Expansion of the Job Support Scheme

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The government announced on Friday (9 October), an expansion of the Job Support Scheme to provide temporary support to businesses whose premises have been legally required to close as a direct result of coronavirus restrictions.

Under this expansion, affected businesses will receive grants towards the wages of employees who have been instructed to and cease work. This will cover businesses that, as a result of restrictions set by one of the four governments of the UK, are legally required to close their premises, or to provide only delivery and collection services from their premises.

The government will pay two thirds of employees’ usual wages, up to a maximum of £2,100 per month. You will not be required to contribute towards wages, but do need to cover employer National Insurance and pension contributions.

You can apply for the JSS including the new expansion even if you haven’t previously used the Coronavirus Job Retention Scheme (CJRS). JSS is available for six months, from 1‌‌‌ November, with payment of grants in arrears from early December. The scheme will be reviewed in January.

Further information can be found at https://www.gov.uk/government/news/job-support-scheme-expanded-to-firms-required-to-close-due-to-covid-restrictions.

WINTER ECONOMY PLAN SUPPORT FOR THE SELF-EMPLOYED

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As part of the Winter Economy Plan the Self-Employment Income Support Scheme (SEISS) will be extended under the name SEISS Grant Extension. The grant:

  • will be limited to self-employed individuals who are currently eligible for the SEISS, and
  • will be available to individuals who are actively continuing to trade but are facing reduced demand due to COVID-19.

The scheme will last for six months, from November 2020 to April 2021, and will consist of two grants. The first grant will cover a three-month period from the start of November until the end of January. This initial grant will cover 20% of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £1,875 in total. The second grant will cover a three-month period from the start of February until the end of April. The government will review the level of the second grant and set this in due course.

The amount of the first grant under the SEISS grant extension will be significantly less than the grants made under the SEISS. The initial SEISS grant was based on 80% of profits (capped at £7,500) and the second SEISS grant was based on 70% of profits (capped at £6,570).

CHANGES TO THE BOUNCE BACK LOAN AND CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEMES

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The Bounce Back Loan Scheme (BBLS) has provided support to many UK-based small businesses. Loans are between £2,000 and £50,000, capped at 25% of turnover, with a 100% government guarantee to the lender. The borrower does not have to make any repayments for the first 12 months, with the government covering the first 12 months’ interest payments. Under a Pay as you Grow scheme businesses will have options to:

  • repay their loan over a period of up to ten years
  • move temporarily to interest-only payments for periods of up to six months (an option which they can use up to three times)
  • pause their repayments entirely for up to six months (an option they can use once and only after having made six payments).

CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME

The Coronavirus Business Interruption Loan Scheme provides loan facilities to UK-based businesses with turnover under £45 million. The scheme provides loans of up to £5 million with an 80% government guarantee to the lender. The government does not charge businesses for this guarantee and also covers the first 12 months of interest payments and fees.

The government has announced that as part of the Winter Economy Plan it intends to allow CBILS lenders to extend the term of a loan up to ten years.

The government is also extending the CBILS and BBLS to 30 November 2020 for new applications.

Applications for the Coronavirus Large Business Interruption Loan Scheme and the Future Fund will also be extended.

VAT DEFERRAL AND ENHANCED TIME TO PAY FOR SELF ASSESSMENT

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Over half a million businesses deferred VAT payments, which were due in March to June 2020, with these payments becoming due at the end of March 2021.

As part of the Winter Economy Plan the government has now announced the option for such businesses to spread their payments over the financial year 2021/22. Businesses will be able to choose to make 11 equal instalments over 2021/22. All businesses which took advantage of the VAT deferral can use the spreading scheme. Businesses will need to opt in and HMRC will put in place an opt-in process in early 2021.

ENHANCED TIME TO PAY FOR SELF ASSESSMENT TAXPAYERS

Taxpayers were able to defer the income tax self assessment payment on account for 2019/20, due by 31 July 2020, to 31 January 2021. There are also other amounts due on 31 January 2021 – a balancing payment for the 2019/20 tax year and the first payment on account for the 2020/21 tax year.

Taxpayers with up to £30,000 of self assessment liabilities due will be able to use HMRC’s self-service Time to Pay facility to secure a plan to pay over an additional 12 months. This means that self assessment liabilities due in July 2020, and those due in January 2021, will not need to be paid in full until January 2022. Any self assessment taxpayer not able to pay their tax bill on time, including those who cannot use the online service, can continue to use HMRC’s Time to Pay self assessment helpline to agree a payment plan.