On Wednesday 3rd March, Chancellor Rishi Sunak presented his Spring Budget in the House of Commons. We published a list of the key points made in the announcement but now we would like to delve deeper into what we know matters most to you.

Government support for businesses

With the country due to exit lockdown for the last time, a spec of light has appeared at the end of the tunnel for some businesses, but there is a long way to go and just a few months can seem like forever.

It is vital that employers and the self-employed receive further support for the duration of the pandemic. Here is some more detail on the extended business support from the UK Government.

Extension to the Coronavirus Job Retention Scheme

The Coronavirus Job Retention Scheme (CJRS) has been extended until the end of September 2021. This announcement provides some security for many jobs as businesses work their way back to normality.

The Government will continue to pay 80% of employees’ normal wages for any hours not worked. These payments will also continue to be capped at £2,500 per month, until the end of June 2021.

From July, the grant covers 70% of employees’ normal wages for any hours not worked, up to a cap of £2,187.50. This is reduced once more for August and September, with the grant covering 60% of employees’ normal wages up to a cap of £1,875.

Employers will need to continue to pay their furloughed employees at least 80% of their usual wages for the hours they do not work during this time. Pay will be capped up to £2,500 per month. This means for periods between July and September, employers will need to fund the difference between this and the CJRS grants themselves. Employers can also top up wages above 80% if they wish, but they are not required to do so.

Employers must also continue to pay the associated Employer National Insurance contributions and pension contributions on subsidised furlough pay from their own funds.

CJRS eligibility from May

For periods from 1‌‌ ‌May 2021 onwards, employers will be able to claim for eligible employees who were on employers’ PAYE payrolls on 2 March 2021. This means they must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021, notifying them of earnings for that employee.

You don’t need to have benefitted from the scheme before to make a claim, as long as you meet the eligibility criteria. There is more information on the scheme and eligibility on the Government website.

February CJRS claims

You are now able to submit your claims for periods in February, so long as they are made by Monday 15 March.

Employers can claim before, during or after they process their payroll. If they can, it’s best to make a claim once they’re sure of the exact number of hours their employees worked so they don’t have to amend their claim later.

Check that you are eligible and work out how much you can claim using the CJRS calculator on the Government website.

What you need to do now

  1. If you haven’t submitted your claim for January but believe that you have a reasonable excuse for missing the deadline of 15 February, check if you can make a late claim by searching ‘claim for wages’ on GOV‌‌‌‌.UK.
  2. Submit any claims for February no later than Monday‌‌‌‌ ‌15‌‌ March.
  3. Keep records that support the amount of CJRS grants you claim, in case HMRC need to check them.

Self-Employment Income Support Scheme future grants

A fourth and forth SEISS grant was announced in the Budget. These will both take into account submitted 2019-20 tax returns meaning you may still be able to claim, even if you weren’t eligible for previous grants. You must, however, have submitted your 2019-20 tax return by 2 March 2021.

Fourth SEISS Grant

The UK Government will pay a taxable grant which is calculated based on 80% of three months average trading profits, paid out in a single payment and capped at £7,500 in total. The value of the grant is based on an average of your trading profits for up to four tax years between 2016 to 2020, where available.

The grant will be available to claim from late April. As with previous grants, trading profits must be no more than £50,000 and at least equal to non-trading income in order to claim the fourth SEISS grant.

Eligibility for the fourth SEISS grant will also depend on whether you experienced a significant financial impact from coronavirus between February 2021 and April 2021.

As the calculation now takes into account the tax year 2019-20, if you previously claimed SEISS grants you may receive grants that are higher or lower in value than any previous SEISS payments you received.

HMRC may be making further checks to prevent fraud and so they may write to you to explain that they will call you to ask for proof of identity and evidence of trade. Further details of the scheme can be found on the Government website.

Claiming the Fourth SEISS Grant

You will receive a personal claim date from HMRC from mid-April. This confirms the earliest date you can claim from. The online claims service will then go live in late April and you must make your claim between your personal claim date and 31 May 2021.

Fifth SEISS Grant

The Chancellor also announced a fifth and final SEISS grant to cover May to September. Learn more about the fifth grant here. The amount given in this grant will be determined by how much your turnover has been reduced.

It will be worth 80% of three months average trading profits, but will be capped at £7,500 for those with a higher reduction in turnover (30% or more).

If you are eligible, you will be able to claim the fifth grant from late July. Further details for the fifth grant will be released soon.

What can you do to prepare?

HMRC will send details of how to make a claim when they contact you with your personal claim date.

In the meantime, to confirm eligibility and make a claim, you should ensure they have the following to hand:

  • National Insurance number
  • Self Assessment Unique Taxpayer Reference (UTR)
  • Government Gateway user ID and password
  • Bank account number and sort code.

If you are claiming SEISS for the first time you may be asked additional questions to prove your identity. Be ready to answer questions about the following documents:

  • UK passport
  • credit file (such as loans, credit cards or mortgages)
  • Self Assessment tax return (within the last 3 years)
  • driving licence (DVLA UK or DVA NI)
  • tax credit claim
  • P60
  • three most recent payslips.

If you need any help preparing any of the above documents for your claim, please get in touch. Our team are on-hand to assist with any support claims.

VAT deferral

If you deferred VAT payments due between 20 March and 30 June you should pay these by 31 March if possible.

If you cannot afford to do this, there is an online VAT deferral new payment scheme open which will help you spread the payment. This service closes on 21 June 2021, so you must join the scheme before this date if you wish to do so.

You can pay your deferred VAT in equal monthly instalments, completely interest free!

Spread the cost across a number of months, depending on when you join:

  • 11 instalments if they join by 19‌‌ ‌March
  • 10 instalments if they join by 21‌‌ ‌April
  • 9 instalments if they join by 19‌‌ ‌May
  • 8 instalments if they join by 21‌‌ ‌June.

For more information on VAT deferral, visit the Government website.

You can still join the scheme if you are on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme but at a later date in March. We are expecting new information on this soon.

If you have a Time to Pay arrangement already in place then you cannot use this scheme.

Further support

As always, we are here to support you. Until we reach the light at the end of what feels like a very long tunnel, keep sending us your questions. Our team are fully prepared to assist, you will find all of our contact details here.

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