New Business Support Schemes
Courtesy of HMRC, 25 September 2020
Additional government support has been announced this week for businesses and employees impacted by coronavirus (COVID-19) across the UK.
This includes a new Job Support Scheme to protect the jobs of millions of people returning to work, extending the Self-Employment Income Support Scheme, extending the VAT cut (from 20% to 5%) for the hospitality and tourism sectors, and help for businesses in repaying government-backed loans.
Further information on these new schemes is available in this email and on GOV.UK, by searching ‘Winter Economy Plan 2020’.
HMRC phone lines and webchat are very busy, so the quickest way to find the support you need is on GOV.UK.
Job Support Scheme
A new Job Support Scheme will be introduced from 1 November to protect jobs where businesses are facing lower demand over the winter months due to coronavirus (COVID-19).
Under the scheme, which will run for six months, the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand.
You will continue to pay the wages for the hours your staff work. For the hours not worked, you and the government will each pay one third of their usual wages (capped at £697.92 per month). You will need to meet your share of the pay for unworked hours and all your National Insurance contributions and statutory pension contributions, from your own funds. This means that employees will receive at least two thirds of their usual wages for the hours not worked.
To be eligible, employees must:
- be registered on your PAYE payroll on or before 23 September 2020. This means a Real Time Information (RTI) submission notifying payment in respect of that employee must have been made to HMRC on or before 23 September 2020
- work at least 33% of their usual hours. The government will consider whether to increase this minimum hours threshold after the first three months of the scheme.
Further eligibility criteria is available on GOV.UK by searching ‘Job Support Scheme factsheet’.
The Job Support Scheme will be open to employers across the UK even if you have not previously applied under the Coronavirus Job Retention Scheme (CJRS) which closes on 31 October.
The Job Support Scheme will start from 1 November and you will be able to claim in December. Grants will be paid on a monthly basis.
The scheme will operate in addition to the Job Retention Bonus. You and your employees can benefit from both schemes in order to help protect viable jobs.
For information on what is covered by the grant, which employers and employees are eligible, and how to claim, search ‘Job Support Scheme factsheet’ on GOV.UK.
Extension to the reduced rate of VAT for Hospitality and Tourism
The government has extended the temporary reduced rate of VAT (5%) to tourist attractions and goods and services supplied by the hospitality sector. This relief came into effect on 15 July 2020 and will now end on 31 March 2021 across the UK.
VAT Deferral New Payment Scheme
If you deferred payments that were due between 20 March and 30 June 2020, then these payments need to be made to HMRC by 31 March 2021. You can use the New Payment Scheme to spread these payments over equal instalments up to 31 March 2022. Alternatively, you can make payments as normal by 31 March 2021 or make Time To Pay arrangements with HMRC if you need more tailored support.
New Self Assessment Self-Serve Time To Pay Scheme
If you deferred paying your July 2020 Payment on Account, you will need to pay the deferred amount, in addition to any balancing payment and first 2020/21 Payment on Account, by 31 January 2021. This may be a larger payment than you usually pay in January.
If you’re unable to pay your Self-Assessment (SA) bill in full by 31 January 2021, you can set up a Time to Pay payment plan of up to 12 months online without speaking to us. If you have SA tax debts of up to £30,000, you’ll be able to access this Time to Pay facility through GOV.UK and will get automatic and immediate approval. If your SA debts are over £30,000, or you need longer than 12 months to repay your debt in full, you will still be able to use the Time to Pay arrangement by calling HMRC.
Other business support schemes:
Changes to CJRS – what you need to do from 1 October
From 1 October, HMRC will pay 60% of usual wages up to a cap of £1,875 per month for the hours furloughed employees do not work.
You will continue to pay your furloughed employees at least 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. You will need to fund the difference between this and the CJRS grant yourself.
The caps are proportional to the hours not worked. For example, if your employee is furloughed for half their usual hours in October, you are entitled to claim 60% of their usual wages for the hours they do not work, up to £937.50 (half of £1,875 cap). You must still pay your employee at least 80% of their usual wages for the hours they don’t work, so for someone only working half their usual hours you’d need to pay them up to £1,250 (half of £2,500 cap), funding the remaining portion yourself. For help with calculations, search ‘Calculate how much you can claim using the Coronavirus Job Retention Scheme’ on GOV.UK.
You’ll also continue to pay your furloughed employees’ National Insurance and pension contributions from your own funds.
Protect yourself from scams
Stay vigilant about scams, which may mimic government messages as a way of appearing authentic and unthreatening. Search ‘scams’ on GOV.UK for information on how to recognise genuine HMRC contact. You can also forward suspicious emails claiming to be from HMRC to firstname.lastname@example.org and texts to 60599.