The Government have a number of schemes that you could potentially take advantage of or are subject to change in the not to distant future. Below is a quick summary of the schemes including Furlough, Self-employed grants (SEISS), Lower VAT rates, Recovery Loan Scheme, Restart Grant, Business Rates Relief and a deeper dive in VAT deferral.
This has been extended until the 30th of September, with employees still receiving up to 80% of their wages for hours they haven’t worked with £2,500 per month. Don’t be scared though this doesn’t mean there are guaranteed to extend or reintroduce lockdown . They’re doing this because they are aiming to support businesses and employees as we bounce back to some sense of normality.
This is due to change on the 30th of June where it will drop to 70% and a cap of £2,187.50. For August and September it will be lowering again to 60% and a cap of £1,875.
For employers NI and pension contributions are required throughout regardless of changes.
Two more grants will be coming your way, a fourth in April and a fifth at the end of July, although more conditions will apply.
The fourth grant is again 80% of three months average profits, this can now include data from 2019/20 but capped at £7,500.
The fifth grant will be similar to the fourth for those with a turnover drop of 30% or more can claim 80% of three months profits. If the drop in turnover has been hit less than 30% then you can receive 30%. Think they like the number 30 guess it keeps it simple. Both levels of the this grant is capped at £2,850.
Lowered VAT rates
For tourism and hospitality rates will stay at 5% until the 30 of September 2021 and will only rise to 12.5% until 31 March 2022.
Recovery Loan Scheme
Loans will be government guaranteed up to 80% of the finance for loans up to £10 million. This launches on April 6th and finishes on the 31st of December.
If you business was non-essential and closed due to COVID-19 and trading on 1st of April 2021 then you can apply for this grant.
Leisure and hospitality can receive up to £18,000 while non essential retail can receive up to £6,000.
Business Rates Relief
Relief, if eligible, will remain at 100% till the 30th of June 2021 after this it will drop to 66% until 31st of March 2022.
If you are a businesses that opted to deferred their VAT payments due between 20 March and 30 June 2020, and found yourself unable to pay by 31 March 2021, do not despair.
You still have the option of joining HMRC’s new scheme allowing you to pay the deferred VAT over a longer period. The new VAT deferral payment scheme opened on 23 February and will not close until 21 June 2021.
Under this scheme, you can arrange to pay any outstanding deferred VAT in equal instalments without incurring interest or penalties. The advice here is to register as soon as possible as the number of instalments can be between two and 10, depending on when you join the scheme.
To benefit from 10 instalments, you must join the scheme by 21st April 2021. For later joining dates:-
You may opt for fewer instalments if you prefer. The first payment is due at the time of joining, with a direct debit set up required for subsequent payments. All instalments must be paid by 31 March 2022.
How to join
You have to opt in to the new scheme yourself, an agent is not able to do this for you and it requires a direct debit to be set up. You need to register using your Government Gateway account, which will need to be created you don’t already have one. Before joining, a you must:
- Be up to date with its VAT returns;
- Correct errors on VAT returns as soon as possible;
- Make sure you know how much VAT was originally deferred, and how much is still outstanding if you have made any payment in the meantime;
- Decide on the number of instalments to pay; and
- Be able to make the first instalment.
If a business is unable to use the online service or pay by direct debit, then they should contact the COVID-19 helpline on 0800 024 1222. You can start the process of joining the scheme using this link.