The government has confirmed that all businesses in England are now able to sign up to its free COVID-19 rapid workplace testing programme, including firms with fewer than 50 employees. Rapid workplace testing detects cases in under 30 minutes meaning that positive cases can isolate immediately, breaking transmission chains.
Businesses that wish to participate must register their interest by 31 March 2021 .
The Recovery Loan Scheme ensures businesses of any size can continue to access loans and other kinds of finance up to £10 million per business once the existing Covid-19 loan schemes close.
The scheme will launch on 6 April 2021 and is open until 31 December, subject to review.
Already major banks like Barclays, Lloyds and Virgin Money have signed up to the new scheme.
The current Coronavirus Bounce Back Loans and Coronavirus Business Interruption Loans (CBILS) close for new applications at the end of March.
Once received, the finance can be used for any legitimate business purpose, including growth and investment.
The government guarantees 80% of the finance to the lender to ensure they continue to have the confidence to lend to businesses.
Term loans and overdrafts will be available between £25,001 and £10 million per business.
Invoice finance and asset finance will be available between £1,000 and £10 million per business.
No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.
You will be able to apply for a loan if your business is trading in the UK and that your business is viable or would be viable were it not for the pandemic, has been impacted by the coronavirus pandemic, and is not in collective insolvency proceedings.
Business that have received support under the existing Covid-19 guaranteed loan schemes will still be eligible to access finance under this scheme, if they meet all other eligibility criteria.
The 4th and 5th SEISS grants
4th grant which will cover the period from February 2021 to April 2021.
Eligibility for the 4th and 5th grants will be based on the 2019/2020 tax return as submitted by midnight on Tuesday 2 March and so the grants will now be open to those that became self-employed from 6 April 2019.
This was not the case in respect of the earlier grants.
Capped at £7,500 the 4th grant will be again set at 80% of three months’ average trading profits.
There will also be a 5th grant covering May to September 2021 and will take the individual’s trading position for 2020/2021.
The 5th grant will be worth:
- 80% of three months’ average trading profits, capped at £7,500, for those with a turnover reduction of 30% or more; or
- 30% of three months’ average trading profits, capped at £2,850, for those with a turnover reduction of less than 30%.
The proposal is that for any grant received on or after 6 April 2021 it will be taxable in the tax year of receipt. Grants 4 and 5 are thus likely to be taxable in 2021/2022.
HMRC will contact those that are eligible and the claims for the 4th grant can be made from ‘late April 2021’.
The 5th grant can be claimed from late July 2021.
There is no requirement that an earlier SEISS grant has been claimed in order to be able to claim the upcoming 4th grant.
The overall qualifying criteria for the 4th grant is the same as it was for the original SEISS and the 3rd grant.
The grants are taxable income and are also subject to National Insurance contributions (NICs).
What if you have been overpaid and you want to pay a grant back?
The taxpayer must notify HMRC of an overpayment within 90 days of receiving the grant to avoid a penalty. The penalty could be up to 100% of the grant.
HMRC will charge late payment interest.
However, HMRC states ’If you did not know you were ineligible for the grant when you received it, we will only charge you a penalty if you have not repaid the grant by 31 January 2022’’
Eligibility criteria for the 4th and 5th grants:
The 2019/2020 tax return must have been submitted by 2 March 2021 and show self-employment/partnership trading profits to be no more than £50,000 and at least equal to non-trading income.
If this is not the case then HMRC can look at the tax years 2016-17, 2017-18, 2018-19 as well as 2019-20.
You must also have traded in both tax years:
- 2019-20; and
You must either:
- be currently trading but are impacted by reduced demand due to coronavirus; and
- have been trading but are temporarily unable to do so due to coronavirus.
You must also declare that:
- you intend to continue to trade
- you reasonably believe there will be a significant reduction in your trading profits due to reduced business activity, capacity, demand or inability to trade due to coronavirus
Once the online check is complete, eligible customers will be given a date when they can submit their claim.
Tax credits and Universal Credit
Individuals that claim tax credits would need to include the grant as part of their income. The grant will be treated as earnings for Universal Credit too and should be reported in the claimant’s online journal to the DWP in the month the grant is paid and may affect the amount of the UC claimed.