Latest position on a number of financial measures to assist with Covid-19
Grant Application Deadlines
Deadlines for grant applications have been announced.
31 March 2021 for:
- Grants relating to the National Lockdown 5 November to 2 December 2020
- Grants relating to the National Lockdown 5 January to 15 February 2021
- One-off Closed Business Lockdown Payment
- Local Restrictions Support Grant (LRSG) for closed businesses (including that for nightclubs etc)
- Local Restrictions Support Grant (LRSG) for open businesses
31 May 2021 for:
- Grants relating to the National Lockdown 16 February to 31 March 2021
Free Lateral Flow Coronavirus Tests
These are available for businesses registered in England where employees cannot work from home and will be available to the end of June.
Businesses must register by 31 March at https://gov.uk/get-workplace-coronavirus-tests
Homeworking Expenses
The existing tax and NI exemption for employers providing home office equipment which was to expire on 5 April 2021 is to be extended to 5 April 2022.
Coronavirus Job Retention Scheme (CJRS)
The Government has announced that the scheme will be extended to 30 September 2021 with the current level of support continuing until 30 June 2021.
From 1 July 2021, employees on furlough will continue to receive 80% of their wages (up to £2,500 per month) but the scheme funding will reduce with the employer paying the balance.
For employees furloughed 100% of the time, scheme payments will be 70% of wages (up to £2,187.50) in July and 60% (up to £1,875) in August and September, meaning that the employer will pay 10% of wages (up to £312.50) in July and 20% (up to £625) in August and September.
For periods starting on or after 1 May 2021, the scheme can be used for any employee employed on 2 March 2021, provided the employee was included on a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021.
Self-Employment Income Support Scheme (SEISS) - Fourth and Fifth Grants
The Government has confirmed details of the fourth grant which will be set at 80% of 3 months’ average trading profits, paid out in a single instalment, capped at £7,500.
The calculation of the grant will include the 2019 and 2020 tax return and so will be available to those who became self-employed in that tax year. The other eligibility criteria remain unchanged.
To be eligible, trading profits in 2019 to 2020 must be no more than £50,000 and at least equal to non-trading income. If these criteria are not met then tax returns for previous years will be considered.
In addition, to be eligible the individual must:
- have traded in both the 2019/20 and 2020/21 tax years
- have submitted the 2019/20 tax return by 2 March 2021
- be currently trading but with reduced demand due to coronavirus; or
- have been trading but are temporarily unable to do so due to coronavirus
- reasonably believe there will be a significant reduction in trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus
The online claims service will be open from late April to 31 May 2021 with HMRC contacting individuals from mid-April.
The Government have also announced that there will be a fifth and final grant covering May to September which can be claimed from late July.
The amount of this grant will depend on the reduction in turnover in the year to April 2021 and will be set at:
- 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%
Further details will be provided on the fifth grant in due course.
VAT
The Government has announced that the 5% VAT rate on hospitality, holiday accommodation and attraction admission will be extended to 30 September 2021. A new reduced rate, with the same scope, of 12.5% will then be introduced for the period to 31 March 2022.
In addition, a penalty of 5% (rather than the normal Default Surcharge) will be applied to any VAT still due under the deferral scheme at 30 June 2021 which isn’t covered by a payment arrangement.
Restart Grant
The existing local authority grants are to be replaced with a new Restart Grant – a one off cash payment.
The amount received will depend on the property’s rateable value and be up to £6,000 (for non-essential retail which is able to open earlier) and up to £18,000 (for hospitality which will be opening later).
Recovery Loan Scheme
A new Recovery Loan Scheme is to be launched on 6 April 2021 to provide term loans and overdrafts of between £25,001 and £10 million along with invoice and asset finance of between £1,000 and £10 million.
Term loans and asset finance will be for up to six years with overdrafts and invoice finance facilities being for three years.
The funds are to be used for any legitimate business purpose, including growth and investment, with the government guaranteeing 80% of the finance to the lender.
No personal guarantees will be required for amounts up to £250,000, and a borrower’s principal private residence cannot be taken as security.
Rates
The current rates holiday will continue until June with a subsequent two thirds discount being applied until March 2022.