Last updated November 2020
After the initial shock of the lockdown in March, nobody can deny that the level of funding that was given by the UK government was unprecedented, and as we come out of Lockdown 2.0 we’ve highlighted below what is still available by way of financial support
The CJRS has now been extended to 31 March 2021 and the Job Support Scheme effectively scrapped. In addition, from the 1st November the level at which you can claim funding from HMRC has reverted to 80% for the next few months. You can now include members of staff who were paid in Octobers payroll. The government have said they will review the terms of the scheme in January. We are continuing to support our payroll clients with this scheme.
Job Retention bonus
With the extenstion of the CJRS the job retention bonus has now been withdrawn with a replacement incentive being planned to be introduced at an appropriate time in the future
Self-employed Income Support Scheme (SISS)
The scheme initially allowed you to claim a first taxable grant and applications for the first and second grants are now closed.
Following ‘Lockdown 2’ the third grant, which now offers 80% of three months’ average trading profits will be available covering the period from 1 November 2020 to 29 January 2021. Self-employed people who are eligible and in need of support will be able to claim the third grant at any time from 30 November 2020 to 29 January 2021.
However, be aware that the declaration you must only claim if the reduction in profits is caused by reduced business activity, capacity or demand, or inability to trade due to coronavirus – reduction in profits due to increased costs (such as having to buy masks) does not count for this purpose.
There will be a fourth grant covering February 2021 to April 2021 details of which are yet to be released.
You must make the claim yourself (we cannot claim on your behalf), so if you’ve not been contacted by HMRC about making a second 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 has now been extened and will be open for applications until 31 January 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 request the top-up by 31 January 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 easy 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 will reamin open until 31 January 2021.
And a final update…
Tax cuts and payment deferrals
- As part of the chancellor’s winter economy plan, the government also announced it will extend the temporary 5% VAT rate for the tourism and hospitality sectors to the end of March next year.
- Businesses who deferred their VAT bills will be given the option to pay the amount that was deferred back in smaller installments through the New Payment Scheme. Rather than paying a lump sum in full at the end of March next year, they will be able to make 11 smaller interest-free payments during the 2021-22 financial year and it will reqiure a direct debit to be set up
- Self-assessment taxpayers will be able to benefit from a separate additional 12-month extension from HMRC on the “Time to Pay” self-service facility, meaning payments deferred from July 2020, and those due in January 2021, can now be paid over an extended period to January 2022.