Government Support Update

This article contains details of the:

• VAT deferral

• Restart Grants

• Self-Employment Income Support Scheme Grant 5

VAT Payment Deferral

One of the first support measures announced by the Government when the scale of the pandemic was first realised was to allow businesses who were adversely affected by the pandemic to defer their VAT payments due between 20 March 2020 and 30 June 2020. The deadline for those businesses to either pay the VAT due or arrange to repay via instalments is 30 June 2021.

Those businesses who either pay the balance in full by 30 June 2021 or join the ‘VAT deferral new payment scheme’ will not be charged a penalty. If these options are ignored and no alternative arrangement is made with HMRC, businesses will face a 5% penalty and interest. It is therefore vital that action is taken now.

VAT deferral new payment scheme:

The deadline to join the VAT deferral new payment scheme online is 21 June 2021. This can be accessed via the Government Gateway:
https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19#join-the-vat-deferral-new-payment-scheme

Businesses unable to access the online application can call HMRC’s Coronavirus helpline by 30 June 2021 on 0800 024 1222.

The deferral scheme will allow businesses up to eight interest-free instalments, the first of which is due upon joining the scheme.

Time to Pay:

If businesses are unable to meet repayments via the deferral scheme, they can enter into a more flexible time to pay arrangement. Whilst this will avoid the 5% penalty, it will not be free of interest.

If you require further advice of support, please do not hesitate to contact your local Simpkins Edwards office.

Restart Grants

Applications for the restart grant will close on 30 June 2021. It is therefore essential that any eligible businesses who are yet to receive a restart grant apply as a matter of urgency.

To recap, the grant was introduced on 1 April 2021 to help businesses reopen after the current lockdown.

Non-essential retail businesses may be entitled to receive up to £6,000 per premises.

Hospitality, accommodation, leisure, personal care, hairdressers and gyms may be entitled to receive up to £18,000 per premises, based on rateable value.

Your business may be eligible if it is:

• based in England

• rate-paying

• in the non-essential retail, hospitality, accommodation, leisure, personal care or gym sectors

• trading on 1 April 2021

• In most cases Local Authorities should contact eligible businesses directly, but if you believe you may be eligible and have not heard anything, please contact your Local Authority.

Self-Employment Income Support Scheme (SEISS) – Grant 5

The SEISS is due to cease in September 2021, after the final grant is paid to those who are eligible.

The grant is due to cover May to September, and it is expected that the portal will open at the end of July for applications.

The grant will be calculated by reference to the reduction in a business’ turnover. Where the reduction is 30% or more, the resulting grant will be 80% of 3 months’ average profits capped at £7,500. Where the reduction is less than 30%, the grant will be 30% of 3 months’ average profits capped at £2,850.

We are still waiting for detailed guidance to be released. However, if you believe you continue to be adversely impacted by the pandemic, we would highly recommend ensuring that your accounting records are up to date to make sure that the required calculations can be completed to determine the level of grant available. If you require assistance with this, please do not hesitate to contact us.

A summary of the latest Covid-19 support can be found on our factsheet: https://www.simpkinsedwards.co.uk/government-support-factsheet/

If you would like to discuss any of the support grants available or require any assistance, please do not hesitate to contact your local Simpkins Edwards office.