Significant expansion of the Covid-19 support and recovery scheme

On 21 January 2021, the government announced new support measures to help businesses through the corona crisis. It concerns a substantial expansion of the support and recovery package for the economy and labour market that the government had presented on 28 August 2020. This press release summarises the new measures. The measures are explained in more detail in a parliamentary letter. New measures include a scheme for starters. In addition, it is mostly about extending and broadening existing measures. The number of measures is substantial, therefore we will mainly discuss the (tax) measures and subsidies that are relevant for our readers. For a more elaborate version, we would like to refer to the Dutch version of this article or the original documents published by the government.

Support measures for the first and second quarter of 2021

Under the new support package, more entrepreneurs will be entitled to a fixed costs allowance (TVL) and the NOW subsidy will be increased. A separate scheme for starters will be introduced, the stock allowance for shops will be increased and a guarantee fund for the events sector will be introduced. In addition, there are also extensions/expansions in the possibility of deferral of payment ('BUVB'), tax-free allowances by employers, the hour criterion for self-employed persons, restructuring and other (tax) measures. This support and recovery package is therefore a substantial expansion, designed to give companies room to prepare for the new future and respond better to the new economic situation.

What does this mean for you?

If your company currently makes use of certain support measures, it is advisable to examine whether anything changes for you. Even if you have not been entitled to the schemes up to now, it is worth examining whether the various extensions make them applicable to you after all.

Special deferment of payment of tax debts

The term to submit a request for the application of the postponement of payment of tax debts regime (BUVB regime) for a period of three months is extended until 1 July 2021 (was 1 April 2021). Extension of previously granted deferment of payment can also be requested until 1 July 2021.

For entrepreneurs who, after 1 April 2021, apply for the first time, this means that they do not have to meet their new payment obligations until 1 July 2021.

Entrepreneurs who have submitted their application for the deferment of payment of three months before 1 April 2021, can still request an extension of the deferment period until 1 July 2021. It is important that entrepreneurs who are unable to meet their payment obligations after this three months period of deferment file themselves for an extension. This does not happen automatically! If they do not do so, they run the risk of being excluded from the payment scheme in which they can repay their tax debts in 36 months.

For entrepreneurs who already received an extension earlier this year the deferment will now be extended automatically until 1 July 2021. These entrepreneurs do not have to resume the payment of new payment obligations until 1 July 2021.


The NOW subsidy will be increased from 80 per cent to 85 per cent. In addition, the previously announced decrease of NOW will not be continued. The numbers for the second period of the NOW-3 (January to March 2021) and the third period of the NOW-3 (April to June 2021) are equalised. As a result, the following rates apply for both periods: 

  • Maximum allowance wage bill: 85%

  • Minimum loss of turnover: 20%

  • Wage bill exemption: 10%

As of 15 February the NOW can be requested for the period January to March 2021

Fixed travel allowance

The government had already extended the approval for the continued payment of the untaxed fixed travel allowance until 1 February 2021 and has now decided to extend it even further until 1 April 2021. The condition remains that the employee was entitled to the fixed travel allowance on or before 12 March 2020. 

Home-working allowance

In addition, the government has announced that it will investigate a new scheme that makes it possible to provide a tax-free reimbursement of home-working expenses. This concerns an investigation into a structural measure, (also) for after the crisis. The elaboration of the new home-working allowance will probably take several months. The connection to existing travel cost reimbursements will be included in the study.

Work-related costs scheme

At present, employers must use the work-related costs scheme to reimburse homework expenses (untaxed). Therefore, the government has decided to broaden the scope of the work-related costs scheme, as it did in 2020. Also for the year 2021, the budget for the first EUR 400,000 of the wage bill will be increased from 1.7 percent to 3 percent. Over the wage bill above EUR 400,000, the margin will remain at 1.18 per cent in 2021.


In contrast to previous support measures, the newly presented package now also includes a number of measures for starters. This scheme will apply for the first and second quarter of 2021 and involves two measures. Firstly, it will be possible for starters, who started between 1 January 2020 and 15 March 2020, to make use of the TVL for the first quarter. In addition, it will be possible for starters to make use of the corona bridging credits up to EUR 50,000. In view of the state aid element, this proposal must be approved by the European Commission. 

Finally, there will be a special starters scheme. The exact details of this starters scheme will be announced in due course, but will be based on the fixed costs allowance (TVL). 


TVL (Fixed costs allowance)

Entrepreneurs can - on top of the allowance for labour costs (NOW) - qualify for a tax-free allowance to pay their fixed material costs. The government has decided to extend and increase this scheme. 

  • In the first and second quarter of 2021, the maximum allowance for fixed costs for companies will increase from 70 percent to 85 percent. This can be used from a 30 percent loss of turnover.
  • The requirement of a maximum of 250 employees will be dropped, so that larger companies can also apply for the TVL.
  • From the first quarter of 2021, the maximum subsidy amount per quarter will increase from EUR 90,000 to EUR 333,000 for SMEs and EUR 400,000 for non-SMEs.
  • The minimum subsidy amount will increase from 750 euros to 1500 euros in order to provide additional support for smaller entrepreneurs.
  • Medium-sized agricultural and horticultural businesses are not eligible for the increase in the TVL due to European regulations. The government is therefore working on an alternative scheme within the state aid framework.
  • The government also wants to offer the smaller entrepreneurs access to the TVL; this possibility is now being investigated.
  • Earlier, the government had already announced that entrepreneurs that can not sell their stock due to the lockdown will be compensated and this scheme is now being extended. In the first quarter of 2021, the subsidy will be increased to a surcharge of 21 percent on the fixed costs percentage in the TVL, up to a maximum of EUR 200,000. 
  • An entrepreneur does not have to submit a separate application for the stock allowance, this runs along with the application for the TVL. 
  • The government has announced that the maximum stock allowance of 200,000 euros falls outside the maximum amount of 330,000 euros of the TVL.

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