We are sharing this update from ACCA, our professional body, for the interest of clients and contacts. The content is (c) ACCA
A look at some of the various support measures and what is changing
As the country moves into the final stages of the lockdown measures, some of the government’s financial support measures are reducing whilst there are other measures which will hopefully have a longer impact on businesses with recovery. Here’s a roundup of some measures that members should be aware of in order to assist clients through this next phase.
The Coronavirus Job Retention Scheme (CJRS)
From 1 July, the level of the grant will be reduced, but employers will be obliged to top up employees’ wages to 80% of their normal salary.
From 1 July, CJRS covers 70% of an employee’s wages (cap: £2,187.50) and employers will pay NICs and pension contributions and must cover the 10% not covered by the scheme.
From 1 August until the end of September, CJRS covers 60% of and employee’s wages (cap: £1,875) and employers will pay NICs and pension contributions and must cover the 20% not covered by the scheme.
The table below shows the level of government contribution available in the coming months, the required employer contribution and the amount that the employee receives per month where the employee is furloughed 100% of the time.
Wage caps are proportional to the hours not worked.
| Monthly amounts | July | August | September |
| Government contribution: wages for hours not worked | 70% up to £2,187.50 | 60% up to £1,875 | 60% up to £1,875 |
| Employer contribution: wages for hours not worked | 10% up to £312.50 | 20% up to £625 | 20% up to £625 |
| For hours not worked, employee receives | 80% up to £2,500 | 80% up to £2,500 | 80% up to £2,500 |
| Employer national insurance and pension contributions | Yes | Yes | Yes |
You can continue to choose to top up your employees’ wages above the 80% total and £2,500 cap for the hours not worked at your own expense.
ACCA guide to members’ PCRT obligations for CJRS claims
Self-Employment Income Support Scheme (SEISS)
A fifth grant covering May 2021 to September 2021 will be open to claims from late July 2021.
The amount of the fifth grant will be calculated differently compared to the first four SEISS grants and will depend on the extent of the reduction of your turnover between April 2020 and April 2021.
Eligible persons will be contacted by HMRC in mid-July 2021 to give them the date that they can make their claim from.
Fifth SEISS grant available from July
ACCA guide to members’ PCRT obligations for SEISS claims
VAT deferral
Businesses that deferred VAT payments between 20 March 2020 and 30 June 2020 and were unable to pay the deferred VAT by 31 March 2021 can still contact HMRC to make arrangements to pay. If it is not paid in full or and arrangement has not been made by 30 June 2021, HMRC may charge a 5% penalty.
At the time of contacting HMRC, businesses must have submitted any outstanding VAT returns. Contact HMRC with the business’s VAT registration number and details of the amount owed (ie the originally deferred amount less the amounts already paid).
Find further help and support on the VAT deferral new payment scheme.
Corporation tax: loss extension
Broadly speaking, the current rules allow trading losses to be carried back one year without restriction. For accounting periods ending between 1 April 2020 and 31 March 2022, this will be extended to three years, with losses required to be set against profits of most recent years first before carry-back to earlier years.
No change is proposed to the current one-year unlimited carry back of trade losses, however, for the extended relief, the amount of loss that can be carried back to the earlier 2 years of the extended period is to be capped for each of those 2 years. This is a cap of £2,000,000 of losses for all relevant accounting periods ending in the period 1 April 2020 to 31 March 2021 (financial year 2020). A separate cap of £2,000,000 applies for all relevant accounting periods ending in the period 1 April 2021 to 31 March 2022 (financial year 2021). Groups will be subject to a group cap of £2,000,000 for each relevant period.
ACCA: extended loss carry back for businesses
The Bounce Back Loan Scheme (BBLS) repayment options
There are three Pay As You Grow options to consider:
- Request an extension of the loan term to 10 years from six years, at the same fixed interest rate of 2.5%
- Reduce the monthly repayments for six months by paying interest only. This option is available up to three times during the term of the Bounce Back Loan
- Take a repayment holiday for up to six months. This option is available once during the term of the Bounce Back Loan
These options can be used individually or in combination with each other. If you have taken out a Bounce Back Loan, your lender will communicate PAYG options three months before your repayments begin, as well as outlining how your payment profile may change according to your PAYG choices.
ACCA technical factsheet: accounting for Covid-19 grants and reliefs
Recovery Loan Scheme
The government-backed recovery loan scheme, launched on 6 April 2021, provides additional finance to businesses that require it. The scheme only runs until 31 December 2021 and will be administered by the British Business Bank. Loans will be available through a diverse network of more than 20 accredited commercial lenders.
The government will provide an 80% guarantee for loans of up to £10m per business with interest capped at 14.99%. it is understood that in the vast majority of cases actual rates are expected to be much lower.
ACCA: financial assistance to help with business interruption
SME Brexit support fund
The £20m SME Brexit Support Fund enables traders to access practical support, including training for new Customs, rules of origin and VAT processes. The grant can also be used to fund professional advice, for example from accountants, so members should highlight this to their clients as soon as possible.
To be eligible, businesses must import or export goods between Great Britain and the EU, or move goods between Great Britain and Northern Ireland.
Applications will close on 30 June 2021.
Help to Grow: management programme
Join other senior business leaders in a practical management training programme, with 1:1 mentorship, delivered across the UK by leading business schools accredited by the Small Business Charter.
The 12-week programme costs just £750 and is 90% subsidised by the government as part of its Plan for Jobs to help businesses to drive growth and create jobs. It is aimed at senior leaders of small and medium businesses.
Register your interest now on the Help to Grow website; sign-ups to the programme open in June.
ACCA: help to grow your business
Rent moratorium for businesses extended to March 2022
Businesses that have had to remain closed during the pandemic and are unable to pay rent on their commercial property will continue to be protected from eviction. The current moratorium to protect tenants from eviction will be extended by nine months to 25 March 2022.
The rent moratorium will likely remain in place until the government can legislate for the framework for a binding arbitration scheme and plans to introduce a scheme to resolve disputes between landlords and commercial tenants. The government has urged that landlords and tenants resolve accumulated rent debts in an orderly fashion and expects that tenants should start to pay rent again in accordance with their leases as soon as they are able to open for business.
Winding up petitions banned for a further three months
Insolvency measures supporting businesses during the pandemic and helping them recover will be extended till the end of September 2021. These were due to end by the end of June 2021.
The measures, which were originally introduced in the Corporate Insolvency and Governance Act in March 2020, included protecting businesses from aggressive creditor enforcement and removing personal liability on company directors.
The measures also include:
- Restrictions on statutory demands and winding-up petitions to protect companies from creditor enforcement action due to debts related to coronavirus.
- No obligation on small suppliers to continue to supply a business in insolvency. However, larger suppliers must not cease their supplies or ask for additional payments while a company is going through a rescue process.
- Relaxations on entry into a moratorium, allowing a company to enter a moratorium if they have been subject to an insolvency procedure in the previous 12 months.
