The Coronavirus Job Retention Scheme (CJRS)
The CJRS has been extended until 31 March 2021.
Employees will receive 80% of their current salary for hours worked, up to a maximum of £2,500 for November and December (with a further review expected in January) and businesses will only be asked to cover National Insurance and employer pension contributions. Employees can be flexibly furloughed, enabling part-time working.
The Job Retention Bonus (JRB)
The JRB was announced in July 2020 as a one-off payment to employers of £1,000 for every employee for whom the employer had made a valid claim under the CJRS and who remains continuously employed. The JRB will no longer be paid as the CJRS has been extended until the end of March 2021.
The Self Employment Income Support Scheme (SEISS)
The SEISS grant extension provides critical support to the self-employed in the form of 2 further grants, each available for 3 month periods covering November 2020 to January 2021 and February 2021 to April 2021.
To be eligible for the grant extension self-employed individuals, including members of partnerships, must:
- Have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
- Declare that they intend to continue to trade and either:
- Are currently actively trading but are impacted by reduced demand due to coronavirus
- Were previously trading but are temporarily unable to do so due to coronavirus
The third grant will cover a 3 month period from 1 November 2020 until 31 January 2021. The Government will provide a taxable grant calculated at 80% of 3 months average monthly trading profits, paid out in a single instalment and capped at £7,500 in total. This is an increase from the previously announced amount of 55%.
The Government are providing the same level of support for the self-employed as is being provided for employees through the Coronavirus Job Retention Scheme which has also been extended until March 2021.
The grants are taxable income and also subject to National Insurance contributions.
Bounce Back Loans
Businesses can borrow up to 25% of turnover from £2,000 to a maximum of £50,000. There is no interest or fees in the first 12 months and after 12 months the interest rate will be 2.5% a year. The scheme is open until 31st January 2021.
The loan is for 6 years and there are no repayments in the first 12 months. Before your first repayment is due, your lender will contact you about further options to:
- Extend the term of your loan to 10 years
- Move to interest-only repayments for a period of 6 months (you can use this option up to 3 times)
- Pause your repayments for a period of 6 months if you have already made at least 6 repayments (you can use this option once).
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.
The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months.
The scheme is open until 31 January 2021.
Deferral of VAT
On 24 September 2020, the Chancellor announced that businesses who deferred VAT due from 20 March to 30 June 2020 will now have the option to pay in smaller payments over a longer period.
Instead of paying the full amount by the end of March 2021, you can make smaller payments up to the end of March 2022, interest free.
You will need to opt-in to the scheme, and for those who do, this means that your VAT liabilities due between 20 March and 30 June 2020 do not need to be paid in full until the end of March 2022.
Those that can pay their deferred VAT can still do so by 31 March 2021.
Deferral of personal tax
You have been able to defer your July 2020 tax liability to January 2021.
You can pay your tax by instalments if you’re unable to pay in full by 31 January 2021.
If you file your 2019 to 2020 Self Assessment return early HMRC will know what payments you owe before the 31 January 2021 payment due date. You’ll then be able to set up a Time to Pay instalment arrangement with HMRC.
If you owe up to £30,000 you can do this online without having to contact HMRC directly.