Month: November 2020

The Government has confirmed that the Self-Employed Income Support Scheme (SEISS) grant extension will apply for 6 months from 1 November 2020. It will be possible to claim the SEISS grant extension even if no previous claim had been made under the scheme once the eligibility criteria are met.

The self-employed will receive 80% of qualifying average trading profits for the first claim under the extended scheme – November, December and January. This will mean a maximum grant for the three months of £7,500 made available to those who meet the eligibility requirements. The claim window for applying for the grant will open on 30 November 2020.

To be eligible for the scheme, self-employed individuals, including members of partnerships, must meet the following criteria:

• have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
• declare that they intend to continue to trade and either are currently actively trading but are impacted by reduced demand due to coronavirus or were previously trading but are temporarily unable to do so due to coronavirus.

This level of support is based on similar terms and conditions to the support offered to employees. An additional second grant will be made available from 1 February 2021 to 30 April 2021. The level of this second grant amount is subject to review and will be set in due course. The grants are taxable income and also subject to National Insurance contributions.

The Bounce Back Loans scheme was launched in May 2020 to provide financial support to businesses across the UK that are losing revenue and seeing their cashflow disrupted as a result of the COVID-19 pandemic. The scheme allows small businesses to borrow between £2,000 and £50,000 and access the cash in most cases within 24 hours of approval.

The scheme was launched for an initial period of 6 months but has now been extended (together with all the government-backed loan schemes) until 31 January 2021. The loans come with a 100% government guarantee and businesses can apply for a loan of up to 25% of their turnover. The government will also pay the interest on these loans for the first 12 months and no repayments will be due during this time. After 12 months the interest rate will be 2.5% a year.

It is also now possible for businesses to ‘top up’ existing Bounce Back Loans should they need additional funding. This applies to businesses who borrowed less than their maximum loan allowance. Businesses will be required to fill out a separate application form, reaffirming the declarations made in the original application form and will only be able to make one top-up application.

The scheme is available through a network of 28 British Business Bank accredited lenders including the five largest banks. Banks will not perform any forward-looking test of business viability or other complex eligibility criteria for these loans. Businesses can instead apply for a loan online using a short and simple online form.
 

An updated Treasury Direction under sections 71 and 76 of the Coronavirus Act 2020 concerning the extended Coronavirus Job Retention Scheme (CJRS) was published on 12 November 2020. The CJRS was due to come to an end on 31 October 2020 but has now been extended until 31 March 2021.

Effective 1 November 2020, employees will receive up to 80% of their salary for hours not worked. Any government contribution will be capped at £2,500 per month per employee. There will be a review date of the scheme in January 2021 which may see employers taking on an increased financial contribution from 1 February 2021, if the economic and health outlook show signs of improvement. A further Treasury Direction is expected to be published confirming any changes to the rules in early 2021.

There are a number of important changes to the way the revised scheme works that started to come into effect from 1 November 2020. This includes the following:

• From 1 December 2020, HMRC will publish information listing employers who have used the scheme. This will include indicative details of the amount of money claimed (but not the exact amount). This information must be removed by HMRC 12 months after the date it was first published. An exception may be made where publication of this information could result in serious risk of violence or intimidation.
• During November 2020, employers will be able to claim for employees who are serving a notice period. However, no CJRS claim can be made in respect of an employee that is serving notice between 1 December 2020 and 31 January 2021.
• A furlough agreement needs to be in place before the start of the relevant claim period but can be subsequently varied. There was an opportunity to backdate agreements for the period from 1 to 13 November 2020. 

If your business acquires goods or sells goods to the EU, and you have no import/export trade with non-EU countries you probably have no experience of dealing with the raft of red tape involved in clearing goods through customs and settling any duties or VAT payable.

Affected businesses will need to abide by the new regulatory situation from 1 January 2021. Only a matter of weeks from now. They will need to employ someone or appoint a customs agency to undertake the necessary chores.

For most businesses, the latter option may be preferred. The Government has anticipated this need and there is a list of UK customs agents published on the GOV.UK website.

If you transport goods on behalf of EU or UK businesses, back and forth across the English Channel, the regulations your drivers will need to comply with from 1 January 2021 are significant.

Government has again stepped up and provided detailed guidance. You can Google and download a PDF copy of their Transporting goods between the UK and EU in a no-deal Brexit: guidance for hauliers on the GOV.UK website.

The outcome of current trade talks with the EU is still uncertain. However, whatever the outcome of these talks, UK firms involved in the acquisition and/or transport of goods to and from the EU will need to abide by the new regulations imposed as a result of our exit from the European Union.

Many of the business disruption grants that have become available in the last few weeks are being distributed by local authorities. They include support for:

• Businesses obliged to close due to local or national lockdown and
• Businesses that have been severely affected by local or national restrictions but are still trading.

Central government is funding these grants but responsibility for distributing the grants rests with local authorities in England. The regions are also receiving additional funds from central government which again will be distributed locally.

In all cases, business owners should be aware that:

• Local Authorities (LA) have the freedom to determine the precise eligibility criteria for these grants.
• Government does expect that funding will be targeted at: hospitality, bed and breakfast and leisure businesses.

LAs will also be expected to use their local knowledge when selecting recipients for grant funding.

If your business is affected, and if you have received no funding or clarification if you are eligible for funding, you may be advised to call your LA asap.

It is entirely possible that affected businesses will fall through any filtering process. In which case, lifting your hand to request a slice of available funding may be a wise move.