Latest COVID-19 update from Shorts

Our accountancy partners Shorts are issuing weekly updates which we are sharing here for information.

 

Date of update: 3rd June

Coronavirus Job Retention Scheme updates

On 29 May Rishi Sunak announced a series of changes to the furlough scheme designed to get the country back to work. The key change announced was that, from 1 July 2020, employees will be able to do some work whilst on furlough, on a part time basis. This is a welcome change as it will allow businesses to utilise staff part time, whilst still benefiting from furlough grants. Our blog has been updated for the latest changes, which will make the scheme even more complex from July onwards. Additional details are expected to be announced 12 June, but we set out the below key points known so far:

  • From 1 July the scheme will allow part-time working, but staff must have been furloughed by 10 June to be eligible. The scheme will close on 30 June to new furloughed employees.
  • Claims for the period to 30 June will need to be made by 31 July.
  • From 1 July, claim periods will no longer be able to overlap months.
  • From 1 August, the furlough scheme will no longer cover employers’ NIC or pension contributions.
  • From September, employers will be asked to contribute at least 10% to furloughed wages, with 70% covered by the grant.
  • From October, employers will be asked to contribute at least 20% to furloughed wages, with 60% covered by the grant.

The scheme will end on 31 October.

We are expecting the claim process to become even more complicated and recommend that employers start to consider how they might utilise their staff on a part time basis.

Furlough and Time to Pay Arrangements (interaction)

Although no official guidance has been issued, we have seen that HMRC have changed their approach to employers arranging a Time To Pay in respect of PAYE, where the employer has received a grant under the CJRS.  In such cases, we understand HMRC are asking employers to pay over at least the PAYE covered by the furlough grant, and only the excess PAYE due can be deferred under a TTP.  We have updated our guidance on this, and any clients wishing to arrange a TTP should get in touch with their accountants if they are unsure how this will impact them.

Update – Self-employed Income Support Scheme extended

The Chancellor has announced the scheme has now been extended for those individuals whose trade continues to be, or is newly, adversely affected by COVID-19.

The scheme currently allows eligible self-employed individuals or members of a partnership to claim a taxable grant worth 80% of average monthly trading profits, paid out in a single installment covering 3 months’ worth of profits, and capped at £7,500 in total. If you are eligible and want to claim the first grant you must make your claim before 13 July 2020.

The extension will allow those eligible to claim for a second and final taxable grant in August 2020. The final grant will be worth 70% of average monthly trading profits, again paid out in a single installment covering 3 months’ worth of profits, and capped at £6,570 in total.

The online service for the second and final grant is not yet available. HM Revenue and Customs will update the guidance to confirm when the claim portal will be open.

Innovate UK / UK Research and Innovation new grants and loans

£210m of new grants and loans for Innovative Businesses – grants and loans for 1,200 businesses of all sizes seeking to fund an innovative project or activities. There are expected to be various calls from Innovate UK and when they are launched the application process is expected to take around one month.

Details of the calls can be found online.

Businesses that currently claim R&D tax reliefs are likely to have projects or activities that would make them suitable for this support.

£200m of brought forward payments for grants and loans for in progress Innovate UK projects
Innovate UK representatives have been in touch with their existing 2,500 customers. Three month deferrals to existing projects have also already been offered.

£210m of continuity loans
SMEs and third sector organisations whose existing Innovate UK projects are at risk due to the impact of Covid-19. Loans between £250k and £1.6m (available until 31 December 2020 or until all of the funds are allocated).

Details can be found here

Business advice and support
Support for 6,000 innovative SMEs in the form of up to five days of specialist growth adviser support from the European Enterprise Network. Details can be found here

UK Research and Innovation’s call for short-term innovative projects relating to Covid-19
Projects of up to 18 months that mitigate the health, social, economic, cultural and environmental impacts of the Covid-19 outbreak. Companies can receive funding of 80% for projects aimed at furthering ‘the understanding of, and response to, the Covid-19 pandemic and its impacts.’

Details for how to apply can be found here

Small Business Support Top-up Grants

Local councils have made a range of new top-up grants and loans available to small businesses in response to the COVID-19 situation. Our separate blog provides details of what grants and loans are available and how to claim

Sheffield Growth Hub’s ‘Re-start to growth’

‘A free support initiative where you will have access to experienced and skilled experts to help assess, plan and restart your business through an agreed programme of intensive support. This support comprises two full days with an experienced business consultant.’ Further details can be found online.

Additional Grants

There are a number of smaller support grants available to businesses, including a £5k Salesforce / Enterprise Nation grant for small businesses. Our colleagues at FCS Associates, Sheffield, have provided an excellent summary of grant options available.

Future Fund is open for applications

Further details have now emerged of the Government’s Coronavirus Future Fund scheme. The scheme provides government loans from £125,000 to £5 million, subject to at least equal match funding from private investors to eligible businesses.

The main eligibility criteria is that the business must be a UK incorporated company and have raised at least £250,000 in equity investment from third-party investors in the last 5 years.

Unlike a typical bank loan, the interest is not payable on a monthly basis and instead will accrue until the loan converts. At this point, the interest and capital will either be repaid or may be converted into equity.

The scheme is open for applications until the end of September 2020.

 

Don’t forget that you can get advice from Shorts about R&D Tax Credits through their Radius service.