Coronavirus and your business (Scotland)
Help for sole traders and businesses
The Government has released guidance for employers and businesses on how you should deal with the impact of coronavirus. The guides cover several topics, such as how to help prevent the spread of the virus and what to do if someone in your work force has coronavirus.
Help for the self-employed and businesses
The Government has announced the following help for self-employed people and businesses.
Statutory Sick Pay refunds
If you run a business with fewer than 250 people, costs for up to 14 days of Statutory Sick Pay will be refunded for eligible employees who have been off work because of coronavirus.
The online claim tool is now available. For further guidance, including eligibility details, see GOV.UK.
HMRC Coronavirus Helpline
You can call the HMRC Coronavirus Helpline on 0800 024 1222 if you cannot pay your tax bill on time because of coronavirus. You can also continue to use HMRC’s Time to Pay service.
Deferral of some payments to HMRC
Businesses are being given longer to make some payments to HMRC. This includes the following.
- VAT payments that were due between 20 March 2020 and 30 June 2020. You may also be able to use HMRC’s VAT deferral new payment scheme. This lets you pay your deferred VAT in up to 11 interest-free monthly instalments (although the later you join the scheme, the fewer instalments are available to you). If you want to join the scheme online, you need to apply by 21 June 2021.
- Self-Assessment payments on account that were due on 31 July 2020.
- Self-Assessment (including Class 2 National Insurance contributions) that was owed in January 2021.
If you have up to £30,000 of self-assessment tax owing in January 2021, you may be able to use HMRC’s self-service Time to Pay facility to get a payment plan for 12 months. This can include deferred self-assessment payments on account that were due on 31 July 2020. See GOV.UK for more information, including eligibility details.
Extra time to get a payment arrangement in place and prevent late filing penalties
HMRC has also said that they will not charge the 5% late payment penalty that would usually be added on 3 March 2021 if you:
- pay your tax by 1 April 2021; or
- set up a payment plan with them by 1 April 2021.
For more information, seeGOV.UK.
Benefit entitlement and Time to Pay arrangements with HMRC
If you need to claim a benefit that requires you to have paid Class 2 National Insurance contributions for the 2019/20 tax year, it is possible that a Time to Pay arrangement with HMRC could delay your benefit claim. This is because HMRC may put your payments toward the July 2020 payment on account before paying your National Insurance contributions. Benefits this could affect include Maternity Allowance and New Style Employment and Support Allowance.
If you are affected by this, you can ask HMRC to put your payments toward your National Insurance contributions first. For more information, see the guidance on GOV.UK.
Extra time for filing your 2019 to 2020 self assessment tax return
File your tax return on time if you can. However, HMRC has said that you will not be charged a penalty for filing your 2019 to 2020 self assessment tax return late if it is filed online by 28 February 2021.
You still need to pay your self assessment tax bill by 31 January 2021 and interest will be charged from 1 February 2021 on any outstanding amounts. You can pay online, through your bank or by post before you file.
Late filing daily penalties will not apply for 2018 to 2019 self assessment returns
HMRC has said that daily penalties will not be charged for the late filing of 2018 to 2019 self assessment tax returns. This is because of the difficult circumstances many taxpayers faced due to coronavirus during the time that daily penalties accrued.
Other penalties will still apply and HMRC will expect you to submit any outstanding returns as soon as possible.
Reducing Payments on Account
You can ask HMRC to reduce your Payments on Account if you think that your 2020 to 2021 tax bill is going to be lower than your 2019 to 2020 bill (for example, because of a loss of earnings caused by the pandemic).
If you are considering this, be aware that HMRC will charge you interest if it is found that a reduced on account payment is less than it should have been.
For more information, see GOV.UK.
Extra time to appeal against some HMRC decisions
If you have been affected by coronavirus, HMRC will give you an extra three months to appeal a tax or penalty decision that is dated 1 February 2020 or later. Send your appeal as soon as you can and also explain that the delay was caused by coronavirus.
VAT rate change for some businesses
The rate of VAT is being temporarily cut on most tourism and hospitality-related activities and on admission charges for some attractions. The rate is reduced from 20%:
- to 5% from 15 July 2020 until 30 September 2021; and
- to 12.5% from 1 October 2021 until 31 March 2022.
For more information, see GOV.UK.
Self-employment Income Support Scheme (SEISS) Grant Extension
The SEISS provides lump sum grant payments. It is for self-employed individuals and members of a business partnership who intend to keep trading, but whose business has been affected by coronavirus.
The fourth grant covers 1 February 2021 to 30 April 2021.
- It will provide a taxable grant for 80% of three months' average trading profits (capped at £7,500 in total).
- The online claim service will be available from late April 2021 to 31 May 2021.
- If you are eligible, HMRC should contact you in mid-April to give you a personal claim date. This will be the date that you can make your claim from.
- If you are newly self-employed and submitted your 2019 to 2020 tax return by 2 March 2021, you may also get support from the fourth grant.
For more information, including eligibility conditions, see GOV.UK.
The fifth grant will cover May 2021 to September 2021.
It will provide a taxable grant for:
- 80% of three months’ average trading profits (capped at £7,500) if you have a reduction in turnover of 30% or more; or
- 30% of three months’ average trading profits (capped at £2,850) if you have a reduction in turnover of less than 30%.
- It will open for applications in July 2021.
HMRC has said that more details about the fifth grant will follow.
The Coronavirus Job Retention Scheme (CJRS) - Extended
The CJRS will now run until the end of September 2021.
If you are finding it difficult to maintain your workforce because your business is affected by coronavirus, you may be able to furlough your employees and apply for a grant to cover some of their wage costs through the extended Coronavirus Job Retention Scheme.
The scheme is available to all UK businesses with a UK bank account and UK PAYE scheme.
- Until the end of June 2021, HMRC will pay 80% of usual wages up to a cap of £2,500 per month for the hours that an eligible employee is furloughed. You will need to pay the employer National Insurance contributions and pension contribution.
From July 2021 onwards HMRC is reducing the amount of the CJRS payment.
- For July 2021, HMRC will pay 70% of usual wages up to a cap of £2,187.50 per month for the hours that an eligible employee is furloughed.
- For August and September 2021, HMRC will pay 60% of usual wages up to a cap of £1875 per month for the hours that an eligible employee is furloughed.
You will still need to pay employees that you furlough 80% of their usual wages up to the cap of £2,500 per month. This means that from July 2021 onwards you will have to pay the shortfall created by the CJRS reductions. You will also need to pay the employer National Insurance contributions and pension contribution.
Claims can be made on GOV.UK and there are set monthly deadlines.
- For claims up to 31 October 2020, the deadline was 30 November 2020.
- For claims after 1 November 2020, the claim must be made within 14 calendar days after the month the claim relates to. For example, an employer claiming a grant for November 2020 must submit the claim by 14 December 2020. If the 14th day falls on a weekend, the deadline will be the following weekday.
- See GOV.UK guidance for a list of monthly submission dates and for information about late applications.
For claims made for the month of December 2020 onwards, HMRC will publish:
- employer names;
- an indication of the value of the claim; and
- the company registration number if the claim is made by a limited company or limited liability partnership (LLP).
You can ask HMRC not to publish these details if it would result in a serious risk of violence or intimidation to certain individuals. This includes you, your employees and anybody that lives with you or your employees. For more information, see GOV.UK or contact us for advice.
If you are a director of a limited company and paid as an employee of the limited company through PAYE, the limited company can apply for help from the CJRS if you are furloughed. Our understanding is that a director who is also an employee can furlough themselves as long as they only carry out minor statutory and administrative director duties. You must not provide services or carry out income generating ‘employee’ activities while you are furloughed.
This scheme will not cover any dividends that you receive as a director. So, if you are a director of a limited company, paid as an employee of the limited company through PAYE and also get dividends from the limited company, you will need to decide whether being furloughed is the best option for you. If you are unsure, speak to your accountant or bookkeeper.
If you are a salaried member of a limited liability partnership (LLP), then you may also be eligible for support through the scheme. If you are a member of an LLP and uncertain about whether you are ‘salaried’, or not, check the LLP agreement. You may also need to contact your accountant or bookkeeper.
The Government previously announced that a Job Retention Bonus would be paid for each eligible furloughed employee who is still employed on 31 January 2021. This will no longer be available.
However, Government has said that a retention incentive will be deployed at the appropriate time.
Recovery Loan Scheme
The scheme is open until 31 December 2021.
It allows you to apply for government-backed finance to use for your business needs. The finance available includes:
- loans and overdrafts of between £25,001 and £10 million per business; and
- invoice finance and asset finance of between £1,000 and £10 million per business.
A list of the creditors that you can apply to for this scheme is available on the British Business Bank's website.
If you meet the eligibility conditions, you can apply to the Recovery Loan Scheme even if you have already had help from other coronavirus loan schemes.
For more information, see GOV.UK.
The Bounce Back Loan scheme
This scheme closed to new applications and top-up applications on 31 March 2021.
If you have a Bounce Back Loan, no repayments are due for the first 12 months of the loan. See GOV.UK for more information about this scheme.
Options when your Bounce Back Loan repayments become due
Your lender should write to you at least three months before your Bounce Back Loan repayments are due to start. The letter should explain that that you can ask your lender for the following options.
- To extend the length of the loan from six years to ten years.
- To make interest-only payments for six months. You can use this option up to three times during the term of the loan.
- To pause repayments entirely for up to six months. You can only use this option once during the term of the loan.
You can ask for the above even if you haven’t missed a payment. However, if you use one or more of these options, you will pay more interest overall. Also, the length of your loan will increase in line with any repayment holidays you take.
The Financial Conduct Authority (FCA) has also issued guidance on the collection of Bounce Back Loan repayments.
The Coronavirus Business Interruption Loan Scheme
This scheme closed to new applications on 31 March 2021.
It allowed banks to offer government-backed loans to support small and medium sized businesses. Government also covered the first 12 months of interest payments under the scheme.
If you took out a loan under this scheme:
- your lender should not have asked you to secure the loan against your home; and
- for loans under £250,000, should not have asked for a personal guarantee.
For more information, see the British Business Bank website.
Flexible Workforce Development Fund
This fund can provide small and medium businesses with up to £5,000 worth of training. This can be used to provide college or Open University in Scotland training to reskill or upskill employees. For more information, see GOV.SCOT.
Business support finder
GOV.UK has an online business support finder. It asks you several multiple choice questions. It uses your answers to produce a list of the types of coronavirus support that may be available to you and your business.
GOV.UK also has information about coronavirus advice and support that is available from business representative organisations and trade associations. Check whether there is any extra help available for your type of business.
For 2021 to 2022
The following businesses will not pay rates during 2021 - 2022.
- Retail, hospitality and leisure businesses.
- Some Scottish airports and handling service providers.
The charitable rates relief for mainstream independent schools will also continue until 1 April 2022.
Contact your local authority to apply for the above reliefs.
For more information on the types of business rates relief available in Scotland, see mygov.scot.
For 2020 to 2021
- Business rates were scrapped for 12 months from 1 April 2020 for retail, hospitality and leisure businesses.
- Business rates were also scrapped for 12 months from 1 April 2020 for Scottish airports and businesses that provide handling services for scheduled passenger flights at Scottish airports.
- All business rates were given rates relief of 1.6%.
This scheme helps businesses to create new jobs for under 25 year olds who are getting Universal Credit and are at risk of long-term unemployment. The scheme pays:
- 100% of a young person's wages (based on the National Minimum Wage or National Living Wage for 25 hours a week) for six months;
- an amount to cover associated employer National Insurance contributions;
- an amount to cover employer minimum automatic enrolment contributions;
- £1,500 per placement to cover setup costs, support and training; and
- £360 per placement to cover admin costs.
Applications no longer need to be for a minimum number of placements. You can apply online yourself or get help from a Kickstart gateway. See GOV.UK.
Adopt an Apprentice
This scheme offers £5,000 if you employ modern apprentices and graduate apprentices who have been made redundant.
The grant is available to help support certain redundant apprentices to continue their apprenticeships and work towards their qualifications.
Applications will be open until 5pm on 24 June 2021.
For more information, see the Adopt an Apprentice programme rules.
Creative Scotland Funding
Creative Scotland supports a wide range of activity in the arts, screen and creative industries. It has several funds available to individuals, groups and organisations. Go to www.creativescotland.com and see the funding section of the website for more information.
Seafood Producers Resilience Fund
This fund is for shellfish catchers and shellfish and trout aquaculture undertakings. It provides grants to eligible businesses that have lost access to domestic and international food markets because of:
- coronavirus; and
- the difficult trading conditions at the end of the transition period following the UK’s withdrawal from the EU.
The amount of grant you get will depend on whether you are claiming as a fishing vessel or as an aquaculture undertaking. Eligibility conditions are also different for each type of business. If your business owns both vessels and aquaculture undertakings, you will have to complete two applications.
For more information and a link to the application forms, see GOV.SCOT.
Business Contingency Fund - Phase 1
This fund provides a one-off grant to nightclubs and soft-play centres that that have been closed by law since March 2020. Awards of between £10,000 and £50,000 are based on the rateable value of your premises. Extra rules apply to businesses operating from multiple premises.
You do not need to apply for this funding. Your council should contact you to gather information for a claim. For more details, see GOV.SCOT.
Support for childminders
The Scottish Government has said that a grant of £750 will be paid to all childminders in Scotland who are registered with the Care Inspectorate. For more information, see GOV.SCOT.
The Business Gateway website is run by local authorities. It contains useful information for businesses in Scotland. It also includes details and links to government grants and support, some of which are being managed through other organisations. Go to www.bgateway.com or call 0300 013 4753.
This service was set up to help Scottish businesses find public sector support. It has a coronavirus advice section, which contains links to general and sector specific funding. For more information, go to findbusinesssupport.gov.scot/coronavirus-advice.
The Scottish Government has introduced a temporary law to protect business tenants. If your landlord wants to use an irritancy clause to end your business lease because of rent arrears, they must give you at least 14 weeks’ notice.
Your business rent will still be due. If you cannot afford to pay your business rent, contact your landlord to discuss your situation.
Business interruption insurance
The Chancellor confirmed in a statement on 17 March 2020 that advice given by Government to avoid pubs, clubs and theatres is sufficient for you to claim on your insurance if you have appropriate business interruption cover for pandemics in place. Although advice did change and the Government said that many of these businesses had to close, the Chancellor's earlier statement may affect the date from which your insurer pays you.
The Financial Conduct Authority’s (FCA’s) test case
As there was widespread uncertainty about what was covered by business interruption insurance policies, the FCA took a test case to court. Based on what the court decided, the FCA has created a policy checker. You can use the FCA’s policy checker to find out if your insurance policy may cover business interruption losses caused by coronavirus and what you can do next.
Companies House accounts
The Government has introduced temporary measures to extend the time that most companies have to file their accounts. The extension is given automatically to:
- public companies with a filing deadline that falls between 25 March 2020 and 6 April 2021; and
- private companies with a filing deadline that falls between 26 June 2020 and 6 April 2021.
For further information, see the guidance Temporary changes to Companies House filing requirements. You can check what the deadline is for filing your company’s accounts on the Companies House website.
The Government has introduced measures that temporarily suspend liability for wrongful trading. For many limited companies, this means that a director is not responsible for any worsening of the financial position of the company or its creditors that occurs between the following periods.
- 1 March 2020 to 30 September 2020.
- 26 November 2020 to 30 June 2021.
Temporary protections for limited companies from statutory demands and winding-up notices
The Government has introduced some temporary measures. In certain circumstances, your company may have extra protection from creditors using a statutory demand or other grounds to apply for the business to be wound up. Also, in some circumstances the court may be able to restore a company if a winding-up order has already been made. More information is available in our Limited companies fact sheet.
Limited company meetings
Some companies have a legal requirement to hold meetings. As holding any meeting during the pandemic is likely to be difficult because of social distancing, temporary measures have been introduced for meetings that were due to be held between 26 March 2020 and 30 March 2021. During this period:
- meetings do not have to be held in a specific place;
- those attending do not have to be together in the same place;
- meetings can be held, and votes can be cast, electronically or by other means;
- shareholders do not have the right to attend the meeting; and
- shareholders only have the right to participate by voting or by using a particular method of voting (for example, a show of hands).