Last updated Monday 8 March 2021- 10:13
- The temporary reduction in VAT to 5% for the tourism and hospitality industry has been extended to 30 September 2021 and will then increase to 12.5% until returning to 20% from April 2022.
- The Stamp Duty Holiday which introduced a £500,000 nil rate band has been extended until 30 June 2021. Thereafter the nil rate band will be reduced to £250,000 for 3 months, returning to £125,000 from 1 October 2021.
- The 3 years within which an individual must sell their first home in order to reclaim the higher rates of Stamp Duty Land Tax (SDLT) due on a second home can now be extended in exceptional circumstances. The individual must have bought a new home on or after 1 January 2017 and have been unable to sell their previous home within 3 years. To be eligible for the refund the delay must be outside of the individual's control. This may include delays due to the outbreak of the coronavirus (COVID-19) pandemic or due to an action taken by a public authority, preventing the sale.
- Businesses with supply chains which rely on Trade Credit Insurance and who are experiencing difficulties maintaining cover due to Coronavirus will get support from the Government.
Due to Coronavirus and businesses struggling to pay bills, they risk having credit insurance withdrawn, or premiums increasing to unaffordable levels. To prevent this from happening, the government will temporarily guarantee business-to-business transactions currently supported by Trade Credit Insurance, ensuring the majority of insurance coverage will be maintained across the market.
The guarantee will be delivered through a temporary reinsurance agreement with insurers currently operating in the market.
The guarantees will cover trading by domestic firms and exporting firms and the intent is for agreements to be in place with insurers by the end of May.
The guarantee will be temporary and targeted to cover CV-19 economic challenges, and will provisionally last until the end of the year. It will be followed by a review of the TCI market to ensure it can continue to support businesses in future. Further details will be announced in due course.
- People whose income has been affected by Coronavirus and who want to access their Lifetime ISA funds early will no longer face an additional withdrawal charge following a temporary rule change.
The Lifetime ISA is intended to help younger people save for their first home or for later life. As with many other long-term saving products, withdrawing funds early or for unintended purposes normally incurs a charge. To help people who need to access to their money earlier as a result of the outbreak, the charge on unauthorised withdrawals will be temporarily reduced. This means savers will get back all the money they originally put in, subject to any investment losses incurred on stocks and shares Lifetime ISAs.
The Lifetime ISA offers a 25% bonus, paid monthly, on up to £4,000 of savings each year. The current charge is 25% of the amount withdrawn. The Treasury will legislate for a temporary reduction in the LISA withdrawal charge to 20% between 6 March 2020 and 5 April 2021 (inclusive). This will mean account holders will only have to pay back any government bonus they have received, but will not pay the additional withdrawal charge of 5%.
The rule change will be backdated to 6th March, so anyone who has withdrawn their money early since that date and paid a 25% charge will have the difference refunded.
More information can be found on the Gov.uk website - lifetime-isa and guidance.
- Universal Credit standard allowance increased by £1,000 a year from 6 April 2020 for 12 months.
- Six-month extension of the £20 per week Universal Credit uplift. A one-off payment of £500 to eligible Working Tax Credit claimants.
- Businesses can apply for a 3-month extension for filing their accounts. This joint initiative between the government and Companies House will mean businesses can prioritise managing the impact of coronavirus. As part of the agreed measures, while companies will still have to apply for the 3-month extension to be granted, those citing issues around COVID-19 will be automatically and immediately granted an extension. Applications can be made through a fast-tracked online system. Please contact your usual Ensors contact to obtain assistance with making an application to Companies House.
- Working Tax Credit basic element increased by £1,000 from 6 April 2020 for next 12 months.
- The self-employed will get full Universal Credit at a rate equivalent to statutory sick pay.
- An update to the rules determining an individual’s residence for tax purposes confirms that those who find themselves unable to leave the UK as a result of the coronavirus pandemic will be able to claim ‘exceptional circumstances’ with regard to their current tax residency status, in cases where they have to stay here for more than the 183 days permitted.
The tax authority warns that ‘whether days spent in the UK can be disregarded due to exceptional circumstances will always depend on the facts and circumstances of each individual case.’
- HM Treasury have confirmed that the roll-out of IR35 reforms to the private sector will be halted for a year until April 2021 to ease the pressure on businesses in the face of the coronavirus outbreak.
- HM Revenue & Customs (HMRC) have increased capacity for their “Time to Pay” arrangements by having 2,000 further staff available to man the dedicated hotline (0800 0159 559) for those with outstanding tax liabilities who are experiencing hardship due to coronavirus.
Our Business Advisory and Turnaround team will be more than happy to help you and will ensure you get the best payment arrangements possible.
In addition, HMRC have waived late payment penalties and accrued interest where a business experiences delays and difficulties in contacting them or making payments due to coronavirus. If you anticipate making late payments please speak to your usual Ensors contact as we can help.
- Government to offer financial support to self-employed individuals and employees earning below the National Insurance Lower Earnings Limit through a ‘new style’ Employment and Support Allowance and Universal Credit.
Available to those affected by coronavirus or self isolating in accordance with government advice. Applies from the first day of sickness rather than the eighth.
Universal Credit and advanced payments will be available without the current requirement to attend a job centre. The minimum income floor for Universal Credit will be temporarily relaxed for the duration of the outbreak. Self employed individuals will be able to claim compensation for losses in income.
- Although not announced in response to the coronavirus outbreak, the Employment allowance will increase from £3,000 to £4,000 from 6 April 2020 (for employers whose National Insurance bill is below £100,000 in the previous tax year).
- Government backed mortgage guarantee scheme offering 95% lending from April 2021.
- Mortgage payment holidays which were due to end on 31 October 2020 will be extended. Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment 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.
- Further to previous announcements protecting commercial tenants who cannot pay their rent because of COVID-19, the Government has confirmed the following changes:
- A statutory instrument to amend the Coronavirus Act to extend the time period for suspension of the forfeiture of evictions from June 30 to September 30, meaning no business will be forced out of their premises if they a miss a payment during this period.
- Secondary legislation to prevent landlords using Commercial Rent Arrears Recovery unless they are owed 189 days of unpaid rent. The time period for which this measure is in force will be extended from June 30 to September 30.
- Extension of Business Improvement Districts (BIDs) arrangements. BIDs will be able to extend the maximum duration of their BID arrangements until 31 March 2021 by delaying BID ballots due to take place this year. This enables BIDs, and the local authorities who administer the ballot process, to concentrate on responding to the current emergency. The change will come into force when the Coronavirus Bill receives Royal Assent. No action is required.
- The Government will introduce steps to allow pubs and restaurants to operate as hot food takeaways to service individuals required to stay at home.
- The Government is increasing the cash grants to businesses in England shut in local lockdowns to support with fixed costs. These grants will be linked to rateable values, with businesses receiving up to £3,000 per month, rather than up to £1,500 every three weeks. Affected businesses are also eligible for payment sooner, after only two weeks of closure rather than three.
Small businesses with a rateable value of or below £15,000 can now claim £1,300 per month; medium sized businesses with a rateable value between £15,000 and £51,000 can claim £2,000 per month; and larger businesses can claim £3,000.
The government is also extending the scheme to include businesses which have been forced to close on a national rather than a local basis. For further information please visit this link.
- Businesses should check the terms and conditions of their business interruption insurance policies and contact their provider.
The Government and insurance industry have confirmed that relevant businesses with pandemic and Government-ordered closure clauses within their policies will be able to make a claim.
- HMRC has confirmed an extension to the deadline for implementing digital links for MTD for VAT. In response to the impact of COVID-19, HMRC are providing all MTD businesses with more time to put in place digital links between all parts of their functional compatible software. This means that all businesses now have until their first VAT return period starting on or after 1 April 2021 to put digital links in place.
- The Government have published guidance in relation to employee expenses for those working from home due to coronavirus.
The guidance implies that where someone is working from home due to the current situation that there doesn’t need to be a formal homeworking arrangement in place in order for them to claim the fixed amounts for additional expenses like electricity, heating or broadband.
The guidance can be found here.
- Extension of the apprenticeship hiring incentive in England to September 2021 and an increase of payment to £3,000.