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.
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.
- VAT payments that were due between 20 March 2020 and 30 June 2020.
- 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.
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.
For 2022 to 2023
Eligible retail, hospitality and leisure businesses will get a 50% reduction in their business rates from 1 April 2022 to 30 June 2022 (up to a maximum reduction of £27,500).
Contact your local authority to apply for the reduction.
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%.
If you are a director of a limited company and your company is being threatened with a winding up petition, see the Temporary coronavirus measures to protect your company from statutory demands and winding-up notices section of our Limited companies fact sheet.
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.
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.
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.
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.