (SSP).
Employers are eligible to use the scheme if they meet the following criteria:
- they're claiming for an employee who's eligible for sick pay due to coronavirus
- they had a PAYE payroll scheme in operation before 28 February 2020
- they had fewer than 250 employees across all PAYE schemes on 28 February 2020
- they're eligible to receive state aid under the EU Commission Temporary Framework.
The repayment will cover up to two weeks of the applicable rate of SSP and is payable if an employee was unable to work on or after 13 March 2020 and entitled to SSP because they either:
- had or have coronavirus;
- could not or cannot work because they were self-isolating from home
- were/are shielding in line with public health guidance
Tax agents can make claims on behalf of their payroll clients.
Records (including but not restricted to: amounts paid and claimed, dates, symptoms, NI numbers) must be kept for 3 years after the date payment is received for the claim.
Note the danger of duplicated claims as claims can be made from both the coronavirus job retention scheme and the coronavirus statutory sick pay rebate scheme for the same employee but not for the same period of time for that employee.
Coronavirus Bounce Back Loan scheme
On 27 April 2020, HM Government announced further support for small business in the form of the Bounce Back Loan Scheme.
The main points of the scheme are as follows:
- The scheme launched on 4 May 2020
- Businesses are able to borrow between £2,000 and £50,000
- No fees or interest to pay for the first 12 months
- No repayments will be due during the first 12 months
- Loan terms will be up to 6 years
- Businesses can apply online through a short form
- HM Government have stated they will work with lenders to agree a low rate of interest for the remaining period of the loan.
Businesses are eligible where they have been negatively affected by coronavirus and was not an “undertaking in difficulty” on 31 December 2019.
You cannot apply if you are already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS). However, if you’ve already received a loan of up to £50,000 under CBILS, you can arrange with your lender to transfer it into the Bounce Back Loan scheme until 4 November 2020.
Coronavirus Job Retention Scheme
Click here to view Coronavirus Job Retention Scheme updates.
All UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salary for those who would otherwise have been laid off during this crisis.
Under the new Coronavirus Job Retention Scheme, government grants will cover 80% of the salary of PAYE employees who would otherwise have been laid off during this crisis. The scheme, open to any employer in the country, will cover the cost of wages backdated to 1 March 2020 and will be open before the end of April. It will continue for at least three months, and can include workers who were in employment on 19 March 2020 (originally 28 February 2020).
HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.
To claim under the scheme employers need to:
- - designate affected employees as ‘furloughed workers’, and notify 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; and
- - 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 online claim service was launched on GOV.UK on 20 April 2020 and claims are usually paid within 6 working days. Business that need short-term cash flow support, may benefit from the VAT deferral (see below) and may also be eligible to apply for a Coronavirus Business Interruption Loan (CBILS).
Self-employment Income Support Scheme (SEISS)
Click here to view Self-Employment Income Support Scheme updates
The scheme provides taxable grants to self-employed individuals or partners negatively impacted by the coronavirus, worth 80% of their average trading profits for three months, capped at £2,500 per month.
HM Government confirmed on 29 May 2020 that the SEISS will be extended beyond the end of June 2020 - with those eligible able to claim a second and final grant capped at £6,570. More details on the extension can be found here.
A SEISS grant is based, for each taxpayer, on the average of their trading profits as reported in their last three tax returns for the tax years: 2015/16 to 2018/19. If the taxpayer started trading within this three year period the monthly average of profits will be calculated from the periods in which they were trading.
The SEISS grant will not be payable to anyone who meets any of these conditions:
- has average annual profits of £50,000 or more
- has not submitted a tax return for 2018/19 (in order to qualify for the grant, the deadline for submission of 2018/19 tax return is 23 April 2020)
- receive less than half of their annual taxable income from self-employed profits
- has already ceased trading permanently
Those who started trading after 6 April 2019 are not eligible for the SEISS grant. This date is the 'line in the sand' for eligibility purposes.
Landlords will not qualify for the SEISS grant as property letting businesses are not regarded as a trade. Similarly, HMRC are unlikely to consider income from furnished holiday lets as qualifying for the SEISS grant.
How do I apply?: HMRC will contact those taxpayers who are eligible for this grant and will invite them to apply for the payment online. The SEISS grant will be payable into the taxpayer's bank account in one lump sum.
The grant will be treatable as taxable income and will have to be reported on tax returns for 2020/21.
Find out more and here.
VAT payment deferral
VAT payments for quarters ended 29 February, 31 March & 30 April 2020 can be deferred, meaning businesses will not need to make VAT payments until the end of June 2020. Businesses will then have until the end of the 2020-21 tax year (ie 31 March 2021) to settle any liabilities that have accumulated during the deferral period.
The deferral applies automatically and businesses do not need to apply for it. VAT refunds and reclaims will be paid by the government as normal.
See also our VAT Updates page here
Income Tax self-assessment payment deferral
Income Tax payments ordinarily due by 31 July 2020 under the Self-Assessment system may now be deferred to January 2021 including the Self-Employed.
The deferment is optional and any persons still able to pay their second self-assessment payment on account by 31 July 2020 should still do so.
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.
Find out more.
Universal Credit
If you are self-employed and want to know if you are eligible for Universal Credit, please visit the gov.uk Universal Credit page.
Find out more.
HMRC Time to Pay
All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC's Time to Pay Service.
HMRC’s Time to Pay scheme can enable firms and individuals in temporary financial distress as a result of Covid-19 to delay payment of outstanding tax liabilities.
HMRC’s dedicated Covid-19 helpline provides practical help and advice on 0800 0159 559.
Find out more here and here.
Business Rates holidays and cash grants
A business rates holiday for the 2020-2021 tax year applies for any business in the retail, hospitality or leisure sectors.
In those sectors, if your rateable value is between £15K and £51k, you'll also receive a cash grant of up to £25,000 per property. Find out more.
Find out more information for retail, hospitality and leisure businesses.
Any business which gets small business rates relief, including those in the retail, hospitality or leisure sectors, will receive a cash grant of £10,000 (increased from £3,000 announced in the 11 March Budget). Find out more here and here.
The rates holiday and cash grants will be administered by local authorities and should be delivered automatically, without businesses needing to claim.
Coronavirus Business Interruption Loan Scheme (CBILS)
The Coronavirus Business Interruption Loan Scheme (CBILS) provides support for businesses to access funding if certain eligibility criteria are met.
For small and medium-sized businesses, a new Coronavirus Business Interruption Loan Scheme (CBILS), delivered by the British Business Bank, provides support for businesses to access a wide range of funding facilities including: overdrafts, loans, asset finance and invoice finance.
Key features of the scheme find out more.:
- Up to £5m facility
- Interest and fees paid by government for 12 months
- Security
- Personal guarantees for facilities under £250,000 cannot be taken
- Personal guarantees for facilities above £250,000 may be required at a lender's discretion
- Finance terms
- Lender provided with a government-backed, partial guarantee against the outstanding facility balance, subject to an overall cap
- No fee payable by smaller businesses to access the scheme
- The borrower always remains 100% liable for repayment of the debt
To be eligible for the scheme the business must be based in the UK, with turnover on no more than £45 million per year and meet certain other criteria.
There is a quick eligibility checklist on the British Business Bank website to help businesses understand if they are eligible to apply for a CBILS-backed facility.
More information on the scheme can be found on the website of the British Business Bank.
COVID-19 corporate financing facility
The Coronavirus Business Interruption Loan Scheme (CBILS) provides support for businesses to access funding if certain eligibility criteria are met.
To support larger firms, the Bank of England has announced a new COVID-19 Corporate Financing Facility to provide a quick and cost-effective way to raise working capital via the purchase of short-term debt.
This supports companies which are fundamentally strong, but have been affected by a short-term funding squeeze, enabling them to continue financing their short-term liabilities. It will also support corporate finance markets overall and ease the supply of credit to all firms.
HM Government updates on this facility can be found here.
Mortgage and rent holiday
Mortgage borrowers can apply for a three month payment holiday from their lender. Both residential and buy-to-let mortgages are eligible for the holiday. It is important to remember that borrowers still owe the amounts that they don't pay as a result of the payment holiday. Interest will continue to be charged on the amount they owe.
Tenants can apply for a three-month payment holiday from their landlord. No one can be evicted from their home or have their home repossessed over the next three months.
Insurance claims
Businesses that have cover for both pandemics and government-ordered closure should be covered. The government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres, etc., is sufficient to make a claim as long as all other terms and conditions are met. Insurance policies differ significantly, so businesses should check the terms and conditions of their specific policy and contact their providers.
Nursery businesses
Business rates holiday for nurseries in England for the 2020/21 tax year. Find out more.
Changes to insolvency rules to help companies trade
The UK government announced that changes will be carried out to include: key safeguards for creditors and suppliers to ensure they are paid while a solution is sought, enabling businesses to buy supplies while attempting a rescue, and temporarily suspending wrongful trading provisions retrospectively from 1 March 2020 for three months for company directors so they can keep their businesses going without threat of personal liability.
Find out more here and here.
Downham Morris & Co is the trading name of Downham Morris & Co Limited, a company registered in England & Wales.
Company Registration Number 10243254. Registered Office 45/49 Greek Street, Stockport, Cheshire, SK3 8AX. VAT Registration Number 906 9789 68.
Company Registration Number 10243254. Registered Office 45/49 Greek Street, Stockport, Cheshire, SK3 8AX. VAT Registration Number 906 9789 68.
