Coronavirus job Retention Scheme (CJRS) and Furlough

• The Coronavirus job retention scheme (CJRS) has been extended until June 2021 – paying 80% of employee wages up to a cap of £2,500 per month.
• For payments made in July the government will continue to pay employee wages up to 70% with a cap of £2,187.50 per month.
• For periods in July and September the government will continue to pay furlough amounts up to 60% of an employee’s usual wages up to a cap of £1875 per month.
• This means that for the periods ending after June 2021 (July and September) employers will be required to fund the difference between the CJRS grant and the amount paid themselves.
• Employers can top up employees’ wages above the 80% rate if they wish but are not required to do so.
• Employers are required to pay the associated Employers National insurance contributions and relevant pensions contributions from their own funds.

Self- Employment Income support scheme (SEISS)- Future grants

• The UK government has announced that the SEISS will continue until September with a fourth and fifth grant available to clients who are eligible.
• The fourth and fifth grants will take into account the 2019-20 submitted tax returns.
This means that clients who were previously not eligible for the grant may now become eligible for the fourth and fifth grant. The client must have submitted their tax return by 2nd March 2021 to be eligible for the fourth and fifth grant.
• The fourth grant covers the three-month period February -April where up to 80% of average trading profits to a maximum of £7,500. Claims for the fourth grant can begin in April 2021.
• The amount of grant available is based on trading profits averaged over four tax years between 2016-2020 where these are available.
• As per the previous grant, it is only available to individuals whose trading profits are not more than £50,000 and at least equal to non-trading income in order to be eligible to claim the fourth SEISS grant.
• In order to claim the fourth SEISS grant the client must have suffered a significant financial impact from coronavirus between February 2021- April 2021.
• From mid-April clients will receive their personal claim date detailing when they earliest date they can submit their claim. This claim must be submitted between the client’s personal claim date and the 31st May 2021 at the latest.
• The fifth grant is the final SEISS grant covering May to July 2021. The amount a client will receive is dependant on how much client’s turnover has been reduced and impacted by Coronavirus.
• The grant will be 80% of three months average of trading profits for the client capped at £7,500. It depends on loss of income clients whose turnover has fallen by at least 30% can apply for a grant up to 80% of profits. Those whose income has fallen by less than 30% can apply for 30% of trading profits capped at £2,850.
• Claims can begin in late July and further details of how the fifth grant will operate will become available.

Restart grants

• The government will provide ‘Restart Grants’ in England of up to £6,000 per premises for non-essential retail businesses and up to £18,000 per premises for hospitality, accommodation, leisure, personal care and gym businesses, giving them cash certainty they need to plan ahead and safely relaunch trading.

Taxes

VAT Deferral

• If you deferred VAT payments due between March and 30 June 2020- they should be paid in full by the 31 March if possible. If this cannot be met then client’s have the option to join the online VAT deferral new payment scheme to help spread the payments out. By joining this scheme clients can spread their VAT liability across several months interest free to lessen the burden.
• The online service for VAT deferral scheme closes on 21st June 2021 so clients must join the scheme before this date.

Personal tax

• The Personal allowance has been frozen at £12,570 to come in force in April which will then stay the same until April 2026.
• The higher rate threshold for income tax is being upped to £50,270 from 2022-2026 meaning many more individuals will benefit from a reduction in tax liabilities.
• The tax threshold for National insurance contributions is also being lifted to £9,500.
• The national living wage has been increased to £8.91 per hour meaning many workers will have a pay increase that will not be penalised by increases in income tax and national insurance.
• No changes implemented in capital gains tax or inheritance tax.

Business

• Corporation tax to rise to 25% in April 2023 from 19%. A small profits rate for companies earning profits less than £50,000 will be implemented meaning they can still pay corporation tax at 19%.
• There will also be a taper rate where businesses earning profits of £250,000 or more will be required to pay the tax at the full rate of 25%.
• Annual investment allowance is to be kept the same at 100% allowance for qualifying plant and machinery in an accounting period up to £200,000 in any one
year.
• Entrepreneur’s lifetime allowance has been reduced from £10m to £1m.
• Business rates relief will continue for another 6-month period where rates will be discounted to 1/3 of the normal charge up to a maximum of £2m for closed businesses.
• The government will continue to provide eligible retail, hospitality and leisure properties in England with 100% business rates relief from 1 April 2021 to 30 June 2021. This will be followed by 66% business rates relief for the period from 1 July 2021 to 31 March 2022, capped at £2 million per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties.
• The loss relief carry back claim for individuals and companies will be extended from 1 year to carry back 3 years temporarily to allow for relief to be received during the difficult trading profit months affected by corona virus.
• From 6 April 2021 the Recovery Loan Scheme will provide lenders with a guarantee of 80% on eligible loans between £25,000 and £10 million to give them confidence in continuing to provide finance to UK businesses. The scheme will be open to all businesses, including those who have already received support under the existing COVID-19 guaranteed loan schemes.

Other

• The government will provide a mortgage guarantee scheme in April 2021 which will affectively allow first time buyers to obtain a mortgage with a 5% deposit on a property up to the value of £600,000. The scheme provides a guarantee to lenders on first time buyer mortgage with a 5% deposit.
• Grants will be available for those companies and businesses who take on trainees and new apprentices.