COVID-19 and Brexit Update
Additional Lockdown Government Grants
A £4.6 billion package of grants has been announced to support businesses throughout the current lockdown.
UK businesses in the retail, hospitality, and leisure sectors are to be given one-off grants worth up to £9,000.
The one-off top-ups will be granted to businesses that are required to close as follows:
- £4,000 for businesses with a rateable value of £15,000 or under
- £6,000 for businesses with a rateable value between £15,000 and £51,000
- £9,000 for businesses with a rateable value of over £51,000
Retail, hospitality, and leisure businesses who received the Local Restriction Support Grant for closed businesses during the November lockdown will automatically be processed to receive the one-off grant of up to £9000 and a monthly/fortnightly Local Restrictions Support Grant Closed payment without having to re-apply. All businesses will be contacted to confirm.
If you are based in Derby and did not receive the payment in November but can answer yes to the following questions
- Are you registered for business rates within Derby City?
- Has your business got a rateable value?
- Has your business been forced to close?
then you should apply for the Local Restrictions Support Grant for Closed Businesses and the one-off grant (application form coming soon).
If the answer to at least one of these questions is no, you are not eligible for this support but will have the opportunity to apply to a new discretionary grant scheme which will be open for those businesses who have been severely impacted by the new national lockdown but do not have a rateable value or have not been forced to close. This will be opened as soon as possible.
Please keep checking New grants for businesses during National lockdown | Derby City Council for more details.
For businesses based outside Derby please refer to your local council website for the relevant details:
Amber Valley: Covid-19 business grants (ambervalley.gov.uk)
Derbyshire Dales: Coronavirus – support for businesses – Derbyshire Dales District Council
East Staffordshire: Coronavirus relief | ESBC (eaststaffsbc.gov.uk)
If you deferred any VAT payment between 20 March and 30 June 2020 you have 3 options:
- pay the deferred VAT in full on or before 31 March 2021. There is no need to contact HMRC.
- get ready to opt-in to the VAT deferral new payment scheme when it launches early in 2021.
You must opt-in yourself. We cannot do this on your behalf. The scheme will allow you to pay your deferred VAT in instalments without adding interest. You will be allowed to select the number of instalments from 2 – 11 equal payments.
To use the scheme you must:
- be up to date with your VAT returns
- opt-in before the end of March 2021
- pay the first instalment before the end of March 2021
- be able to pay the deferred VAT by Direct Debit.
To be ready to opt-in you should:
- create your own Government Gateway account if you do not already have one
- submit any outstanding VAT returns from the last four years. You will not be able to join the scheme if you have not done so.
- correct any errors on your VAT returns as soon as possible. Corrections received after 31 December 2020 may not show in your deferred VAT balance
- ensuring you know how much they owe, including the amount you originally deferred and how much you may have already paid.
- If you are still unable to pay and need more time, you can contact HMRC via their Payment Support Service on 0300 200 3835 to discuss your situation and try to negotiate a Time to Pay arrangement.
The CJRS has been extended until the end of April 2021. The government will continue to pay 80% of employees’ salaries for hours not worked. Employers will only be required to pay wages, national insurance contributions and pensions for hours worked, and national insurance contributions and pensions for hours not worked. You can only claim for furloughed employees that were employed and on the payroll on 30 October 2020.
HMRC is advising the self-employed that the Self-Employment Income Support Scheme (SEISS) has been extended.
To claim for the third grant the taxpayer’s business must have had a new or continuing impact from coronavirus between 1 November 2020 and 29 January 2021, which they reasonably believe will have a significant reduction in their profits.
The third taxable grant is worth 80% of a taxpayer’s average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £7,500 in total.
The online service to claim the third grant is open. Taxpayers should make their claim from the date HMRC gives taxpayers either by email, letter, or within the service. Eligible taxpayers must claim the third grant on or before 29 January 2021.
The grant does not need to be repaid, but will be subject to Income Tax and self-employed National Insurance and must be reported on the taxpayer’s 2020 to 2021 Self Assessment tax return. Taxpayers must keep evidence to support their claim.
Taxpayers who were not eligible for the first and second grant will not be eligible for the third.
COVID 19 Business Loan Schemes
Businesses have been given until the end of March 2021 to access the:
- Bounce Back Loan Scheme (BBLS): Apply for a coronavirus Bounce Back Loan – GOV.UK (www.gov.uk)
- Coronavirus Business Interruption Loan Scheme (CBILS): Apply for the Coronavirus Business Interruption Loan Scheme – GOV.UK (www.gov.uk)
- Coronavirus Large Business Interruption Loan Scheme (CLBILS): Apply for the Coronavirus Large Business Interruption Loan Scheme – GOV.UK (www.gov.uk)
The deadline for submitting your 2019/20 self-assessment return is 31 January 2021. The deadline applies to taxpayers who need to complete a tax return and make direct payments to HMRC in respect of their income tax, Classes 2 and 4 National Insurance Contributions (NIC), capital gains tax,and High Income Child Benefit Charge liabilities.
There is a penalty of £100 if a taxpayer’s return is not submitted on time, even if there is no tax due or the return shows that they are due a tax refund.
The balance of any outstanding income tax, Classes 2 and 4 NIC, capital gains tax, and High Income Child Benefit Charge for the year ended 5th April 2020 is also due for payment by 31 January 2021. Where the payment is made late interest will be charged.
The first payment on account for 2020/21 in respect of income tax and any Class 4 NIC or High Income Child Benefit Charge is also due for payment by 31st January 2021.
The Supreme Court has found in favour of small firms receiving payments from business interruption insurance policies. Following this ruling tens of thousands of small businesses will benefit and receive a payment to cover the losses from the first national lockdown. As many as 60 insurers sold business interruption products and will now have to pay out. Customers who have made claims that are affected by this test case will be contacted by their insurer.
Since this issue emerged Insurance policies will have been amended for new and renewing businesses and so losses from the latest lockdown measures in different parts of the UK will be clearly stated as part of the cover – or not – in new business interruption insurance policies.
The Culture Recovery Fund is now open for cultural organisations as they transition back to a viable and sustainable operating model during April – June 2021. You can apply for this fund if you are a cultural organisation based in England. Grants of between £25000 and E3 million can be applied for. The application deadline is midday, 26 January 2021.
Trading Post Brexit
The UK has now left the EU and is out of the EU’s Customs Union and VAT regime.
For any business selling or moving goods between the EU and UK, this creates new customs issues and import VAT and registration obligations.
To check what you need to do differently please refer to the following links:
- importing goods from the EU: Import goods into the UK: step by step – GOV.UK (www.gov.uk)
- exporting goods to the EU: Export goods from the UK: step by step – GOV.UK (www.gov.uk)
- moving goods to or from Northern Ireland: Moving goods into, out of, or through Northern Ireland – GOV.UK (www.gov.uk)
- providing services to EU countries: Selling services to the EU, Switzerland, Norway, Iceland and Liechtenstein – GOV.UK (www.gov.uk)