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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.
If you have any concerns about paying tax due to the impact of COVID-19, or have outstanding tax liabilities, contact HMRC. A helpline has been set up specifically to address these situations and measures can be put in place to help you, such as agreeing instalments, or putting a halt to debt collection proceedings.
Call HMRC on 0800 024 1222 to discuss your options, or read more about how they may be able to help you here.
We are aware of scams where taxpayers are receiving a text or email and being asked to click on a link and populate bank details to receive the grant. Please be aware that HMRC will never contact you by text or email requesting bank details for a refund or payment of a grant.