There is now very much a focus on recovery rather than crisis support and with that in mind, we thought it worth summarising the current situation, covering the 4 areas of: government COVID support, cash flow, Local Authority grants and job creation.
There had been an offer of Free Lateral Flow Tests If you are a business and had 10 or more employees (& a ltd company) but you had to register by 31st March, which was then extended to 12th April (yesterday).
This is a legal requirement. You could be eligible for a £500 payment if you currently receive UC or other benefits. You MAY be eligible for a discretionary payment from your LA. You need to show that you will face financial hardship if you are asked to self-isolate.
From July 2021 employers will be asked to contribute 10% of the cost, rising to 20% in August and September 2021.
The Self-Employed Income Support Scheme has been extended to September 2021.
The grant extension now applies to the newly self-employed who have filed a tax return before midnight on 2 March 2021. Those whose turnover has fallen by 30% will continue to receive the 80% grant. Those whose turnover has fallen by less than 30% will receive a 30% grant.
February to April 2021. Applications will be open from late April.
From May onwards. The fifth grant will be open from late July. Max £7,500 but this time spread over 5 months. Details still to be confirmed.
The Self-Employment Income Support Scheme is open to those who are self-employed or a member of a partnership that has been adversely affected by coronavirus (COVID-19).
To claim they must:
- Be currently actively trading and intending to continue to trade but are impacted by reduced demand due to coronavirus.
- Have been unable to trade due to the impact of coronavirus.
- Reasonably believe there will be a significant reduction in your trading profits due to reduced demand or your inability to trade.
The 100% business rates holiday will continue for the first three months of the year until the end of June. For the remaining nine months, they will be discounted by two-thirds, up to a value of £2m, with a lower cap for businesses who have been able to stay open.
Recovery Loan Scheme
Applications for CBILS and BBLS closed on 31 March 2021. The Recovery Loan Scheme will replace CBILS and BBLS. Applications opened on 6 April.
Types of finance available?
- Term loans and overdrafts between £25,001 and £10 million per business.
- Invoice finance and asset finance will be available between £1,000 and £10 million per business.
Finance terms are up to 6 years for term loans and asset facilities. Overdraft and invoice finance facilities, terms will be up to 3 years.
NO PERSONAL GUARANTEES will be taken on facilities up to £250,000 and a borrower’s main home (principle private residence) cannot be taken as security.
Eligibility criteria? To apply your business:
- Is trading in the UK.
- Is viable or would be viable if it were not for the pandemic.
- Has been impacted by the pandemic.
- Is not in collective insolvency proceedings.
If they have received other COVID support, they will still be able to apply.
The British Business Bank will administer the scheme via a list of approved lenders.
VAT rate reduction
The reduced VAT rate of 5% will be extended until 30 September 2021 for eligible businesses. Following this, an interim rate of 12.5% will be in place for a further six months with the standard rate of 20% returning in April 2022.
VAT deferral payments scheme
Deadline: 21 June 2021
If you deferred VAT payments between 20 March 2020 and 30 June 2020, you can either:
- pay the deferred VAT in full, on or before 31 March 2021.
- pay over the course of 11 payments up until the end of March 2022. The VAT deferral new payment scheme is now open until 21 June 2021.
You may be charged interest or a penalty if you do not:
- pay the deferred VAT in full by 31 March 2021.
- opt into the new payment scheme by 21 June 2021.
- agree to extra help to pay with HMRC by 30 June 2021
Self-Assessment deferral scheme – payments on account
If less than £30k, Self-assessed income taxpayers can spread their outstanding tax payments over a 12-month period from January 2021. Payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.
If over £30k then the client needs to contact HMRC direct to discuss.
Local Authority Grants
In the budget, the Government announced the introduction of grant support for non-essential retail, hospitality, accommodation, leisure, personal care, and gym businesses in England. This is from 1st April.
The restart grant replaces the Local Restrictions Support Grant (Closed) and Local Restrictions Support Grant (Open) scheme.
Non-essential retail businesses will receive up to £6,000 per premises. Gyms, leisure, personal care, accommodation, and hospitality businesses will receive up to £18,000. The sum received is calculated from the rateable value of your business.
- If your business has a property with a rateable value of £15,000 or less, you can claim up to £8,000.
- If your business has a property with a rateable value of between £15,000 and £51,000, you can receive up to £12,000.
- If your business has a property with a rateable value over £51,000 then you can claim up to £18,000
This grant is administered by local authorities.
Discretionary grants could be available from certain LA’s and its totally up to the LA if they have the funds to support such an initiative.
The Kickstart Scheme was announced in July 2020 as part of the Chancellor’s Plan for Jobs. The scheme aims to create thousands of high-quality six-month work placements for young people aged 16 to 24 who are claiming Universal Credit and are at risk of long-term unemployment.
Under the scheme, the Government will cover 100 per cent of employment costs for 25 hours a week. This includes the employee's salary at the appropriate minimum wage for their age, as well as National Insurance and pension contributions. Originally it was only open for businesses with 30+ kick-starters but this condition has been removed.
Applications can be made directly through the DWP or an approved gateway scheme. If you go direct, you will get £1,500 funding for each kick-starter. If you go through an approved gateway scheme, they get the £1,500 but manage the whole process and effectively employ the kick-starter so you do not need a PAYE scheme if a sole trader. Some gateway schemes keep the whole £1,500 and others will pay you a portion.
- Extension of the apprenticeship hiring incentive in England to September 2021 and an increase of payment to £3,000.
- £7 million for a new “flexi-job” apprenticeship programme in England, that will enable apprentices to work with several employers in one sector.
- Additional £126 million for 40,000 more traineeships in England, funding high quality work placements and training for 16–24-year-olds in 2021/22 academic year.