COVID-19

Overview of Government Support in response to coronavirus

Chancellor of the Exchequer Rishi Sunak announced a range of measures to help businesses see out the COVID-19 pandemic. 

We understand that this is a confusing time for many people, so we’ve outlined some of the key measures for you.

Overview of Government Support in response to coronavirus

Quick links: 

      1. Self Assessment tax return payments deferred for a year
      2. VAT payments deferred for a quarter
      3. Coronavirus job retention scheme
      4. Universal Credit for the self-employed
      5. Coronavirus business interruption loan 
      6. IR35 delayed
      7. Grants for businesses with properties

 

1. Self Assessment tax return payments deferred for a year

For any self-employed people who were due to make a payment on account this year, you’ll now have until 31st January 2021. 

Tax payments were originally due in July, so it gives a little breathing space for those people who were due to pay their tax bills.

The extension of the deadline to Self Assessment payments is an automatic one – you don’t need to apply in order to qualify.

No late penalties or interest fees will be charged during this deferral period. 

 

2. VAT payments deferred for a quarter

The next quarter of VAT payments has been deferred to help businesses keep people in work.

In short: If you were due to pay over your VAT between 20th March 2020 and 30th June 2020, you now won’t need to. 

You must still file your VAT returns on time because HMRC will still want to collect it when the extension is over.

According to government guidance, you’ll still need to pay the VAT you owe on or before 31st March 2021. 

Just like the Self Assessment payment deferral, the VAT deferral is an automatic extension. You don't need to do anything to qualify. 

Chancellor Sunak’s announcement is expected to create a £30 billion cash injection into the economy and to help businesses keep paying their staff. 

 

3. Coronavirus Job Retention Scheme

The Coronavirus Job Retention scheme has been introduced as a temporary measure for all UK employers to help prevent a potentially huge increase in unemployment in the UK.

Employers can claim 80% of an employee’s usual wage, up to a maximum of £2,500, whilst they are furloughed.

The associated Employer National Insurance contributions and the minimum automatic enrolment employer pension contributions can also be claimed.

The scheme is available for at least three months, starting from 1st March, 2020.

You can read more about the Coronavirus Job Retention Scheme here

4. Universal Credit for the self-employed

If you’re self-employed, you’ll now be able to claim up to £94.25 through employment status allowance (ESA) and/or Universal Credit. 

All self-employed work is considered when it comes to Universal Credit, but in order to be exempt from the job search responsibilities that could be placed on you, you’ll need to show that your ‘gainfully self-employed’. 

To be gainfully self-employed, you must show that: 

  • The majority of your work comes from self-employment
  • You can demonstrate that you have self-employed earnings
  • Your work is organised, developed and you are expecting regular profits

You’ll also need to give evidence of the following:

  • Your Self Assessment tax return 
  • Your Unique Taxpayer Reference (UTR) 
  • A list of customers, suppliers, receipts and invoices
  • Any marketing materials you’ve created before

Read more about self-employment and universal credit here

 

5. Coronavirus Business Interruption Loan Scheme

The government also announced a temporary Coronavirus Business Interruption Loan Scheme to support any small to medium-sized businesses to access to a range of extra facilities.

These include loans, overdrafts, invoice financing and asset financing up to the value of £5 million, for up to 6 years. 

To cover the first 12 months of interest payments or lender fees, the government will also introduce a ‘Business Interruption Payment’. This is to help smaller businesses by giving them no upfront costs and lower initial repayments.

You can access the scheme so long as your business is based in the UK, has less than £45m turnover each year and meets the British Business Bank eligibility criteria

 

6. IR35 delay

The off-payroll working rules, otherwise known in the UK as IR35, had been due to be rolled out in April 2020. 

In order to alleviate the growing pressure on businesses during the coronavirus pandemic, these tax reforms have been placed on hold for a year. 

Chief Secretary to the Treasury Steve Barclay said: “The government is postponing the reforms to the off-payroll working rules, IR35, from 6 April 2020 to 6 April 2021.”

Read more about the IR35 delays here.

 

7. Grants for businesses with properties

Businesses that qualify for small business rate relief or rural rate relief will be able to access government grants of up to £10,000; larger businesses can access up to £25,000.

Any grants only apply to businesses based in England and will be distributed directly via local authorities. There are similar schemes in Northern Ireland, Wales and Scotland. 

 

VAT Domestic Reverse Charge Delayed until March 21

16 June 2020

A 12-month delay has been announced by the Government for the UK-wide rollout of the new VAT domestic reverse charge within the construction industry. The reverse charge had been set to come into force on October 1st, 2020.


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