COVID19 Financial Measures update

We are now more than 7 months down the line from when the initial lockdown started. Most businesses have been impacted in one way or another and future months are still uncertain.

Financial measures have been provided but many have missed out for various reasons or have not been able to claim enough. So let’s look at where we are now.

Support for Wages

As of Saturday, Boris Johnson announced the extension of the CJRS for one month. It came as a bit of a shock for accountants who were advising clients on the JSS which was due to commence. The JSS is delayed and may be rolled out for December. Whether the date on which payroll has to have been submitted for JSS changes, due to the delayed introduction, remains to be seen.

For November the government will pay 80% of salary but the employer still has to pay Employers NIC and pension contributions. It doesn’t matter whether those employees were on CJRS before or not. Also, it would appear that employers can claim if they put staff on furlough, even if they are not forced to shut under the lockdown rules.

The criteria that must be met though is that the employee was on payroll before 23:59 on Friday 30 October and an RTI must have been submitted by that date.

https://www.gov.uk/government/news/furlough-scheme-extended-and-further-economic-support-announced

Local Restrictions Support Grant Scheme

This measure was introduced to help businesses, with retail premises, that were forced to close under Tier 3 local lockdowns. The government’s announcement on the link in the previous section says these payments apply to national lock down as well. Local Council’s are awaiting further instruction on this according to some of the websites.

SEISS

So, the self-employed were looking forward to a meagre 20% of profits as a support under the Winter Economy Plan. That then increased to 40%. It now stands at 55% for the three months from 1 November to 31 January. Basically, it is 40% for December and January and 80% for November, which equates to approximately 55% average for that 3 month period.

We do not know what the percentage payout will be for the 3 months, from 1 February to 30 April. That will be announced in the future.

This grant is subject to income tax and NIC, when you complete your self-assessment tax return for 2020/21.

The claim facility will be open from 30 November and your accountant can not submit this claim for you.

https://www.gov.uk/government/publications/self-employment-income-support-scheme-grant-extension/self-employment-income-support-scheme-grant-extension

Bounce Back Loan

If your business is struggling and you have not yet applied for a bounce back loan, that facility is still open till 31 January 2021. Do read the fine print of the loans, which explains what the money can and cannot be used for once it is received by the company.

VAT deferrals

Businesses that deferred their VAT payments which were due between 20 March and 30 June 2020 now have the option of paying the full amount by 31 March 2021 or they can opt to pay it in smaller amounts, interest free, upto the end of March 2022.

We are still awaiting details on how to opt in but please note this is an opt in ………it is not automatic. You will need to take action!

https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19