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Business Support | Government To Help Support Businesses

Business Support

Business support

As our payroll department has advised you previously, the current Job Retention Scheme will end at the end of this month. From 1 November 2020, the government will introduce a new Job Support Scheme. Employees must work at least 33% of their usual hours. For every hour not worked, the employer and the government will each pay one-third of the employee’s usual pay, and the government contribution will be capped at £697.92 per month.

As part of the business support initiative, employees using the scheme will receive at least 77% of their pay, where the government contribution has not been capped. The employer will be reimbursed in arrears for the government contribution. The employee must not be on a redundancy notice. The scheme will run for six months from 1 November 2020 and is open to all employers with a UK bank account and a UK PAYE scheme.

Business Support  | SEISS Grant Extension

The grant will be limited to self-employed individuals who are currently eligible for the SEISS and are actively continuing to trade but face reduced demand due to the effects of COVID-19. The scheme will last for six months, from November 2020 to April 2021.

The extension will be in the form of two taxable grants. The first grant will cover a three-month period from the start of November until the end of January. This initial grant will cover 20% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £1,875 in total. The second grant will cover a three-month period from the start of February until the end of April. The government will review the level of the second grant and set this in due course.

Business Support  | Enhanced Time to Pay for Self-Assessment taxpayers

The government will give the self-employed and other taxpayers more time to pay taxes due in January 2021, building on the Self-Assessment deferral provided in July 2020. Taxpayers with up to £30,000 of Self-Assessment liabilities due can use HMRC’s self-service Time to Pay facility to secure a plan to pay over an additional 12 months.

This means that Self-Assessment liabilities due in July 2020 will not need to be paid in full until January 2022. Any Self-Assessment taxpayer unable to pay their tax bill on time, including those who cannot use the online service, can continue to use HMRC’s Time to Pay Self-Assessment helpline to agree on a payment plan.

Business Support  | VAT

The government is extending the temporarily reduced VAT rate (5%) until 31 March 2021. This will continue to apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises, accommodation supplies, and admission to attractions across the UK.

The government will give businesses that defer VAT due in March to June 2020 the option to spread their payments over the financial year 2021-2022. Rather than paying in full at the end of March 2021, businesses can choose to make 11 equal instalments over 2021-22. All businesses that took advantage of the VAT deferral can use the New Payment Scheme. Businesses will need to opt in, but all are eligible. HMRC will put in place an opt-in process in early 2021.

Business Support  | Loan Schemes

The government is extending the Bounce Back Loan Scheme (BBLS) and the Coronavirus Business Interruption Loan Scheme (CBILS)  to 30 November 2020 for new applications.

The government will give all businesses that borrowed under the BBLS the option to repay their loan over a period of up to ten years. This will reduce the average monthly repayments on the loan. UK businesses will also have the option to move temporarily to interest-only payments for periods of up to six months (an option which they can use up to three times) or to pause their repayments entirely for up to six months (an Connect For Intermediariesoption they can use once and only after having made six payments).

As part of “Business Support”, the government intends also to allow CBILS lenders to extend the term of a loan up to ten years.

We reached the end of our publication on “Business Support | Awe-inspiring Government Measures To Help Support Businesses | 2020”; until next time, stay Connect!

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