General Covid-19 Support Update
Bounce Back Loan Scheme (BBLS)
There have been two recent changes to the BBLS, the government-backed loans of up to £50,000 available to small and medium-sized businesses:
- The scheme has been extended, so applications can be made up to 31 January 2021 [updated 20 December 2020 - applications now extended to 31 March 2021]
- Top-ups are now available; any business that took an initial loan of less than the maximum available to them can now apply (once) for a top-up; note that the cumulative loan is still subject to the overall limit, which is the lesser of £50,000 and 25% of turnover
The BBLS is available to any UK-based business that was established before 1 March 2020 and has been adversely impacted by the coronavirus. Applications are made directly to participating banks, most of whom will only deal with existing customers.
The loans are interest-free for a year and have no capital repayments due in that year. Before the first instalment is due, the lenders will be in touch to explore optional extensions to a 10 year term rather than the standard 6, and to outline further interest-only repayment periods (6 month interest-only periods can be used up to 3 times) and repayment holidays (a 6 month repayment holiday can be used once).
Our original post on the BBLS can be found HERE.
This scheme provides funding where an employer creates a new job for a 16-24 year old who was on Universal Credit. The funding covers 100% of National Minimum Wage (or in some cases the National Living Wage) for 25 hours per week for 6 months, plus National Insurance and pension contributions. Any wage costs on top of this need to be covered by the employer.
The employer also gets a £1,500 payment per job placement for setup costs and "to support the young person develop their employability skills".
Placements can start any time up to December 2021.
The major catch here for small businesses is that an organisation must be creating a minimum of 30 job placements to apply directly. Obviously most small businesses won't be able to manage this but there is an alternative route to accessing the programme via 'Kickstart Gateways' such as Inverness Chamber of Commerce.
Covid-19 Statutory Sick Pay
For general absences due to sickness Statutory Sick Pay (SSP) is not recoverable by the employer but for Covid-19 related absences an exception was made at the start of the pandemic, as per our news post which you can find HERE.
There have been a number of changes to these rules since March. These include details of the claim mechanism, which is similar to that for the CJRS, and changes to eligibility. The eligibility changes are quite frequent and numerous - you can find the up to date information on this on the main gov.uk site HERE.
VAT registered businesses were permitted to defer any VAT return liabilities that fell due in the period from 1 April to 30 June 2020. This included the VAT returns for quarters and months ending on 29 February, 31 March and 30 April. Initially those liabilities were due to be settled on or before 31 March 2021 but these can now be spread over smaller payments up to March 2022, interest free.
There will be an opt-in mechanism for the instalment arrangement but details have not been made available yet. We will update this page when we know more.
Self-Assessment Tax deferments
All July 2020 self-assessment payments due by individuals, whether self-employed or not, were eligible for an automatic deferral to 31 January 2021, with no interest or penalties arising. For those who took advantage of this (it wasn't compulsory) the July liabilities have been rolled up into the amounts already due on 31 January on your tax account. The figures may of course have changed if your 2019/20 tax return has now been submitted as the original liabilities would have been projections based on 2018/19.
There has always been the option to make a 'time to pay' arrangement (TTP) to spread tax liabilities over longer periods and the government have made plans to make this easier for liabilities due in January 2021. If your debt at that point will be less than £30,000 you will be able to make a TTP arrangement online via your tax account, spreading the payments for up to 12 months. Online TTP arrangements can only be made if the debt is less than 60 days overdue, your tax returns are up to date, and you have no other payment plans or debts with HMRC. If you don't qualify for an online plan, or your debt is over £30,000, any TTP arrangements will need to be made by calling HMRC on 0300 200 3822
Note that interest will run on TTP arrangements but that penalties for what would normally be late payment will not be applied so long as a TTP arrangement is adhered to.
The Scottish "Strategic Framework Business Fund"
The above arrangements are all UK-wide. There have however been a number of more localised programmes during the pandemic, the latest of which for Scotland is the Strategic Framework Business Fund. Businesses currently experiencing closures or restrictions enforced by law can apply for the following grants:
- Temporary Closure Grant. These are £2,000 or £3,000 depending on the business's rateable value and are payable where a business is required to close by law.
- Business Restrictions Grant. These are £1,400 or £2,100 depending on the business's rateable value and are payable "if your business can remain open but is specifically required to modify its operations by law, for example having to close earlier than normal or demand for your products or services has been reduced because of the pandemic".
Claims are made through local authority websites and grants will be paid every 4 weeks (in arrears) as long as localised restrictions last.