Covid-19 Information Centre
PLEASE BE ADVISED THAT THE INFORMATION ON THIS PAGE IS LIKELY TO CHANGE AS THE GOVERNMENT UPDATES ITS POLICIES.
THIS SUMMARY WAS LAST UPDATED 5th January 2021 AT 10:45.
As Covid-19 develops, so too will the information made available regarding what support there is for both businesses and individuals. In order to keep our clients as up to date as possible, and make useful resources readily available, we will be regularly updating this page with important information and links.
HMRC's New dedicated helpline number is 0800 024 1222.
Please use the tabs below to navigate through the different support available to you.
This tab covers the following:
- Extended Coronavirus Job Retention Scheme
- Self-employment Income Support Scheme ("SEISS")
- One-off Lockdown Grant
- Reduced rate of VAT for Hospitality and Tourism
- Business Bounce Back Loan Scheme
- Coronavirus Business Interruption Loan Scheme (CBILS)
- New Self-Assessment Self-Serve Time To Pay Scheme
- Business Rates Holiday
- Statutory Sick Pay (SSP)
- Extension of Companies House filing deadlines
*Important Note* Submission or change to claims for periods ending on or before 31 October 2020 must be made by 30 November 2020.
If you are claiming for a period that ends on or before 31 October 2020, you can only claim if you have previously furloughed your employee(s) before 1 July 2020 and you have submitted a claim for this by 31 July 2020. This may differ if you have an employee returning from statutory parental leave.
In October, the Government will pay 60% of wages up to a cap of £1,875 for the hours that the employee does not work. Employers will pay ER NICs, ER pension contributions and at least 20% of wages to make up the 80% total.
This scheme was due to end on 31 October 2020 and be replaced by the Job Support Scheme (JSS), however, the JSS has been postponed and the CJRS has now been extended to 30 April 2021.
The guidance provided below reflects the CJRS from 1 November 2020 to 30 April 2021.
You can furlough employees and apply for a grant to cover a portion of their usual monthly wage costs. From 1 November 2020 you can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month. 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.
Please note that where agreements are in effect being backdated to 1 November 2020, then in order to be able to make a claim from this earlier date the agreement must be in place on or before 13 November 2020.
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.
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.
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.
If you are a self-employed individual or a member of a trading partnership and your business has been adversely affected by Coronavirus you may be eligible to receive a grant based on your previous trading profits.
This scheme has been extended for an additional six months to April 2021.
Self-employed individuals and members of partnerships who are eligible for the SEISS and are actively continuing trading but are experiencing reduced demand due to coronavirus (COVID-19), will be eligible for a further SEISS grant to provide support over the winter months.
The first SEISS Extension grant will cover a three-month period from the start of November 2020 until the end of January 2021. It will be a taxable grant to cover 80% of trading profits, up to £7,500 and will be paid out in a single instalment covering the three months’ worth of profits. Applications for the grant will open from 30 November 2020.
An additional second SEISS Extension grant will be available for self-employed individuals to cover the period from February to the end of April, although this may be adjusted to respond to changing circumstances. The government will review the level of support needed at a later date.
Eligibility for the additional grants will be similar to the previous SEISS grants however, in the latest guidance published by HMRC just a week before the portal opens for applications on 30 November 2020, the eligibility conditions have now been tightened. Whereas for the first two SEISS grants businesses only had to be “Adversely Affected”, businesses will now be required to declare that you “reasonably believe there will be a significant reduction in your trading profits”.
In addition to the ‘Other eligibility criteria’ below HMRC have also stated that you must either:
- be currently trading but are impacted by reduced demand due to coronavirus
- have been trading but are temporarily unable to do so due to coronavirus
And you must also declare that:
- you intend to continue to trade
- you reasonably believe there will be a significant reduction in your trading profits
“Significant reduction and Reasonable Belief”
You must decide if the impact on your business will cause a significant reduction in your trading profits for the tax year you report them in.
You should wait until you have a reasonable belief that your trading profits are going to be significantly reduced before you make your claim.
HMRC has specifically said that a reduction in profits due to increased costs (such as having to buy masks) does not count for this purpose.
No claim can be made where the reduced activity, capacity or demand is caused solely because the person is required to self-isolate, or care for a person required to self-isolate, as a result of travelling to the UK.
HMRC has provided a list of examples of reduced demand or unable to trade, see LINK.
Other eligibility conditions
The scheme requires you have a trading profit of either:
- less than £50,000 in the 2018-19 tax year and this trading profit is more than half of your total taxable income in that year; or
- an average trading profit in tax years 2016-17, 2017-18 and 2018-19 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 2019 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 in the tax year 2020-21
- you have lost trading/partnership trading profits due to Coronavirus
- you have submitted a tax return for the tax year 2018-19 by 23 April 2020.
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:
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:-
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.
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.
The government has temporarily reduced the rate of VAT to 5% for tourist attractions and goods and services supplied by the hospitality sector. This relief came into effect on 15 July 2020 and will now end on 31 March 2021 across the UK.
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.
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/
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.
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.
Note Fishery, aquaculture and agricultural businesses may not qualify for the full interest and fee payment.
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.
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 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 but more information regarding this will be released in the coming months.
For those that can pay their deferred VAT, they can do so by making payments by 31 March 2021.
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
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. This will therefore apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill to exclude the business rate charge. They will do this as soon as possible. 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.
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.
Universal Credit for self-employed
If you are self-employed and not claiming tax credits then you may able to claim Universal Credit, provided you meet certain criteria. These include:-
- you’re on a low income or out of work
- you’re 18 or over (there are some exceptions if you’re 16 to 17)
- you’re under State Pension age (or your partner is)
- you and your partner have £16,000 or less in savings between you
- you live in the UK
Under the Universal Credit rules the Minimum Income Floor (MIF) assumes that those who are self-employed work 35 hours per week and earn the minimum wage. However, from 6 April the requirements of the Minimum Income Floor will be relaxed for all claimants for the duration of the outbreak. In addition, the requirement to attend the JobCentre in person is suspended.
The Chancellor has said that he is increasing the Universal Credit standard allowance (and separately the basic element of Working Tax Credit) by £20 per week. This means that for a single Universal Credit claimant (aged 25 or over), the standard allowance will increase from £317.82 to £409.89 per month.
For further details about Universal credit and making a claim see:
Advice for individuals struggling to pay bills
For those worried about paying utility bills or repaying credit cards, loans or mortgages due to the impact of coronavirus, the government agreed a raft of measures with providers across a range of sectors to ensure struggling consumers are treated fairly.
In the first instance, people struggling to pay essential bills are encouraged to:
- contact your provider: if you think you might have a problem paying a bill, contact your provider as early as possible to explain, and receive help with paying your bills
- ask for help if you need it: if you are struggling with your bills or credit commitments, free advice is available. coronavirus has affected the entire nation and many of us need support now, even if we never have before
- explore payment options: if you are struggling with bills, it is better to agree a payment plan with your provider and keep making regular instalments, rather than cancelling direct debits and letting debt build
Follow this LINK to see the agreements in place for the various sectors.
Sick pay for self-employed workers
Self-employed workers do not have access to statutory sick pay (SSP), but the government has said that if you are ill, or you have been advised to self-isolate, you will be able to claim New Style Employment and Support Allowance (ESA). You may also still be able to claim Universal Credit.
To be eligible you need to have paid NI contributions in the last 2 to 3 years through an employment or a self-employment.
If you are eligible for new style ESA and have coronavirus or are advised to stay at home then the benefit will now be payable from day one of sickness rather than day eight.
The weekly payment for ESA is typically £73.10 or £57.90 for people under the age of 25.
For further details about new style ESA and making a claim see: https://www.gov.uk/guidance/new-style-employment-and-support-allowance
Statutory Sick Pay (SSP) for employees
Employees who have COVID-19 or are told to self-isolate will be eligible for statutory sick pay from their employer. The employee will not need to provide a GP fit note. Instead, they will be able to obtain an “isolation note” by visiting NHS 111 online and completing an online form, rather than visiting a doctor.
Deferring Income Tax Payments
For Income Tax Self Assessment payments, the second payment on account due on 31 July 2020 will be deferred until 31 January 2021. This is an automatic offer with no applications required and no interest or late payment fees will be charged during the deferral period.
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.
Mortgage Payment Holidays
Mortgage payment holidays will continue to be available for homeowners in the UK. Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a 6- month holiday and those that have already started a mortgage payment holiday will be able to top up to 6 months without this being recorded on their credit file. The FCA published draft guidance setting this out on 2 November.
- HMRC have deferred the deadline for MTD 'digital links' until 1 April 2021, read more on our blog.
- HMRC have now updated their Coronavirus hotline number. The new number to call is 0800 024 1222 which will replace the original 0300 hotline number. This new hotline will be open 8am to 4pm Monday to Friday only.
- As of 1 April 2020 the spending limit for contactless card payments will be increased from £30 to £45 in a bid to reduce the use of paper money during the current pandemic.
- The Bank of England has cut interest rates again in an emergency move as it tries to support the UK economy in the face of the coronavirus pandemic. It is the second cut in interest rates in just over a week, bringing them down to 0.1% from 0.25%. Interest rates are now at their lowest level in history.
- The Bank said it would also increase its holdings of UK government and corporate bonds by £200bn effectively pumping more money into the economy.