The government has issued new measures designed to support businesses from 1 November 2020.
Although the full details are not yet known, the headlines are that assistance will come in the form of:
- support for businesses to bring people back to work and save jobs with a new Job Support Scheme
- an extension to the Self-Employed Income Support Scheme (SEISS)
- new payment schemes to ease the burden of paying deferred Self-Assessment tax liabilities
Further summarised information in relation to these three measures are as follows:
Job Support Scheme
The new Job Support Scheme will be introduced from 1 November 2020 for employees who work a minimum of 33% of their usual hours. For every hour not worked the employer and the government will each pay one third of the employee’s usual pay with the government contribution will be capped at £697.92 per month.
Employees will receive at least 77% of their pay unless capped, and they may not be on notice of redundancy. Employers will be reimbursed in arrears for the government contribution. The scheme will run for six months from 1 November 2020, and as with the current furlough scheme it is open to all employers with a UK bank account and a UK PAYE scheme.
All Small and Medium-Sized Enterprises (SMEs) will be eligible (assumed to be the Companies Act definition of size), whereas large businesses will be required to demonstrate that their business has been adversely affected by COVID-19. Details as to how this can be demonstrated are not yet known, but the government statement expects that large employers will not be making capital distributions (such as dividends), whilst using the scheme.
The SEISS Grant will be limited to self-employed individuals who are currently eligible for the SEISS and are actively continuing to trade, but who are facing reduced demand due to COVID-19. The scheme will last for six months, from November 2020 to April 2021.
As with the previous arrangements under SEISS, it will be in the form of two taxable grants. The first grant will cover a three-month period from the start of November until the end of January and equates to 20% of average monthly trading profits. This will be paid out in a single instalment covering three months’ worth of profits and capped at £1,875 in total. The second grant will cover a three-month period from the start of February until the end of April, however, the quantum is unknown and will be reviewed by the Government in due course.
Enhanced Time to Pay for Self-Assessment taxpayers
The government will give the self-employed and other taxpayers who pay under self-assessment more time to pay taxes falling due in January 2021. This extends the Self-Assessment deferral provided in relation to payments due on 31 July 2020. Taxpayers with up to £30,000 of Self-Assessment liabilities due, will be able to use HMRC’s self-service Time to Pay facility to secure a plan to pay over an additional 12 months.
This means that Self-Assessment liabilities due, will not need to be paid in full until January 2022. Any Self-Assessment taxpayer not able to pay their tax bill on time, including those who cannot use the online service, can continue to use HMRC’s Time to Pay Self-Assessment helpline to agree a payment plan.
The Mercer & Hole team are here to support you and your business. Please contact us if you have any questions and wish to discuss these new measures further.