The coronavirus pandemic is a fast-moving global situation with many businesses across the UK affected. The UK Government, NI Assembly and HMRC are acting and have produced guidance for businesses and employers and employees setting out the various measures of support announced. There is also a dedicated page for NI businesses. General advice on the UK Government response is also available and includes helpful advice for different sectors.
We recommend you bookmark the relevant pages on GOV.UK on your web browser to ensure you’re getting the most up to date information and guidance over the coming weeks and months.
The COVID-19 pandemic has struck hard at many sectors of business. Most will find a way through the crisis through a combination of perseverance, innovation and ingenuity. Accountants, with their expertise in financial planning, accessing finance, restructuring businesses, and applying for state aid are at the forefront of helping businesses. Accountants should develop an expertise and a familiarity with these resources.
To support our members, we have put in place a range of information. As most businesses will need finance, access and availability of adequate and timely finance will be crucial to the economic recovery going forward. On this page we provide a guide to the broad and expanding range of capital supports available. Some are schemes offering working capital loans or grants; others are for industry sectors particularly hard hit by the crisis.
We have gone through the key supports available and categorised them in a format that is useful to an accountant seeking to identify the most appropriate form of finance. Please note that this list is not comprehensive and that the supports available are constantly changing. Members are advised to keep an eye on developments and refer to the source documentation where necessary.
Last updated: Wednesday, 20 January 2021
Tax
Tax section last updated: Monday, 11 January 2021
We continue to update the pages dedicated to the UK Coronavirus Job Retention Scheme and the UK Self-Employed Income Support Scheme as new changes emerge.
After postponing the Autumn Budget in the face of worsening coronavirus infection rates and increased restrictions, the Chancellor announced his ‘Winter Economy Plan’ on Thursday 24 September 2020. Many of measures announced by the Chancellor were recommendations of this Institute in its Next Financial Year position paper published in early July.
- Extension of UK Job Retention Scheme
- UK Self-Employment Income Support Scheme ("SEISS") - grant extension
- UK VAT cut for tourism and hospitality sector extended
- UK Self-Assessment - Time to Pay extension facility
- UK VAT deferral - new payment scheme
- HMRC arrangements
- UK COVID-19 tidbits
Extension of UK Job Retention Scheme
The Job Support Scheme was due to be introduced from 1 November 2020 after the Coronavirus Job Retention Scheme (“CJRS”) was scheduled to end on 31 October 2020. However it was announced on 5 November 2020 that the CJRS was extended for a further five months until 31 March 2021 with employees receiving 80 per cent of their current salary for hours not worked, up to a maximum of £2,500 for the months of November 2020 to January 2021 inclusive.
On 17 December 2020, it was further announced that the scheme will now run until 30 April 2021 and that for the months of February 2021 - April 2021 inclusive the Government will also continue to pay 80 per cent of the salary of employees for hours not worked.
Employers are therefore only required to pay Employer NICS and pensions for hours not worked. Hours worked should be paid as normal by the employer. This means that the Government is paying 80 per cent of hours not worked for the whole of the extended period of the scheme from November 2020 to April 2021 inclusive. However, the monthly cap for these months has not yet been announced.
The job retention bonus will not now be paid in February 2021 – given the extension of the CJRS to April 2021, it is currently not clear if an alternative retention incentive will be considered by the Government.
For the months of November 2020 onwards, claims for each month must be submitted by 11.59pm on the 14th day after the month end. Therefore the deadline for the month of December 2020 is 14 January 2021.
From February 2021, on a monthly basis HMRC will publish the names, an indication of the value of claims and Company Registration Numbers (for those who have one) of employers who make CJRS claims that cover periods from December 2020 onwards. Employees will also be able to check if their employer has made a CJRS claim on their behalf through their online Personal Tax Account from February 2021.
Read more about the CJRS on our dedicated page.
UK Self-Employment Income Support Scheme ("SEISS") - grant extension
Applications for the first and second grants are now closed. The third and fourth grants are being paid in two lump sum instalments each covering three months. The third grant covers a three-month period from the start of November 2020 until the end of January 2021 and opened for claims from 30 November 2020. This is a taxable grant to cover 80 per cent of average monthly trading profits capped at £7,500 in total. Claims for the third grant must be made by Friday 29 January 2021.
A fourth grant, which may be adjusted to respond to changing circumstances, will be available to cover the period from 1 February 2021 to 30 April 2021.
Readers are also advised that the third and fourth grants are subject to revised eligibility criteria which should be carefully checked before making an application. However, applicants will still need to have submitted a Self-Assessment tax return for the tax year 2018/19 showing self-employment income in order to claim (unless one of the existing exceptions applies).
More information is available on GOV.UK. You can also read more about the SEISS on our dedicated page.
UK VAT cut for tourism and hospitality sector extended
As part of the package, the Government also announced it will extend the 5% VAT rate for the tourism and hospitality sectors which was due to end on 12 January 2021 to 31 March 2021.
UK Self-Assessment - Time to Pay extension facility
Many taxpayers deferred the payment of their second 2019/2020 payment on account which was due on 31 July 2020 until 31 January 2021. As these taxpayers will need to pay this deferred amount, plus any balancing payment for 2019/20 and the first 2020/21 payment on account all by 31 January 2021, their 31 January 2021 tax bill may be larger than usual.
Any taxpayer unable to make these payments in full by 31 January 2021 due to COVID-19 may be able to set up a Time to Pay ("TTP") payment plan of up to 12 months online (via 12 monthly direct debit payments) without needing to contact HMRC.
Taxpayers with self-assessment tax debts up to £30,000 and who need extra time to pay will be able to access this TTP facility and can get automatic and immediate approval.
Those with self-assessment debts over £30,000, or who need longer than 12 months to repay their debt in full will still be able to set up a TTP arrangement but they will need to contact HMRC to set it up. More information on this is expected soon however some interim guidance has been published.
UK VAT deferral - new payment scheme
VAT due in the period 20 March 2020 to 30 June 2020 was due to be paid by 31 March 2021. Businesses will be able to make 11 interest free smaller repayments via direct debit in the 12 months to 31 March 2022. More details are available on GOV.UK which confirms that businesses must opt in to do so by 31 March 2021.
HMRC arrangements
Call HMRC’s dedicated helpline. HMRC has established a dedicated helpline set up to help businesses and self-employed individuals in financial distress and with outstanding tax liabilities receive support with their tax affairs.
Through this, businesses may be able to agree a bespoke Time to Pay arrangement. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities. If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.
HMRC has also stated that it will also waive late payment penalties and interest where a business experiences administrative difficulty contacting HMRC or paying taxes due to COVID-19.
UK COVID-19 tidbits
The COVID-19 pandemic impacts on many areas of the UK tax system, from inheritance tax forms-submission where signatures are required, to announcements regarding the tax treatment of working from home expenses.
Our UK Tax Specialist Leontia Doran reviews all of this content and pulls it together every few weeks as tidbits in the UK section of Chartered Accountants Tax News. You can find all tidbits in the archive of Chartered Accountants Tax News