Latest budget updates on Covid 19 for businesses and employers
COVID-19 support for businesses announced by the Chancellor
Extending the Coronavirus Job Retention Scheme (CJRS) until the end of September 2021:
The UK government will continue to pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, up to the end of June 2021. For periods in July, CJRS grants will cover 70% of employees’ usual wages for the hours not worked, up to a cap of £2,187.50. In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875. Employers will need to continue to pay their furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month. They also need to pay the associated Employer National Insurance contributions and pension contributions on subsidised furlough pay from their own funds. When claiming for periods from 1 May 2021 onwards, eligible employees must have been employed on 2 March 2021 and had a Real Time Information (RTI) submission to HMRC notifying a payment of earnings for that employee by their employer between 20 March 2020 and 2 March 2021. You can find out more about the CJRS on GOV.UK.
The VAT deferral new payment scheme:
The new payment scheme helps businesses with deferred VAT to pay what they owe in smaller, monthly instalments from March, interest free. The scheme is now open, and you can choose to make 2-11 monthly payments, depending on when you join. The later you join the fewer instalments are available to you. You can join through a simple online service without needing to contact HMRC. You need to join the scheme before the end of June. More details are available from GOV.UK.
VAT reduction for the UK’s tourism and hospitality sector:
The government will extend the temporary reduced rate of 5% VAT for goods and services supplied by the tourism and hospitality sector until 30 September 2021. To help businesses manage the transition back to the standard 20% rate, a 12.5% rate will apply for the subsequent six months until 31 March 2022.
Income Tax exemption for employer-reimbursed coronavirus antigen tests for tax year 2020-21 and 2021-22:
This measure will continue the Income Tax exemption for payments that an employer makes to an employee to reimburse for the cost of a relevant coronavirus antigen. There will be no Income Tax liability for the employee or employer.
Continuation of the home office equipment expenses COVID-19 easement for the 2021-22 tax year:
An Income Tax exemption and corresponding NICs disregard were introduced for the 2020-21 tax year. This allowed employers to reimburse employees for the cost of home office equipment deemed necessary to work from home as a result of the COVID-19 outbreak free from Income Tax and Class 1 NICs. The exemption was due to end on 5 April 2021 but will now be extended to have effect until 5 April 2022.
Extended loss carry back for business:
To help otherwise-viable UK businesses which have been pushed into a loss-making position, the trading loss carry-back rule will be temporarily extended from the existing one year to three years. This will be available for both incorporated and unincorporated businesses. Further details are available from our guidance note.
Full help available - announcements prior to the March 2021 budget:
The Government have announced a range of measures to support businesses and employees (including self -employed people).
This includes:
Businesses and employees need to check regularly for updates
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a Coronavirus Job Retention Scheme
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deferring VAT and Income Tax payments
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a Self-employment Income Support Scheme
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a Statutory Sick Pay relief package for small and medium sized businesses (SMEs)
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a 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England
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small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
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grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
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the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
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a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
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business 'bounce back loans'
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the HMRC Time To Pay Scheme
All of the guidance is constantly being changed and updated and the latest updates from the Government/HMRC can be found here:
Guidance and support for employers
Check if a furlough claim can be made
How to claim under the job retention scheme
Guidance and support for employees
Guidance and support for businesses including self employed
Bounce back loans application and information
More information about this and regular updates can be found on HMRCs dedicated business support webpage and also for general information on the virus at GOV.UK.
A dedicated helpline has been set up to help businesses and self-employed individuals in financial distress and with outstanding tax liabilities receive support with their tax affairs. Through this, businesses may be able to agree a bespoke Time to Pay arrangement. If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.
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