CORONAVIRUS: extended support through the recovery

As lockdown restrictions ease and the economy starts to reopen, there are new grants and extended support schemes to help businesses and the Self-Employed through the recovery.

These include the Restart Grant Scheme, the Coronavirus Job Retention Scheme (CJRS), VAT cuts and the Self-Employed Income Support Scheme (SEISS), along with other support that we highlighted in our Lockdown 3 summary previously.

We’ve included updated information on this key support below, but please do get in touch if you would like further help to access any of these schemes.

 

RESTART GRANTS OPEN

The Restart Grant Scheme, which is designed to support businesses to open safely as COVID-19 restrictions are lifted, is now available for applications. Grants of up to £6,000 are available for non-essential retail businesses and up to £18,000 for hospitality, leisure, personal care, gym and business premises that will open later under the lockdown lifting plans and will be impacted more by restrictions when they do so.

If you received the previous grant, then you do not need to apply, as you should be contacted by your council directly. For those who have not applied for a Coronavirus support grant previously, new applications opened online last week. For businesses in BANES, you can find further details and an application link here.

CJRS

The Coronavirus Job Retention Scheme (CJRS), as mentioned in our previous update, has also been extended up to 30 September 2021. The rules are broadly as they were, but it is worth reiterating some of the key points up to this date.

In summary, the different claim periods and amounts available to claim are as follows:

• November 2020 to June 2021 claims: 80% of regular wages up to £2,500, with a percentage reduction for any part-time working

• July 2021: 70% of regular wages up to £2,187.50, with a percentage reduction for any part-time working

• August to September 2021: 60% of regular wages up to £1,875, with a percentage reduction for any part-time working

Also, it’s worth noting the importance of getting it right, as HMRC are already starting to probe into claims, and whilst their focus is on fraud, HMRC will expect employers to rectify any significant mistakes.

VAT CUTS FOR HOSPITALITY AND OTHER SECTORS

As announced in the recent Budget, the government will be legislating to:

• extend the temporary reduced rate of VAT of 5% until 30 September 2021;

• prepare for a new rate of 12.5% from 1 October 2021 to 31 March 2022.

The supplies to which the temporary reduced rates will apply remain the same.

If you refer to our previous update , we advised which sectors this should apply to. As a quick recap, the government made an announcement on 8 July 2020 allowing VAT registered businesses to apply a temporary 5% reduced rate of VAT to certain supplies relating to:

• hospitality

• hotel and holiday accommodation

• admissions to certain attractions

SELF-EMPLOYED INCOME SUPPORT SCHEME (SEISS)

The government announced in November that there would be a fourth SEISS grant and further details were published in the recent Budget. Perhaps the most critical point to highlight is that the eligibility criteria has changed.

The summary

• The fourth SEISS grant will be set at 80% of 3 months’ average trading profits, paid out in a single instalment, capped at £7,500.

• The grant will now take into account 2019-20 tax returns.

• The grant will also be open to those who became self-employed in tax year 2019-20.

• The rest of the eligibility criteria appear to remain broadly unchanged based on the current guidance.

• Because the eligibility for the scheme will now be based on your submitted 2019-20 self-assessment tax return this may also affect the amount of the fourth grant, such that it could be higher or lower than previous grants you may have received.

Eligibility

This has changed from previous grants and according to press reports and other sources, we are also anticipating some more detailed guidance on the full eligibility criteria. However, this article is based on what we know currently.

The overriding positive point to highlight is that people who have filed their 2019/20 tax return and are newly self-employed, are now potentially eligible. This should result in a new cross section of people who may be entitled to the grant.

In summary:

• you must be a self-employed individual or a member of a partnership.

• your trading profits in your 2019-20 Self-Assessment tax return must be no more than £50,000 and at least equal to your non-trading income.

• if you’re not eligible based on your 2019-20 Self-Assessment tax return, HMRC will then look at the tax years 2016-17, 2017-18, 2018-19 and 2019-20.

You must also have traded in both tax years as follows:

• 2019-20 and submitted your tax return by 2 March 2021

• 2020-21

In addition, you need to be aware of the following additional criteria:

1. You must be currently trading but are impacted by reduced demand due to Coronavirus; OR

2. You must have been trading but are temporarily unable to do so due to Coronavirus.

And you must also declare that:

1. you intend to continue to trade;

2. you reasonably believe there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to Coronavirus.

The above two criteria and declarations are essentially in line with what applied for the previous third grant.

The claims process

The online claims service for the fourth grant is expected to be available from late April 2021 until 31 May 2021.

If you are eligible, HMRC will contact you in mid-April to give you your personal claim date. This will be the date that you can make your claim from.

Final fifth grant

Finally, whilst writing, it was also announced that there will be a fifth and final grant covering May to September 2021. You will be able to claim from late July 2021 if you are eligible for this.

It’s important to note that one key difference in terms of criteria for this fifth grant is that the amount will be determined by how much your turnover has been reduced in the tax year ended 5 April 2021.

The fifth grant will be worth:

• 80% of 3 months’ average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more; OR

• 30% of 3 months’ average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%.

Further details are expected to be provided on this fifth grant in due course and we will update you when they become available.

If you would like advice on accessing Coronavirus support, or for help with bookkeeping, cash flow management or payroll during the Coronavirus pandemic, please call us on01225 325580 or email info@richardsonswift.co.uk.

Please note that this is only a summary of the main issues and should not be construed as advice. Every effort has been made to ensure factual accuracy at the time of publication (12 April 2021), however the government response to the Coronavirus situation is changing 24-7, so it should not be not relied upon completely.