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For most, this last year has been one of the most unsettling in our lives. Not only have we had to endure worrying about the health of family and friends, as well as our own, but also many have had severe financial worries. The Government’s communication has not always alleviated this burden, since a lot of it has been confusing and unspecific. This article will outline the help that your business can expect to receive from the government during the second lockdown, and what plans have been put in place in order to protect your livelihood.

Employee Retention Scheme Extended

The key aspects of the Coronavirus Job Retention Scheme (CJRS) will remain the same; furloughed employees will receive 80% of their salary up to a maximum of £2,500. Just as before, businesses will be paid upfront to cover wages costs. There will be a short period where changes to the legal terms of the scheme and updates to the system will have to take place, and businesses will be paid in arrears for that period.

However, the scheme has been altered slightly to make it easier for employers to retain their employees. Now, employers will have more flexibility in deciding whether to furlough their staff full time or on a flexible part-time basis – in other words, it is now easier for an employer to have their staff work part of their hours, and the scheme will pay for the hours an employee misses.

Further, under the extended scheme employers will only be asked to cover National Insurance and employer pension contributions which, for the average claim, accounts for just 5% of total employment costs.

Businesses Forced To Close Will Now Also Be Entitled To Receive Grants

 

In addition, premises forced to close will now be eligible to receive grants of up to £3,000, depending on the size of the business:

  • For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;
  • For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;
  • For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.

These grants will be handed out by local authorities, so if you think you may be eligible you should see what information is available on your local council website.

Also, if you are in the hospitality sector please remember that the reduction of VAT for hospitality and tourism is still in effect. This means that establishments only need to pay 5% VAT on food and drink sold on the premises (alcohol is exempt) or ordered for takeaway. This also applies for admission to tourist attractions, and this initiative will last until 12th of January 2021.

Self-Employed Getting a Boost

 

For self-employed sole traders, the government has announced the Self-Employment Income Support Scheme. The scheme will run for two 3-month periods, the first running from November 2020 to January 2021 and the second from February 2021 to April 2021.

For the first 3 months, the government will provide a taxable grant covering 55% of average monthly trading profits for 3 months. The 55% derives from the fact that the government will pay 80% of profits for November, in order to keep this scheme in line with the Employee Retention Scheme, and then 40% for the two remaining months. This will be capped at £5,160 in total.

The government will review the scheme before the second grant and then reveal the amount for the second instalment of the grant in due course.

If you would like to claim, please be aware that the online service for the next grant will be available from 30 November 2020. Keep an eye on HMRC’s communications, as full details about claiming and applications will be released over the coming weeks.

Conclusion – What You Should Do Now

Hopefully the above information has been helpful. If you need to claim for any of the schemes above you can do so through the Governments website or, in the case of the grant for businesses forced to close, your local council’s website. Please bear in mind that you don’t have to have had used the previous Work Retention Scheme in order to use the new one. If you want more information on how the pandemic has affected VAT and other tax issues, please read our previous post here.

In what ways has your business been affected by the Coronavirus? Let us know in the comments section below, or by sharing this article on social media!

If your small business has been impacted negatively by Coronavirus, please do not suffer in silence – at J&P, helping small businesses is our passion, and we understand that companies across the UK are at risk now more than ever. We are here to support you through the Coronavirus crisis, so please do not hesitate to give us a call on 0161 637 1080 or send an e-mail to enquiries@jpaccountant.com.

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