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Coronavirus and your business (Scotland)

Help for sole traders and businesses

Government guidance

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 original support ended on 30 September 2021. However, the government has announced that the scheme is being reintroduced for eligible periods of sickness starting on or after 21 December 2021. It has also said that for the reintroduced scheme:

  • claims can be made retrospectively from mid-January 2022; and
  • you will be able to reclaim the costs for up to 14 days of SSP for an employee who takes time off because of coronavirus, regardless of whether you claimed for that employee under the previous scheme.

We will add more information when guidance is made available.

Under the original scheme:

  • you can only claim for eligible employees who were off work on, or before, 30 September 2021; and
  • you must submit your eligible claims on, or before, 31 December 2021.

To claim back coronavirus-related Statutory Sick Pay use the online claim tool. 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

Some businesses have been given longer to make certain payments to HMRC. This includes the following.

Extra time to get a payment arrangement in place and prevent late filing penalties

HMRC also said that they will not charge the 5% late payment penalty that is usually added on 3 March 2021 if you:

  • had paid your tax by 1 April 2021; or
  • had 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 2020 to 2021 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 2020 to 2021 self assessment tax return late if it is filed online by 28 February 2022.

You still need to pay your self assessment tax bill by 31 January 2022 and interest will be charged from 1 February 2022 on any outstanding amounts.

Extra time for filing your 2019 to 2020 self assessment tax return

HMRC has said that you should not be charged a penalty for filing your 2019 to 2020 self assessment tax return late if it was filed online by 28 February 2021.

You still need to have paid your self assessment tax bill by 31 January 2021 and interest is 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 has given an extra three months for you to appeal a tax or penalty decision that was dated between 1 February 2020 and 30 September 2021.

Standard time limits will apply if you want to appeal a decision that is dated from 1 October 2021 onwards. However, HMRC has said that it is aware that some customers are still feeling the impact of coronavirus, and this may still be a reasonable excuse for not meeting their tax obligations on time in some cases.

If you plan to appeal, send your appeal as soon as you can and explain if 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)

The SEISS has closed.

If you claimed a grant through the SEISS, HMRC will write to you with information:

  • on how to report SEISS grants correctly on your tax return; and
  • what to do if anything has changed since you claimed a SEISS grant.

Recovery Loan Scheme

The scheme is open until 30 June 2022.

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.

Sector support

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.

Business rates

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%.

Business rent

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. 

If you are a director of a limited company and your company is being threatened with a winding up petition, also see the Temporary coronavirus measures to protect your company from statutory demands and winding-up notices section of our Limited companies fact sheet.

Grants

December and January Business Support Top Up

The December and January Business Support Top Up fund will provide one-off payments to eligible businesses affected by measures introduced to slow down the spread of the Omicron variant.

Hospitality sector

You may be eligible for a one-off payment of £4,500 or £6,000 if your business:

  • has lost crucial bookings because of coronavirus measures introduced in December 2021;
  • was actively trading on 8 December 2021; and
  • is registered as either a public house, restaurant, café, nightclub, hotel with bar and restaurant or other licensed premises classed as hospitality.

If you are eligible and have previously received support through the Strategic Framework Business Fund, your local authority should contact you with information on how to apply.

If you are not contacted by your local authority or you have not previously received support through the Strategic Framework Business Fund, contact your local authority to check your eligibility.

The closing date for applications is 31 January 2022.

For further information, see GOV.SCOT.

Support for other sectors

The December and January Business Support Top Up fund will also provide support to:

  • the events sector;
  • the culture sector;
  • wholesalers affected by hospitality cancellations;
  • some parts of the tourism sector; and
  • some parts of the wedding sector supply chain. Eligible businesses that previously received support through the Scottish Wedding Industry Fund will be contacted in the week commencing 10 January 2022.

Further information for the different sectors will be published on findbusinesssupport.gov.scot/coronavirus-advice.

January Business Support Top Up – Hospitality and Leisure

This fund provides one-off payments of up to £2,100 for hospitality businesses and up to £3,150 for leisure businesses affected by coronavirus restrictions introduced in December 2021.

You may be eligible for a payment if your business:

  • has physical premises that it is the main occupier of; and
  • was trading on 20 December 2021.

If you are eligible and have previously received support through the Strategic Framework Business Fund, your local authority should contact you with information on how to apply.

If you are not contacted by your local authority or you have not previously received support through the Strategic Framework Business Fund, contact your local authority to check your eligibility.

The closing date for applications is 31 January 2022.

For further information including a list of the types of business that may be eligible, see GOV.SCOT.

Business Ventilation Fund

If you have a business where people come into close contact, you may be eligible to claim up to £2,500 to help with the cost of work to improve the ventilation and air quality in your business premises.

Your business may be eligible if it is the main occupier of premises that is registered for non-domestic rates. To get the funding you will need to:

  • complete an online assessment to check if your business is eligible for support;
  • get approval for the work you are proposing to undertake; and
  • pay for the work before submitting receipts to claim back costs.

The scheme will open for applications in the week beginning 22 November 2021 until 31 March 2022, or sooner if the funds run out. For more information, see FindBusinessSupport.

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.

Taxi and Private Hire Driver and Operator Support Fund 2022

This fund provides one-off grants to eligible taxi and private hire drivers and operators.

Taxi and private hire drivers may be eligible for a payment of £750.

The grant for taxi and private hire operators will depend on the number of vehicle licences held. The grants start at £750 for one vehicle licence, up to a total grant of £15,000 if 50 or more vehicle licences are held.

You may be eligible for a payment if you:

  • received support through the Taxi Driver and Private Hire Vehicle Driver and Operator Support Fund in 2021; and
  • you are still active in the sector.

You do not need to apply for the grant. Local authorities will contact eligible drivers and operators to verify entitlement and to arrange payment.

For more information, see GOV.SCOT.

Nightclub Closure Fund

If your business is a nightclub that was forced to close because of coronavirus measures in December 2021 and January 2022, you may be eligible for a one-off payment of up to £55,000.

You may be eligible if your nightclub:

  • was trading on 22 December 2021; and
  • closed before 23:59 on 31 December 2021 because of coronavirus restrictions.

If you have previously received coronavirus support from your local authority, you should be contacted with an invite to complete an application by 14 January 2022. If you do not receive an invitation by this date but feel you should have received one, you should contact covidbusinesssupport@gov.scot

If you have never received coronavirus funding through your local authority, further information on the applications process should be made available soon. For more information, see FindBusinessSupport.

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.

Business Gateway

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.

FindBusinessSupport.gov.scot

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.

HMRC guidance

HMRC has produced guidance to help you find out if you need to include a coronavirus grant or support payment on your tax return. For more information, see GOV.UK.

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 introduced temporary measures to extend the time that most companies had to file their accounts. The extension was given automatically to:

  • public companies with a filing deadline that fell between 25 March 2020 and 6 April 2021; and
  • private companies with a filing deadline that fell between 26 June 2020 and 6 April 2021.

You can check what the deadline is for filing your company’s accounts on the Companies House website.

Directors’ duties

The Government introduced measures that temporarily suspended 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 occurred 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. More information is available in our Limited companies fact sheet.