COVID-19

As part of our commitment to you and your business we are doing our utmost to keep you updated on the government's latest announcements and advice for business. Please keep checking this page for information and resources to help you during these difficult times

Please note: This page covers announcements made from 1 March 2021

For December to February 2021 click here

For September to November 2020 click here

For June to August 2020 click here

For March to May 2020 click here

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17 June - HMRC outlines plans to recover fraudulent furlough funds

HMRC has announced that it will recover over £1bn in fraudulently claimed furlough cash over the next two years.

UK employers have claimed more than £60bn in furlough funds since the introduction of the Coronavirus Job Retention Scheme (CJRS) in March 2020. The CJRS was extended in the 2021 Budget until 30 September. 

Data published by the Office for National Statistics (ONS) recently revealed that workers in the hospitality sector were most likely to still be on furlough. At peak use of the CJRS, 91% of pub and bar staff were furloughed.  

HMRC stated that it intends to launch a handful of criminal investigations into suspected cases of serious CJRS fraud.

15 June -Four week delay to final easing of restrictions

The government has announced that current restrictions to minimise the risk of catching or spreading coronavirus will remain in place until 19 July.

However, more than 30 people will be able to attend weddings, receptions, and commemorative events including wakes from 21 June. The number of people able to attend such events will be determined by the number that can be safely accommodated in the venue with social distancing in place.

The proposed extension will be reviewed to see if action can be taken two weeks sooner on 5 July.

8 June - Bounce Back Loan Scheme (BBLS) repayments due for many small businesses

The BBLS helped to support businesses affected by the pandemic, and permitted firms to apply for a minimum of £2,000, up to a maximum of £50,000, or 25% of business turnover, with the government paying the interest for the first 12 months.

Many businesses have asked banks for more time to repay their BBLS loans. Some of these businesses have opted to extend the loan term. However, for those firms who have stuck to the original terms, they are required to begin repaying after the 12-month payment holiday. 

Businesses can choose to use the government's Pay as You Grow initiative, which gives firms the option to extend the length of their loan from six to ten years; make interest-only payments for six months; or pause repayments entirely for up to six months.

2 June - Fifth SEISS grant details announced 

HMRC has confirmed the fifth self-employment income support scheme (SEISS) grant will be available from the end of July. It will cover the period May to September 2021.

The amount of the first grant will be determined by how much turnover has been reduced in the 2020-21 tax year. Where turnover has fallen by at least 30% the grant will be worth 80% of three month's average trading profits, capped at £7,500. However, where turnover has fallen by less than 30%, the grant will be worth 30£ of three month's average trading profits, capped at £ 2,850. 

The grant will be made as a single payment and is taxable. Guidance for claiming will be available by the end of June 2021.

To be eligible, individuals must have traded in tax year 2019-20 and submitted their tax return on or before 2 March 2021. Trading profits must be no more than £50,000 and must account for at least 50% of your income.

24 May - Deadline looms for joining VAT Deferral Scheme 

A reminder for businesses that deferred VAT payments last year - the online portal for the HMRC VAT deferral scheme closes on 21 June 2021 if they want to spread the cost by paying in monthly instalments.  

Under the scheme businesses had until 31 March 2021 to pay this deferred VAT or they could go online from 23 February to set up a new payment scheme and pay by monthly instalments.

17 May - Covid expected to cost Britain £372bn

According to the National Audit Ofice, the government’s bill for tackling Covid-19 has risen by £100bn since the start of 2021 and now stands at £372bn, .

The NAO’s cost tracker found that almost half the £372bn had been earmarked for support for businesses, including spending on the coronavirus job retention scheme and bounce-back loans. Health and social care has been the next largest item of expenditure, with the cost of the test-and-trace and vaccine programmes put at £97bn.

Support for individuals, mainly through the self-employment income support scheme, is estimated to cost £55bn, and support for other public services and emergency responses to cost £65bn. The rest of the money, £3.5bn, is being spent on other support and operational expenditure.

The NAO said that according to available data, £172bn of the budgeted £372bn had already been spent. The remainder includes £92bn of government-guaranteed loans, of which the latest estimates suggest £26bn will eventually be written off.

6 May - HMRC sets out penalty regime for SEISS abuse

An overclaimed SEISS grant includes any amount of grant which the self-employed was not entitled to receive or was more than the amount HMRC said the applicant was entitled to when the claim was made.

Overpayments must be notified to HMRC within 90 days of receipt of an SEISS grant.

The HMRC guidance states: ‘If you knew you were not entitled to your grant and did not tell us in the notification period, the law treats your failure as deliberate and concealed. This means we can charge a penalty of up to 100% on the amount of the SEISS grant that you were not entitled to receive or keep.

‘If you did not know you were not entitled to your grant when you received it, we will only charge you a penalty if you have not repaid the grant by 31 January 2022.’

4 May - Change to the Job Retention Scheme from 1 May 2021

The introduction of a new employee eligibility category which covers those employed as at 2 March 2021 who did not previously qualify for a grant means that for pay periods that start on or after 1 May 2021, employees who were employed on 2 March 2021 can be furloughed,. This is provided the organisation has made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021, notifying a payment of earnings for that employee. 

29 April - Beware of fake HMRC email re SEISS grant four

The email is in a format used by the Government's website and contains convincing use of images and logos, making it particularly easy to fall for. It alerts the recipient that claims for the SEISS grant have now opened for applications and directs them to sign in to HMRC online services.  

The email may come from "support@access.service.gov.uk" and will have "Your HMRC Fourth SEISS Tax Refund Notification" in the subject line.

It instructs the user to “follow step 1 of 3 to have your tax refund credit to your bank account”. The email recipient is then advised to have their passport and driving licence details in order to submit the application. 

Following this, a hyperlink is presented which recipients should obviously not click on.

The email concludes: "Note : For security reason we will record (IP Address, Time and Date) Deliberate Wrong input or flooding with be criminally pursued. 

Aside from the grammatical mistakes, the tell-tale sign that this is a scam is the reference to the grant as a tax refund. As AccountingWEB’s tax editor Rebecca Cave pointed out on Twitter, “SEISS is not a tax refund.”

23 April - Fourth SEISS grants now open for online applications   

The gateway to apply for the fourth SEISS grant is now live on the Government website.

The fourth grant covers the period 1 February to 30 April. For more details and eligibility see 'Claiming the fourth SEISS grant' below. 

Claimants have until 1 June to make their claim and must do this themselves.

21 April - COVID business scam

Businesses are being targeted by scammers sending letters reportedly from a government department telling them that, by law, they need to purchase air purifiers to comply with coronavirus regulations rules. This is not true. If you receive a letter, you can report it online at Action Fraud or by calling 0300 123 2040. 

19 April - VAT reduced rate eligibility

As announced in the Budget (3 March 2021) the 5% VAT rate for hospitality has been extended until 30 September 2021. On 1 October 2021 it will increase to 12.5%, before reverting to the normal 20% rate from 1 April 2022.

As hospitality businesses begin to reopen, we thought it would be useful to provide a reminder of what's eligible for these reduced rates:

  • food and non-alcoholic beverages sold for on-premises consumption, for example in restaurants, cafes and pubs
  • hot takeaway food and hot takeaway non-alcoholic beverages
  • sleeping accommodation in hotels or similar establishments, holiday accommodation, pitch fees for caravans or tents and associated facilities
  • admissions to the following attractions, if they are not already eligible for the 'cultural' VAT exemption: theatres, concerts and cinemas; circuses, fairs, amusement parks and zoos; museums and exhibitions; similar cultural events and facilities.

Note that businesses are not obliged to pass the VAT cut to customers. This means you can keep your gross prices the same and use the tax break to increase profit margins if you feel your prices will still be competitive.

13 April - Claiming the fourth SEISS grant

HMRC will contact (by phone, email, letter or SMS) eligible self employed individuals based on their tax returns in mid April to give a date for making applications for the fourth Self Employed Income Support Scheme grant.

To be eligible self-employed individuals (including members of partnerships) must: 

  • Have submitted their 2019-20 tax return on or before 2 March 2021.
  • Have trading profits that are no more than £50,000 and at least equal to their non-trading income, based on their 2019-20 tax return or an average of relevant tax years between 2016-17 and 2019-20.
  • Declare that they intend to continue to trade and are either:
    - currently trading but are impacted by reduced activity, capacity or demand due to coronavirus, or
    - have traded previously but are temporarily unable to do so due to coronavirus (If they’ve been abroad and have to stay in quarantine or self-isolate, this does not count).
  • Declare that they have a reasonable belief that there will be a significant reduction in their trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus.

The online service to claim the fourth grant will be available from late April 2021 and will close on 1 June 2021.

The grant will be set at 80% of three months’ average trading profits and capped at £7,500.

For the latest information about the fourth grant please see our factsheet (dated 20 April 2021).

9 April - Sole trader losses temporary extension of carry back

To help sole traders and partnerships impacted by the pandemic the government has temporarily increased the extension rules for claiming back or offsetting tax paid.

Normally there is only a one-year carry back available against total income. However, the introduction of the temporary extension means that trade losses can be carried back a further two years, but against trade profits only. This will produce repayments of tax where a currently loss-making business was previously profitable.

The extended carry back can be used for losses for the tax years 2020-21 and 2021-22. For each year there is a cap (£2m) on the amount of loss that can use the extended carry back.

Other options for losses can include setting them against Capital Gains, special rules of cessation of trade and carrying a loss forward against future profits. Let us know if you would like our advice about this.

6 April - Recovery Loan Scheme now open

From today, businesses – ranging from coffee shops and restaurants, to hairdressers and gyms – and can access loans varying in size from £25,000, up to a maximum of £10 million. Invoice and asset finance is available from £1,000. This is in addition to furlough being extended until 30 September, and the New Restart Grants scheme (see below) launched last week. 

The scheme runs until 31 December 2021 and will be administered by the British Business Bank, with loans available through a diverse network of accredited commercial lenders. The government will provide an 80% guarantee for all loans. Interest rates have been capped at 14.99% and are expected to be much lower than that in the vast majority of cases.

The Recovery Loan Scheme can be used as an additional loan on top of support received from the emergency schemes – such as the Bounce Back Loan Scheme and Coronavirus Business Interruption Loan Scheme – put into place last year.

1 April - New grant funding to help reopening businesses

A new £5bn Restart Grants Scheme launched on 1 April will provide one-off grants of up to £6,000 to eligible businesses in the non-essential retail sector. Businesses in the hospitality, accommodation, leisure, personal care and gym sectors, which are reopening later, will be eligible for one-off grants of up to £18,000. The funding will be delivered by local authorities.

Businesses can check their eligibility for the Restart Grants here

29 March - Business Rates Relief boosted by £1.5bn fund 

The government is to extend business rates relief with a £1.5bn fund targeted at those businesses unable to benefit from the current coronavirus support.

Retail, hospitality and leisure businesses have not been paying any rates during the pandemic as part of a 15 month-long relief which runs to the end of June this year. However, many businesses ineligible for reliefs have been appealing for discounts on their bills, arguing that the pandemic represented a 'material change of circumstance' (MCC).

The government says that market-wide economic changes to property values, such as from COVID-19, can only be properly considered at general rates revaluations and it will therefore be legislating to rule out COVID-19-related MCC appeals. Instead, it will provide funding to sectors which have suffered most economically, rather than on the basis of decreases in property values, to ensure the support is provided in the fastest and fairest way possible.

25 March - Insolvency measures extended until 30 June 2021 

The government has extended measures in the Corporate Insolvency and Governance Act to protect businesses during the pandemic. This includes an extension of the suspension of liability for wrongful trading from 30 April 2021 to 30 June 2021 and a respite for those facing winding up petitions with the same extension to end June, while the amendments to the use of moratorium is also extended.

The threat of personal liability arising from wrongful trading for directors who continue to trade a company through the pandemic with the uncertainty that the company may not be able to avoid insolvency in the future has also been temporarily removed.

23 March - National Day of Reflection

The anniversary of the UK going into the first national lockdown is being held today to remember all those who have sadly passed away during the pandemic.

The National Day of Reflection includes a minute's silence at midday (12 noon) and again as night falls at 8pm as the public appear on their doorsteps with candles, torches or lights from their mobiles to shine a beacon of support in these incredibly difficult times.

22 March - Welcome Back Fund to aid recovery

The government has announced a support package for the safe reopening of high streets and seaside resorts.

The £56m Welcome Back Fund will help councils boost tourism, improve green spaces and provide more outdoor seating areas, markets and food stall pop-ups for people to meet up safely. Pubs, restaurants and listed buildings will also be given more flexibility to use their land, including erecting marquees in pub gardens for the whole summer rather than the 28 days currently permitted.

The funding has been divided up across the country with the east of England set to receive £6.1m, the south east £9.6m and south west £5.5m for example.

15 March - Further details on Recovery Loan Scheme

The scheme is due to launch on 6 April 2021 and will replace the existing government guaranteed schemes which have supported £73bn of lending to date and will close at the end of this month. The finance can be used for any legitimate business purpose, including growth and investment.

Term loans and overdrafts will be available between £25,001 and £10m, and invoice finance and asset finance between £1,000 and £10m, per business. The terms of the loans will be up to six year for term loans and asset finance facilities, and three years for overdrafts and invoice finance facilities. The government guarantees 80% of the finance to the lender to ensure they continue to have the confidence to lend to businesses. 

Details on how to apply are expected in due course. Subject to review, the scheme will remain open until 31 December 2021.

12 March - SEISS grant claims for new traders

HMRC is sending SEISS verification letters to self employed traders who started trading after 5 April 2019 asking them to confirm their identity and prove they have been trading before they can claim the fourth SEISS grant. HMRC says the pre-verification check is necessary to reduce fraudulent claims.

Those new traders can claim support under the SEISS for the first time if they submitted their 2019/20 tax return by midnight on 2 March 2021. The fourth and fifth SEISS grants will be wholly or partly based on profits reported in the 2019/20 return.

The letter will tell customers to expect a telephone call from HMRC on the number they provided on their tax return. (If the customer provided an agent’s number on their return, HMRC will ask the agent to pass on the customer’s number as they need to speak to the customer directly).

5 March - Government invests £100m in Covid fraud taskforce

The Taxpayer Protection Taskforce will seek to crack down on criminals who attempt to fraudulently claim money via government COVID-19 financial support schemes, in particular the Coronavirus Job Retention Scheme (CJRS) and the Self-employment Income Support Scheme (SEISS). HMRC also intends to raise awareness of enforcement action in order to deter fraud and will 'significantly strengthen' law enforcement for Bounce Back loans.

3 March - The Budget: More financial help for businesses

The Chancellor's Budget on 3 March set out a three point plan to protect businesses through the pandemic, fix the public finances and begin building the future economy.

Measures include:

  • Extension to the Coronavirus Job Retention Scheme until the end of September 2021
  • The Self-Employment Income Support Scheme will continue to September 2021 with a fourth and fifth grant
  • VAT reduced rate of 5% for tourism and hospitality until 30 September 2021
  • A new Recovery Loan Scheme to support businesses once the existing Covid-19 scheme closes

Download our special report of the key announcements and watch the accompanying video on our Budget 2021 page.

 

For earlier government announcements and updates please see COVID-19 pages:

 

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REF: MC/NL/1.2