As we start the gradual move out of Lockdown 3.0 and pass the anniversary of the shock of what the first lockdown on 23rd March 2020 meant for us all, we again revisit the current position on government Covid support available so that small businesses are up to date.
The fact that the government have extended certain schemes indicates that they don’t expect this to be a straight road to economic recovery, but the roadmap they have set out for easing out of lockdown at least gives us a taste of what’s to come.
CJRS (Furlough Scheme)
The Coronavirus Job Retention Scheme will stay open until 30 September 2021. However, there are some important changes occurring over the remaining months of the scheme.
The key features remain the same as follows:
– All employers with a UK PAYE scheme can claim the grant.
– Employers can continue to furlough employees for any amount of time and with any working pattern (Flexi-Furlough).
– You will need to pay for employer National Insurance Contributions and pension costs.
– Claims must be made by the 14th working day of the month following the period of claim.
– To be eligible for the grant, employers must have confirmed to their employee in writing that they have been furloughed.
For periods ending on or before 30 April 2021, you can claim for employees who were employed by you on 30 October 2020 and had been included within an RTI submission to HMRC between the 20 March 2020 and 30 October 2020. You do not need to have previously claimed before 30 October 2020.
However, there are changes that you need to be aware of are around the claim periods from 1st May 2021.
From 1 May 2021, you can only claim for employees who were employed on 2 March 2021 AND had been included on an RTI submission between 20th March 20 and 2nd March 21. You do not need to have made a claim before 2nd March 21
From 1 July 2021, the level of grant will be reduced to 70%, and further reduced to 60% for August and September, and you will be asked to contribute the remaining 10% and 20% respectively towards the cost of your furloughed employees’ wages to ensure that the employee still receives 80% of their wages paid for hours not worked.
We are continuing to support our payroll clients with this scheme.
Statutory Sick Pay Recovery
The Coronavirus Statutory Sick Pay Rebate Scheme will repay employers the Statutory Sick Pay paid to current or former employees and this scheme has also been extended to 30th September.
You can claim back up to 2 weeks of SSP if;
– you have already paid your employee’s sick pay
– you’re claiming for an employee who’s eligible for sick pay due to coronavirus
– you have a PAYE payroll scheme that was created and started on or before 28 February 2020
– you had fewer than 250 employees on 28 February 2020
Self-employed Support (SEISS)
This lifeline scheme has now paid out 3 grants over the last year and allowed eligible self-employed businesses to claim the taxable grants on a periodic basis. Whilst the base criteria for eligibility essentially remains the same, here are some important updates now that we have moved on a tax year.
Fourth Grant covering the period February to April 2021
HMRC will now look at the 2019/20 Self Assessment tax return to check that your trading profits are below £50,000 and at least equal to your non-trading income. Crucially this return should have been submitted by midnight on 2ndMarch 2021 – if this did not happen then you will not be able to claim either the fourth or fifth grant.
This now means that businesses who were trading for the first time in 2019/20 may now be eligible to claim. as well as those who may not have been eligible on the basis of their previous 3 years returns.
The fourth grant will provide a taxable grant calculated at 80% of 3 months’ average trading profits for up to four tax years ending 2019/20 and capped at £7,500 in total.
The online claims service for the fourth grant will be available from late April 2021 until 31 May 2021. If you are eligible, HMRC will contact you in mid-April to give you your personal claim date. This will be the date that you can make your claim from.
Fifth and Final grant covering May to September
The fifth grant will introduce an additional turnover test and the amount of the grant paid will be determined by how much turnover has been reduced in the year April 2020 to April 2021. It will be available to claim from late July. Further details will be announced by HMRC in due course.
In the meantime, it would make sense for you to make the most of any down time you have by making sure you’re accounting records are up to date, so you know what your turnover for 2020/21 is so you can make a claim as soon as possible when the online portal is open.
The good news is that you don’t need to have claimed any of the first three payments to be able to claim the fourth or fifth grant, so if your business has only just started to suffer as a result of Covid then this is still available for you to claim.
You must make the claim yourself (we cannot claim on your behalf), so if you’ve not been contacted by HMRC about making a claim, or didn’t claim the first time around you can find out more about claiming here
Bounce Back Loan Scheme (BBLS)
The Bounce Back Loan Scheme (BBLS) brought much needed cashflow funding to enable smaller businesses to access finance more quickly during the COVID outbreak. Small and medium sized businesses can apply for between £2,000 up to 25% of their turnover, with a maximum loan available under the Scheme of £50,000.
The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.
The scheme was extended but will be close for applications on 31 March 2021 and if you already have a Bounce Back Loan but borrowed less than you were entitled to, you can top up your existing loan to your maximum amount. You must also request the top-up by 31 March 2021.
There are no specific criteria as to what you use this money for and we have seen clients using this to cover some of their bigger tax bills after having to use their tax savings to get by, or just to plug a short-term working capital gap. Either way, it is a reasonably quick and straightforward way to obtain a loan to give much needed breathing space in these difficult times.
Coronavirus Business Interruption Loan Scheme (CBILS)
The scheme helps small and medium-sized businesses to access loans and other kinds of finance up to £5 million and the government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months. The scheme has also been extended and but will close on 31 March 2021.
Any other business funding?
- Ongoing support is being given for the retail, hospitality or leisure businesses via various local council operated grants but many of these older schemes close on the 31 March 2021
- The business rates holiday has been extended for retail, hospitality and leisure until the end of the June, after which point a further 6-month period where rates will be discounted to two-thirds of the normal charge.
- The Restart Grant scheme supports businesses in the non-essential retail, hospitality, leisure, personal care and accommodation sectors with a one-off grant, to reopen safely as COVID-19 restrictions are lifted.
- If you are in the non-essential retail sector you may be entitled to a one-off cash grant of up to £6,000 from your local council.
- If you are in the hospitality, accommodation, leisure, personal care and gym sectors you may be entitled to a one-off cash grant of up to £18,000 from your local council.
Make sure you have checked your local council website for full details on these schemes and up to date information on how to receive any grants.