Just when you thought it was safe to go back into the world! It seems we are faced with further challenges that will impact on our day to day life and consequently, our livelihoods and finances. We understand how frustrating, confusing and complex this can be when it comes to your income and taxes as a result of the COVID-19 pandemic. That’s why we’re here to help you work through the latest support announced from the Government and explain what that means for you.
Some of the key support is as follows:
A number of the government’s interventions to support jobs and employment such as the Coronavirus Jobs Retention Scheme (CJRS) and the Self-employed Income Support Scheme (SEISS) are due to come to a close over the autumn, while other schemes, such as the Jobs Retention Bonus and employment support including Kickstart Scheme, begin to take effect.
We can help you to understand the government support on offer for you to adapt and evolve to the prolonged challenge of COVID-19. There are further details of the schemes available on gov.uk but here is a snapshot of what you need to know now.
- Job Support Scheme – viable for UK employers who face lower demand due to COVID-19.
- SEISS Grant Extension – providing critical support to the self-employed, lasting for six months from November 2020, the grant will be limited to self-employed individuals who are currently eligible for the SEISS and are actively continuing to trade but are facing reduced demand due to COVID-19.
- Easing the burdens on business – an extension of the temporary reduced rate of VAT (5%) from 12 January to 31 March 2021. This will continue to apply to supplies of food and non-alcoholic drinks and admission to attractions across the UK will also be included. There is also an extension up to 30 November 2020 for new applications for the four temporary loan schemes, which are as follows:
- Bounce Back Loan Scheme (BBLS) – these are loans between £2,000 and £50,000, capped at 25% of turnover with a 100% government guarantee to the lender.
- Coronavirus Business Interruption Loan Scheme (CBILS) – provides loans of up to £5 million with an 80% government guarantee to the lender, giving lenders the confidence to provide finance to SMEs. CBILS loan extension – allows CBILS lenders to extend the term of a loan up to ten years, providing additional flexibility for UK-based SMEs who may otherwise be unable to repay their loans.
- Coronavirus Large Business Interruption Loan Scheme (CLBILS) – provides loans of up to £200 million (to a maximum of 25% of turnover), with an 80% government guarantee to the lender, which is more generous than equivalent schemes in many other countries.
- Future Fund – The investment scheme for innovative and fast-growing UK-based businesses, has provided loans ranging from £125,000 to £5 million which are subject to at least equal matching from private investors. Support also continues through the COVID-19 Corporate Financing Facility which will remain open until 22 March 2021.
- Pay as you Grow – giving all businesses that borrowed under the BBLS the option to repay their loan over a period of up to ten years. Reducing average monthly repayments on the loan by almost half, UK businesses will also have the option to move temporarily to interest only payments or to pause their repayments entirely for up to six months.
- VAT deferral ‘New Payment Scheme’ – The government will give businesses which deferred VAT due in March to June 2020 the option to spread their payments over the financial year 2021-2022. All businesses which took advantage of the VAT deferral can use the ‘New Payment Scheme’. HMRC will put in place an opt-in process in early 2021.
• Enhanced Time to Pay for Self-Assessment taxpayers – giving self-employed and other taxpayers more time to pay taxes due in January 2021, this builds on the Self-Assessment deferral provided in July 2020. Taxpayers with up to £30,000 of Self-Assessment liabilities due will be able to use HMRC’s self-service Time to Pay facility to secure a plan to pay over an additional 12 months.
Rather than worry about how these new announcements will affect you, let us help you to navigate the complexities of your tax issues and ensure you are keeping as much of your hard earned income as possible. Contact us at 0203 384 2224 for a free initial consultation.