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.
The Chancellor also confirmed in a statement on 17 March 2020 that advice given by Government to avoid pubs, clubs and theatres is sufficient for businesses to claim on their insurance if they 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.
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:
- 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; and
- Self-Assessment that will be 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. See GOV.UK for more information, including eligibility details.
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.
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
From 15 July 2020 to 31 March 2021, the rate of VAT will be cut from 20% to 5% on most tourism and hospitality-related activities and on admission charges for some attractions. For more information, see GOV.UK.
Self-employment Income Support Scheme (SEISS) Grant Extension
The SEISS grant extension covers 1 November 2020 to 30 April 2021. It provides further grants if you are self-employed and:
- were previously eligible for the SEISS first and second grant (although you don't have to have made a claim);
- intend to continue trading; and
- are facing reduced demand due to coronavirus or are temporarily unable to trade because of coronavirus.
The extension provides two further taxable grants that will be paid as separate lump sums, each covering a separate three-month period.
- The third grant will cover 1 November 2020 to 31 January 2021. It provides a grant for 80% of your average monthly trading profits up to a maximum of £7,500.
- The fourth grant will cover 1 February 2021 to 30 April 2021. HMRC has said that it will provide details of the payment at a later date.
For more information, see GOV.UK.
The Coronavirus Job Retention Scheme (CJRS) - Extended
The CJRS was due to close at the end of October 2020, but will now run until the end of April 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 scheme is reviewed in January 2021, HMRC will pay 80% of 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.
Claims can be made on GOV.UK from 11 November 2020. Monthly deadlines will apply.
- For claims up to 31 October 2020, the deadline is 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).
HMRC will soon provide information on how to request that they do not 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.
The Coronavirus Business Interruption Loan Scheme
This scheme is open for new applications until 31 March 2021. It allows banks to offer loans to support small and medium sized businesses. The Government will cover the first 12 months of interest payments.
The Government also announced the following changes to the scheme on 3 April 2020.
- All viable small businesses affected by coronavirus issues, and not just those unable to secure regular commercial financing, are now eligible for the scheme.
- Lenders cannot ask for a personal guarantee for loans under £250,000.
For more information about the scheme and a list of lenders, visit the British Business Bank website.
The Bounce Back Loan scheme
This scheme is open for new applications until 31 March 2021. It allows banks to offer loans to support small and medium sized businesses. that have been affected by coronavirus to take out loans of between £2,000 and £50,000.
From 10 November 2020, businesses may be able to apply for a top to an existing Bounce Back Loan if the original loan was for less than the maximum they were entitled to. The maximum loan is the lesser of £50,000 or 25% of turnover.
Bounce Back Loans can offer repayment terms of up to 10 years and no repayments are due for the first 12 months of the loan. See GOV.UK for more information about this scheme, including eligibility details.
Recovery Advice for Business scheme
The professional and business services sector and Enterprise Nation are offering small and medium sized businesses free advice in the following areas:
- accounting and finance;
- people and building a team;
- planning, strategy and pivoting;
- marketing, PR and social media; and
- technology and digital tools.
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.
- Business rates will be scrapped for 12 months from 1 April 2020 for retail, hospitality and leisure businesses. You do not need to apply, as this relief will automatically be applied to your bill by your local authority.
- Business rates will also be 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 will get rates relief of 1.6% for the business rates year 2020 - 2021.
Strategic Framework Business Fund
This is a fund to provide grants to businesses that have been affected by COVID-19 restrictions from 2 November 2020.
- Grants of up to £3,000 every four weeks are being made available to businesses that have had to close by law.
- Grants of up to £2,100 every four weeks are being made available to businesses that can remain open but have had to change their operations by law. For example, a business required to close earlier than normal.
The grants are being dealt with by local authorities and the amount you will get depends on the rateable value of your business premises. For more information, see GOV.SCOT.
Additional targeted support for hospitality, retail and leisure businesses
A top-up grant is available for hospitality, retail and leisure businesses that are closed by level 4 restrictions.
Eligible businesses will get a one off grant. This is in addition to the grants payable through the Strategic Business Framework Fund.
The amount of the grant is:
- £25,000 for larger hospitality businesses with a rateable value of £51,001 or more;
- £6,000 for smaller hospitality businesses with a rateable value of £51,000 or less;
- £9,000 for larger retail and leisure businesses with a rateable value of £51,001 or more; and
- £6,000 for smaller retail and leisure businesses with a rateable value of £51,000 or less.
If your business is eligible and you have already applied for the four-weekly payment from the Strategic Framework Business Fund, you should get an automatic top-up.
If you haven’t applied, you will need to do so as soon as possible through your local authority website. Applications are now open. For more information, see GOV.SCOT.
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.
It will pay a young person's wages (based on the National Minimum Wage for 25 hours a week) for six months, plus an amount to cover associated employer National Insurance contributions and employer minimum automatic enrolment contributions. £1,500 per placement is also available to cover setup costs, support and training.
Applications need to be for a minimum of 30 job placements, but employers can partner with other organisations to apply. See GOV.UK .
Apprenticeship Employer Grant
The grant will be available to eligible employers where an apprentice starts on or after 1 December 2020. The grant provides the following.
- £5,000 for employers taking on or upskilling a 16 to 24-year old apprentice, and for those aged up to 29 years who are disabled, care leavers and Minority Ethnic.
- £3,500 for employers taking on or upskilling an apprentice aged 25 plus.
Applications will open from the start of January 2021. For more information, see GOV.SCOT.
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.
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.
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 April 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).