COVID-19 support – what’s available and actions you or your clients may need to take

Dear Payadvice Ltd,

I’m writing to you with the latest information about financial support schemes available to help your clients during the pandemic. This includes the latest on the Self-Employment Income Support Scheme (SEISS), the Coronavirus Job Retention Scheme (CJRS) and the VAT deferral new payment scheme.

Thank you for providing invaluable support to your clients during these challenging times, including to potentially vulnerable customers who can also seek help from our Extra Support Team.

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SEISS

The online claims service for the fourth grant of the Self-Employment Income Support Scheme (SEISS) is now open to all eligible customers. The claims service will close on 1‌‌ ‌June‌‌ ‌2021. To help you support your clients, here are the latest updates on the scheme and information which you may find useful.

Upcoming customer contact

In the next few days we will be contacting customers who we believe are eligible for the fourth SEISS grant but have yet to submit a claim, and have previously asked for extra support. We’ve provided contact information, should they need any help. 

Calculation of the fourth SEISS grant – impact of including 2019-20 returns

The fourth SEISS grant takes into account the 2019-20 tax return, reflecting the most recently available data on a customer’s business profits. This means that customers who received previous grants may find that the amount of the fourth grant is higher or lower than past SEISS payments. The grant calculation is based on an average of the 2016-17, 2017-18, 2018-19 and 2019-20 tax returns, where this information is available.

There is a very small number of customers where we may not use the 2019-20 tax return in the calculation of the fourth SEISS grant; for example, when considering some people who tell us they are new parents, and customers with a loan charge.

If your client is not eligible for the fourth SEISS grant

Customers who claimed at least one of the first three SEISS grants, but are not eligible for the fourth grant, should have received an email from us in mid-April.

Some of your clients may have anticipated that they would be ineligible for the fourth grant after reading the published guidance. For those who were unsure of the reason for their ineligibility, there are instructions in the email they received on how to find this information through the online claims service. Please note, you should not access the claims service on your client’s behalf.

Once a customer has viewed their reasons for ineligibility through the online claims service, they should consider whether it is accurate and applicable to their circumstances. We know that many of you are helping your clients to understand whether they are eligible for the fourth SEISS grant, and are grateful for your support with this.

If, after consideration, they believe the ineligibility reasons are incorrect, your client will need to select the ‘If you don’t agree’ option. This will present your client with two ways to begin their review; the coronavirus helpline number (08‌‌00‌‌ ‌024‌‌ ‌12‌‌22) and a webchat service. The outcome will be communicated by letter, which we aim to send within 10 working days of receiving the review. It is likely that we will request evidence during the review process.

If you have clients who are unable to access the online claims service to find their reasons for ineligibility, they can call the coronavirus helpline (08‌‌00‌‌ ‌024‌‌ ‌12‌‌22) instead.

If you have clients who are no longer eligible for the SEISS, they may be eligible for other UK Government support, including: Restart Grants, the Recovery Loan scheme, business rates relief and other business support schemes. More details can be found on GOV.UK.

Amending tax returns and the impact on SEISS grants

This section applies to claims for the fourth and fifth SEISS grants only, and amendments made to tax returns for 2016-17, 2017-18, 2018-19 and 2019-20. This section does not apply to the first three SEISS grants.

If a customer was entitled to their SEISS grant at the time of claim, but subsequently ceases to be entitled to all or part of the grant following an amendment to a tax return, when the amendment was made on or after 3 March 2021, they need to contact us if that would reduce the value of the grant by £100 or more.

This should be done within 90 days of making an amendment to their tax return, or receiving the grant – whichever is later. If a customer does not contact us, they may be charged a penalty. After they have contacted us, we will be able to advise them of the amount they will need to repay and how they can do this.

We will update guidance on GOV‌‌.UK in mid-May with full details of how customers should contact us regarding amendments and what will happen when they do. We’ll also include this in a future email update to you.

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April CJRS claims

Thank you if you have submitted your clients’ April furlough claims already. If you haven’t submitted them yet, you must do so by the deadline of Friday‌‌ ‌14‌‌ ‌May.

Employers can currently claim 80% of furloughed employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, to the end of June.

You can claim before, during or after your client’s payroll is processed. It’s best to encourage your clients to provide the exact number of hours their employees will work, so you don’t have to amend the claim later.

What you or your clients need to do now

1. Check if they’re eligible and work out how much they can claim using our CJRS calculator and examples.
2. Submit any claims for April no later than Friday‌‌ ‌14‌‌ ‌May.
3. Keep records that support the amount of CJRS grants claimed, in case HMRC needs to check them.

Please remind your clients that they must pay the associated employee tax and National Insurance contributions to HMRC. If they don’t do that, they’ll need to repay the whole of the CJRS grant, as this is a condition of applying for the grant.

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CJRS eligibility for claim periods from May

If your clients have employees who have previously been ineligible for the CJRS, as they were not on their payroll on 30 October 2020, they may be eligible for periods from 1 May 2021 onwards.

For claim periods from May, employers can now claim for eligible employees who were on their PAYE payroll on 2 March 2021. This means they must have made a PAYE Real Time Information (RTI) submission between 20 March 2020 and 2 March 2021, notifying HMRC of earnings for that employee.

Your clients and their employees do not need to have benefitted from the scheme before to make a claim, as long as they meet the eligibility criteria.

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Frequently asked questions about the CJRS

You can find everything you need to know about the CJRS on GOV‌‌.UK by searching ‘Job Retention Scheme’, and here are some answers to the most common questions that employers have been asking us recently:

How much can my clients claim through the CJRS?

The UK Government will continue to pay 80% of furloughed employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, to the end of June.

In July, CJRS grants will cover 70% of employees’ usual wages for the hours not worked, up to a cap of £2,187.50. In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875.

Employers will need to pay the difference from July, so that they continue to pay their furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month.

Employers must also pay the associated employee tax and National Insurance contributions to HMRC. If they don’t do that, they’ll need to repay the whole of the CJRS grant to us.

Can a CJRS grant be used to pay for holiday leave?

If employers have furloughed employees because of the impact of the pandemic on their business, they can claim under the CJRS for periods of paid leave their employees take while on furlough, including for bank holidays. Employers should not place employees on furlough just because they are going to be on leave.

If an employee is furloughed for only some of their hours, employers can count all time taken as holiday as furloughed hours, rather than working hours. This means employers can currently claim for 80% of their employee’s usual wages when they’re on leave.

In line with the Working Time Regulations, if a furloughed employee takes holiday employers should make sure they are calculating the correct holiday pay, and not simply continuing to pay the 80% they receive through the CJRS. They may need to top up their employees’ pay to 100% of their normal hourly rate or salary. You can find more information on GOV.UK.

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VAT deferral – apply now to spread your payments

The VAT deferral new payment scheme is open for all businesses who deferred paying VAT due between 20 March and 30‌‌ June‌‌ 2020 and have been unable to pay in full by 31 March‌‌ ‌2021.

Your clients can apply now to spread these payments – businesses that join by 19‌‌ ‌May‌‌‌ ‌2021 can pay in up to nine monthly instalments. The later businesses join, the fewer instalments will be available to them.

Businesses can join the easy-to-use scheme quickly and simply online by 21‌‌ ‌June, without needing to call us. To find out more, including what your clients need to join online, go to VAT deferral on GOV‌‌‌.UK.

If businesses are still unable to pay and need more time, they should contact us.

Businesses may be charged a 5% penalty and/or interest if they do not pay in full, sign up to the scheme or get in touch with us to make an arrangement to pay by 30‌‌ ‌June‌‌ ‌2021.

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Where can I get further support?

Many agents have benefitted from our webinars which offer information on the CJRS and SEISS, other government support and how it applies to your clients. Go to help and support if your business is affected by coronavirus to book online, or to view updated guidance. If you’re booked on a webinar but can no longer attend, please cancel your place to allow space for others to register.

For the CJRS, there’s also list of monthly claims deadlines and a helpful step by step guide on GOV‌‌.UK, summarising the latest information on the CJRS and the steps you need to take to make a claim.

Find out what other government financial support may be available for you and your business as part of the UK Government’s Plan for Jobs on GOV.UK.

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A word about scams

We are aware of recent increases in scam phone calls, emails and texts. If someone contacts you claiming to be from HMRC saying that you owe tax and face arrest, are due a tax refund, that your National Insurance number has been compromised, or asking you to transfer money, or for bank or other personal details, it might be a scam.

Search GOV‌‌.UK for our ‘scams checklist’ and to find out how to report tax scams. You can also access the National Cyber Security Centre’s new guide on how to stay secure online and protect yourself or your business against cybercrime by searching ‘Cyber Aware’.

PAYadvice.UK 5/5/2021