The following is an extract from a recent guidance note sent to accountants and tax agents giving some “flesh” to the bones of last week’s financial statement by the Chancellor of the Exchequer. This includes:
- Job Support Scheme
- SEISS Grant Extension
- Extension to the reduced rate of VAT for Hospitality and Tourism
- VAT Deferral New Payment Scheme
- New Self-Assessment Self-Serve Time To Pay Scheme
Job Support Scheme
A 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 coronavirus.
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.
Further eligibility criteria is available on GOV.UK by searching ‘Job Support Scheme factsheet’.
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 Job Support Scheme will start from 1 November and employers will be able to claim in December. Grants will be paid on a monthly basis.
The scheme will operate in addition to the Job Retention Bonus. Businesses can benefit from both schemes in order to help protect viable jobs.
For information on what is covered by the grant, which employers and employees are eligible, and how to claim, search ‘Job Support Scheme factsheet’ on GOV.UK.
SEISS Grant Extension
The government is continuing its support for 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 coronavirus (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.
The government’s factsheet is helpful. Search ‘SEISS Grant Extension factsheet’ on GOV.UK.
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 businesses 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. Businesses can use the New Payment Scheme to spread these payments over equal instalments up to 31 March 2022. Alternatively, they can make payments as normal by 31 March 2021 or make Time To Pay arrangements with HMRC if they need more tailored support.
New Self-Assessment Self-Serve Time To Pay Scheme
If individuals deferred paying their second 2019/20 Payment on Account due in July 2020, they will need to pay the deferred amount, in addition to any balancing payment and first 2020/21 Payment on Account, by 31 January 2021. If they are unable to pay their Self-Assessment (SA) bill in full by 31January 2021, they can set up a Time to Pay payment plan of up to 12 months online without speaking to HMRC. If individuals 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.
Other business support schemes:
Changes to CJRS – what you need to do from 1 October
From 1 October, HMRC will pay 60% of usual wages up to a cap of £1,875 per month for the hours furloughed employees do not work.
Employers will continue to pay furloughed employees 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. Employers will need to fund the difference between this and the CJRS grant themselves.
For help with calculations, you can search ‘Calculate how much you can claim using the Coronavirus Job Retention Scheme’ on GOV.UK.
Employers will also continue to pay furloughed employees’ National Insurance and pension contributions from their own funds.
These are complex rules. If you need help then please contact C & H Stedman on 01442 202650 and we will endeavour to clarify your situation.