Update – 25 September 2020
COVID-19
Update 25 September 2020
Winter Economy Plan, Kick Start Scheme and Business Recovery Grants
We have simplified all the details we have so far behind the headlines of yesterdays announcement from the Chancellor.
1.Job Support Scheme
What is it?
It is a subsidy scheme designed to support employers with partial contributions towards salary. The burden of payment for hours not worked is shared equally between the employer and the government.
It is NOT an extension of the furlough scheme.
Who is eligible?
- All Small and Medium Sized Business
- Large businesses who have been directly affected by COVID
- Claims can be made for any employee if they are not on redundancy notice.
- The employee must be working at least 33% of their usual contracted hours
When does it start?
It starts from 1 November 2020 and will run for six months.
When can I claim?
The employer will be reimbursed in arrears.
How much can I claim?
For every hour not worked the government will pay 33% of the hours not worked BUT the employer must match this. The governments contribution is up to a maximum of £697.92.
Confused?…… here is an example
Illustration: 10 Good Reasons Limited
Scott works 30 hours per week at £10 per hour £300 per week.
Currently his employer Charlene can only offer him 10 hours work.
Worked Hours
Charlene pays Scott 10 hours at £10 for working £100
Non-working Hours
Charlene claims from the government 33% of non-working hours
33% x 20 hours @ £10 £66
Charlene pays 33% of non-working hours
33% x 20 hours @ £10 £66
Outcome
Charlene pays £100 + £66 £166
Government subsidy £66
Scott receives £232
As you can see in this example Charlene the employer will effectively be paying time and 2/3 for each hour worked.
2.Self-Employed Grant
What’s new?
This scheme has been extended to last a further six months running from November 2020 to April 2021
Who is eligible?
Only those who were eligible for the current scheme.
You must be continuing to trade but are facing reduced demand due to COVID 19.
When will I receive the money?
It will be released in two payments covering initially the three months to Jan 2021 and then the three months to April 2021.
No payment date confirmed yet.
How much will I receive?
The first payment will be at 20% of average monthly trading profits, will cover three months and be capped at £1,875.
The second payment covering Feb 21 to April 21 remains under review in terms of percentage and cap.
3.Vat Deferral ‘New Payment Scheme’
What was the old scheme?
Under the previously announced Deferral Scheme, Vat which fell due during the period 20 March to 30 June could be deferred without interest until 31 March 2021.
What has changed?
This deferred Vat can now be settled over 11 equal payments during 2021-22 under the Vat deferral ‘New Payment Scheme’.
Do I have to apply?
YES. The main change is that you have to opt-in to this New Scheme to take advantage of the payment by instalments. This scheme will be available to opt in to during early 2021.
What Action do I need to take?
To be very clear if you have deferred your Vat
-If you plan to pay by March 2021 then you don’t have to do anything and can pay now, in March or any instalments between now and then as you wish. You don’t need to contact HMRC.
-If you want to take advantage of the NEW Scheme then watch for our updates and opt in when this becomes available.
4.Self-Assessment Deferral
What was the old scheme?
Under the previously announced Time to Pay for Self-Assessment any tax payments which fell due in July 2020 could be deferred without interest until 31 Jan 2021.
What has changed?
Anyone with a tax bill of up to £30,000 relating to tax due in July 2020 or Jan 2021 can now defer payments over 12 months.
What Action do I need to take?
You will need to contact HMRC Time to Pay facility to actively arrange this.
5.Temporary Vat Rate for hospitality and Tourism
What has changed?
The temporary reduced Vat rate of 5% has now been extended to 31 March 2021.
6.Bounce Back Loans – Pay as you Grow
What has changed?
All businesses who took out a bounce back loan will now have the following options
-You can extend your repayment terms from 6 to 10 years
-You can ask for interest only repayments for six months (you can do this three times)
-You can request a repayment holiday for six months BUT only after you have made an initial six payments.
Can I apply now?
The scheme has been extended and new applications for bounce back loans can be made up to 30 November.
7.CBILS (Coronavirus Business Interruption Loan Scheme)
What has changed?
You can extend your repayment terms to 10 years.
Can I apply now?
The scheme has been extended and new applications for CBILS can be made up to 30 November.
Other Key Schemes to be aware of outside of the Winter Economy Plan
8.Kickstart Scheme
What is it?
A scheme to create 6-month placements for young people on Universal Credit or at risk of long-term unemployment. It is NOT an apprenticeship.
What are the criteria?
There are quite a few conditions… are you ready?
- Applications must be for a minimum of 30 placements.
If you are unable to offer this, you can find someone to apply on behalf of a group of employers
www.gov.uk/guidance/find-someone-to-apply-for-a-kickstart-scheme-grant-on-your-behalf
- The job must be a new job, cannot replace existing or planned vacancies
- The job cannot cause existing employees or contractors to reduce their hours
- The role must be for a minimum of 25 hours per week for 6 months
- The employee must be paid Minimum wage
- The employee should not require extensive training before they begin
How much can I claim?
- £1,500 per placement for set up costs, support, and training
- 100% of min wage for 25 hours per week plus associated employers NI and pension costs
I have a few more questions who can I ask?
Contact details for each region can be found here www.gov.uk/government/publications/kickstart-scheme-employer-contacts/kickstart-scheme-employer-contacts
9.Business Grants for Areas in local Lockdown
What is it?
A grant up to £1,500 paid every three weeks for businesses required to close due to local COVID restrictions.
What are the eligibility criteria?
You must have been REQUIRED to close due to local COVID restrictions.
Any businesses still closed at a national level (e.g. nightclubs) will not be eligible.
Local Authorities may add additional criteria.
Which areas are currently eligible?
As at 9 September this was available to businesses in Blackburn with Darwen, Pendle, and Oldham as part of an ongoing trial scheme.
How much can I claim?
If you are on the business rates list then
If you are in a property with a rateable Value less than £51,000 this equates to £1,000 grant
If you are in a property with a rateable Value greater than £51,000 equates to £1,500 grant
Local Authorities will also have a discretionary pot for those not on the business rates list and can pay any amount up to £1,500 for these
How will I get paid?
Each payment will be made for a 3-week lockdown period. Each new 3-week lockdown period triggers an additional payment.
How do I claim?
Local Authorities will be responsible for distributing the grants so watch your LA website.
Any further questions please contact us below
This article is written for the general interest of our clients and is not a substitute for consulting the relevant legislation or taking professional advice. The authors and the firm cannot accept any responsibility for loss arising from any person acting or refraining from acting on the basis of the material included herein.
