Today the Chancellor announced further measures to aid the economy due to the ongoing ill effects of Covid-19. Four of these are summarised below:
1.Extension to the Self-Employment Income Support Scheme (SEISS)
There are to be two further taxable grants, which have the same eligibility criteria as the earlier SEISS grants, for those who are continuing to trade but are facing reduced demand due to Covid-19. The first will cover the three months November 2020 to January 2021 and be 20% of average monthly trading profits covering 3 months’ worth of profits and capped at £1,875. This will be paid out as one instalment. The second will cover the three months February to April 2021. The government is to review the level of this grant and will be set in due course.
2.Enhanced Time to Pay for Self-Assessment Taxpayers
There will be the option of more time to pay taxes due in January 2021 for those taxpayers with up to £30,000 of self-assessment liabilities. They will be able to use HMRC’s self-service Time to Pay facility to secure a plan to pay over an additional 12 months. This means that self-assessment liabilities due in July 2020 will not need to be paid in full until January 2022.
3.VAT Deferral – “New Payment Scheme”
The government will give businesses which deferred VAT due in March to June 2020 the option to spread their payments over the financial year 2021/22 rather than paying in full at the end of March 2021. Businesses will be able to choose to make 11 equal instalments over the year 2021/22 if they opt in. HMRC will put in place an opt-in process in early 2021.
4.Bounce Back Loans (BBLS)
Bounce Back Loans are government backed loans of between £2,000 and £50,000 capped at 25% of turnover. There are no repayments for the first 12 months, with the government covering the first 12 months’ interest payments. There is an extension of access to 30 November 2020 for new applications. Under the new Pay as you Grow options, borrowers will be offered the choice of more time and greater flexibility for their repayments:
There will be the option to repay the loan over up to ten years.
There will be the option to move temporarily to interest only payments for periods of up to six months (an option which can be used up to three times) or to pause repayments entirely for up to six months (an option that can be used once and only after having made six payments).
Winter Economy Plan: https://www.gov.uk/government/publications/winter-economy-plan/winter-economy-plan