Self-employment Income Support Scheme:

What is it?

It’s a taxable grant which will be 80% of the average profits from the tax years (where applicable):

· 2016/2017

· 2017/2018

· 2018/2019

The average: Total trading profit for the 3 tax years (where applicable) divided by 3 (where applicable), divided by 12 to calculate a monthly amount.

A maximum payment of £2,500 per month for 3 months will be paid directly into your bank account, in one instalment.

Who can apply?

1) Self-employed individuals

2) Members of a partnership

Who:

· Submitted a Self-Assessment tax return for tax year 2018-19

· Traded in tax year 2019-20

· Are trading when you apply, or would be except for COVID-19

· Intend to continue to trade in the tax year 2020-21

· Have lost trading/partnership trading profits due to COVID-19

Subject to:

· Self-employed trading profits < £50,000 and more than half of your income comes from self-employment. 

Determined by at least one of the following conditions being true:

· having trading profits in 2018-19 < £50,000 and these profits constitute more than half of your total taxable income

· having average trading profits in 2016-17, 2017-18, and 2018-19 < £50,000 and these profits constitute more than half of your average taxable income in the same period

Note: If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.

If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020.

HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020.

How to apply?

· You cannot apply for this scheme yet.

· HMRC will contact you if you are eligible and will invite you to apply online

· Once HMRC has received your claim they will contact you to tell you how much you will get.

If you claim tax credits you’ll need to include the grant in your claim as income.

When will it be paid?

Payments are expected to be paid in June 2020.

Coronavirus Job Retention Scheme:

What is it?

· Support to continue paying part of employees’ salary for those that would otherwise have been laid off during this crisis

· Applies to employees who have been asked to stop working, but who are being kept on the pay roll, otherwise known as ‘furloughed workers’.

· Covers the cost of wages backdated to 1 March and is initially open for 3 months, but will be extended if necessary.

· HMRC will reimburse 80% of wages, up to £2,500 per month. 

Who can apply?

Any UK organisation with employees can apply, including:

· Businesses

· Charities

· Recruitment agencies (agency workers paid through PAYE)

· Public authorities

UK employers with a PAYE scheme created and started on 28 February 2020, can claim: 

· Monthly wage costs 

· Employer National Insurance contributions

· Minimum automatic enrolment employer pension contributions of 3% of income above the lower limit of qualifying earnings (£512 per month until 5th April and £520 per month from 6th April 2020 onwards).

When will it be paid?

The online service to claim is expected to be available by the end of April 2020. You can submit one claim at least every 3 weeks, which is the minimum length an employee can be furloughed for. Claims can be backdated until the 1 March if applicable.

The detail if you need it:

Employees you can claim for

Furloughed employees on PAYE payroll on 28 February 2020 including: 

· full-time employees

· part-time employees

· employees on agency contracts

· employees on flexible or zero-hour contracts

· employees made redundant since 28 February 2020, if they are rehired by their employer

To be eligible:

· an employee can not undertake work for or on behalf of the organisation, including providing services or generating revenue. 

· the employee’s wage will be subject to usual income tax and other deductions.

· employees on agency contracts can not work

· an employee working, but on reduced hours, or for reduced pay, will not be eligible

· employers should discuss with their staff and make any changes to the employment contract by agreement 

· employers should write to their employee confirming that they have been furloughed and keep a record of this communication

· employees hired after 28 February 2020 cannot be furloughed

· all employees do not need to be placed on furlough

If your employee is on unpaid leave

Employees on unpaid leave cannot be furloughed, unless they were placed on unpaid leave after 28 February.

If your employee is on Statutory Sick Pay

Employees on sick leave or self-isolating should get Statutory Sick Pay, but can be furloughed after this.

Employees who are shielding in line with public health guidance can be placed on furlough.

If your employee has more than one job

If your employee has more than one employer they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually.

If your employee does volunteer work or training

A furloughed employee can take part in volunteer work or training, as long as it does not provide services to or generate revenue for, or on behalf of your organisation.

However, if workers are required to for example, complete online training courses whilst they are furloughed, then they must be paid at least the NLW/NMW for the time spent training, even if this is more than the 80% of their wage that will be subsidised.

If your employee is on Maternity Leave, contractual adoption pay, paternity pay or shared parental pay

Individuals who are on or plan to take Maternity Leave must take at least 2 weeks off work (4 weeks if they work in a factory or workshop) immediately following the birth of their baby. This is a health and safety requirement. In practice, most women start their Maternity Leave before they give birth.

If your employee is eligible for Statutory Maternity Pay (SMP) or Maternity Allowance, the normal rules apply, and they are entitled to claim up to 39 weeks of statutory pay or allowance.

Employees who qualify for SMP, will still be eligible for 90% of their average weekly earnings in the first 6 weeks, followed by 33 weeks of pay paid at 90% of their average weekly earnings or the statutory flat rate (whichever is lower). The statutory flat rate is currently £148.68 a week, rising to £151.20 a week from April 2020.

If you offer enhanced (earnings related) contractual pay to women on Maternity Leave, this is included as wage costs that you can claim through the scheme.

The same principles apply where your employee qualifies for contractual adoption, paternity or shared parental pay.

Work out what you can claim:

Full time and part time employees

For full time and part time salaried employees, the employee’s actual salary before tax, as of 28 February should be used to calculate the 80%. Fees, commission and bonuses should not be included.

Employees whose pay varies

If the employee has been employed (or engaged by an employment business) for a full twelve months prior to the claim, you can claim for the higher of either:

· the same month’s earning from the previous year

· average monthly earnings from the 2019-20 tax year

If the employee has been employed for less than a year, you can claim for an average of their monthly earnings since they started work.

If the employee only started in February 2020, use a pro-rata for their earnings so far to claim.

Once you’ve worked out how much of an employee’s salary you can claim for, you must then work out the amount of Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions you are entitled to claim.

What you’ll need to make a claim

Employers should discuss with their staff and make any changes to the employment contract by agreement. Employers may need to seek legal advice on the process. If sufficient numbers of staff are involved, it may be necessary to engage collective consultation processes to procure agreement to changes to terms of employment.

To claim, you will need:

· your ePAYE reference number

· the number of employees being furloughed

· the claim period (start and end date)

· amount claimed (per the minimum length of furloughing of 3 weeks)

· your bank account number and sort code

· your contact name

· your phone number

You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim.

What to do after you’ve claimed

Once HMRC have received your claim and you are eligible for the grant, they will pay it via BACS payment to a UK bank account.

You should make your claim in accordance with actual payroll amounts at the point at which you run your payroll or in advance of an imminent payroll.

You must pay the employee all the grant you receive for their gross pay, no fees can be charged from the money that is granted. You can choose to top up the employee’s salary, but you do not have to.

When the government ends the scheme

When the government ends the scheme, you must make a decision, depending on your circumstances, as to whether employees can return to their duties. If not, it may be necessary to consider termination of employment (redundancy).

Employees that have been furloughed

Employees that have been furloughed have the same rights as they did previously. That includes Statutory Sick Pay entitlement, maternity rights, other parental rights, rights against unfair dismissal and to redundancy payments.

Once the scheme has been closed by the government, HMRC will continue to process remaining claims before terminating the scheme.

Income tax and Employee National Insurance

Wages of furloughed employees will be subject to Income Tax and National Insurance as usual. Employees will also pay automatic enrolment contributions on qualifying earnings, unless they have chosen to opt-out or to cease saving into a workplace pension scheme.

Employers will be liable to pay Employer National Insurance contributions on wages paid, as well as automatic enrolment contributions on qualifying earnings unless an employee has opted out or has ceased saving into a workplace pension scheme.

Tax Treatment of the Coronavirus Job Retention Grant

Payments received by a business under the scheme are made to offset these deductible revenue costs. They must therefore be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes, in accordance with normal principles.

Businesses can deduct employment costs as normal when calculating taxable profits for Income Tax and Corporation Tax purposes.

Deferral of VAT payments

What is it?

UK VAT registered businesses with a VAT payment due between 20 March 2020 and 30 June 2020 can be deferred to on or before 31 March 2021

· It does not cover VAT MOSS payments

· HMRC will not charge interest or penalties on any amount deferred 

· VAT Returns still need to be submitted to HMRC on time

· HMRC will continue to process VAT reclaims and refunds

· You do not need to tell HMRC that you are deferring your VAT payment.

· If you normally pay by Direct Debit you should contact your bank to cancel your Direct Debit or cancel online if you’re registered for online banking.

· VAT payments due following the end of the deferral period will have to be paid as normal

Deferral of Income Tax payments

What is it?

Income Tax Self-Assessment, payments due on the 31 July 2020 can be deferred until 31 January 2021

Who is eligible?

· Anyone due to pay a second self-assessment payment on account on 31 July 

· You do not need to be self-employed

· The deferment is optional

How to apply?

· This is an automatic offer with no applications required

· No penalties or interest for late payment will be charged

Support for businesses who are paying sick pay to employees

What is it?

· Legislation to allow small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19 will be brought forward

· The refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19

Who is eligible?

· all UK based businesses

· employers with fewer than 250 employees employed as of 28 February 2020

How to apply?

· employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19

· employers should maintain records of staff absences and payments of SSP

· employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website

· eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force

· the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible 

When will it be paid?

· A rebate scheme is being developed

· Further details will be provided once the legislation has been passed.

  

Business rates holiday for retail, hospitality and leisure businesses

What is it?

A business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.

Who is eligible?

· your business is based in England

· your business is in the retail, hospitality and/or leisure sector

· business with occupied properties that are wholly or mainly being used:

• as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
• for assembly and  leisure
• for hospitality, as hotels, guest & boarding premises or self-catering accommodation

How to apply?

· no action is required

· local authorities may have to reissue bills. They will do this as soon as possible.

Cash grants for retail, hospitality and leisure businesses

What is it?

· The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.

· Businesses in these sectors with a property that has a rateable value of up to £15,000 may be eligible for a grant of £10,000.

· Businesses in these sectors with a property that has a rateable value of between £15,000 and less than £51,000 may be eligible for a grant of £25,000.

Who is eligible?

· your business is based in England

· your business is in the retail, hospitality or leisure sector

· your business has a rateable value of under £51,000

· businesses with  occupied properties that are wholly or mainly being used:

· as shops, restaurants, cafes, drinking establishments, cinemas and live music venues

· for assembly and leisure

·  as hotels, guest and boarding premises and self-catering accommodation

How to apply?

· no action is required

· local authorities will write to you if you are eligible for this grant

· Any enquiries on eligibility, should be directed to the relevant local authority

Support for nursery businesses that pay business rates

What is it?

A business rates holiday for nurseries in England for the 2020 to 2021 tax year.

Who is eligible?

· your business is based in England

· business with properties that are:

• occupied by      providers on Ofsted’s Early Years Register
• wholly or mainly      used for the provision of the Early Years Foundation Stage

How to apply?

· no action is required

· local authorities may have to reissue bills. They will do this as soon as possible.

Support for businesses that pay little or no business rates

What is it?

· Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief. 

· This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

Who is eligible?

• your business is      based in England
• you are a business      that occupies property
• you are receiving      small business rate relief or rural rate relief as of 11 March

How to apply?

· no action is required

· local authorities will write to you if you are eligible for this grant

· Any enquiries on eligibility, should be directed to the relevant local authority

.

Support for businesses through the Coronavirus Business Interruption Loan Scheme

What is it?

· The temporary Coronavirus Business Interruption Loan Scheme supports SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years.

· The government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.

· The government will provide lenders with a guarantee of 80% on each loan (subject to pre-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The scheme will be delivered through commercial lenders, backed by the government-owned British Business Bank.

· There are 40 accredited lenders able to offer the scheme, including all the major banks.

Who is eligible?

• your business is UK based with turnover of no more than £45 million per year
• your business meets the other British Business Bank eligibility criteria

How to apply?

• The scheme is now open for applications. All major banks are offering this scheme
• To apply, you should talk to your bank or one of the 40 accredited finance providers (not the British Business Bank) as soon as possible, to discuss your business plan. You can find out the latest on the best ways to contact them via their websites. Please note that branches may currently be shut down to enable social distancing
• The full rules of the scheme and the list of accredited lenders are available on the British Business Bank website
• If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow