Chamber accountants Lakeview give an overview of the new government support package for businesses. If you would like to get in touch with Lakeview please contact Adrian Hull on [email protected]
Job Support Scheme
Furlough ends 31 October and from 1 November the Job Support Scheme will begin in its place, and this is planned to run for 6 months. To qualify, employees must work at least a third of their normal (pre-COVID) hours, for which they’ll be paid in full by their employer. For ‘normal hours’ they don’t work, the cost will be split three ways – the government pays a third, the employer pays a third and the employee loses a third.
The Government’s contribution will be capped at £697.92. Employer’s NI and pension contributions will not be covered by the scheme. Further details on how to apply will follow, along with details for zero hours contracts and irregular hours. You can’t add employees now, they needed to be on your payroll by 23 September. You did not have to use the furlough scheme to be eligible for the Job Support Scheme.
Self-Employment Income Support Scheme
This has been extended for six months, with a third and fourth grant to be made available. The third grant though, for November 2020 to January 2021, is at a much lower level than the previous grants – those eligible will get 20% of their average trading profits, capped at £1,875. Details for the fourth grant have not been given. Eligibility will be the same as the previous claims, but this may change for the fourth grant when those details are released in the new year.
Further delay to self-assessment tax
Tax due by 31 January 2021 can now be paid over the following 12 months instead. This includes the delayed 31 July 2020 payment on account for those owing tax of up to £30,000.
Businesses have been given longer to repay bounce back loans
New and existing loans can now be repaid over 10 years, with payment holidays and interest-only repayment periods also available. The deadline for applying for a bounce back loan has been extended to 30 November 2020. The deadline for applying for CBIL’s has also been extended to 30 November 2020 and these can also be repaid over 10 years rather than the initial 6.
Business can delay VAT payments under the ‘New Payment Scheme’
Rather than paying the deferred VAT due in March to June 2020 in full by March 2021, you will now be able to spread payments throughout the 2021/22 financial year with no interest charged.
The VAT reduction for the hospitality and tourism sectors will be extended
The current lower 5% rate was supposed to revert to the usual 20% on 12 January 2021. This has now delayed to 31 March 2021.