Covid 19 – Important Dates and Deadlines
In response to the COVID-19 pandemic the UK government put into place various schemes in order to support businesses throughout the pandemic. Many of these measures are coming to an end and it is advisable to be aware of key dates and deadlines.
VAT payment deferral scheme
The COVID-19 VAT payment deferral scheme allowed VAT registered businesses to defer VAT payments falling due between 20 March 2020 and 30 June 2020 until 31 March 2021. Those businesses that deferred VAT payments can now join the new online VAT Deferral New Payment Scheme which gives businesses the option of paying the deferred VAT in equal interest free instalments (from 2 to 11, depending on when you join).
Businesses will need to opt-in to the new scheme and can do this via the online service which opened in February 2021 and closes on 21 June 2021. If your business will need more time to pay then you must contact HMRC 0800 024 1222 by 30 June 2021. You will be charged a 5% penalty or interest if an arrangement to pay has not been made by the deadline, or the VAT has not been paid in full.
Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme (Furlough) is extended until 30 September 2021. The level of grant available to employers under the scheme will stay the same until 30 June 2021 but from 1 July 2021 the level of grant will be reduced and businesses will be required to contribute towards the cost of your furloughed employees’ wages.
The table below shows the level of government contribution available in the coming months, the required employer contribution and the amount that the employee receives per month where the employee is furloughed 100% of the time.
|Government contribution: wages for hours not worked||80% up to £2,500||80% up to £2,500||70% up to £2,187.50||60% up to £1,875||60% up to £1,875|
|Employer contribution: employer National Insurance contributions and pension contributions||Yes||Yes||Yes||Yes||Yes|
|Employer contribution wages for hours not worked||No||No||10% up to £312.50||20% up to £625||20% up to £625|
|For hours not worked employee receives||80% up to £2,500 per month||80% up to £2,500 per month||80% up to £2,500 per month||80% up to £2,500 per month||80% up to £2,500 per month|
Bounce Back Loan Scheme (BBLS) repayments
The BBLS offered loans up to £50,000 and intended to help businesses access finance more quickly. The scheme closed to new applications and top-up applications, on 31 March 2021.
Under the existing scheme, businesses are not required to make any loan repayments in the first year, and no interest is charged during this period. For those businesses which took early advantage of the scheme, the loans will now be (or soon) due for repayment.
Businesses that have not started repayment now have the option to delay first instalments for a further six months. In addition, under Pay As You Grow (PAYG) businesses who have started repaying their Bounce Back Loans have the following options:
- request an extension of their loan term to 10 years from six years, at the same fixed interest rate of 2.5%
- reduce their monthly repayments for six months by paying interest only. This option is available up to three times during the term of their Bounce Back Loan
- take a repayment holiday for up to six months. This option is available once during the term of their Bounce Back Loan.
Borrowers can use these options individually or in combination with each other.
Coronavirus Business Interruption Loan Scheme (CBILS)
The CBILS was another source of emergency funding. The scheme guaranteed facilities up to £5M, on repayment terms up to six years for loans and asset finance, and up to three years for overdrafts and invoice finance facilities. Interest payments were covered for the first 12 months, which gave businesses the benefit of initially lower repayments.
If your business borrowed a substantial sum, and is still recovering, this could have an impact on cash flow and these loans are not covered by the provisions relating to BBLS.
Other temporary business support measures
Various measures were introduced in the Corporate Insolvency and Governance Act, including protection for businesses from aggressive creditor enforcement, and suspension of personal liability (Wrongful Trading) for company directors.
Suspension of wrongful trading provisions ended on 30 April 2021. The following provisions are now due to expire on 30 June 2021.
- Statutory demands and winding-up petitions will continue to be restricted to protect from creditor enforcement action due to debts related to coronavirus (COVID-19).
- Small suppliers will not have to continue to supply a business in insolvency. However, larger suppliers will not be able to cease their supply or ask for additional payments while a company is going through a rescue process.
In addition the rules surrounding moratoriums are relaxed and a company will be able to enter a moratorium even if they have been subject to an insolvency procedure in the previous 12 months, until 30 September 2021.
If your business will be affected by any of these changes then the team at Keywood Group will be happy to provide a no obligation assessment of the financial position .If you want further information, please contact us for a no obligation chat.