The budget of 3 March 2021 included the announcement of a further £65 billion of government spending on the extension of existing financial support measures, as well as the introduction of some new schemes.
These new pledges for financial support are expected to take the anticipated total cost across the various government backed Covid support measures to £352 billion in this financial year, with public sector debt expected to reach a peak of 97.1% of GDP by 2023/24 before gradually improving.
Coronavirus Job Retention Scheme (CJRS)
The CJRS, which was due to end in April 2021, has now been extended to the end of September 2021.
- The scheme will provide the same level of support as under the current arrangements until June 2021;
- From July, the government will introduce the requirement for an employer contribution towards the cost of unworked hours of 10% in July;
- This will increase to 20% in August and 20% in September; and
- Employees will continue to receive 80% of their current salary, capped at £2,500 per month, for hours not worked.
How to claim
- There are now monthly deadlines for making a claim, meaning that claims may need to be submitted earlier than in previous months, see below for claims deadlines for the current scheme;
- Claims should be made online at GOV.UK. Click here and use the ‘Claim now’ button.
- All claims require a Government Gateway ID and password; and
- HMRC will check the validity of a claim and then pay the grant by BACS within six working days.
Monthly claims deadlines
14 June: final date to submit claims for May
14 July: final date to submit claims for June
16 August: final date to submit claims for July
14 September: final date to submit claims for August
14 October: final date to submit claims for September.
Coronavirus Self-Employment Income Support Scheme (SEISS)
The Coronavirus Self-Employment Income Support Scheme (SEISS) delivers financial support to those that are self-employed or a member of a partnership in the UK and have lost income due to Coronavirus (COVID-19).
The fifth Self-Employment Income Support Scheme (SEISS) grant will be available from the end of July, covering the period May to September 2021.
This grant is different from those that preceded it as the amount of the grant is determined by how much turnover has been reduced in the year April 2020 to April 2021.
Guidance for claiming the grant will be available by the end of June 2021.
The grant is taxable and will be paid out in a single instalment.
The amount of the fifth grant will be determined by how much turnover has been reduced in the year April 2020 to April 2021.
- For a turnover reduction of 30% or more, the grant will be 80% of three months’ average trading profits, up to a cap of £7,500;
- For a turnover reduction of less than 30%, the grant will be 30% of three months’ average trading profits, up to a cap of £2,850.
The Restart Grant scheme is intended to offer support for those businesses in the non-essential retail, hospitality, leisure, personal care and accommodation sectors, helping them to re-open safely as Covid-19 restrictions are lifted.
It is down to the discretion of the local authority to determine eligibility for this scheme.
Where eligibility criteria are met, businesses will receive a one-off grant of up to
- £6,000 for those within the non-essential retail sector; and
- £18,000 for those within the hospitality, accommodation, leisure, personal care and gym sectors.
In most cases, the amount of grant is based on the rateable value of the business premises as shown on the rating list on 1 April 2021. Rateable value bands and associated grant funding available can be found on local authority websites.
How to apply
The Restart Grant is available through local authorities, with application information detailed on their individual websites.
Local Restrictions Support Grant
The Government has provided funding to local authorities, under the Local Restrictions Support Grant (LRSG), for businesses required to close as a result of national restrictions.
This grant is an extension of the Local Restrictions Support Grant schemes for businesses that were required to close in November and during Tier 4 restrictions.
The amount of grant payable is based on the business property’s rateable value as shown in the business rates list at the start of the national lockdown on 5 January 2021.
Additional Restrictions Grant
The Additional Restrictions Grant (ARG) is available to those businesses that are not covered by other grant schemes, such as the Local Restriction Support Grant, but have still been severely impacted by the national lockdown restrictions.
This is a discretionary grant and local authorities determine the way in which the ARG is distributed to businesses and the associated eligibility criteria.
Recovery Loan Scheme
This new loan scheme will enable businesses, of any size, to continue to access loans through a series of accredited lenders.
The scheme is now open for applications and will run until 31 December 2021, subject to review.
Lenders are able to provide finance as either a term loan, overdraft, invoice finance or asset finance.
- The maximum amount of a facility provided is £10m per business (£30m per group);
- Minimum facility sizes vary, starting at £1,000 for asset and invoice finance and £25,001 for term loans and overdrafts;
- The term length for loans and asset finance is from three months up to six years;
- The term length for overdrafts and invoice finance is from three months up to three years;
- Businesses must cover the costs of interest payments and any fees associated with the RLS facility; and
- The annual effective rate of interest and upfront and other fees cannot be more than 14.99%.
How to apply
The RLS is available through a number of British Business Bank accredited lenders.
Businesses should approach the lender themselves, through their website. The amount of finance offered varies between lenders and not every lender can provide all of the different types of finance available through the scheme.
Help To Grow
This programme from the Government offers small and medium-sized businesses access to new skills and digital expertise. The purpose of the Scheme is to help small and medium sized businesses across the UK learn new skills, reach new customers and boost profits.
The scheme is divided into two parts – Help To Grow: Digital and Help To Grow: Management.
Help To Grow: Management will give 30,000 businesses the opportunity to take part in a 12 week-programme delivered by business schools across the UK.
- Fifty hours of tuition will provide strategic skills including financial management, innovation and digital adoption; and
- The programme is 90% subsidised by the Government, with participants charged £750.
Who is it for?
UK businesses from any sector that have been operating for more than one year, with between 5 to 249 employees are eligible.
The participant should be a decision maker or member of the senior management team within the business e.g. Chief Executive, Finance Director etc.
Charities are not eligible.
Help To Grow: Digital will enable businesses to access free advice, via an online hub, on the technologies that can help save time and money, whilst encouraging growth.
- Eligible businesses will be given vouchers, entitling them to 50% off the purchase of approved software;
- It is expected that this will be software to help build customer relationships, optimise online sales and manage finances digitally;
- The voucher is expected to be available to UK businesses that have been trading for more than one year and are purchasing discounted software for the first time; and
- Full details of eligibility will be published this summer.
Who is it for?
All businesses will be able to benefit from free online advice on the platform.
The voucher is expected to be available to UK business that
- Employ between 5 and 249 employees and are registered at Companies House;
- Have been trading for more than 12 months; and
- Are purchasing the discounted software for the first time.
Business Rates Holiday
The existing business rates holiday for businesses in the retail, hospitality, and leisure sectors, was due to end on 31 March 2021. This has now been extended for three months until the end of June 2021.
For the following nine months to 31 March 2022, rates will be discounted by two thirds, up to a limit of £2 million per business for properties that were required to be closed on 5 January 2021, with a lower cap for businesses that have been able to stay open.
How to apply
There is no action required as this will be administered by your local authority.
Self Assessment Payment Plan
If you owe Self Assessment tax and your bill is less than £30,000 you may be able to pay in monthly instalments.
- This arrangement enables the cost of your tax bill to be spread into monthly payments, up to a 12-month period;
- The online service can be used once your 2019-20 tax return has been completed;
- The online Time to Pay facility was previously available for paying tax liabilities up to £10,000; and
- From 1 October 2020, the threshold to use the online service has been increased to £30,000.
VAT Reduced Rate
The Chancellor announced a very welcome extension to the temporary reduced rate of VAT on supplies of accommodation, food and beverage services excluding alcohol, and specified attractions.
- The extension of the 5% rate is for 6 months from 1 April 2021 to 30 September 2021; and
- This is followed by a 12.5% rate until 31 March 2022.
VAT Deferral Payment Scheme
The VAT deferral new payment scheme is now open and will close on 21 June 2021.
The scheme enables VAT payments deferred between 20 March and 30 June 2020 to be paid in equal instalments, interest free.
Businesses may be charged a 5% penalty or interest if they do not pay in full or make an arrangement to pay by 30 June 2021.
If the deferred VAT was not paid in full by 31 March 2021, a late penalty or interest charge may still be avoided by either:
- Joining the new payment scheme by 21 June 2021; or
- Paying the deferred VAT in full by 30 June 2021
The VAT deferral scheme enables payment to be made in equal instalments, these can be between two and eleven instalments, depending on when the scheme is joined.
Joining dates and the maximum number of payment instalments available
- By 21 April 2021: ten payment instalments;
- By 19 May 2021: nine payment instalments; and
- By 21 June 2021: eight payment instalments.
How to apply
Prior to joining the scheme, users must
- Create their own Government Gateway account;
- Submit any outstanding VAT returns from the last four years;
- Correct errors on VAT returns as soon as possible; and
- Have clarity of the amount owed, including the amount originally deferred and how much has already been paid.
The Coronavirus Statutory Sick Pay Rebate Scheme
Employers with fewer than 250 employees will continue to be able to reclaim up to two weeks’ of eligible SSP costs per employee from the Government.
Eligible sickness absence includes time taken off due to being ill with COVID-19 or having to self-isolate or shield because of it. This scheme is a temporary COVID-19 measure intended to support employers whilst levels of sickness absence are high and was first introduced on 13 March 2020.
Mortgage payment holidays have been extended beyond the 31 October 2020.
If a borrower has been negatively impacted by coronavirus, and has not yet had a mortgage holiday, they will be eligible for a six month payment holiday.
For those borrowers that have already started a mortgage payment holiday, there will be the option to increase to six months, without this being recorded on their credit file.
Stamp Duty Land Tax (SDLT)
On 8 July 2020, the SDLT nil rate band threshold was increased temporarily to £500,000 until 31 March 2021.
The government has now extended this increased nil rate band threshold at £500,000 for three months until 30 June 2021. It will then be held at £250,000 until 30 September 2021, before returning to its permanent level of £125,000 from 1 October 2021.
Mortgage Guarantee Scheme
The Government has announced a new Mortgage Guarantee Scheme to increase the availability of 95% loan to value mortgage products. The scheme will provide a guarantee to lenders across the UK who offer mortgages to people with a deposit of just 5% on homes with a value of up to £600,000.
Under the scheme, all buyers will have the opportunity to fix their initial mortgage rate for at least five years should they wish to.
The scheme is intended as a temporary measure and will be open for new mortgage applications from April 2021 to December 2022.
- Businesses that have cover for both pandemics and government-ordered closure should be covered; however
- Please contact your insurance provider to check the specific terms and conditions of your policy.
Universal Credit (UC)
Please be aware of fraudulent schemes
You will access Government support schemes only through GOV.UK. If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.
Should you have any queries on the support measures outlined on this page then please either get in touch with your usual M+A Partners contact or email email@example.com and we will be happy to help.