As we move into the new financial year and following the Budget on 3 March, a number of COVID-19 related financial support measures continue in place. This update summarises the main forms of support that remain available as at 1 April 2021. A comprehensive list of business support measures and links to full detail of each scheme are available via GOV.UK (link).
Coronavirus Job Retention Scheme (CJRS)
The CJRS, which provides grant funding to businesses to support paying the wages of employees temporarily laid off due to COVID-19, has now been extended until 30 September 2021. The scheme will now gradually wind down, reducing the extent of support available, such that while employees’ minimum pay remains at 80% of their usual pay for any hours worked, an increasing share must be borne by employers:
- Until 30 June 2021, grants will cover the full 80% of employees’ wages, but employers must pay employers NICs and minimum pension contributions.
- In July, employers must contribute 10% towards employees’ wages (the CJRS covers 70%).
- In August and September, employers must contribute 20% towards employees’ wages (the CJRS covers 60%).
Employers may ‘top up’ wages above the 80% minimum if they choose, but this is not required. Employees may work on a flexible basis, paid at 100% for any hours worked (and CJRS support not claimed for those hours).
Claims under the CJRS must be made on a monthly basis, by the 14th day of the following month.
From 1 April 2021, a new “Restart Grant” scheme will replace existing local grant schemes in England, providing non-essential retail businesses that have been required to close with a grant of up to £6,000 per premises, based on rateable value. For businesses required to remain shut for longer (e.g., gyms and leisure), a larger grant, up to £18,000 per premises, is available, as follows:
- For rateable value of £15,000 or less, a grant of £8,000 (£2,667 for non-essential retail)
- For rateable value between £15,000 and £51,000, a grant of £12,000 (£4,000 for non-essential retail)
- For rateable value above £51,000, a grant of £18,000 (£6,000 for non-essential retail)
Applications for Restart Grants can be made via local authorities, for which a search tool is provided on the GOV.UK website (link).
A new Government-backed loan scheme opens from 6 April 2021, offering loans from £25,000 to £10 million, with the Government providing an 80% guarantee. This scheme is open to all businesses aside from banks and insurers, until 31 December 2021, in addition to earlier loan schemes.
Business rates relief
Qualifying retail, leisure and hospitality businesses will continue to benefit from 100% relief from business rates for an extended period, until 30 June 2021; this will then reduce to 66% relief until 31 March 2021. A cap applies, set at £2 million per business for properties forced to close on 5 January 2021; for other business, not subject to forced closure, a lower cap of £105,000 applied.
Reduced VAT rates
The reduced VAT rate of 5% for hospitality, accommodation and attractions across the UK is extended until 30 September 2021, followed by a 12.5% rate for a further six months until 31 March 2022.
The Self-Employment Income Support Scheme provides grant funding to support self-employed individuals whose businesses have been negatively impacted by the COVID-19 pandemic. Intended to mirror the support available for furloughed employees, three rounds of grants have previously been paid, with fourth and fifth grants still to be paid.
- The fourth grant will cover the period from 1 February to 30 April 2021, providing similar support to the earlier grants, set at 80% of three months’ average trading profits, capped at £7,500 and paid as a single instalment. The online claims service will be available from late April 2021 until 31 May 2021.
- The fifth grant will cover the period from 1 May 2021 to 30 September 2021. Again, this will be referenced to three months’ average trading profits, but with a turnover-based test introduced. Where the individual’s business has suffered a turnover reduction of 30% or more, the grant will remain at 80% of average trading profits, but where trading profits have reduced by a smaller amount, this will be 30% of average trading profits, capped at £2,850. Claims will be open from late July 2021.
Those eligible for the fourth and fifth grants must have annual profits of no more than £50,000 in tax year 2019/20, or average annual profits of no more than £50,000 in prior years, with more than 50% of their annual income from self-employment, and must have lost income as a result of the pandemic. Individuals commencing self-employment after 5 April 2020 will not be eligible.