New Job Support Scheme

This new scheme will start on 1 November 2020, replacing the Coronavirus Job Retention Scheme, and enables employers to continue to receive government contributions towards employee wages.

At the time of writing, key government guidance on the scheme hasn't yet been published – we plan to give a detailed overview of the scheme in next month's bulletin, once it is. We also intend to make our new Job Support Scheme letter available on 3 November, which will help you agree the necessary changes to your employees' contracts and allow you to claim from the scheme.

Insolvency measures extended

Existing measures originally introduced in June have now been extended from their original 30 September end date:

  • Restrictions on statutory demands forming the basis of a winding-up petition now last until 31 December.
  • Companies facing winding-up petitions can get moratoriums until 30 March 2021.

Income tax and VAT deferrals extended

If you were due to make a second self-assessment payment on account on 31 July 2020, you previously had until 31 January 2021 to pay. However, if you owe £30,000 or less and you can't pay by then, you can get an extra 12-month extension to pay it off in smaller instalments. If you want to make use of this extension you need to set up a Time to Pay arrangement online. No interest or penalties will be charged.

If you can't make due VAT payments before the existing extended deadline of 31 March 2021, you can make 11 smaller, interest-free instalments during the 2021-22 financial year. Unlike the previous extension, however, you'll need to opt-in to take advantage.

Loan extension options

Coronavirus Business Interruption Loan Scheme loans can be extended from 6 years to 10 years. The same goes for Bounce Back Loans, for which interest-only repayment periods and repayment holidays will also be available.

Self-Employment Income Support Scheme (SEISS) Grant Extension

This is a UK-wide scheme to provide support for the self-employed (including members of partnerships). The original SEISS scheme was split into 2 grants. This has now been extended to offer 2 further grants that will last for 6 months from November 2020 until April 2021. The grants will be paid in 2 lump sums each covering a period of 3 months. To qualify you must declare that:

  • you're currently actively trading and that you intend to continue to do so; and
  • in the qualifying period of the extended grant you are claiming, you were impacted by a reduced demand as a result of COVID-19. The qualifying period for the first grant is between 1 November and the date of your claim.

You must also have been eligible for the original SEISS grant (although you don't need to have actually claimed it). This means you must:

  • be a self-employed individual or a member of a partnership;
  • have submitted your self-assessment tax return for the tax year 2018-2019;
  • have traded in the tax year 2019-2020; and
  • have trading profits of £50,000 or less, which are more than half of your total income for either the tax year 2018-2019 or the average of the tax years from 2016-2017 to 2018-2019 (inclusive).

Different criteria apply if you have loans covered by the loan charge or you're a farmer claiming farmers' averaging relief.

The 1st grant will be paid in a single taxable instalment to cover 20% of your average monthly trading profits over the period 1 November 2020 to 31 January 2021, but it is capped at £1,875.

The 2nd grant will also be paid in a single taxable instalment to cover the 3-month period from 1 February 2021 to 30 April 2021, but the level of support isn't yet known.