The Chancellor’s Winter Economy Plan included the following announcements for the self-employed, VAT registered businesses and those paying tax through self-assessment.
Self-employment Income Support Scheme (SEISS)
Full details about how this scheme works are covered in Helen Furniss’ SEISS blog but the Chancellor’s Winter Economy Plan revealed a six-month extension in two further three month tranches. The initial taxable grant will be for 20% of average monthly trading profits, capped at £1,875 in total for the three month period starting on 1 November 2020 to 31 January 2021. An additional second grant, which may be adjusted to respond to changing circumstances, will cover the period from 1 February 2021 to 30 April 2021.
To benefit from the extension, self-employed individuals must:
- have previously been eligible for SEISS
- be trading and intending to continue to trade, and
- be affected by reduced demand due to COVID-19 in the period of the grant.
Whilst this benefit is a lot lower than the previous SEISS grant, the support for the employed has also been reduced and you can read about that in Ali Jones’ Job Support Scheme blog. Please contact your usual Sagars manager for help with the SEISS or get in touch with Helen Furniss.
The 15% VAT reduction down to 5% for certain businesses in the hospitality and tourism sectors was due to end in January but the Chancellor has announced that the reduction will remain in place until the end of March.
In addition, up to half a million businesses who have taken advantage of the VAT deferral will welcome the introduction of the New Payment Scheme which will give them the option to spread the VAT payment that was due in a lump sum at the end of March 2021 into 11 interest-free payments throughout the 2021-22 financial year. Businesses will need to opt-in, but all are eligible and HMRC will have an opt-in process in place early next year. Do note that this only applies to VAT payments that were deferred earlier in the year and current VAT liabilities will be due as normal.
Similarly, up to 11 million self-assessment taxpayers will be eligible to make their income tax payments in 12-monthly instalments up to January 2022. This applies to those income tax payments deferred from July 2020 and due in January 2021. Individuals with liabilities up to £30,000 can use the self-service Time to Pay facility or you can agree a payment plan via the Time to Pay helpline if you are unable to use the online service, call 0300 200 3822 Monday to Friday 8 am-4 pm.
Winter Economy Plan
Alongside these measures, the Chancellor’s Winter Economy Plan included extensions to the Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) and the Future Fund. Read what we know about this and the new repayment measures in Paul Lodder’s loans blog.
Our COVID-19 hub is full of guidance and advice about the various measures that you might be able to benefit from and our team are happy to help you with any queries, just get in touch with your usual Sagars contact our office 0113 297 6789.