Rishi Sunak delivered his Winter Economy Plan last week (after announcing that there will be no Autumn Budget this year). Please read on for a summary of the key points that may affect you and your business.

We also share information about important deadlines, which are approaching for:

• Small and Medium-Sized Business (SME) and Kick-starting Tourism grant applications
• Claiming the Self Employment Income Support Grant (SEISS)
• Repaying overpaid SEISS or Coronavirus Job Retention Scheme (CJRS) grants.

Please remember, we are here to support you and your business, so please just ask if you have any questions or concerns.

JOB SUPPORT SCHEME

The CJRS (furlough) scheme which ends on 31 October is being replaced by the Job Support Scheme which will run for 6 months to April 2021.

The scheme is available to all small and medium sized businesses, with large ones only being eligible if they have can demonstrate they have been adversely affected due to Covid-19.

It is open to all businesses, even those that didn't previously use the furlough scheme, but it can only be used for employees on the payroll and whose pay was reported to HMRC via Real Time Information (RTI) on or before 23 September 2020.

Detailed guidance will be issued in due course but this is what we know so far:

• An employee needs to work at least 33% of normal hours, which the employer pays for in full. 
• After 3 months, the Government will consider whether to increase the minimum hours threshold.
• Of the unworked hours, the employer pays 33% and the government pays 33%.
• The funding is capped at £697.92 per month per employee.
• The scheme will run alongside the Job Retention Bonus which gives a one-off payment of £1,000 for previously furloughed employees still employed at the end of January 2021 (subject to qualifying earnings criteria).
• How the scheme will operate in practice is best demonstrated by examples:

SELF EMPLOYMENT INCOME SUPPORT SCHEME (SEISS) – CLAIM DEADLINE 19.10.20 AND EXTENSION OF SCHEME TO APRIL 2021

Under the existing scheme if you are eligible and your business has been adversely affected on or after 14 July 2020, you must make your claim for the second grant on or before 19 October 2020.

This scheme is being extended for a further six months from 1 November 2020 to 30 April 2021.

The basics are:

• To be eligible you must have been met the qualifying criteria for the previous SEISS grants, but need not have claimed them.
• The claimant must be actively trading but experiencing continuing reduced demand due to coronavirus.
• The first of these next two grants, covering the three months to 31 January 2021, will be worth 20% of average monthly profits, up to a total of £1,875 (i.e. £625 a month).
• The second grant will cover a three-month period from the start of February until the end of April. The level of this grant will be reviewed and set it in due course.

TOURISM AND HOSPITALITY VAT

The current VAT reduction from 20% to 5% is being extended until the end of March 2021.

VAT DEFERRAL AND THE NEW PAYMENT SCHEME

Businesses who deferred their VAT liabilities for the quarters ended February, March or April 2020, and who are due to pay the deferred tax in March 2021, will be now be given an opportunity to pay by smaller interest free instalments up to March 2022. 

This deferral is not automatic and will need to be applied for so, if you are not able to pay the deferred tax in March, 2021, please let us know in plenty of time so that we can help you apply for the scheme.

SELF-ASSESSMENT TAX DEFERRAL AND THE NEW PAYMENT SCHEME

The Chancellor has given individual taxpayers the ability to apply for a Time to Pay Arrangement to pay the tax due on 31 January 2021.

Unlike the 31 July 2020 deferral, you will have to apply to spread the tax due over 12 monthly instalments to January 2022.

Providing the amount due is less than £30,000, you will be able to use HMRC’s online self-service Time to Pay facility to secure a plan to pay over an additional 12 months.  Where your tax due exceeds £30,000 or you need longer to pay, you will need to use HMRC’s telephone service to apply.

CORONAVIRUS LOAN – TERMS INCREASED TO 10 YEARS AND APPLICATION DEADLINES EXTENDED

The Bounce Back Loan (BBS) and Coronavirus Business Interruption Loan Scheme (CBILS) were initially set with a payback period of six years. Borrowers will be given the opportunity to extend their term to ten years, which would substantially reduce repayments.

The application deadlines for both schemes have been aligned and extended with both of the schemes now open for applications up to 30 November 2020.

A new Pay as You Grow flexible repayment system has been announced providing flexibility for firms repaying a Bounce Back Loan.

Businesses will have the option to move temporarily to interest-only payments for periods of up to six months (an option which you can use up to three times), or to pause repayments entirely for up to six months (an option you can use once and only after having made six payments).

SMALL AND MEDIUM-SIZED BUSINESSES (SME) & KICK-STARTING TOURISM GRANT FUNDING – APPLICATIONS NOW OPEN BUT CLOSING DATE IS MONDAY AT 10AM

Stage 1 applications for the SME and Kick-starting Tourism grant funding opened yesterday (Wednesday 30th September). There is a very short window for this round of applications (the deadline is 10am, Monday 5^th October), so if you want to apply you need to act quickly.

This grant was announced by the government to help small and medium-sized businesses gain access to professional support, new equipment and technology.

Thinking of applying?

If you are planning to apply, it is worth noting that applications are expected to exceed the funding available, so the process will be competitive.

The guidance states that for your application to be prioritised, you will need to demonstrate:

• a clear impact of COVID-19 on your business
• your proposed activity to address the impact
• how the proposed activity will positively impact your business through adapting products and services to meet customer needs, building resilience or minimising future business interruption.

But please note; even eligible applicants able to demonstrate the above are not guaranteed to be invited to stage 2 of the process.

For full details and to access the application form, please visit the following link:

https://www.ynygrowthhub.com/resources/covid-19-small-business-grant/

REPAYMENT DEADLINES FOR ANYONE WHO HAS OVERCLAIMED FOR SEISS OR CJRS

HMRC have asked recipients of the Self-Employment Income Support Scheme (SEISS) and the Coronavirus Job Retention Scheme (CJRS) grants to repay any funds that were overpaid or claimed in error. They have also invited any voluntary repayments. If you receive a letter from HMRC prompting you to correct an error on a CJRS claim, please do not ignore it. Please get in touch with us for advice.

You must tell HMRC by the following deadlines to avoid a penalty:

SEISS
This depends on the date you received your grant, so if you received the grant:

• before 22 July 2020 you must notify HMRC on or before 20 October 2020
• on or after 22 July 2020 you must notify HMRC within 90 days of receiving the grant

CJRS
You must notify HMRC by the latest of either:

• 90 days after the date you received the grant you were not entitled to
• 90 days after the date you received the grant that you were no longer entitled to keep because your circumstances changed
• 20 October 2020

Further details and information on how to repay (in part or full) can be found via the following links:

SEISS: https://www.gov.uk/guidance/tell-hmrc-and-pay-the-self-employment-income-support-scheme-grant-back

CJRS: https://www.gov.uk/guidance/pay-coronavirus-job-retention-scheme-grants-back