It has been a busy week or so of updates from the government and as of late last week we have news of further extensions to the different support schemes. We are doing our best to keep up with the announcements and the latest plans seem to have been put in place to ensure more longer term stability.
The Chancellor announced on 5 November that workers across the United Kingdom will benefit from increased support with a five-month extension of the furlough scheme, until March 2021, with employees receiving 80% of their current salary for hours not worked. The furlough scheme was initially extended until 2 December but the government is now going further so that support can be put in place for long enough to help businesses recover and get back on their feet, with some more certainty around the support they will receive.
Under current proposals, there are no employer contributions required to wages for hours not worked. Employers will only be asked to cover National Insurance and employer pension contributions for hours not worked.
This furlough extension will be reviewed in January 2021 to determine whether the economic circumstances are improving enough for employers to be asked to increase contributions.
So, to summarise the key points:
- Eligible employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month.
- Businesses will have flexibility to use the scheme for employees for any amount of time and shift pattern, including furloughing them full-time.
- There will be NO employer contribution to wages for hours not worked. Employers will only be asked to cover National Insurance and Employer pension contributions for hours not worked.
- The extended scheme will operate as the previous scheme did, with businesses being able to claim either shortly before, during or after running payroll. Claims can be made from 8am Wednesday 11 November. Claims made for November must be submitted to HMRC by no later than 14 December 2020. Claims relating to each subsequent month should be submitted by day 14 of the following month, to ensure prompt claims following the end of the month which is the subject of the claim.
- Neither the employer nor the employee needs to have previously claimed or have been claimed for under furlough to make a claim under the extended scheme (if other eligibility criteria are met). An employer can claim for employees who were employed and on their PAYE payroll on 30 October 2020. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
- Employees that were employed and on the payroll on 23 September 2020 (the day before the Job Support Scheme announcement) who were made redundant or stopped working afterwards can be re-employed and claimed for. The employer must have made an RTI submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees.
- HMRC will publish details of employers who make claims from December onwards under the extended scheme. Full details of this will be within the detailed guidance to be published over the next few days.
- Further details on how to claim are now available on gov.uk and full guidance will be published on Tuesday 10 November 2020, which we will provide an update on.
Job Retention Bonus (JRB)
As a result of the extension of the scheme the Job Retention Bonus (JRB) will not be paid in February and the government will redeploy a retention incentive at the appropriate time. The purpose of the JRB was to encourage employers to keep people in work until the end of January, which is now being achieved through the extended furlough scheme.
Self-Employed Support (SEISS)
The Government has also announced that they are increasing the overall level of the SEISS grant to 80% of trading profits, covering November to January for all parts of the UK.
This brings support for the self-employed in line with that to employees through the extended furlough scheme.
It is calculated based on 80% of 3 months’ average trading profits, paid out in a single instalment and capped at £7,500.
HMRC will pay this enhanced grant sooner than planned and in time for Christmas – the window for claiming a grant will open on 30 November 2020, two weeks earlier than previously announced.
The Government has already announced that there will be a fourth SEISS grant covering February to April 2021. The Government will set out further details, including the level of this fourth grant in due course.
Fraudsters are targeting those who might be claiming SEISS grants. To guard against fraud, any emails and SMS messages from HMRC do not include active links. If a taxpayer receives an email or SMS purporting to come from HMRC which includes an active link, that email or SMS is a scam.
Additional Restrictions Grant
The Additional Restrictions Grant is funding for local authorities to support businesses impacted by the period of national lockdown in November to December 2020, due to enforced closure or the inability to provide the usual in-person service. The guidance is currently being revised, following the expansion from local restrictions to national restrictions, but is expected to be available to businesses which pay business rates on their premises. We will have more information on this as soon as the guidance is available (hopefully in the next few days), please get in touch if this is relevant to you.
Details of enhanced time-to-pay for self-assessment bills
As part of his Winter Economy Plan announced on 24 September 2020 the Chancellor announced enhanced payment arrangements for taxpayers who are unable to pay their self-assessment bill that falls due on 31 January 2021.
The enhanced payment arrangements applies to all tax due on that date including:
- Deferred second payment on account for 2019/20 which was originally due on 31 July 2020.
- Balancing payment for 2019/20 due on 31 January 2021.
- First payment on account for 2020/21 due on 31 January 2021.
The amount due can be paid in monthly instalments over a period of up to 12 months.
Taxpayers can set up a payment plan directly online if they meet the following requirements:
- They have no outstanding tax returns (the 2019/20 tax return must have been filed and it must also have been processed by HMRC which can take 72 hours for a return filed online).
- They must have no other tax debts, or HMRC payment plans set up.
- The debt must be between £32 and £30,000.
- The payment plan must be set up no later than 60 days after the due date of a debt i.e., by 1 April 2021. However, to avoid late payment penalties the payment plan must be set up by the trigger date for late payment penalties which is 30 days after the due date, so, by 2 March 2021.
Interest will be applied to any outstanding balance from 1 February 2021. This is a change from the deferral of the second payment on account due in July 2020 on which no interest was charged.
Taxpayers who owe more than £30,000 or need longer than 12 months to pay may still be able to set up a time to pay arrangement by calling the self-assessment payment helpline on 0300 200 3822.
Please get in touch if you have any questions.