Self-Employment Income Support Scheme (“SEISS”) – Grant 2

Self-employed individuals or members of a partnership can claim the second SEISS grant if the business has been adversely affected on or after 14 July 2020.

The second and final grant is worth 70% of your average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £6,570 in total.

The eligibility conditions are the same as the first grant, and HMRC will contact you if you are eligible. You can make a claim for the second grant if you are eligible, even if you did not make a claim for the first grant. As per the first grant, you can continue to work, start a new trade or take on other employment.

It will be possible to make a claim from 17 August to 19 October 2020. You will need your Government Gateway user ID and password and UK bank details to make a claim.

The grant is subject to Income Tax and self-employed National Insurance.

Find out more details from HMRC’s website.

Supporting Jobs

Kickstart Scheme

The Government announced this £2 billion scheme to fund the direct creation of high-quality jobs for young people at the highest risk of long-term unemployment.

The scheme involves 6-month work placements aimed at those aged 16-24 who are claiming Universal Credit and are deemed to be at risk of long-term unemployment

Funding available for each job will cover 100% of the relevant National Minimum Wage for 25 hours a week, plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions.

There has been no indication that the employer must hire the individual at the end of the placement. The intention appears to be to give the individuals workplace skills, confidence and work experience.

This scheme is available to all businesses and it has been stated that there will be no cap on the number of placements.

No detailed guidance or information about the application portal has been released yet but this is expected in August or September.

Payments for employers who hire new apprentices

The government will introduce a new payment of £2,000 to employers in England for each new apprentice they hire aged under 25, and a £1,500 payment for each new apprentice they hire aged 25 and over, from 1st August 2020 to 31st January 2021.

These payments will be in addition to the existing £1,000 payment the government already provides for new 16-18 year-old apprentices, and those aged under 25 with an Education, Health and Care Plan – where that applies.

Claims can be made from 1 September 2020 through the apprenticeship service.

Find out more information in the funding document.

Business Loan Rules/Changes

Some businesses which were classed as ‘undertakings in difficulty’ under EU State Aid rules were unable to access Government-backed loans under the Coronavirus Business Interruption Loan Scheme (CBILS) (primarily business with high levels of debt and accumulated losses). Under the EU Temporary State Aid Framework, under which CBILS is notified, financial support cannot be awarded to businesses which were ‘in difficulty’ at the end of 2019.

Government and industry groups approached the European Commission to seek changes to these rules to make sure that small businesses who were viable before the Covid-19 outbreak could benefit from the support even if they were classed as “undertakings in difficulty” on 31 December 2019.

From 30 July businesses in this category which have fewer than 50 employees and a turnover of less than £9m can apply.

These changes mean more small businesses can access CBILS, however, some viable larger businesses may still breach EU rules around undertakings in difficulty. With that in mind, the government has been doing more to help viable businesses that have so far been unable to secure government-backed financial support. The British Business Bank will soon circulate new guidance with lenders on identifying undertakings in difficulty, which should be helpful in clarifying how to approach the various elements of the test.

Redundancy and Notice Pay – Furloughed Employees

The government has passed new regulations intended to ensure that furloughed employees who are made redundant receive statutory redundancy and notice pay based on their “pre-furlough” rate with effect from 31 July 2020.

For employees with normal working hours, if the calculation date for statutory redundancy pay or statutory notice pay falls on or before 31 October 2020, the amount which is payable “is to be calculated disregarding any reduction in the amount payable as a result of being furloughed” (i.e. full wage). This also applies to contractual notice, if this is not at least one week more than statutory minimum notice.

Similar provisions apply for employees whose pay varies with the time of or amount of work, or who have no normal working hours. In these cases, pay is normally averaged over the last 12 weeks. The new rules apply where this period includes at least one week during which the employee was furloughed and ensure that the averaging is based on full rather than reduced pay.

The new regulations also protect employees’ pre-furlough position in respect of certain other claims where the calculation of a week’s pay is relevant, such as unfair dismissal basic awards.

There has been no change the cap on a week’s pay for the purpose of calculating statutory redundancy pay (currently £538), so there is no effect on the overall maximum statutory redundancy payment or unfair dismissal basic award that an employee can receive (currently £16,140).

Any redundancy or notice payments already made before 31 July 2020 will not be covered by the new rules.

Job Retention Scheme Bonus

Employers claiming the JRB

Employers are able to claim the JRB for any employees that were eligible for the Coronavirus Job Retention Scheme (“CJRS”) scheme and they have claimed a grant for.

Employers should ensure that they have:

• complied with their obligations to pay and file PAYE accurately and on time under the Real Time Information (“RTI”) reporting system for all employees
• maintained enrolment for PAYE online
• a UK bank account
• Coronavirus Job Retention Scheme claims have been accurately submitted, and any necessary amendments have been notified to HMRC

Eligible employees

Employers will be able to claim for employees who meet the following criteria:

• were furloughed and had a Coronavirus Job Retention Scheme claim submitted for them that meets all relevant eligibility criteria for the scheme
• have been continuously employed by the relevant employer from the time of the employer’s most recent claim for that employee until at least 31 January 2021
• have been paid an average of at least £520 a month between 1 November 2020 and 31 January 2021 (a total of at least £1,560 across the 3 months). Please note, the employee does not have to be paid £520 in each month, but must have received some earnings in each of the three calendar months that have been paid and reported to HMRC via RTI;
• only earnings recorded through HMRC RTI records can count towards the £520 a month average minimum earnings threshold.
• have up-to-date RTI records for the period to the end of January 2021
• are not serving a contractual or statutory notice period, that started before 1 February 2021, for the employer making a claim

The above includes claims made for office holders and company directors.

Detailed guidance in respect of the above criteria will be published in September 2020.

How to claim

From February 2021, employers will be able to claim through HMRC’s website. More details about the process for claiming the bonus will be published at the end of September 2020.

The bonus is taxable, therefore the company must recognise this as income when calculating their taxable profits for Corporation Tax.

£20 million in new grants to boost recovery of small businesses

• £20 million new funding has been announced to help businesses across England get back on track.
• Small and medium sized businesses in England will be able to access grants between £1,000 – £5,000 for new equipment and technology and specialist advice, such as HR, financial and legal advice.
• Other activities supported through the £20m may include one-to-many events providing guidance to respond to coronavirus.
• The grants will be fully funded by the Government with no obligation for businesses to contribute financially.
• The funding has been allocated to Growth Hubs within each Local Enterprise Partnership (“LEP”) area in line with the current European Regional Development Fund (“ERDF”) Programme.
• To apply and find out more, you can locate and contact your local area Growth Hub. Details can be found here: https://www.lepnetwork.net/local-growth-hub-contacts/

£20 million to improve small business leadership and problem-solving skills

Two new leadership programmes to help small business leaders grow their companies in the wake of COVID-19 have been launched by the government.

Small Business Leadership Programme

• This will focus on strengthening decision-makers’ leadership skills and equip business leaders with the confidence to plan for the future of their business and ensure they are in a good position to recover from the impact of coronavirus.
• The 10-week programme will teach participants how to maximise their business’s potential by improving productivity, organisation and efficiency.
• Businesses will undertake a series of 90-minute webinars delivered by leading business experts.

Peer Networks Programme

• This will focus on helping business owners improve their problem-solving, leadership and management, and sales and marketing skills in order to grow their businesses in the wake of coronavirus.
• Participants will take part in sessions where common coronavirus related business challenges will be discussed, such as finding new customers and using technology such as customer record management and websites to adapt a business model.

Tax-Free Childcare Extension

Parents who are eligible for tax-free childcare or 30 Hours Free Childcare but have temporarily fallen below the minimum income requirement as a result of the pandemic, will continue to receive financial support until 31 October.

This will also apply to critical workers (those whose role is vital in tackling the pandemic) who may exceed the threshold for 2020/21 (You or partner have an adjusted net income in excess of £100k).

Families will receive a £2 government top-up for every £8 they pay into their child’s account, up to the value of £2,000 per child, or £4,000 per disabled child in financial support. The money can be used towards the cost of qualifying childcare for a child up to the age of 11 or 17 for a disabled child.

Parents need to reconfirm their eligibility every three months.

Those in receipt of the childcare element of working tax credits who have continued to pay childcare fees they have incurred, despite their children being unable to access childcare because of Covid-19, must notify HMRC if they expect this to continue beyond 7 September.

Companies House to resume the compulsory strike off process

The temporary measures to suspend compulsory strike off action introduced by the government in April 2020 as a result of COVID-19 will be lifted from 10 October 2020.

From 10 October 2020, companies will be removed from the register if there is a reasonable cause to believe a company is no longer carrying on business or in operation. For example, if:

• company documents are outstanding, and Companies House have had no response to their letters
• letters sent by Companies House are returned undelivered
• the company has no directors

If your company is in default and you want it to remain on the register, you must file your outstanding documents or contract Companies House immediately.

Companies that do not file their annual accounts or confirmation statement will normally receive 2 letters from Companies House.

A notice is the published in the Gazette to tell the public that the registrar intends to strike off the company.

If there are no objections to dissolution and the 2-month period from the publication of the Gazette notice has expired, your company will be struck off shortly afterwards.