New Financial Business Support Measures

The Chancellor Rishi Sunak announced on Wednesday, 3 March 2021 the new financial support arrangements for UK businesses who have been adversely affected due to COVID-19.

Coronavirus Job Retention Scheme (CJRS)

The CJRS has now been extended until 30 September 2021.  The level of grant available to employers under this scheme will remain the same until 30 June 2021.

From 1 July 2021, the level of grant will reduce, requiring participating firms to contribute towards their furloughed employees’ wages.  To continue to be eligible for the scheme, employers must continue to pay their employees 80% of their wages, up to a cap of £2,500 per month for the time they spend on furlough (proportionate to the hours not worked in the case of flexible furlough).


For periods ending on or before 30 April 2021, you can claim for employees who were employed on 30 October 2020, as long as you have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee. You do not need to have previously claimed for an employee before the 30 October 2020 to claim for periods from 1 November 2020.

For periods starting on or after 1 May 2021, you can claim for employees who were employed on or before 2 March 2021, as long as you have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021, notifying a payment of earnings for that employee.

Self-Employment Income Support Scheme (SEISS) Fourth Grant

There will now be the opportunity for self-employed individuals to apply for the SEISS Fourth Grant between late April and 31 May 2021.

To be eligible for the Fourth Grant you must:

  • be either a self-employed individual or a member of a partnership
  • have had trading profits not in excess of £50,000 and at least equal to you non-trading income according to your 2019/20 Self Assessment tax return
  • have been trading in both 2019/20 and 2020/21 tax years
  • have submitted your 2019/20 tax return by 2 March 2021
  • be currently trading, but are impacted by reduced demand due to coronavirus or have been trading but are temporarily unable to do so due to coronavirus
  • declare that you intend to continue to trade, or that you reasonably believe there will be a significant reduction in your trading profits due to reduced business activity due to coronavirus

The Fourth Grant will provide a taxable grant calculated at 80% of three months’ average trading profits.  It will be paid out in a single instalment and will be capped at £7,500 in total.

The HMRC SEISS claims portal will be available from late April 2021 until 31 May 2021.  HMRC will contact eligible individuals to issue each person with a personal claim date, which is the date they will be able to make their specific claim from.

HMRC will release further advice about how to claim in due course.

 

Recovery Loan Scheme

A new loan scheme has been announced to support access to finance for UK businesses as they grow and recover from disruption caused by COVID-19.  The scheme launches on 6 April 2021 and is open until 31 December 2021, subject to review.

The Recovery Loan Scheme ensures that businesses of any size can continue to access loans and other kinds of finance up to £10 million per business once the existing COVID-19 loan schemes end.

Types of available finance:

  • Term loans and overdrafts between £25,001 and £10 million per business
  • Invoice finance and asset finance between £1,000 and £10 million per business

Finance terms are up to six years for term loans and asset finance facilities.  For overdrafts and invoice finance facilities, terms will be up to three years.

The government guarantees 80% of the finance to the lender to ensure they continue to have the confidence to lend to businesses.  Loans will be available through a network of accredited lenders, whose names will be made public in due course.

The finance secured can be used for any legitimate business purpose, including growth and investment.

 

VAT Deferral Extension and Flexible Repayment terms

Businesses who have arranged to defer payment of their VAT bills until the end of March 2021 can now take advantage of more favourable repayment terms under the New Payment Scheme.  This scheme gives the option to pay back a deferred tax bill in 11 smaller interest-free payments during the 2021/22 financial year.

The government has announced that it will extend the temporary 15% VAT cut for the tourism and hospitality sectors until the end of March 2021.

In addition, self-assessment taxpayers with liability for up to £30,000 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.

  • Previous information on funding opportunities that have been available throughout COVID-19 can be found here.