More Support From the Government

 Hello Everyone

 

I know this is two emails in two days – sorry about that.

 

I thought it was worth dropping you a line just to let you know about the Chancellor’s announcement a few minutes ago if you didn’t hear it.

 

Although (as always) there’ll be more details to follow, five high level announcements about ongoing support were announced by the Chancellor a little while ago.

 

We’ll fill in the gaps when we get the detail and some of what I’m about to write is what I got from the live speech so may be subject to change when we get more info.

 

Anyway, here goes:

 

 

Job Support Scheme

 

This scheme is replacing the Job Retention Scheme – also known as the furlough scheme – which is going to end on 31^st October.

 

The new scheme is designed to protect jobs so will only be available if employees are retained and actually working for at least 1/3 of their usual hours.  Employees must be paid as usual for the hours they actually work.

 

Up to 1/3 of their usual salary will then be paid by the government meaning employees will get at least 2/3 of normal pay.  This is capped at £697.92 per month.

 

All small businesses will be eligible if employees have to work less hours because of Coronavirus – whether or not the employer has used the furlough scheme in the past.

 

The Job Support Scheme will begin in November and more details are to be published.

 

 

Government Backed Loans

 

Some of the repayment terms have changed on the Bounce Back Loan.

 

Payments can now be taken over ten years – up from six years and can be changed if, for example, your business starts to grow again.  A borrower can also change to an interest only option or suspend payments for up to six months altogether.

 

There’s a change to CBILs too.  The government guarantee has been extended to ten years which should (according to Rishi) make it easier for lenders to say ‘yes’.

 

 

Deferred Tax Bills

 

Some businesses chose to defer VAT and self employed people deferred Payments on Account.

 

These deferred payments were due to be paid by 31^st March 2021 and 31^st January 2021 respectively.  The government is now allowing deferred VAT bills to be paid over 11 smaller instalments with no interest and the tax bills over 12 months.

 

 

VAT Reduction for Hospitality

 

Businesses in hospitality have had a reduction in VAT rate to 5%.

 

This reduction was due to be cancelled on 13^th January 2021.  The reduction will now be in place to 31^st March 2021.

 

 

Self Employed Income Support Scheme

 

I have to say there was one line about support for the self employed which I almost missed.

 

However, There will be an additional grant for people who are already eligible for the SEISS and who are seeing reduced demand because of Coronavirus.

 

The grant will cover three months from November to January next year and will pay 20% of average profits up to £1,875.  There’s a second grant (which may be adjusted) that will cover February to end of April next year.

 

Phew!

 

We now need to work through the detail of all this but hopefully there’s some good news in there for you from whatever scheme is being put in place.

 

As we get more info we’ll write out again but please do ask questions if you have any… I’ll most likely collate the questions and put out as an update email next week.

 

Speak soon.

 

Rowena

Self Employed Income Protection Scheme

 Happy Fri-yay!

 

We’ve almost made to the weekend everyone – well done!

 

Just one update today as a result of a few questions we’ve had about the Self Employed Income Protection Scheme.

 

Some of you have held off applying for the second grant because you’re not sure what the words ‘adversely affected’ mean… remember you can only claim the grant if your business has been ‘adversely affected’ but Coronavirus.

 

Unfortunately I can’t tell you if you class as having been adversely affected but HMRC has published guidance on what it means.

 

Here is what the gov.uk website has to say about it:

 

Your business could be adversely affected by coronavirus if, for example:

 

you’re unable to work because you:

 

• ·         are shielding
• ·         are self-isolating
• ·         are on sick leave because of coronavirus
• ·         have caring responsibilities because of coronavirus

 

you’ve had to scale down, temporarily stop trading or incurred additional costs because:

 

1. ·         your supply chain has been interrupted
2. ·         you have fewer or no customers or clients
3. ·         your staff are unable to come in to work
4. ·         one or more of your contracts have been cancelled
5. ·         you had to buy protective equipment so you could trade following social distancing rules

 

The website also goes on to say:

 

If your business recovers after you’ve claimed, your eligibility will not be affected.

 

There are some examples on the gov.uk site too.

 

So, please do remember the grant isn’t only for you if your business had to stop completely (and actually one of the eligibility criteria is that you intend to continue to trade in 2020 to 2021), it’s also for you if your costs have gone up or your income has gone down – even if you continued to trade.

 

You can read more about eligibility on gov.uk here:

 

https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme#check

 

And there’s a useful step by step guide to making a claim on the TaxAssist Accountants website here:

 

https://www.taxassist.co.uk/resources/articles/how-to-submit-your-self-employment-income-support-scheme-claim

 

That’s it for today…

 

See you on the other side – well, Monday (or Tuesday if you get the Bank Holiday) and if you have the weekend off please do have a good one.

 

Speak soon.

 

Rowena

Tuesday 18th August - Self Employed Income Support Grant

 Hello Everyone

 

Happy Tuesday update… hope your week is going well.

 

Today is all about the Self Employed Income Support Scheme grant.

 

So, if you are self employed the second SEISS grant is now open for claims.  You can make a claim even if you didn’t claim the first grant.

 

HMRC will be in touch to let you know if they think you are eligible.  They are also staggering the dates you can apply from to help manage the number of people using their website at any one time.

 

You can check whether you are eligible by following this link:

 

https://www.gov.uk/guidance/claim-a-grant-through-the-self-employment-income-support-scheme

 

You’ll need your Unique Taxpayer Reference (UTR) and your National Insurance Number.

 

If you use this link to check whether you can claim you’ll also be advised the day you can enter your claim from.

 

I entered details for a friend this morning and the date she could claim from was 20^th August.

 

Remember – you must have been adversely affected by the pandemic on or after 14^th July – although that doesn’t mean all your work must have dried up.  It could be that sales have dropped or costs have increased.

 

The grant is capped at £6,570.  The amount is calculated as three times average monthly profits, based on profits in 2016/2017, 2017/2018 and 2018/2019… or the average of as many years as you have been self employed.

 

You must have submitted your 2018/2019 self assessment tax return.

 

Once your claim has been accepted payments will be made directly to a UK bank account within six working days.

 

Finally, you have until 19^th October to make your claim.

 

We can’t make these claims on your behalf – but if you have any questions please do get in touch – happy to answer any questions you have.

 

See you all very soon.

 

Rowena

Friday's Coronavirus Update

Hello everyone

Happy Friday.

I woke up this morning with a terrible sense of disappointment… I was dreaming it was Saturday!

I told Robert (one of our colleagues) about this on our daily call and he said he had exactly the same dream.  Strange.

Anyway, today’s update is all about the Self Employed Income Protection Scheme.  We’ve had a few questions in over the past couple of days (well, three actually) about the scheme and what happens next.

Let’s dive right in –

Current Position

Okay – the scheme is now in two parts – the first grant paid 80% of trading profits (based on an average of three year’s profits) capped at £7,500.  There will be a second grant made available which will pay 70% of trading profits capped at £6,750.  Average profits must have been less than £50,000 over the years 2017, 2018 and 2019 and have been more than half of total income.

There are some other criteria: you must have completed a tax return for 2018/2019 and you traded in that year, you must have traded in 2019/2020 and will continue trading in 2020/2021.  Your business must have been adversely affected by Coronavirus.

You can still work and receive the grant.  This is HMRC’s list of what ‘adversely affected’ means:

You're unable to work because you:

• Are shielding
• Are self isolating
• are on sick leave because of Coronavirus
• Have caring responsibilities because of Coronavirus

You've had to scale down, temporarily stop trading or incurred additional costs because:

• Your supply chain has been interrupted
• You have fewer or no customers or clients
• Your staff are unable to come to work
• One or more of your contracts has been cancelled
• You have had to buy protective equipment so you could trade

In terms of this first grant I want to flag up a deadline…

If you are eligible for the first grant and you haven’t claimed yet (and you want to claim) you have to do it by 13^th July.  Unfortunately I can’t do it for you but here’s the link to make the claim:

https://www.gov.uk/guidance/claim-a-grant-through-the-self-employment-income-support-scheme

The Next Claim

The scheme has been extended and a second grant will be available.

The earliest you will be able to claim is 17^th August.  As far as we know the claim process will be the same.

To be eligible your business must have been adversely affected by Coronavirus on or after 14^th July 2020. 

As far as we know the other criteria remain the same – so even if your 2020 tax return shows income of more than £50,000 this won’t affect your ability to claim – the claim amount is based on your 2017, 2018 and 2019 tax returns.

Just a final note on local authority grants

Following Wednesday’s update a few of you have been in touch to say you were initially turned down for a local authority grant only to receive a letter out of the blue to say some cash has been awarded.

Money has also turned up in bank accounts so all seems to be above board!

That’s it for today…

Do check out our Facebook page for 1) a link to our blog which will feature this email – feel free to pass on to colleagues if you think it would help and 2) infinitely funnier – Richard’s First Play Friday* choice for this evening!

Have a fabulous weekend.

Rowena

*First Play Friday – if you haven’t seen the Facebook posts here’s a precis: Richard bought a record player at the beginning of lockdown and has been building a new record collection.  Each week he buys a new album and then plays it for the first time on Friday evening.  Suggestions via the Facebook page are always welcome!

https://www.facebook.com/AccountantsEdinburgh

Wednesday's Coronavirus Update

Hello everyone…

Welcome to Wednesday’s update and (it seems) to summer, too…

Okay – a really short update today based on a question we received from a couple of people – about deferring payments on account due in July until January 2021.

We thought the answer to this question was an easy one but it turned out to be a conundrum (yes, a conundrum) and we had to do some digging around HMRC.

The issue was this:

The deferment of the payments on account due to be made by 31^st July was originally just for the self-employed…

However, I found this entry on another website:

‘… HMRC have updated their website to confirm that everyone within Self-Assessment is eligible to defer their second payment on account due on 31 July 2020 not just the self-employed…’

So, I checked it out with HMRC – although it took a bit of digging - I eventually got the answer I was looking for on webchat.  Here’s a snip of the convo.

'...Self Assessment customers who are due to pay their second payment on account by 31 July 2020 may defer payment until 31 January 2021.  This will be done automatically there is no need to apply for this.  A deferrment is available to any self assessment tax payer who has difficulty in paying their payment on account by 31 July 2020 due date...'

So, there we are – if you complete a self assessment and you have a payment on account to make in July 2020 you can defer it to 31^st January 2021.

You don’t have to do anything to defer – just don’t make the payment.  You won’t be charged interest nor penalties.

If you’ve already made the payment and you’d prefer not to you can request a refund from HMRC of the payment made – you have to do this before 31^st July.

That’s it for today everyone… and please keep the questions coming and we’ll share with everyone else.

See you Friday.

Rowena

NEWSFLASH:

Just heard the news from Nicola Sturgeon (not personally, you understand) that there’s a relaxation of the lockdown rules.  More details later but these are the highlights:

From July 3^rd we can travel around the country for leisure and not be restricted to the 5 mile limit

We can also visit self catering accommodation such as holiday cottages or caravans
From July 6^th beer gardens and other outdoor hospitality such as restaurants and cafes will open –as long as we don’t have an uptick in the virus
From July 13^th shopping centres can open and organised sport for children and young people will resume
From July 15^th tourism should be up and running – indoors and outdoors

More details will follow and all this subject to social distancing and assumes there’s no increase in the spread of the virus.

Of course you’ll want to have a think about all this… but if it immediately changes your thoughts about furloughing staff do get in touch and we can talk about it.

Speak soon.

Rowena

Thursday's Coronavirus Update

Hello everyone…

Yes, it’s a Thursday update this week rather than Friday.

No particular reason other than I really need to share some information with you about the Job Retention Scheme which is changing from 1^st July.

Job Retention Scheme

I’ve written about the changes to the scheme before but I want to give you a few more details because it’s… well, complicated.

So, I’ve explained in the past about the introduction of the Flexible Furlough from 1^st July onwards.  Essentially this means that an employer can bring back a staff member part time and pay them for the hours worked, whilst the government will pay 80% of the salary for the time when the team member couldn’t work.

There’s been a fair amount of detail put out by HMRC about all this so I thought I’d just give you more of the highlights… if they can be called that!

Claim Periods

First of all in the new scheme claim periods can’t overlap a calendar month.

This is because the scheme is changing on the 1^st of each month starting from 1^st July.

·         1^st July – part-time furloughs start

·         1^st August – employers can’t claim NI or pension payments

·         1^st September – claim amount drops to 70% of salary – employers make up the rest

·         1^st October – claim amount drops to 60% of salary – employers make up the rest

So, all claims for staff on furlough in June can only run up to 30^th June and be claimed by 31^st July… even if someone continues to be furloughed full time in June and July.  In other words there will be a claim for furloughed days in June and another one for the furloughed days in July.

Up until now we’ve tried to keep the furlough claims (wherever we can) in line with your pay periods – we may not be able to do that in future.

For claims starting on or after 1^st July – the claim can only start and end in the same calendar month.  Claims have to be for at least seven days – unless the period of the claim includes either the first or last day of the calendar month and the period immediately before it has already been claimed for.

Essentially this means that the furlough calculations (which we thought were complicated before) are about to get hugely complicated!

Other requirements

There’s quite a lot to the small print.  I’ve read through the detail and pulled out the most important bits… but there’s lots more.  Have a look at these requirements:

•                     You can only make one claim for any period so you must include all furloughed or flexibly furloughed employees in one claim even if you pay them at different times

•                     If you make more than one claim, your subsequent claim cannot overlap with any other claim that you make

•                     Where employees have been furloughed or flexibly furloughed continuously (or both), the claim periods must follow on from each other with no gaps in between the dates

•                     You can claim before, during or after you process your payroll; you can usually make your claim up to 14 days before your claim period end date and do not have to wait until the end of a claim period to make your next claim

•                     When claiming for employees who are flexibly furloughed, a claim should not be made until you are sure of the exact number of hours, they will have worked during the claim period

•                     This means that you should claim when you have certainty about the number of hours employees are working during the claim period

Phew!

I need to lay down in a darkened room.

You can read more about the scheme (if you want to or you have trouble sleeping) here:

https://www.gov.uk/guidance/steps-to-take-before-calculating-your-claim-using-the-coronavirus-job-retention-scheme

Extra record keeping

When first furloughing employees you will have had a chat with them and given them a letter confirming the change to their contract.

If you are going to furlough staff part time a new written agreement will need to be in place confirming the new arrangements.

I can’t give you a sample of this agreement (not being an HR lawyer and all that) so please do get some advice about this if you need it.

There’s also some extra record keeping relating to the payroll – of course we’ll look after this bit if we’re running your payroll.  This is what we’ll keep a records of:

•                     The usual number of hours each employee would normally work in the claim period.

•                     The number of hours each employee will work in the claim period, and

•                     The number of furloughed hours the employee has been furloughed for in the claim period

The real reason I’m telling all this is because, of course, we’ll help you through this process and will continue to file claims for you – but we’ll need extra information from you.  We’ll try to get all the information from you in one go but as we may just need to come to you more than once as we get used to the new calculations and the info that’s needed.

What I’m really doing is asking for your patience as we get to grips with the new calculations!

Self Employment Income Support Scheme

Last thing for today…

HMRC have published the first minor update to their SEISS guidance.

They have confirmed that to qualify for the second grant under this scheme, businesses had to be adversely affected on or after 14 July 2020, together with all of the other criteria relating to the first grant.

It’s a minor point but if HMRC are flagging it up they must think it’s important.

I think that’s enough for today!

As always, any questions please do get in touch and we’ll answer any specific questions that you have about your own situation.

See you soon!

Rowena

A One-Off Thursday Coronavirus Update

Hello everyone

Surprise!

A Thursday update this week instead of the usual Wednesday.

I promise it’s a quickie today and it relates to getting back to work…

One of our clients recommended an online course to us.  It’s about what you need to do if you run a bar, café, an office or a shop and you want to learn more about how to make your place safe for re-opening.

It’s free and takes about forty minutes to complete.  It covers things like how to complete a risk assessment, what signage is needed as well things like how to support team members returning to work who may suffer with a mental health issue.

Over and above this there’s a folder of resources – with posters, suggested floor markings and even risk assessment forms.

And… this was the clincher for me… you get a certificate at the end of the programme.

You can get to the programme here:

https://www.cpllearning.com/online-courses/ready-to-serve-manager-reopening-following-lockdown

This programme is actually aimed at managers and owners of businesses (although interesting enough for everyone) but there’s a second programme coming, I think tomorrow, which provides information for team members.

Once again I believe the team member’s course is free of charge AND they get a certificate too!

Just a quick disclaimer (sorry): we have no affiliation to CPL Learning, it’s just a programme that has been recommended to us by a client and we thought it was worth passing on.  We don’t take any responsibility for the content of the programme and if you choose to follow the programme we recommend you read CPL’s terms and conditions because any come back will be on them rather than us.

Sorry about that – I almost feel like a lawyer.

I promised you a short one today – so see you tomorrow.

Rowena