Last week, the Chancellor announced a raft of new Covid grants, loans and extensions to help businesses on the roadmap out of lockdown, which may be summarised as follows:
Furlough (Coronavirus Job Retention Scheme)
This scheme has now been extended until the end of September 2021. Employees will continue to receive 80% of their wages, with businesses asked to make a contribution of 10% in July and 20% in August and September, towards the hours their staff do not work.
Restart Grant Scheme
This scheme aims to help firms in retail, hospitality, accommodation, leisure and personal care get back on their feet as lockdown ends and they re-open. Non-essential shops are first to open in April and may seek grants of up to £6,000. Full eligibility and details on how to apply are yet to be published but it will be handled by local government. See your local authority website for further details, in due course.
Government Backed Loans
A new Recovery Loan Scheme (RLS) will be launched on the 6 April 2021 and runs until 31 December 2021. It replaces the existing government guaranteed schemes that close at the end of March 2021. See www.gov.uk/guidance/recovery-loan-scheme for further details.
The RLS replaces the Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme, and the Coronavirus Large Business Interruption Loan Scheme. The end date for these schemes had already been extended to the 31 March 2021.
The loan schemes had a 12-month interest-free payment holiday. In February, it was announced that borrowers under the BBLS may now delay all repayments for a further six months. The option to pause repayments will now be available to all from their first repayment, rather than after six repayments have been made. The Pay as You Grow plan will also enable borrowers to extend the length of their loans from six to ten years (reducing monthly repayments by almost half) and make interest-only payments for six months.
The Self Employment Income Support Scheme Grant
More than 600,000 people, many of whom became self-employed in 2019-20, will now be able to claim direct cash grants under the Self-Employment Income Support Scheme (SEISS).The Government has now published details on how to apply for the fourth SEISS grant. The grant will be set at 80% of 3 months’ average trading profits, paid out in a single instalment, capped at £7,500. The fourth grant will take into account 2019 to 2020 tax returns and will be open to those who became self-employed in tax year 2019 to 2020. The rest of the eligibility criteria remain unchanged from the earlier grant schemes.
Payment of VAT due between 20 March and 30 June 2020 had been deferred to help businesses manage cashflow. The amount is now due in full on or before 31 March 2021. There are options available beyond March with the new VAT deferral new payment scheme. The online ‘opt in’ process opened from 23 February up to and including 21 June 2021. So, instead of paying the full amount due by the end of March 2021, businesses can make up to 11 smaller monthly instalments, interest free. All instalments must be paid by the end of March 2022.
Businesses in the retail, hospitality and leisure sectors and early years nurseries in England have not had to pay business rates for the 2020 to 2021 tax year, which was set to end on the 5 April 2021. This has now been extended by a further three months to the end of June, before shifting to a two-thirds discount for the rest of 2021.