Additional government support has been announced this week for businesses and employees impacted by COVID-19 across the UK.
This includes a new Job Support Scheme to protect the jobs of millions of people returning to work, extending the Self-Employment Income Support Scheme, extending the VAT cut (from 20% to 5%) for the hospitality and tourism sectors, and help for businesses in repaying government-backed loans.
Job Support Scheme
The new Job Support Scheme will be 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, the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand.
Employers will continue to pay the wages for the hours staff work. For the hours not worked, the government and the employer will each pay one-third of their usual wages (capped at £697.92 per month).
Employers will need to meet their share of the pay for unworked hours, and all employer National Insurance contributions and statutory pension contributions, from their own funds. This means that employees will receive at least two thirds of their usual wages for the hours not worked.
To be eligible, employees must:
• be registered on PAYE payroll on or before 23 September 2020. This means a Real Time Information (RTI) submission notifying payment in respect of that employee must have been made to HMRC on or before 23 September 2020.
• work at least 33% of their usual hours. The government will consider whether to increase this minimum hours threshold after the first three months of the scheme.
The Job Support Scheme will be open to employers across the UK even if they have not previously applied under the Coronavirus Job Retention Scheme (CJRS) which ends on 31 October.
The scheme will operate in addition to the Job Retention Bonus. Businesses can benefit from both schemes in order to help protect viable jobs.
SEISS Grant Extension
The government is continuing its support for millions of self-employed individuals by extending the Self-Employment Income Support Scheme (SEISS) grant.
Self-employed individuals and members of partnerships who are eligible for the SEISS and are actively continuing trading but are experiencing reduced demand due to COVID-19, will be eligible for a further SEISS grant to provide support over the winter months;
- The first grant will cover a three-month period from the start of November 2020 until the end of January 2021. It will be a taxable grant to cover 20% of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £1,875 in total.
- An additional second grant, which may be adjusted to respond to changing circumstances, will be available for self-employed individuals to cover the period from February to the end of April – ensuring our support continues right through to next year.
New Self Assessment Self-Serve Time to Pay Scheme
If you deferred paying your July 2020 Payment on Account, you will need to pay the deferred amount, in addition to any balancing payment and first 2020/21 Payment on Account, by 31 January 2021. This may be a larger payment than you or your clients usually pay in January.
If you are unable to pay your Self-Assessment (SA) bill in full by 31 January 2021, you can set up a Time to Pay payment plan of up to 12 months online without speaking to HMRC. If employers have SA tax debts of up to £30,000, they will be able to access this Time to Pay facility through GOV.UK and will get automatic and immediate approval. If their SA debts are over £30,000, or they need longer than 12 months to repay their debt in full, they will still be able to use our Time to Pay arrangement by calling HMRC.
Extension to the reduced rate of VAT for Hospitality and Tourism
The government has extended the temporary reduced rate of VAT (5%) to tourist attractions and goods and services supplied by the hospitality sector. This relief came into effect on 15 July 2020 and will now end on 31 March 2021 across the UK.
VAT Deferral New Payment Scheme
If you deferred payments that were due between 20 March and 30 June 2020, then these payments need to be made to HMRC by 31 March 2021. Employers can use the New Payment Scheme to spread these payments over equal instalments up to 31 March 2022. Alternatively, you can make payments as normal by 31 March 2021 or make Time To Pay arrangements with HMRC if you need more tailored support.