Job Support Scheme
A new Job Support Scheme has been introduced from 1 November to protect jobs where businesses are facing lower demand over the winter months due to Covid-19.
Under the scheme, which will run for six months (until 31 March 2021), the government contributes towards the wages of employees who are working fewer than normal hours due to decreased demand. Claims will open in December and grants will be paid on a monthly basis from this date.
Large businesses, defined as those that employ 250 or more people, need to complete a financial impact test to prove reduced demand due to Covid-19. Businesses below this size can claim without completing the test.
Read ACCA’s guidance on the new scheme.
SEISS extension
The government has extended support for self-employed individuals and members of partnerships under the Self-Employment Income Support Scheme (SEISS) grant.
Individuals qualifying for the SEISS previously – those who are actively continuing to trade but experiencing reduced demand due to Covid-19 – will be eligible for a further SEISS grant to provide support over the winter months.
ACCA has updated guidance on the SEISS grant.
Pay As You Grow
The Pay as You Grow flexible repayment system provides flexibility for firms repaying a Bounce Back Loan. This includes extending the length of the loan from six years to 10, which will cut monthly repayments by nearly half. Interest-only periods of up to six months and payment holidays will also be available to businesses. These measures will further protect jobs by helping businesses recover from the pandemic.
Coronavirus Business Interruption Loan Scheme (CBILS) lenders will have the ability to extend the length of loans from a maximum of six years to 10 years if it will help businesses to repay the loan.
The government’s Covid-19 loan schemes are due to finish at the end of November. This will apply to loans under the CBILS, the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Loan Scheme and the Future Fund.
Businesses may need to consider if further loans are required or if they will need to move from one loan type to another and ensure that these are agreed before the schemes expire.
ACCA has updated guidance on the various schemes.
VAT changes
Businesses that deferred VAT in the period to 30 June 2020 would have had to pay this by the end of March 2021. They will now be able to make 11 interest-free, smaller repayments in the 12 months to 31 March 2022 by opting in to this new arrangement.
The temporary 15% VAT cut for the tourism and hospitality sectors has been extended to the end of March 2021.
See ACCA guidance on these changes.
Self-serve Time to Pay
Many taxpayers deferred their July 2020 Payment on Account until 31 January 2021. As they will need to pay the deferred amount – plus any balancing payment and the first payment on account for 2020/21 – by 31 January 2021, their January tax bill may be larger than usual.
Taxpayers who are unable to make these payments in full by January 2021 can set up a Time to Pay payment plan of up to 12 months online without needing to phone HMRC.
