Key Government Support Dates

For COVID affected business

KEY DATES

There are a number of key dates that businesses will need to be aware of that are fast approaching;

31 March 2021

• CBILS & CLBILS scheme closed. It has been replaced by a new Recovery Loan Scheme (see below)
• Last day for payment of VAT payments deferred that fell due between 20 March 2020 to 30 June 2020 if businesses do not plan to join the new VAT deferment scheme (see below).
• New national living wage introduced of £8.91 (up from £8.72)

6^th April 2021

• Recovery loan scheme opens to all businesses with no minimum turnover- click here for further information

31 May 2021

• Residential landlord forfeiture moratorium ends

21 June 2021

• Deadline for registering for VAT deferral scheme for payments originally due between 20 March 2020 and 30 June 2020. The online service is open from 23 February to register for the scheme.

30 June 2021

• End of Government being sole supporter of furlough payments to employees. Employers will be required to make up 10% of the payment in July and 20% of the payment to employees in August & September.
• Commercial landlord forfeiture moratorium ends
• Restriction on stat demands and winding up petitions ends
• End of 100% business rates relief for retail, hospitality and leisure businesses
• End of suspension of wrongful trading for directors

For businesses who have not been keeping up to date with their obligations to their landlord, agreed a reduction in sums due under their lease(s) or built up sufficient cash reserves they may find themselves subject to recovery proceedings in short order from 30 June 2021. If not already done so businesses need to give careful consideration now as to how they will discharge these liabilities and how this will effect their cashflows/ margins. It is unlikely that the UK economy will have recovered sufficiently from the start of Q3 2021, coupled with changing consumer habits for trading to return to the levels prior to the outbreak of COVID-19.

Any queries in respect of safeguarding your cashflow, you may find our guide helpful.

New Recovery Loan Scheme

The new scheme announced in the Chancellor’s March 2021 budget has replaced CBILS and CLBILS. Launched on 6^th April 2021 we detail below the specifics of the scheme alongside the differences to the CBIL scheme. The threshold to access the scheme is relatively low as long as a company can demonstrate that it has been impacted (positively or negatively) by the Coronavirus pandemic.

Loan Recovery Scheme applications must be made via specific lenders who will each follow their own credit procedures and apply to the BBB. The application process will be similar to the CBILS and CLBILS.

Further information can be found here: https://www.british-business-bank.co.uk/ourpartners/recovery-loan-scheme/

Moorfields have close relationships with most accredited lenders so can assist with applications and proposals and often enable you to access better terms and more suitable facilities.

 Business Rates Holiday and Grant (Retail, Hospitality and Leisure)

• No rates charged for 15 months from April 2020 to June 2021.
• Rates between July 2021 and March 2022 will be discounted by two thirds i.e business rates for qualifying businesses will be the equivalent of 25% for the year April 2021 to March 2022.
• A cash grant of up to £25,000 per property depending on the rateable valuable of the property was made available in the Spring of 2020 with a further £9,000 per property being made available.
• Only retail, hospitality and leisure business are currently eligible.
• Bill changes should be applied automatically depending on your property classification.
• There is also some additional relief available for smaller businesses with low or nil rates obligations due to existing reliefs.

Restart Grant

A restart grant is to be made available for businesses to help them reopening from April 2021.

• Non-essential retail businesses will be entitled to up to £6,000 per premises depending on the rateable value.
• Other businesses such as hospitality, leisure and personal care will be entitled to up to £18,000 per premises depending on the rateable value.
• Only businesses that were forced to close as a result of national lockdowns between 5 November and 2 December 2020 and 5 January 2021 to their permitted opening can apply.
• Businesses should apply for the grant from their local authority.

Forfeiture Moratorium

The Government has extended the protection for commercial tenants by preventing landlords from forfeiting leases until 30 June 2021. The temporary Commercial Rent Arrears Recovery (“CRAR”) changes have also been extended and will prevent landlords using CRAR to enforce unpaid rent on commercial leases until 30 June 2021.

While this may not be good news for many commercial landlords, this will be welcome news to many tenants who would have otherwise struggled to pay c. 5 quarters of rent that would have fallen due on 1 April 2021. Many businesses will now rely on a strong quarter between April & June as restrictions are due to be eased, to generate sufficient cashflow to ensure they are able to repay all arrears from 1 July 2021.

For landlords of residential properties, the moratorium has been extended until 31 May 2021.

Restrictions on Stat Demands and Winding Up Petitions

Companies have been protected from their creditors issuing stat demands or winding up petitions until 30 June 2021, this protection is coming to an end after c. 12 months. Companies were only eligible for this relief where the debt is unpaid for reasons relating to the financial impact of Coronavirus.

VAT Holiday

HMRC agreed to allow all UK businesses to defer VAT payments due between 20 March 2020 to 30 June 2020 and they will have until 31 March 2022 to clear these liabilities via smaller, interest free payments. Businesses must opt in to avail of this holiday to avoid any deferred liabilities falling due on 31 March 2021 and if not paid incurring unnecessary interest/ penalties. In order to be eligible businesses must have;

• A Government Gateway Account,
• Filed all returns and have no other VAT liabilities outstanding within the last 4 years.
• First instalment is due when you register, businesses can choose to pay between 2-11 instalments depending on when they register for the scheme.
• Registered for the scheme between 23 February 2021 and 21 June 2021.

VAT Emergency Cut

The 15% emergency VAT cut for the tourism and hospitality industries has been extended to 30 September 2021 in an attempt to boost spending in these industries. The VAT will be increased to 12.5% between 1 October 2021 and 31 March 2022 before a planned return to 20% in April 2022.

HMRC Job Retention Scheme

What are the options?

A Government grant of 80% towards employee salaries who would otherwise have been laid off as a result of the crisis.

• All UK businesses are eligible
• Capped at £2,500 per month per employee.
• Workers must be ‘furloughed’, i.e. they must stop working but not be made redundant.
• Back dated to 1 March 2020.
• Extended until 30 September 2021.

HMRC set up a new system to process requests and payments.

HMRC are also allowing business with fewer than 250 employees to reclaim up to 2 weeks Statutory Sick Pay for staff who have been off work due to Coronavirus.

Further information can be found here

The JRS was due to come to an end on 31 October 2020 to be replaced by the Job Support Scheme. However, due to the Government’s announcement on 31 October 2020 and due to further national lockdowns from 5 November 2020, the JRS has been extended through to 30 September 2021.

Employees will receive 80% of hours unworked (up to a cap of £2,500) by the UK Govt. and employers will only be required to contribute the employer National Insurance Contributions (NICs) and pension contributions for the hours the employee does not work until 30 June 2021. From 1 July 2021 to 30 September 2021 employees will continue receive 80% of hours unworked (up to a cap of £2,500), with 10% of this payment being made by their employer in July and 20% in August & September.

The Job Retention Bonus, £1,000 per furloughed employee still employed in January 2021, will not be paid in February 2021 as previously advised by the Government due to the extension of the JRS. The Government advice states that a retention bonus will be deployed at the appropriate time. Any such bonus will likely be under similar terms that a furloughed employee will still need to be employed by the business c. 3 months after the JRS ends, if the bonus will be paid at all.

Wrongful Trading

• Directors will not be considered responsible for worsening the position for creditors between 1 March 2020 and 30 September 2020 or 26 November 2020 and 30 June 2021 in the context of wrongful trading claims.

Time to Pay Scheme (TTP)

• HMRC has indicated that it will accommodate more requests to defer existing tax liabilities over a longer period, which would include PAYE/NI, CIS and Corporation Tax liabilities as well as VAT. The TTP scheme is available to all UK businesses with existing liabilities.
• Businesses should be aware that the VAT Deferment Scheme is only available for VAT due in the March 2020 – June 2020 period.

Anyone with any concerns or queries in respect of how these changes may impact their business or any of their clients are welcome to contact Tom Straw on 0207 186 1148.