Today, as part of the Budget, the UK Government has announced further support for employers and the self-employed.
Extension to the Coronavirus Job Retention Scheme
Self-Employment Income Support Scheme – future grants confirmed
VAT deferral
Extension to the Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme (CJRS) has been extended until the end of September 2021.
The UK Government will continue to pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, up to the end of June 2021.
For periods in July, CJRS grants will cover 70% of employees’ usual wages for the hours not worked, up to a cap of £2,187.50. In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875.
Employers will need to continue to pay their furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month. This means, for periods between July and September, employers will need to fund the difference between this and the CJRS grants themselves. Employers can also top up wages above the 80% if they wish, but they are not required to do so.
Employers must also continue to pay the associated Employer National Insurance contributions and pension contributions on subsidised furlough pay from their own funds.
CJRS eligibility from May
For periods from 1 May 2021 onwards, employers will be able to claim for eligible employees who were on employers’ PAYE payrolls on 2 March 2021. This means they must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021, notifying HMRC of earnings for that employee.
You do not need to have benefitted from the scheme before to make a claim, as long as you meet the eligibility criteria.
For more information on the extension to the scheme and the support available, search 'Job Retention Scheme' on GOV.UK.
February CJRS claims
You can now submit claims for periods in February. These must be made by Monday 15 March.
Employers can claim before, during or after they process their payroll. If you can, it’s best to make a claim once you’re sure of the exact number of hours your employees worked so you don’t have to amend your claim later.
Check if your employees are eligible and work out how much you can claim using our CJRS calculator and examples, by searching 'Job Retention Scheme' on GOV.UK.
What you need to do now
If you haven’t submitted claim for January but believe that you have a reasonable excuse for missing the deadline of 15 February, check if you can make a late claim by searching 'claim for wages' on GOV.UK.
Submit any claims for February no later than Monday 15 March.
Keep records that support the amount of CJRS grants you claim, in case HMRC need to check them.
Self-Employment Income Support Scheme – future grants confirmed
The UK Government has today announced that the Self-Employment Income Support Scheme (SEISS) will continue until September with a fourth and fifth grant.
The fourth and fifth grants will take into account submitted 2019-20 tax returns. This means your clients may be able to claim, even if they were not eligible for previous grants. You must have submitted your 2019-20 tax returns by 2 March 2021 to be eligible for the fourth and fifth grants.
Fourth SEISS grant
The UK Government will pay a taxable grant which is calculated based on 80% of three months’ average trading profits, paid out in a single payment and capped at £7,500 in total. The value of the grant is based on an average of your trading profits for up to four tax years between 2016 to 2020, where available.
The grant will be available to claim from late April. As with previous grants, trading profits must be no more than £50,000 and at least equal to non-trading income in order to claim the fourth SEISS grant.
Eligibility for the fourth SEISS grant will also depend on whether you experienced a significant financial impact from coronavirus between February 2021 and April 2021.
As the calculation now takes into account the tax year 2019-20, your clients who previously claimed SEISS grants may receive grants that are higher or lower in value than any previous SEISS payments they received.
Further details of the scheme can be found by searching 'Self Employed Income Support Scheme' on GOV.UK.
How you can claim the fourth SEISS grant
From mid-April, you will be given their personal claim date by HMRC which confirms the earliest date you can claim. HMRC is inviting customers to claim on different days to ensure the system is fast and easy to use.
The online claims service for the fourth grant will be live from late April.
You must make your claim for the fourth grant between your personal claim date and 31 May 2021 at the latest.
You will need to make an honest assessment that there has been a significant reduction in trading profits due to reduced demand or your inability to trade, and to keep appropriate records as evidence.
Fifth grant
The UK Government has also announced that there will be a fifth and final SEISS grant covering May to September. The amount of the fifth grant will be determined by how much your turnover has been reduced.
The grant will be worth 80% of three months’ average trading profits, capped at £7,500, for those with a higher reduction in turnover (30% or more).
For those with a lower reduction in turnover, of less than 30%, then the grant will be worth 30% of three months average trading profits.
You will be able to claim the fifth grant from late July if you are eligible. Further details will be provided on the fifth grant in due course by HMRC.
What support is there for those who are not eligible?
Those who are not eligible for SEISS may be eligible for other elements of the financial support provided by the UK Government. This includes Bounce Back Loans, tax deferrals, rental support, increased levels of Universal Credit, mortgage holidays, and other business support grants.
More information on further support can be found by searching on GOV.UK.
VAT deferral
If you deferred VAT payments due between 20 March and 30 June 2020 and still have payments to make, then you should pay by 31 March if you can.
If you cannot afford to pay by 31 March this year, you can now join the online VAT deferral new payment scheme to spread the payment.
The new scheme lets customers pay your deferred VAT in equal monthly instalments, interest free. You can spread payment across a number of months, depending when you join – the earlier you join, the more months you have to spread the payments across:
11 instalments if you join by 19 March
10 instalments if you join by 21 April
9 instalments if you join by 19 May
8 instalments if you join by 21 June.
You can join the scheme quickly and simply online, without the need to call HMRC. To find out more information, including the things customers need to do before joining, go to GOV.UK and search 'VAT deferred'.
The online service will close on 21 June 2021 – if you wants to join the scheme online, you must do so before this date.
If you are on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme, You’ll be able to join the new payment scheme later in March.
If you have a Time to Pay arrangement already in place for your deferred VAT, you cannot use the online scheme. If you want to amend your Time to Pay arrangement, you should contact HMRC to do this.