Day: November 6, 2020

DMS Posts, Tax

What support is available for businesses during the second lockdown?

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With lockdown number two starting on Thursday 5 November, the government has announced new measures to help businesses keep going. The main announcement is the extension of the Job Retention Scheme, which is reverting back to the levels of support during August, offering businesses more generous financial help than they would have received under the postponed Job Support Scheme. 

Job Retention Scheme  

The Job Support Scheme has been postponed and the Job Retention Scheme has been extended until March 2021. 

Key points of the Job Retention Scheme: 

  • All employers are eligible for the extended Job Retention Scheme. 
  • As long as the employee was on the payroll at 23:59 on 30 October 2020, they can be furloughed.  
  • Employees do not have to have been previously furloughed to be eligible. 
  • Businesses will have the flexibility to bring furloughed employees back to work on a part-time basis or furlough them full-time. 
  • If employers fully furlough employees, the government will pay 80% of their current salary up to £2,500. 
  • If employers choose to flexibly furlough, the government will cover 80% of the hours not worked. 
  • Employers must pay all National Insurance and employer pension contributions.  
  • Employers will need to report and claim for a minimum period of 7 consecutive calendar days. 
  • Employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish. 
  • The level of support is expected to be reviewed in January 2021.

Increased support in November for the Self Employment Income Support Scheme 

In line with the increased support for employers, the third SEISS grant covering November, December and January will now be 80% of 3 months average monthly trading profits, paid out in a single instalment and capped at £7,500 in total. The grant will be available from 30 November 2020.

Extension to Government-Backed Loan Schemes 

There has been a further extension to the application deadlines for the CBILS and BBLS as well as the CLBILS and Future Fund, giving people more opportunities to access funding if they need it. These schemes will now be extended until the end of January 2021. 

The government has also announced existing Bounce Back loans can be topped up if businesses did not apply for their maximum in their application (to the maximum under the scheme rules) should they need additional finance. Details on how to top up loans have not been given at the moment but we will continue to update this page as further information is announced. 

Grants 

Businesses required to close in England due to local or national restrictions will be eligible for the following: 

  • For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks; 
  • For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks; 
  • For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks. 

Mortgage Holidays 

Mortgage payment holidays were set to end on 30 October, however, this has also been extended. Borrowers who have not yet had a mortgage holiday will be entitled to a six month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file. 

DMS Posts, Tax

CJRS and SEISS: how to correct an over claimed grant

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Unsurprisingly, HMRC has announced how they will be cracking down on fraudulent grant claims. Due to the speed and urgency that claims were made and issued, there are likely to be a number of innocently miscalculated grants and HMRC is requesting that businesses double-check their calculations and notify HMRC within 90 days of receiving any grants, however the penalties will largely be directed at those who deliberately did not comply with the criteria and knowingly submitted fraudulent claims.

HMRC services sign in

This applies to the Coronavirus Job Retention Scheme (CJRS) and the Self Employment Income Support Scheme (SEISS) as well as the Coronavirus Statutory Sick Pay Rebate Scheme and other coronavirus business support grants. In this blog, we have explained how to repay an over claimed CJRS or SEISS grant, when you need to do this and what penalties you may face if you do not comply.

Why would I need to repay part or all of a claim?

Under the CJRS, the main reasons that could trigger a partial or full repayment of a claim include:

  •  grants not used for the purposes for which they are intended;
  •  calculation errors
  •  employees working during periods that they are on furlough.

For those who claimed under the SEISS you will need to repay some or all of your grant if you:

  • received more than HMRC said you were entitled to
  • your business was not adversely affected
  • you did not trade in the tax year 2019 to 2020
  • you did not intend to continue to trade in the tax year 2020 to 2021
  • you have incorporated your business since 5 April 2019

When do I need to inform HMRC about an overpayment?

If you have claimed too much for a grant and have not repaid it, you must notify HMRC and repay the money by the 20 Oc‌to‌be‌r 2020 if you received money you’re not entitled to or if your circumstances changed on or before 22 J‌ul‌y or within 90 days if you received the money after 22 July.

How do I tell HMRC about an over claimed grant?

CJRS: If you are making another CJRS claim, you can report the overpayment as part of the claims process, and the new claim will be adjusted to count for the overpayment. If you are not making any further claims, you will need to contact HMRC who will then provide a reference number for you to make a repayment. Further guidance can be found here.

SEISS: To repay an over claimed SEISS grant you will need to log into your Government Gateway account and fill out the relevant form with your grant claim reference and Self Assessment Unique Taxpayer Reference (UTR) number. Once you have filled this form out, HMRC will give you the details of where to repay the funds.

What penalty could I face if I do not notify HMRC?

For an over claimed CJRS payment that is not paid back within the notification period, you may have to pay a penalty of up to 100% of the amount of the CJRS grant that you were not entitled to receive or keep. HMRC has been very clear that the onus is on the taxpayer to determine if they received an incorrect grant amount.

If you received an overpayment under the SEISS, the penalty will depend on whether you knowingly over claimed or not. If you knowingly applied and received a grant whilst being ineligible, the penalty will be based on the amount you were not entitled to receive along with other factors. If you honestly believed you were eligible, and you later realised this was not the case, HMRC will only penalise you if you have not repaid the grant by 31 January 2022.