Financial support for businesses during Coronavirus

Financial support for businesses during Coronavirus

Find out what financial support you can get for your business.
Published 3 April 2020
Last updated 12 November 2020
From: HMRC.gov.uk

National restrictions began in England on 5 November. Find out about the new restrictions and what you can and cannot do. A full range of business support measures have been made available to UK businesses.

This page help businesses find out how to access the support that has been made available, who is eligible, when the schemes open and how to apply.

Find out about business support

The Coronavirus Job Retention Scheme (CJRS), which was due to end on 31‌ October, will now be extended, with the UK government paying 80% of wages for the hours furloughed employees do not work, up to a cap of £2,500 for periods from 1 November.

You will need to pay all employer National Insurance Contributions (NICs) and pension contributions. You can choose to top up your furloughed employees’ wages beyond the 80% paid by the UK government for hours not worked, but you are not required to do so. There will be no gap in support between the previously announced end date of CJRS and this extension.

For more information, go to GOV‌.UK and search ‘furlough scheme extended’.

On 24 September, Rishi Sunak, the Chancellor unveiled the government’s plan to protect jobs and support businesses over the coming months.
– central to plan is a new Job Support Scheme and extension of Self Employment Income Support Scheme
– and over one million businesses will get flexibilities to help pay back loans

Support for workers

–  A new Job Support Scheme will be introduced from 1 November to protect viable jobs in businesses who are facing lower demand over the winter months due to coronavirus.  Under the six month long scheme, aimed at keeping employees attached to the workforce, the government will contribute towards the wages of those who are working fewer than normal hours due to decreased demand.  Employers will continue to pay the wages of staff for the hours they work – but the government and the employer will each pay one third of their equivalent salary for hours not worked.  This means employees who can only go back to work on shorter time will still be paid two thirds of the hours for those hours they cannot work.

• In order to support only viable jobs, employees must be working at least 33% of their usual hours. The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.
• The Job Support Scheme will be open to businesses across the UK even if they have not previously used the furlough scheme, with further guidance being published in due course.
• It is designed to sit alongside the Jobs Retention Bonus and could be worth over 60% of average wages of workers who have been furloughed – and are kept on until the start of February 2021. Businesses can benefit from both schemes in order to help protect jobs.
• In addition, the Government is continuing its support for millions of self-employed individuals by extending the Self Employment Income Support Scheme Grant (SEISS). An initial taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus. The lump sum will cover three months’ worth of profits for the period from November to the end of January next year. This is worth 20% of average monthly profits, up to a total of £1,875.

Tax cuts and deferrals

• The government also announced it will extend the temporary 15% VAT cut for tourism and hospitality sectors to the end of March next year.
• In addition, up to half a million business who deferred their VAT bills will be given more breathing space through the New Payment Scheme, which gives them the option to pay back in smaller instalments, so rather than paying a lump sum in full at the end March next year, they will be able to make 11 smaller interest-free payments during the 2021-22 financial year.
• On top of this, around 11 million self-assessment taxpayers will be able to benefit from a separate additional 12-month extension from HMRC on the “Time to Pay” self-service facility, meaning payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.

Giving businesses flexibility to pay back loans

– The burden will be lifted on more than a million businesses who took out a Bounce Back Loan through a new Pay as You Grow flexible repayment system which will provide flexibility for firms repaying a Bounce Back Loan.
– This includes extending the length of the loan from six years to ten, cutting monthly repayments by nearly half. Interest-only periods of up to six months and payment holidays will also be available.
– We also intend to give Coronavirus Business Interruption Loan Scheme lenders the ability to extend the length of loans from a maximum of six years to ten years if it will help businesses to repay the loan.
– In addition, it was announced that the government will be extending applications for the coronavirus loan schemes, continuing to help over a million businesses until the end of November, meaning more businesses will be able to benefit from the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Loan Scheme and the Future Fund. This change aligns all the end dates of these schemes.

HMRC  – From 1 July, you are able to flexibly furlough eligible employees – what you need to do

– pay your employees’ wages for the time they’re in work and apply for a job retention scheme grant to cover the remainder of their usual hours for which they are still furloughed
– claim for further furlough periods as needed

What to do if you have over-claimed

– If you have over-claimed, you will be asked when making your next claim whether you need to adjust the amount to take account of a previous error and your new claim amount will be reduced to reflect it. You do not need to take any other action but should keep a record of the adjustment for six years.  If you’ve made an error in a previous claim, but do not plan to submit further claims, just contact HMRC to let them know; they will advise how you can repay the money.

Claiming for 100 or more employees?

– If you are claiming for 100 or more employees, search for ‘download a template through the Coronavirus Job Retention Scheme’ on GOV.UK.

Updated guidance on military reservists

– Guidance now confirms you can furlough an employee who is a military reservist returning to work following a period of mobilisation ending after 10 July – even if they haven’t been furloughed before.

Paying your employer National Insurance Contributions (NICs) and pension contributions

– A condition of the CJRS grant is that you pay the related PAYE tax, NICs and pension contributions due on wages and from 1 August employers are no longer able to claim for NICs and pension contributions.  If you think you may struggle to pay your PAYE tax and/or NICs from August, please contact HMRC as soon as possible, before they start action to recover unpaid debt as they may be able to give you time to pay.

More details about the extension to the Coronavirus Job Retention Scheme (CJRS)

Flexible furloughing

– From 1‌‌July 2020, you have had the flexibility of bringing previously furloughed employees back to work part-time.  You decide the hours and shift patterns that your employees will work on their return and you are responsible for paying their wages in full while working. This means that employees can work as much or as little as your business needs, with no minimum time that you can furlough staff for.
– Any working hours arrangement that you agree with your employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, you will need to report and claim for a minimum period of a week. You can choose to make claims for longer periods such as on monthly or two weekly cycles if you prefer. You will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.
–  If your employees are unable to return to work, or you do not have work for them to do, they can remain on furlough and you can continue to claim the grant for their full hours under the existing rules.

Employer contributions

– From August, the government grant provided through the job retention scheme became tapered.  In October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500
– the cap on the furlough grant will be proportional to the hours not worked.
– If you are a smaller employer, some or all of your employer NIC bills will be covered by the Employment.

Parents on statutory maternity and paternity leave who return to work in the coming months are eligible for the government’s furlough scheme even after the 10 June cut-off date

– The Coronavirus Job Retention Scheme (CJRS) has been extended until October, with new flexibilities introduced from 1 July allowing furloughed employees to return to work part-time.
– The government previously announced that to enable the introduction of part-time furloughing, and support those already furloughed back to work, claims from July onwards are restricted to employers who previously furloughed employees.  However, the Treasury confirmed that parents on statutory maternity and paternity leave who return to work after a long period of absence will be permitted to be furloughed.  This applies to people on adoption leave, shared parental leave, and parental bereavement leave, but only in circumstances where they work for an employer who has previously furloughed employees.

Self-Employment Income Support Scheme

If your business has been adversely affected by COVID-19 (coronavirus), eligible self-employed people will be able to claim a second and final SEISS grant in August; this will be a taxable grant worth 70% of their average monthly trading profits for three months, paid out in a single instalment and capped at £6,570 in total.

The eligibility criteria for the second grant is the same as for the first grant. People do not need to have claimed the first grant to claim the second grant.

It’s really important to note that the eligible individual must make the claim themselves. The process is simple: the calculation of the amount of self-employment support individuals is done for them.

Look after yourselves, stay safe and best wishes to you all, from the team at Douglass Grange

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