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We take a look at the current and future Coronavirus support from HMRC, as the pandemic continues to impact businesses and self-employed individuals in the UK.

Coronavirus Job Retention Scheme (CJRS)

Business support for employers is coming to an end on 31st October 2020. The last day you can claim for periods ending on or before that date is 30th November 2020.

Since August 31st, employers have been contributing towards topping up their employee’s wages if they are on furlough.

For October, HMRC’s policy is:

“the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.”

Any claims made for this period must be in relation to employees previously furloughed before 30th June 2020 that were claimed for on or before 31st July 2020.

Job Retention Bonus

The bonus is worth £1,000 per furloughed employee. The employee must have been included in a CJRS claim and must be continuously employed until 31st January 2021.

The criteria to claim are:

  • The employee must have received taxable pay in the three tax months:
    • 6th November to 5th December
    • 6th December to 5th January
    • 6th January to 5th February
  • The employee must have received at least £1,560 in taxable pay across those three months
    • Tax-free allowances or adjustments cannot be deducted or added to the taxable pay
  • The full payment submission for each of the above months has been submitted to HMRC on time and is accurate
    • The payment submission must be submitted under RTI

This business support scheme is validated ahead of payments using RTI data.

Self Employment Income Support Scheme

The second grant is available now. It is worth 70% of the average monthly trading profits and is paid in a single installment to cover three months of profits. It is capped at £6,570 in total.

HMRC works out eligibility and invites applications. For the second grant, claims must be made on or before 19th October 2020.

Recently, an extension to the SEISS has been announced which will provide two further payments to cover the period between November 2020 and April 2021. For the first three months from November to January, the grant is worth 20% of the average monthly trading profits and is capped at £1,875 in total.

The second period of the extension will be announced by HMRC.

Deferral of Self-Assessment payment on account

The options to defer the Self-Assessment second payment on account was available for those who found it difficult to make the payment on 31st July 2020. The payment is deferred until 31st January 2021 without incurring interest or penalties.

It’s important to note that other payments may be due on 31st January 2021:

  • Any balancing payment for 2019/20
  • The first payment on account for 2020/21

Self-employed individuals can speak with HMRC to set up a Time to Pay installment arrangement if they have other overdue tax, or a budget payment plan.

Coronavirus support for VAT payments

The VAT payments deferral scheme ended on 30th June 2020, however, a recent update from the Chancellor has given businesses who deferred VAT to spread their payment into smaller amounts over a longer period.

That means that instead of paying the full amount by 31st March 2021, they can now make interest free payments up until 31st March 2022. This scheme is on an opt-in basis.

VAT reduction for hospitality and tourism

The VAT reduction is valid from 15th July 2020 until 31st March 2021. During this period, the rate of VAT on certain supplies in the hospitality industry, along with hotel and holiday accommodation and admissions to some attractions, will be reduced to 5%.

Other support

Full information on current and future Coronavirus support from HMRC is available on gov.uk.

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