Covid-19 Information Centre

This tab covers the following:

• Extended Coronavirus Job Retention Scheme
• Self-employment Income Support Scheme ("SEISS")
• Grants
• One-off Lockdown Grant
• Restart Grant 
• Reduced rate of VAT for Hospitality and Tourism
• Business Bounce Back Loan Scheme
• Coronavirus Business Interruption Loan Scheme (CBILS)
• Recovery Loan Scheme
• New Self-Assessment Self-Serve Time To Pay Scheme
• Business Rates Holiday
• Statutory Sick Pay (SSP)
• Extension of Companies House filing deadlines

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‘Extended’ Coronavirus Job Retention Scheme 

The guidance provided below reflects the CJRS from 1 November 2020 to 30 September 2021, including the latest announcements from the Budget 2021.

 

You can furlough employees and apply for a grant to cover a portion of their usual monthly wage costs. From 1 November 2020 until 30 June 2021 you can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month.

In July 2021, you can claim 70% of an employee’s usual salary for hours not worked, up to a maximum of £2,187.50 per month. The employer will have to contribute 10%, up to £312.50, so the employee will still receive 80% of their wages for the hours not worked.

In August and September 2021, you can claim 60% of an employee’s usual salary for hours not worked, up to a maximum of £1,875 per month. The employer will have to contribute 20%, up to £625, so the employee will still receive 80% of their wages for the hours not worked.

As with the original scheme it is up to you the employer as to whether you top up an employee’s salary to 100% of their normal pay. You will however remain liable in full for both employer pension contributions and employer national insurance contributions.

HMRC requires that in order to make a claim you must, as a minimum, have confirmed to your employee in writing that they have been furloughed. You must:

• make sure that the agreement is consistent with employment, equality and discrimination laws
• keep a written record of the agreement for five years
• keep records of how many hours your employees work and the number of hours they are furloughed (i.e. not working)

For full furlough, the HMRC guidance states that the employee does not have to provide a written response in order for you to be able to make a claim. However, any change to an employee’s contract of employment should be by agreement and therefore we would strongly recommend that you seek their agreement in writing (whether they are on full furlough or flexible furlough).

A number of suitable template agreements are available on ACAS’s website. You may also wish to seek employment advice from your legal adviser.

 

Fully furloughed employees must not undertake any work for you, however, they can take part in training, volunteer for another employer/organisation, or work for another employer (if contractually allowed).

Flexibly furloughed employees can work for any amount of time, and any work pattern but they cannot do any work for you during the hours that they are recorded as being on furlough.

Flexible furlough agreements can last for any amount of time. Unless otherwise specified (i.e. where a pay period spans a month-end) the period that you claim for must be for a minimum claim period of seven calendar days.

 

Directors

Company directors are eligible to be furloughed and receive support through this scheme. Where one or more directors are furloughed this should be formally adopted as a decision of the company. This means it should be noted in a board minute and confirmed to the director in writing.

The PDF templates at the bottom of this page in the 'Downloadable Content' section may assist. 

Directors cannot work, i.e. attempt to generate revenue, for their company whilst on furlough. They may however do minimum tasks to comply with their statutory duties under the Companies Act such as approving accounts etc.

 

Who can claim?

• You can claim for employees who were employed on 30 October 2020, as long as you have made a PAYE RTI submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee. This may differ where you have re-employed an employee after 23 September 2020.
• You must have a UK bank account and UK PAYE schemes can claim the grant.
• You do not need to have previously claimed for an employee before 30 October 2020 to claim for periods from 1 November 2020.
• You can furlough employees for any amount of time and any work pattern, while still being able to claim the grant for the hours not worked.
• There is no maximum number of employees you can claim for from 1 November 2020.
• You can continue to claim for a furloughed employee who is serving their notice period.

If you made employees redundant, or they stopped working for you on or after 23 September 2020 you can re-employ them and put them on furlough. This applies provided the employee was employed and on your PAYE payroll on or before 23 September 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made between 20 March and 23 September 2020.

 

When making a claim you should follow these steps:

 

1. Check which employees can be claimed for. For full guidance on which employees can be claimed for, you should see the published Government Guidance.

2. Work out your claim period and your flexibly furloughed employees’ usual and furloughed hours. For detail on how to work out your claim period and your flexibly furloughed employees’ usual and furloughed hours see the Government Guidance.

3. Calculate how much you have to pay your furloughed employees for hours on furlough and how much you can claim back. You can use the Government Guidance to calculate how much you have to pay your furloughed employees for hours on furlough and how much you can claim back.

4. Make your claim. Find out what information you will need to make your claim and the link to the claim portal on the following Government Guidance.

 

*NEW Claims Submission Deadline*

Claims from 1 November 2020 MUST be submitted by 11:59 pm 14 calendar days after the month you’re claiming for. If this time falls on the weekend then claims should be submitted on the next working day. All subsequent months' claims will have the same 14 calendar day deadline.

For claims relating to periods after 1 November 2020, you will only be able to make amendments to the claim within 28 calendar days after the month the claim relates to (unless this falls on a weekend and then it is the next working day).

 

The employer should still continue to make PAYE payments to HMRC and RTI submissions.

Employers must deduct and pay to HMRC income tax and employee National Insurance contributions on the full amount that is paid to the employee, including any scheme grant.

Employer National Insurance contributions must be paid to HMRC on the full amount that is paid to the employee, including any scheme grant.

These payments must be reported via a Full Payment Submission (FPS) to HMRC on or before the pay date.

Your employee will also still pay pension contributions (both employer and automatic contributions from the employee) unless the employee has opted out or stopped saving into their pension.

 

From December 2020, HMRC will be making claim information public.

HMRC will be publishing the employer names and for companies and Limited Liability Partnerships (LLPs), the company registration number of those who have made claims under the extended CJRS scheme for the month of December onwards.

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Jobs Retention Bonus (JRB) Scrapped

The JRB will not be paid in February and the government will redeploy a retention incentive at the appropriate time. Employers were set to receive a one-off taxable payment of £1,000 in February for each eligible employee that was furloughed and kept continuously employed until 31 January 2021. Following the announcement of the extension of the CJRS this policy has now been scrapped, at least for now.

 

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Self-employment Income Support Scheme ("SEISS")

If you're self-employed or a member of a trading partnership and have been impacted by coronavirus (COVID-19) you may be able to claim a grant under the Self-employment Income Support Scheme ("SEISS").

 

This scheme has been extended until September 2021 with two additional grants being announced.

 

The fourth SEISS grant will be set at 80% of the trader’s average trading profits, capped at £2,500 per month. It will be paid in one lump sum, up to £7,500, covering the three months from February 2021 to April 2021. The online claims service for the fourth grant will be available from late April 2021 until 31 May 2021.

The main difference with these additional grants is that the figure of average trading profits will include profits reported for the tax year 2019/20. This will mean newly self-employed individuals that had not submitted a tax return in 2018/19, could potentially be eligible for the latest grants provided they submitted a 2019/20 self-assessment tax return by midnight on 2 March 2021.

To be eligible for the fourth SEISS grant you must declare that you have suffered a significant drop in trading profits. This is further defined as being a reasonable belief that profits have reduced due to one or more of: 

• reduced activity
• reduced capacity
• Inability to trade

HMRC provides a number of examples to illustrate what is meant by reasonable belief and significant reduction in profits.

 

The fifth grant will be worth up to £7,500 and cover the period from May to September 2021. The difference with the fifth grant is that the amount of grant you are eligible for is determined by how much your turnover has been reduced in the tax year 2020/21.

The fifth grant will be worth:

• 80% of 3 months’ average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more
• 30% of 3 months’ average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%

The online service for claiming the fifth grant will open in late July 2021.

The scheme requires you have a trading profit of either:

• less than £50,000 in the 2019-20 tax year and this trading profit is more than half of your total taxable income in that year; or
• an average trading profit in the four tax years 2016-17, 2017-18, 2018-19 and 2019-20 of less than £50,000 and these profits are more than half of your average total taxable income in the same period. If you only started trading between 2016 and 2020 then HMRC will only use those years for which you have filed a return.

Additionally, the following conditions must be met:-

• you are trading when you apply, or would be except for Coronavirus
• you intend to continue to trade 
• you have submitted a tax return for the tax year 2019-20 by 2 March 2021.

HMRC will use the existing information they hold to check if you are eligible. You can also check if you are eligible by using HMRC’s Eligibility Checker:

https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference

When checking if you are eligible you will need your National Insurance (NI) number and Unique Tax Reference (UTR) number. Once you follow the link and enter your NI number and UTR, HMRC will confirm whether it believes you are eligible to make a claim. At this point a link will guide you to the Government Gateway login.

If you do not have a Government Gateway Account then you will need to follow the link and set one up. It is important that you follow the link provided on the page to avoid setting up a Gateway Account for the wrong service.

Please note that as Agents we will not be able to make the claim on your behalf. This is due to the way the system has been set up by HMRC. However, we will be able to offer advice on eligibility and provide further instructions on how you can make your claim if requested.

Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are both operating a PAYE scheme and able to be furloughed.

For SEISS eligibility guidance from HMRC you should visit:-

https://www.gov.uk/guidance/how-hmrc-works-out-total-income-and-trading-profits-for-the-self-employment-income-support-scheme#eligibility

 

 

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Grants

1. Business Grants for Businesses with Premises (Local Restrictions Support Grant - LRSG) 

For businesses forced to close due to local or national lockdowns, this grant will be payable by your local authority and will be based on the rateable value of your business’ property. 

The size of the grant is determined by the rateable value of the property:

• For properties with a rateable value of £15k or under, grants to be £1,334 per month or £667 per two weeks;
• For properties with a rateable value of between £15k-£51k grants to be £2,000 per month or £1,000 per two weeks;
• For properties with a rateable value of £51k or over grants to be £3,000 per month or £1,500 per two weeks.

Funding will be provided to local councils to distribute, you should seek further information on how to claim from your local council.

To claim the LRSG grant from Lancaster City Council see their website HERE.

 

2. Business Grants for Businesses without Premises (Additional Restrictions Grant - ARG)​​​​​​

Additional funding has been made available to local councils for discretionary grants for businesses that are required to close but do not pay business rates.  It will be at your local councils’ discretion to choose how this money is distributed. Lancaster City Council has now released guidance on how they will pay this grant and have now opened the application process. You can find out more about this on our detailed guidance. 

 

3.) Business Grants for Businesses with Premises that have been financially severely impacted

This grant is for Hospitality, Accommodation and Leisure businesses that were open, but financially severely impacted by LCAL High (Tier 2)/LCAL Very High (Tier 3) restrictions. Businesses can apply for a grant from 22 September - 4 November 2020 (when Tier 2/3 restrictions began in Lancashire). You can find out more information on this grant from our detailed guidance. 

 

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One-off Lockdown Grant

The new grant will be a one-off grant for retail, hospitality and leisure businesses and will be paid in addition to the existing grants for closed businesses.

For closed businesses with a rateable value of:

• £15,000 or under they will receive a one-off grant of £4,000
• between £15,000 and £51,000, they will receive a one-off grant of £6,000
• over £51,000 they will receive a one-off grant of £9,000.

You should apply to your Local Authorities.

 

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Restart Grant 

It was announced in the 2021 budget that there would be an additional one-off grant to help support businesses reopening after the lockdown. The following grants will be available from 1 April 2021:

• Non-essential retail opening in April 21 will receive up to £6,000 per premises 
• Hospitality, accommodation, leisure, personal care and gym businesses will receive up to £18,000 per premises

Eligible businesses will be able to apply for these grants through the local authorities. 

Your business may be eligible if it is:

• based in England
• rate-paying
• in the non-essential retail, hospitality, accommodation, leisure, personal care or gym sectors
• trading on 1 April 2021

 

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Reduced rate of VAT for Hospitality and Tourism

The government has temporarily reduced the rate of VAT to 5% for tourist attractions and goods and services supplied by the hospitality sector. This rate came into effect on 15 July 2020 and will apply until 3‌0‌‌ ‌‌September 2021 across the UK. This will be followed by a rate of 12.5% for a further six months until 31 March 2022.

 

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Business Bounce Back Loan Scheme

The Business Bounce Back Loan for small and medium-sized businesses is a 100% government backed loan for amounts between £2,000 and £50,000 and up to 25% of turnover. There won’t be any interest or fees to pay for the first 12 months and then after this, a rate of 2.5% a year will be charged for the remaining period of the loan, although to avoid any fees you can repay early. No repayments will be due during the first 12 months and Loan terms will be available up to 6 years.

The recently announced 'Pay as You Grow' scheme allows greater repayment flexibility including:

• the option to repay the loan over a period of up to ten years which will reduce average monthly repayments,
• the option to move temporarily to interest-only payments for periods of up to six months (an option which can be used up to three times);
• or to pause repayments entirely for up to six months (an option which can only be used once and only after having made six payments).

The deadline for arranging government backed loans has been extended to 31 March 2021. Following the end of the BBBL scheme the new Recovery Loan Scheme will be available for business, see below for more detail about this new scheme.

You can apply for a loan if your business:

• is based in the UK
• was established before 1 March 2020
• has been adversely affected by coronavirus

If your business was classed as a business in difficulty on 31 December 2019 you’ll need to confirm that you’re complying with additional state aid restrictions. Check the business in difficulty criteria and state aid regulations HERE.

If you’re already claiming funding under the Coronavirus Business Interruption Loan Scheme (CBILS) then you will not be able to apply for the Business Bounce Back Loan scheme. However, if the loan you have received is £50,000 or under and you would like to transfer it to the Bounce Back Loan scheme then you will be able to arrange this with your lender.

For businesses that have borrowed under the Bounce Back Loan scheme and borrowed less than the maximum (i.e. less than 25% of their turnover) then you will be able to top-up your existing loan. Businesses will be able to take-up this option from 10 November 2020 and can only make use of this option once.

For further details follow this LINK to HMRC’s guidance.

There are a number of lenders participating in this scheme, you can find a lender here: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/for-businesses-and-advisors/

 

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Coronavirus Business Interruption Loan Scheme (CBILS)

A new temporary Coronavirus Business Interruption Loan Scheme will be delivered through commercial lenders and backed by the British Business Bank, to support primarily small and medium-sized businesses to access bank lending and overdrafts. This will be available to businesses based in the UK with a turnover of no more than £45 million per annum.

The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value and for up to 6 years. The Government will cover the first 12 months of interest payments and any lender-levied fees. 

See the Government Guidance on how to apply for a CBILS Loan.

The deadline for arranging government backed loans has been extended to 31 March 2021. Following the end of the CBIL scheme the new Recovery Loan Scheme will be available for business, see below for more detail about this new scheme.

To apply you should talk to your bank or one of the accredited finance providers as soon as possible. All major banks are offering this scheme and if you currently have an existing loan with monthly repayments you can ask for a repayment holiday in order to help with cash flow.

https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

Note Fishery, aquaculture and agricultural businesses may not qualify for the full interest and fee payment.

 

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Recovery Loan Scheme 

This new loan scheme will provide support for businesses seeking finance to help recover following the end of the Business Bounce Back Loan Scheme (BBBLS) and Coronavirus Business Interruption Loan Scheme (CBILS). The government is guaranteeing 80% of the finance to the lender to ensure they continue to have the confidence to lend to businesses.

The scheme will run from 6 April until 31 December 2021 and is open to all sizes of business. The finance available to businesses will be:

• Term loans and overdrafts will be available 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 six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.

No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.

You will be able to apply for a loan if your business:

• is trading in the UK

You will need to show that your business:

• is viable or would be viable were it not for the pandemic
• has been impacted by the coronavirus pandemic
• is not in collective insolvency proceedings - further details will be provided in due course

Businesses that have received support under the existing COVID-19 guaranteed loan schemes will still be eligible to access finance under this scheme if they meet all other eligibility criteria.

We will update this section once the government releases more details on how to apply.

 

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New Self-Assessment Self-Serve Time To Pay Scheme

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.

If you deferred paying your July 2020 Payment on Account, you will need to pay the deferred amount, in addition to any balancing payment and first 2020/21 Payment on Account, by 3‌1‌‌ ‌‌January 2021. 

If you are unable to pay your Self-Assessment (SA) bill in full by 31‌‌ January 2021, you can set up a Time to Pay payment plan of up to 12 months online without speaking to HMRC. For SA tax debts of up to £30,000, then access to this Time to Pay facility will be available through GOV‌.UK and the taxpayer will get automatic and immediate approval. If your SA debts are over £30,000, or you need longer than 12 months to repay your debt in full, then the Time to Pay arrangement will still be available however you will need to call HMRC to arrange this.  

 

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VAT Deferral New Payment Scheme

If you deferred VAT payments that were due between 20 March and 30 June 2020, then these payments need to be made to HMRC by 3‌1‌‌ ‌‌March 2021. If you are unable to make these payments then the VAT Deferral New Payment Scheme will allow you to spread these payments over equal instalments up to 3‌1‌‌ ‌‌March 2022, interest-free. You will need to opt-in to the scheme by 21 June 2021. You can find more details on paying your deferred VAT on our blog HERE.

 

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Statutory Sick Pay (SSP)

For businesses with fewer than 250 employees, the cost of providing 14 days of Statutory Sick Pay per employee will be refunded by the government in full. Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. Instead, those who have COVID-19 or are advised to self-isolate, will be able to obtain an “isolation note” by visiting NHS 111 online and completing an online form, rather than visiting a doctor. This scheme is set to launch on 26 May 2020. See HMRC's website for full guidance on eligibility and claiming: https://www.gov.uk/guidance/claim-back-statutory-sick-pay-paid-to-employees-due-to-coronavirus-covid-19

 

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Business Rates Holiday Extension

If you are a UK business and your business is in the retail, hospitality and/or leisure sector, which includes properties being used:

• as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
• for assembly and leisure
• as hotels, guest & boarding premises and self-catering accommodation

Then no business rates are payable for the 2020-2021 tax year. You do not need to take any action as the relief is automatic. This has also been extended to include estate agents, lettings agencies and bingo halls.

There will be an extension to the business rates holiday for 3 months of the 2021-2022 tax year to June 2021. Then from July 2021 rates will be discounted by two-thirds of the normal charge.

 

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Extension of Companies House filing deadlines

If a Company or LLP’s filing deadline falls between 27 June 2020 to 5 April 2021 then its filing deadline will be extended from the usual 9 months to 12 months. Your filing deadline will be extended automatically. You do not need to apply for an extension. The extension granted by the regulations will apply to your original filing deadline. It will not be added to any filing extension already granted by Companies House.