The government is extending the temporary reduced rate of VAT (5%) from 12 January to 31 March 2021.

This will continue to apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises, supplies of accommodation and admission to attractions across the UK.

VAT deferral

Over half a million businesses deferred VAT payments, which were due in March to June 2020, with these payments becoming due at the end of March 2021.

The government has now announced the option for such businesses to spread their payments over the financial year 2021/22.

Businesses will be able to choose to make 11 equal instalments over 2021/22.

All businesses which took advantage of the VAT deferral can use the spreading scheme. Businesses will need to opt in and HMRC will put in place an opt-in process in early 2021.

How we can help

Further technical details of the schemes will be published by the government but no date has been announced as to when.

Please be assured we will be here to provide you with support and please contact us if you have any queries on the measures announced.

The Self-Employment Income Support Scheme (SEISS) will be extended under the name SEISS Grant Extension.

The grant:

• will be limited to self-employed individuals who are currently eligible for the SEISS, and
• who are actively continuing to trade but are facing reduced demand due to COVID-19.

The scheme will last for six months, from November 2020 to April 2021, and will consist of two grants.

The first grant will cover a three-month period from the start of November until the end of January. This initial grant will cover 20% of average monthly trading profits, paid out in a single instalment

covering three months’ worth of profits, and capped at £1,875 in total.

The second grant will cover a three-month period from the start of February until the end of April. The government will review the level of the second grant and set this in due course.

The amount of the first grant under the SEISS grant extension will be significantly less than the grants made under the SEISS. The initial SEISS grant was based on 80% of profits (capped at £7,500)

and the second SEISS grant was based on 70% of profits (capped at £6,570).

How we can help

Further technical details of the schemes will be published by the government but no date has been announced as to when.

Please be assured we will be here to provide you with support and please contact us if you have any queries on the measures announced.

Kind regards

The Team at Blackthorns

The existing job support scheme – the furlough scheme – comes to an end on 31 October.

The government will be introducing a new Job Support Scheme from 1 November 2020.

For employers to participate in the scheme:

• employees will need to work a minimum of 33% of their usual hours
• for every hour not worked, the employer and the government will each pay one third of the employee’s usual pay
• the government contribution will be capped at £697.92 per month.

Employees using the scheme will receive at least 77% of their pay, where the government contribution has not been capped. The employer will be reimbursed in arrears for the government contribution.

The employee must not be on a redundancy notice.

The scheme will run for six months from 1 November 2020 and is open to all employers with a UK bank account and a UK PAYE scheme. It will be open to such businesses even if they have not previously

used the furlough scheme.

All small and medium-sized enterprises will be eligible. Large businesses will be required to demonstrate that their business has been adversely affected by COVID-19. The government also expects that

large employers will not be making capital distributions (such as dividends), while using the scheme.

The Job Support Scheme will sit alongside the Jobs Retention Bonus which was announced by the Chancellor in July. The Bonus will provide a one-off payment of £1,000 to UK employers for every

furloughed employee who remains continuously employed through to the end of January 2021 and who earns at least £520 a month on average between the 1 November 2020 and 31 January 2021.

Businesses can benefit from both schemes.

How we can help

Further technical details of the schemes will be published by the government but no date has been announced as to when.

Please be assured we will be here to provide you with support and please contact us if you have any queries on the measures announced.