Welcome to our newsletter detailing the latest developments announced by the government. Please note the following is our interpretation of the current rules and the rules are being regularly updated by government so we advise you check the latest position before taking any action.
(1) Coronavirus Job Retention Scheme (CJRS)
The scheme ends on 31 October 2020. 30 November 2020 is the last day you can submit claims for periods ending on or before 31 October 2020. After this date you will not be able to submit any further claims or add to existing claims.
If you’ve overclaimed and have not paid HMRC back please see the following link for further guidance https://www.gov.uk/guidance/pay-coronavirus-job-retention-scheme-grantsback
(2) Coronavirus Job Support Scheme (JSS)
The Coronavirus Job Retention Scheme (CJRS) ends 31 October 2020 and is replaced by a new arrangement, the ‘Job Support Scheme’ with effect from 1 November 2020. The new scheme will initially run for 6 months until 30 April 2021, but this will be reviewed in January 2021. In the case of large business, the scheme is only available to those whose turnover is lower now than before the coronavirus and they should not be making capital distributions.
The details are included at Appendix 1
(3) Job Retention Bonus
The Chancellor has announced that a one-off payment of £1,000 will be made to UK employers for every employee that they furloughed under the CJRS, provided that they continue to employ them for at least three months after the scheme ends.
For employers to qualify for the Job Retention Bonus they must:
- Have furloughed the employee at least once and submitted a valid CJRS claim for that employee.
- Continue to employ them from the time of their most recent claim for that employee until at least 31 January 2021.
- Pay the employee an average of at least the lower earnings limit (£520 per month) between 1 November 2020 and 31 January 2021 (ie a total of at least £1,560 across three months).
Employers will be able to claim the Job Retention Bonus after they have filed PAYE for
January 2021. Payments will be made from February 2021.
For more information about the Job Retention Bonus, go to www.gov.uk/government/publications/job-retention-bonus/job-retention-bonus.
Claiming under the job support scheme will not impact on the above
(4) Self Employed Income Support Scheme (SEISS)
A self-employed individual may claim support in the form of a grant under the Self-employed Income Support Scheme (the ‘SEISS’). The key points of the SEISS are set out in Appendix 2.
A person trading through a limited company is not eligible for the SEISS.
(5) Local Restrictions Support Grant
The Local Restrictions Support Grant (LRSG) supports businesses that were open as usual, providing services in person to customers from their business premises, but which were then required to close due to local lockdown restrictions imposed by government. Detailed guidance is in Appendix 3.
(6) Test & Trace Support Payment
If you have symptoms of coronavirus, you should stay at home and self-isolate immediately. If you’re asked to self-isolate by NHS Test and Trace and you’re on a low income, unable to work from home and will lose income as a result, you may be entitled to a payment of £500 from your local authority under the Test and Trace Support Payment scheme.
The scheme will run until 31 January 2021.
This payment is subject to income tax.
For further information relating to this https://www.gov.uk/government/publications/test-andtrace-support-payment-scheme-claiming-financial-support/claiming-financial-support-underthe-test-and-trace-support-payment-scheme.
(7) Deferral of VAT payments due to coronavirus (COVID-19)
On 24 September 2020, the Chancellor announced that businesses who deferred VAT due from 20 March to 30 June 2020 will now have the option to pay in smaller payments over a longer period.
Instead of paying the full amount by the end of March 2021, you can make smaller payments up to the end of March 2022, interest free.
You will need to opt-in to the scheme, and for those who do, this means that your VAT liabilities due between 20 March and 30 June 2020 do not need to be paid in full until the end of March 2022.
Those that deferred their VAT payment can still pay the VAT by 31 March 2021 if preferred. If you are still unable to pay the VAT due and need more time, see the guidance about what to do by going to the following link https://www.gov.uk/difficulties-paying-hmrc. You can also contact HMRC by phoning: 0300 200 3835.
(8) Defer your Self Assessment payment on account due to coronavirus (COVID-19)
You had the option to defer your second payment on account if you were:
- registered in the UK for Self Assessment and
- finding it difficult to make that payment by 31 July 2020 due to the impact of coronavirus
You can still pay your deferred July 2020 payment on account any time up to 31 January 2021. There’ll be no interest or penalty as long as you pay in full by that date.
(9) If you cannot pay your self assessment tax bill by 31 January 2021
You can pay your tax by instalments if you’re unable to pay in full by 31 January 2021. If you file your 2019 to 2020 Self Assessment return early HMRC will know what payments you owe before the 31 January 2021 payment due date. You’ll then be able to set up a Time to Pay instalment arrangement with HMRC by using the following link. https://www.gov.uk/difficulties-paying-hmrc.
If you owe up to £30,000 you can do this online without having to contact HMRC directly.
You’ll need to wait at least 48 hours after your tax return is submitted before you can set up your Time to Pay arrangement online.
Call the Self Assessment helpline if you’re not eligible for a payment plan or cannot use the online service.
Self Assessment Payment Helpline
Telephone: 0300 200 3822
Monday to Friday, 8am to 4pm
Please note that interest is payable on Time to Pay instalments from the original due date of payment(s).
This newsletter is written for the benefit of our clients. Further advice should be obtained before any action is taken.
(2) Coronavirus Job Support Scheme (JSS)
There are two strands to the scheme:
Job Support Scheme – Open
1. Under the terms of JSS Open, where the employer is continuing to operate but employees work reduced hours, HMRC will potentially pay 61.67% of each employee’s wages up to the ‘reference salary’ for non-working time giving a maximum grant of £1541.75 per month. The employer is required to pay (at least) 5% of the employee’s reference salary for unworked hours, up to a maximum of £125 per month. It is not necessary for there to be a constant fixed pattern and the unworked hours may change from week to week, but each short-time working arrangement must cover a minimum of 7 days. Employers will need to agree the new short time working agreement with their employees, make any changes to the employment contract by agreement and notify their employees in writing. Agreements must be available for HMRC to view and comply with relevant employment, equality and discrimination legislation and must be kept for at least 5 years. HMRC will be incorporating checks into the claims process and employers may need to provide ev dence of short-time working arrangements.
Job Support Scheme – Closed
2. Under the JSS Closed, where employees are unable to work because the employer has been required to close its premises, HMRC will pay 2/3rds of the employee’s wages (the ‘reference salary’) up to a maximum £2083.33 per month. Employers must put a written agreement in place with affected employees (or a collective agreement with the relevant union where appropriate) confirming that they have been instructed to stop working for at least 7 days. HMRC will be incorporating checks into the claims process and agreements must be available for HMRC to view and comply with relevant employment, equality and discrimination legislation and must be kept for at least 5 years.
Additional information for both JJS Open and Closed schemes
- Employers may claim under either or both versions of the scheme in respect of different employees.
- Employers will not be able to top up employees wages above the 2/3 rd contribution to hours not worked at their own expense.
- Employers must have a UK Bank Account and PAYE scheme open.
- Each Employee must have an RTI submission by 23 September 2020. If an employee ceased employment with their employer after 23 September 2020 and are subsequently rehired then the employer can claim for these employees.
- Employees cannot be made redundant or put on notice of redundancy whilst their employer is claiming under the scheme.
- There is no requirement for the employee to have been previously furloughed before 1 November 2020 or for the employer to have made a claim under the CJRS.
- Class 1 employers national insurance contributions and pension contributions are not covered and will remain payable by the employer.
- The national minimum wage applies for all hours worked.
- The grant will subject to taxation.
Calculation of usual wages
Calculation of usual wages (the ‘reference salary’) will follow similar methodology to that used for the Coronavirus Job Retention Scheme (CJRS). Calculations are performed using pay after any relevant salary sacrifice. The maximum reference salary in respect of which aclaim can be made is £3,125 per month.
Elements of pay which should be included are:
- regular contractual wages/salary
- compulsory overtime
- contractual fees
- contractual commission
- piece rate payments
Any non-contractual or discretionary elements of pay must be excluded from the calculation. Benefits in kind and other non-cash payments are also excluded.
For employees who have not been furloughed it will be based on their underlying usual pay/hours and not the amount paid on furlough.
For more detailed guidance on this please go to the following link https://www.gov.uk/government/publications/the-job-support-scheme/the-job-supportscheme.
How to claim
Employers will be able make their first claim from 8 December 2020 on GOV.UK. This will cover salaries for pay periods ending and paid in November i.e. paid monthly in arrears. Subsequent months will follow a similar pattern, with the final claims for April being made from early May. More detail about this process will be published in guidance by the end of October 2020.
Agents who are authorised to do PAYE online for employers will be able to claim on their behalf.
(4) Self Employed Income Support Scheme (SEISS)
Qualifying for the SEISS (original and grant extension)
An individual is eligible for a grant under the SEISS where they satisfy all of the following conditions:
- they carried on a trade in 2018-19;
- they submitted their tax return for 2018-19 by 23 April 2020;
- they carried on a trade in 2019-20;
- they intend to continue to trade in 2020-21; and
- their trade has been ‘adversely affected’ by COVID-19. HMRC’s guidance includes examples of circumstances in which this condition may be met including where the person has been ill with COVID-19 and where they have scaled-down their activities due to the impact of COVID-19 on their customers. The link to the guidance is https://www.gov.uk/guidance/decide-if-your-business-has-been-adversely-affectedfor-the-self-employment-income-support-scheme.
Exclusion from the SEISS
A person is excluded from the SEISS where they are a high earner or where they have significant other income. The exclusion applies unless at least one of the following conditions is met:
Condition 1: For 2018-19, the person’s trade profits:
- are more than £0 and less than £50,001; and
- they are equal to or more than the person’s non-trading income.
Condition 2: For the relevant period, the person’s trade profits:
- on average, are more than £0 and less than £50,001; and
- in total, are equal to or more than the person’s total non-trading income.
The figures for trade profits and non-trading income are based on entries on the person’s tax return(s). The relevant period for condition 2 is determined by how long the person has traded: where they traded in all of 2016-17, 2017-18 and 2018-19, the relevant period is those three tax years; and where they traded in 2017-18 and 2018-19 only, the relevant period is those two tax years.
Self-Employment Income Support Scheme Grant Extension
The UK Government recognises the continued impact that coronavirus (COVID-19) has had on the self-employed and has taken action to provide support.
The Self-Employment Income Support Scheme Grant Extension provides critical support to the self-employed in the form of two grants, each available for three month periods covering November 2020 to January 2021 and February 2021 to April 2021.
1. Who can claim – to be eligible for the Grant Extension self-employed individuals, including members of partnerships, must:
- have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
- declare that they intend to continue to trade and either:
- are currently actively trading but are impacted by reduced demand due to coronavirus
- were previously trading but are temporarily unable to do so due to coronavirus
2. What the Grant Extension covers – the extension will last for six months, from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a three-month period. The first grant will cover a three-month period from 1 November 2020 until 31 January 2021. The Government will provide a taxable grant covering 40% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £3,750 in total. The Government are providing broadly the same level of support for the self-employed as is being provided for employees through the Job Support scheme. The second grant will cover a three-month period from 1 February 2021 until 30 April 2021. The Government will review the level of the second grant and set this in due course.
3. The grants are taxable income and also subject to National Insurance contributions.
4. How to claim – HMRC will provide full details about claiming and applications in guidance on GOV.UK in due course
Claimants should ensure that they inform the appropriate government department if they are claiming tax credits/universal credits etc., as this may affect their claim.
PLEASE BE AWARE OF SCAMMERS DURING THIS PERIOD.
(5) Local Restrictions Support Grant
The Local Restrictions Support Grant (LRSG) supports businesses that were open as usual, providing services in person to customers from their business premises, but which were then required to close for at least 2 weeks due to local lockdown restrictions in tier three imposed by government.
Your business may be eligible if it:
- occupies property on which it pays business rates
- is in a local lockdown area and has been required to close because of the formal publication of local restrictions guidance that resulted in a first full day of closure on or after 9 September. This funding is not retrospective
- has been required to close for at least 2 weeks because of the lockdown
- has been unable to provide its usual in-person customer service from its premises
For example this could include non-essential retail, personal services or cafes/restaurants that operate primarily as an in-person venue, but which have been forced to close those services and provide a takeaway-only service instead.
Eligible businesses will get one grant for each property liable for business rates within the lockdown zone.
What you will get
- If your business is eligible and has a property with a rateable value of less than £15,001, you will receive a cash grant of £667 for each 2-week period your business is closed.
- If your business is eligible and has a property with a rateable value of between of £15,001 and less than £50,000, you will receive a cash grant of £1,000 for each 2 week period your business is closed.
- If your business is eligible and has a property with a rateable value of £51,000 or over, you will receive a cash grant of 1,500 for each 2 week period your business is closed.
Grants will be based on the rateable value of the property on the first full day of local lockdown restrictions.
Businesses that are affected by the tier two restrictions will get a grant of between £934 to £2,100 per month while restrictions apply. The funds will be distributed by local councils and it will be up to them to determine which businesses are eligible for grant funding in their local areas and what precise funding to allocate to each business. For further details contact your local council.
Businesses that are required to close but do not pay business rates may be eligible for funding at the discretion of the local council, as may businesses not required to close but which are severely impacted. Please see the below: –
You may receive a grant of up to £1,500 at the discretion of your local council if:
- your business is required to close but you do not pay business rates
- if your business is not required to close, but has been severely affected, for example as a result of customer businesses being closed
Your local council will publish details of discretionary funding on their website.
Exclusions for both eligible and discretionary grants
- businesses which are able to continue to operate during the lockdown because they do not depend on providing direct in-person services from their premises
- businesses that have chosen to close, but have not been required to close as part of a local lockdown
- businesses that are still subject to national closures such as nightclubs
- businesses that have reached the state aid limit
If you already get state aid
The Local Restrictions Support Grant counts towards state aid.
How to apply
Visit your local council’s website to find out how to apply. The following link will enable you to find the website of your local council.
These grants are generally taxable.