Continued business support – Updated 26th October 2020

By 28th September 2020 COVID-19, Support No Comments

Further details are still to be released, but here’s what we know so far… [updates added on 26th October 2020 – following announced changes to the JSS]

New Support for job and employers (Job Support Scheme – JSS): 

  • Will run for 6 months
  • Starts 1st November 2020
  • Employees need to work for minimum of 20% of their time [Update: this was: at least a third of their normal hours (33%)].
  • Of the hours not worked 5% will be covered by the employer (max £125), 61.67% by the Government (max £1,541.75) and 27% will be unpaid [Update: This was originally a third each (33%)].

There are slightly different rules for businesses who are forced to closed due to local lockdowns, so please contact us if you are one of these affected businesses.

[Update] Useful comparison of the furlough scheme compared to the new scheme: here

Key points – taken from: here 

  • Neither the employer or the employee need to have previously used the Coronavirus Job Retention Scheme !
  • Large businesses will have to meet a financial assessment test, so the scheme is only available to those whose turnover is lower now than before experiencing difficulties from Covid-19. There will be no financial assessment test for small and medium enterprises (SMEs).
  • Our [Government’s] expectation is that large employers using the Job Support Scheme will not be making capital distributions, such as dividend payments or share buybacks, whilst accessing the grant. Further details will be set out in guidance
  • Employees must be on an employer’s PAYE payroll on or before 23 September 2020. This means a Real Time Information (RTI) submission notifying payment to that employee to HMRC must have been made on or before 23 September 2020.
  • In order to support viable jobs, for the first three months of the scheme the employee must work at least 33% (update: now 20%) of their usual hours. After 3 months, the Government will consider whether to increase this minimum hours threshold.
  • The grant will not cover Class 1 employer NICs or pension contributions, although these contributions will remain payable by the employer.
  • The scheme will be open from 1 November 2020 to the end of April 2021. Employers will be able to make a claim online through from December 2020. They will be paid on a monthly basis.
  • Employers must agree the new short-time working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing. This agreement must be made available to HMRC on request.

Self Employed

  • Further support for the Self Employed, details still to be announced.

There will be an extension of the Self-Employed Income Support Scheme (SEISS) which the Government had introduced to support self-employed individuals through the initial lockdown measures. The new grants will only be available to those self-employed who have been previously eligible and who continue to experience reduced demand due to COVID-19.

There will be two grants. The first will be for the period start November 2020 to end January 2021. This grant will be for 20% of average monthly trading profits and will be capped at £1,875. The second grant will be for the period start February 2021 to end April 2021. The value of this grant has not yet been determined by Government. We will provide you with more information as it becomes available.

Self-Assessment – Enhanced Time to Pay

Taxpayers with up to £30,000 in self-assessment tax liabilities due in January 2021 will be able to use HMRC’s self-service Time to Pay facility to secure a plan to pay their liability over 12-months.

VAT deferral

  • Any VAT deferred to March 2021 can now be paid over 11 instalments from this date. Updates to be posted when we know more.

Loan extensions for Bounce Back Loans and CBILS

If your business is still struggling then there are options to change your payment terms. We advise speaking to your lender if you are going to struggle to keep on top of the currently agreed loan schedule.

There are rumours of a new loan scheme starting Jan 2021.

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