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What help is available from the Government? 

Tax

Furlough scheme extended by five months: With the announcement of a second national lockdown, the Prime Minister also confirmed the coronavirus job retention scheme (also known as the furlough scheme) would be extended, on the day it was due to end. Read more here.

Enhanced support for the winter months: Three key announcements were made on 22 October by Rishi Sunak, including increasing Government support under the job support scheme and self employment income support scheme, as well as introducing business grants for those in high alert level areas. Read more here.

Businesses required to close due to COVID-19 - further support offered: With three tiers of lockdown levels announced, inevitably more businesses will be required to close their doors, once again, depending on the local measures imposed. In recognition of this, the Government has announced a new package of support measures for those affected businesses. Read more here.

Job retention bonus: detailed guidance released: In July, the Government announced a new job retention bonus (JRB) where they will pay employers a one-off £1,000 bonus for each eligible employee that had been furloughed and then retained in employment until 31 January 2021. Further guidance on the JRB has now been published and we have summarised the key points. Read more here.

Self assessment - enhanced time to pay: A deferral had already been provided for the second payment on account due on 31 July 2020 for the 2019/20 tax year to 31 January 2021. The Government has now further announced that it will be possible to agree a time to pay arrangement over the 12 months following 31 January 2021 for tax liabilities of between £32 and £30,000. Read more here.

Job support scheme to replace furlough leave: The Chancellor has confirmed that the coronavirus job retention scheme will still end as planned on 31 October 2020 but has unveiled a new job support scheme (JSS) to take its place.  Read more here.

Coronavirus job retention bonus scheme: As part of Rishi Sunak’s mini summer Budget, he confirmed that the furlough scheme would continue to wind down as planned, ending in October. However, with the aim of ensuring that after this time those furloughed employees are retained by their employers, he announced a new ‘coronavirus job retention bonus’. This bonus will be introduced at a cost of up to £9 billion to the Treasury and will be payable in February 2021. Read more here.

SDLT deadline relaxed for main residence disposals: A 3% SDLT surcharge was introduced in April 2016 for the purchase of second homes. This charge also applies where a new main residence is purchased but where your previous home is not sold at the same time. It is, however, possible to claw back this surcharge if the old property is disposed of within three years. Read more here.

Business rates and cash grants to small businesses: All retail, hospitality, and leisure businesses will be given a business rates holiday for the 2020/21 tax year as part of the package of coronavirus measures. This rates holiday will be known as the ‘expanded retail discount scheme’. Read more here. Local council grant portals are also now open. Read more here.

Discretionary grants: The Government has provided further funds to local councils for them to make discretionary grants to small business affected by the coronavirus outbreak. Typically the grants will be up to £10,000, but could be as much as £25,000. Importantly those who have received a payment under the self-employed income support scheme (SEISS) are eligible for this grant as well. Read more here. 

Filing deadlines: Companies House has acknowledged that some businesses may struggle to file their company accounts on time due to the impacts of COVID-19. Should this be the case, you will need to follow their procedure to apply for an extension. Read more here.

Changes to the coronavirus job retention scheme from July 2020: The coronavirus job retention scheme (CJRS) was established in March 2020 to help cover the wages of furloughed employees as a result of the COVID-19 pandemic. Read more here.

Tax deferrals: We thought we would take this opportunity to summarise the different tax deferrals that are available and what the implications are. Read more here.

Deferral of July payments on account: The Government has clarified its guidance in relation to the deferral of upcoming income tax payments. Read more here

VAT

New payment scheme update: As a further update to the VAT payment deferral measures, HMRC has now announced that they will be unable to provide an agent service for the opt-in scheme as the VAT deferral new payment scheme will require a Direct Debit to be set up as part of the digital opt-in process and this must be done by the authorised bank account holder. Read more here.

Further support from winter economy plan: In the Chancellor’s winter economy plan two major changes to previous COVID-19 related VAT reliefs were announced. Read more here.

‘Eat out to help out’ scheme: From the viewpoint of VAT, nothing is changing! The important point to remember is that VAT will always be due on the whole amount of the bill. Read more here. 

Reduced rate of VAT for the hospitality sector: This guidance confirms that the reduced rate of 5% will take effect for the following supplies made between 15 July 2020 and 12 January 2021. Read more here.

Temporary VAT zero-rating of personal protective equipment (PPE): The Government has announced that, as an urgent response to the coronavirus emergency, a new temporary zero rate will apply to supplies of PPE, as defined by Public Health England’s coronavirus PPE guidance on 24 April 2020. Read more here.

Import taxes waived on vital medical equipment: The Chancellor has announced a waiver on customs duty and import VAT on certain medical goods coming from non-EU countries. The waiver applies where the goods are being supplied to the NHS to help combat the coronavirus outbreak. This measure will help speed up the supply of goods to the NHS as well as reducing costs by up to 12%. Read more here.

Reinstatement of direct debits for VAT payments: The next quarterly VAT payments have been deferred by the Chancellor such that no VAT will be due between now and the end of June. Instead, businesses will have until April 2021 to settle this deferred liability. Read more here.

Refunds available for VAT payments: As a further update to the temporary arrangements for the deferral of VAT payments, HMRC has confirmed that where taxpayers wanted to defer VAT payments due between 20 March 2020 and 30 June 2020, but did not manage to cancel their direct debit in time they can claim a refund. Read more here.

Deferral of import VAT and duty payments: HMRC has provided the below information setting out how COVID-19 affected businesses may qualify for a deferral of import VAT and customs duty payments, including payments due tomorrow (15 April). Read more here.

MTD digital links delay: In a further addition to the announcements being made in light of COVID-19 and its impact on businesses, HMRC has now confirmed that it is delaying the deadline for all making tax digital (MTD) businesses to put in place digital links between all parts of their functional compatible software. Read more here.

Other grants and guidance

Extension of Government support schemes: Whilst many considered some form of winter lockdown a possibility, few would have expected a month long set of restrictions starting as soon as 5 November; yet ‘Lockdown v2’ has thrust itself upon us. In order to assist businesses as they navigate the continuing turbulence of 2020 a number of Government support schemes have been extended. Read more here.

Future fund: Applications for the highly anticipated Future Fund opened on Wednesday 20 May, proposed by the Government as a means of providing cash to innovative UK start-ups, a group which have so far been unable to obtain funding from other schemes such as CBILS. This scheme will issue convertible loans between £125,000 to £5 million to innovative companies. Read more here.

Changes afoot for UK insolvencies: The Corporate Insolvency and Governance Bill, first presented to Parliament on 20 May 2020 is set for a second reading on Wednesday 3 June. It sees a number of additions to UK’s corporate and insolvency framework, some permanent and some temporary for specific COVID-19 effects. Read more here.

Determining residence status - updated guidance:  HMRC has issued additional guidance confirming that the coronavirus pandemic creates exceptional circumstances for determining residence status. Read more here.

Ban on evictions for commercial tenants: The Government announced an extra protection for businesses on Monday 23 March with a ban on evictions for all commercial tenants who miss rent payments due to coronavirus. Read more here.

What can I do to help my business keep moving?

Can you help to kickstart a career?: Young people are often one of the groups most affected when a recession hits – apprenticeships are cancelled, graduate recruitment is cut, and employers are understandably hesitant to invest in staff where there is uncertainty in the economy. Read more here.

Business Restructuring: We work with businesses to deliver financial and operational improvements, supporting management teams to generate liquidly and protect value. Read more here.

Cycle to work scheme: As we are being asked to avoid public transport, this will change the work commute for many, and as businesses try to scale up operations again, it may be helpful to take another look at the cycle to work scheme. Through the scheme employers can provide employees with bicycles and bicycle safety equipment as a tax-free benefit. Read more here.

Are virtual board meetings still valid?: COVID-19 has forced boards to adapt to meeting virtually. Are these meetings valid? The good news is – yes! Not just for now, but for the future as well. Take a look at our top tips for conducting a virtual board meeting with a minute template adapted to the virtual needs. Read more here.

Tax deferrals: We thought it would be useful to summarise the different tax deferrals that are available and what the implications are. These are across self assessment, VAT, PAYE and corporation tax. Read more here.

Cloud accounting: working from home whilst running your business: Despite these difficult times, this could be an excellent opportunity to make the leap from desktop software to a cloud solution. Making the transition may seem daunting, but cloud solutions are increasingly necessary, now more than ever. Read more here.

Management information: using a forecast model for scenario planning: If you already have a good forecast model in place or, failing that, the last budget you prepared, now is the time to update it to reflect what you are experiencing currently. This will allow you to assess the impact on your business and plan accordingly. Read more here.

Have you considered R&D tax incentives for short-term cash?: As COVID-19 continues to impact on the day-to-day operations of businesses, considering all potential sources of finance and short-term cash is key. Read more here.

How do I complete my statutory audit?: If you have booked an audit or site visit over the coming weeks, senior members of our team will be in touch to discuss with you whether the plans in place are still appropriate and practical. Alterations or rescheduling will be agreed where possible. Read more here

Claiming on insurance: There has been some confusion around whether businesses – particularly in the retail, hospitality, and leisure industries – will be able to claim on their insurance if closing due to the impact of COVID-19. Read more here.

Considering insolvency during the COVID-19 crisis - take a deep breath: In these uncertain times, if you find your business in financial crisis, you may consider insolvency. However, the advice from Hazlewoods Business Recovery and Insolvency team is to be bold and take a breath. Read more here.

Unlawful dividend payments: The support announced by the Government to date for the COVID-19 outbreak, is limited for directors of owner-managed businesses who receive their remuneration predominantly by dividends and a small salary. Therefore, director/shareholders may want to continue to pay dividends where possible during this time. Read more here.

Continuing international trade during COVID-19: As COVID-19 escalates around the globe it is important to remember that there are organisations ready and able to support with business continuity, including for those businesses trading internationally. Read more here.

Trade credit insurance: certainty in an uncertain world: Looking ahead, there will be a time that business trading resumes at a more normal rate. Protection of your assets has always been important in business; cash assets which are owed to the business are frequently overlooked. This is where trade credit insurance could help. Read more here.

Cloud accounting update: Revolutionising bill payments in Xero: Software providers are continuously making changes to provide users with a greater experience. From Wednesday 27 May a new bill payments experience will be available to users of Xero. Read more here.

What do I need to know for my employees/contractors?

Furloughed employees required to receive full redundancy under new law: A new law has been introduced with effect from 31 July 2020 to ensure that furloughed employees receive statutory redundancy and notice pay based on their ‘normal’ wage rather than their furlough pay. Read more here.

Off-payroll working rules delay: The Government has announced that they are postponing the off-payroll working rules (also known as IR35) due to come in from 6 April 2020, for medium and large sized businesses by one year to 6 April 2021. Read more here.

Statutory sick pay for those affected by COVID-19: The Government has announced that ‘eligible’ employees diagnosed with COVID-19, or ‘eligible’ employees that are unable to work as they are self-isolating in line with Government advice due to displaying COVID-19 symptoms, will be entitled to statutory sick pay (SSP) which will be payable from day one. Read more here.

Taxation of expenses when working from home: With a large majority of the workforce now working from home, we have set out below some of the typical expenses they might be incurring and the tax treatment of these. Read more here.

What do I do if I am self-employed?

Extension to support offered to self-employed: As part of the Chancellor’s winter economy plan, he announced an extension to the self-employment income support scheme (SEISS).  Since this time, he has gone on to increase the amount of support offered under the grant on two occasions. Read more here.

Further support offered to the self-employed: As part of the Chancellor’s winter economy plan, he announced an extension to the self-employment income support scheme (SEISS).  Read more here.

Self-employed income support scheme - the second and final grant: Guidance has now been issued on the ’second and final grant’ of the self-employed income support scheme (SEISS). The scheme will allow you to claim a taxable grant of 70% of your average monthly trading profits (down from 80% for the first grant), paid out in a single instalment covering three months, capped at £6,570 (down from £7,500). As before, if you receive the grant you can continue to work. Read more here.

Support for self-employed workers: The Government has announced a delay in upcoming income tax payments until January 2021 and universal credit is now accessible by all self-employed individuals required to self-isolate, which will be provided at the same rate of statutory sick pay available for employees. Read more here.

Self-employment income support scheme: On 26 March the Chancellor announced a grant scheme for the self-employed similar to that for employees but with some additional caveats. HMRC will cover up to 80% of average monthly trading profits (based on the past three tax years) and capped at £2,500 per month. This scheme is not expected to be up and running until early June, so in the meantime a business interruption loan could be considered.  The grant will be backdated until March 2020 and will initially be available for three months but will be extended if required. Read more here.

What else do I need to know?

Time for a holiday? COVID-19 related rent concessions: As a direct consequence of COVID-19, many landlords have been giving rent concessions (rent holidays) to tenants on property under operating leases. Read more here.

EMI not to be impacted by furlough leave: HMRC has provided some welcome news that an employee participating in an Enterprise Management Incentive (EMI) share scheme who has been furloughed during the COVID-19 pandemic will not be adversely impacted. Read more here.

Government guidance for reopening businesses: As June approaches and thousands of high street shops are set to reopen, the Government has produced eight guides that cover a range of working environments and how they can be made COVID-19 safe. Read more here.

Do you have a Government Gateway account?:  It is currently anticipated that employers and the self-employed may need to have a Government Gateway account in order to make a claim under the respective schemes. Read more here.

Disposals of residential property: What has changed?: There has been a significant change to the tax reporting and payment requirements for disposals of UK residential properties from 6 April 2020. We have set out some common questions and answers for this change to help determine whether the new rules could apply to your disposal. Read more here.

Mortgage holidays: Homeowners and those with buy-to-let mortgages who are impacted financially by the coronavirus, will be able to request a mortgage payment holiday of up to three months. The Financial Conduct Authority has advised that lenders should grant mortgage holidays regardless of customers’ circumstances and should have no negative impact on credit scores. Read more here.

Support when renting private or social accommodation: Evictions from private or social accommodation have been banned for at least three months. Read more here.

Planned changes to UK insolvency rules to help businesses: The Government’s Business Secretary, Alok Sharma, has announced a commitment to change insolvency laws so that if a business is unable to meet its debts, due to the impact of coronavirus, then they cannot be forced into an insolvency procedure, for example, liquidation or bankruptcy. Read more here.

Accounting treatment for support schemes: There have been a variety of support schemes and funds available to businesses from the Government and other sources during the pandemic. Alongside the weekly updates we have provided on how to access these, we have now compiled an overview of accounting for these and any steps you need to take next. Read more here.

Information sources

For further information and guidance, please see below for links to Government and WHO websites. 

HM Government Business Support

Government guidelines for employees, employers and businesses

HMRC dedicated coronavirus helpline

World Health Organisation – country and technical guidance

Coronavirus business interruption loan scheme (CBILS)