8 March 2021: BUDGET 2021
Now that the dust has settled here are the highlights from the Budget 2021 announced by The Rt Hon Chancellor of The Exchequer, Rishi Sunak MP.
The Furlough scheme has been extended and now ends September 2021. The scheme changes in July 2021 for employers only with the Government reimbursing the employer for 70% of employees’ usual wages. In August and September, this falls to 60% funding from the Government. Employers will still have to pay both the employer’s national insurance and pension for the employee as they currently do. The amount of 80% (capped at £2,500 pcm) for the employee remains unchanged whilst the scheme continues.
The Self Employment Scheme – 4th and 5th grants have been announced. The 4th grant will be paid out at the end of April 2021 and is for 80% of three months average profits capped at £7,500. This now includes the 2019/20 Self-Assessment Tax return thus including many newly self-employed people. The 5th grant will be reduced proportionate to the effect COVID-19 has had on turnover. If your turnover has fallen by over 30% you will receive the full grant in line with grant #4. However, if your turnover has fallen less than 30% you will only receive 30% of average profits which will be capped at £2,850.
VAT deferral payment scheme – for VAT registered businesses who took advantage of delaying paying VAT for the period 20 March – 30 June 2020, full payment must be made by 31 March 2021 unless the taxpayer chooses to pay in instalments. To benefit from the maximum term of 11-month repayment terms you need to join the scheme by 19 March 2021.
VAT reduction – The Government have extended the temporary reduced rate of 5% VAT for goods and services supplied by the tourism and hospitality sector until 30 September 2021. The VAT rate increases to 12.5% on 1 October until 31 March 2022 before reverting to 20% on 1 April 2022.
Loss relief – for all businesses that have made a loss, there is a temporary extension to carry back trading losses up to 3 years rather than 1 year. This can help taxpayers gain immediate cash from The Treasury from tax already paid. Advice should be sought from your advisor to discuss the best options for you.
Rates are increasing for Limited Companies who have a table profit greater than £250,000 from 1 April 2023. From this date Corporation Tax Rates increase to 25% from 19%. Limited companies who have taxable profits of £50,000 or less, retain the lower tax level of 19%. Profits in between £50,000 – £250,000 will be taxed on a sliding rate.
A “super-deduction” rate was announced, this is new terminology for the first-year allowance (FYA) currently in place. For capital expenditure made between 1 April 2021 and 31 March 2023 an enhancement by a further 30% of the cost price can be deducted from taxable profits. Special rate allowance claims (such as long-life assets) will benefit from a 50% enhancement in the same period.
RESEARCH AND DEVELOPMENT (R&D)
The amount of R&D tax credit that an SME business can receive in any one year is to be capped at £20,000 plus three times the company’s total PAYE and NIC’s liability. The change has been made to deter abuse. The cap doesn’t apply if employees are creating Intellectual Property (IP) and less than 15% is subcontracted.
HELPING TO GROW
The Government are to provide a subsidy of up to 90% for a 12-week management programme following a national curriculum. Approved software to increase productivity in a business will be eligible for a grant of up to 50% of cost (capped at £5,000). To register your interest in either of these options, follow the link below :-
Government backed 95% mortgages until 31 December 2022 for homes costing up to £600,000 will enable more renters to enter the homeowner market. Under the scheme all buyers will have the opportunity to fix their initial mortgage rate for at least 5 years should they wish to.
Stamp Duty – Extension of the nil-rate band for properties valued to £500,000 will continue until 30 June 2021, reducing to £250,000 until 30 September 2021 before reverting to £125,000 from 1 October 2021.
From 1 April to 30 September 2021 employers who take on new apprentices will be awarded a grant of £3,000 (up from £1,500).
From 6 April 2021 a Recovery Loan Scheme with a Government Guarantee of 80% on loans between £25,000 and £10 million will be available.
Restart grants for non-essential retail premises of up to £6,000 will be distributed and we suspect this will be done by the local authorities as per the other grants released. The grant amount for leisure, hospitality, accommodation, personal care and gyms is up to £18,000 per premises as they reopen.
Business rates relief – a further 3 months 100% business rates relief will be available to hospitality and leisure properties in England. Business who were required to close on 5 January 2021 will be eligible for 66% business rates relief for the period 1 July 2021 to 31 March 2022 (capped at £2 million per business). Nurseries will also qualify for relief in the same way as other eligible properties.
AND THE NOT SO FAVOURABLE NEWS!
Personal Allowance and higher rate threshold will increase in the tax year 2021/2022 but then will remain the same until April 2026. This will push some marginal basic rate taxpayers into higher rates of tax over the upcoming years.
Contactless payments limit increases to £100 – this isn’t good for our wallets 😊
15 February 2021: Update on Small Business Support available during the Coronavirus outbreak
- Your business is registered for VAT, and
- You opted to defer any VAT payments due between 20 March and 30 June 2020 and have not subsequently made payment
- By making a payment in full by 31 March 2021 – please let us know if you would like to use this option and we will give you the payment details
- By signing up to pay by instalments. The online portal for this scheme will be open from 23 February to 21 June 2021 and you can choose between 2 and 11 payments – but the later you apply the fewer the number of instalments available
- By contacting them if you will not be in a position to use either of the above options and need to make alternative arrangements. Please let us know if you are in this position so that we can talk this through with you.
If one of the above options is not used interest can be charged.
As the instalment option will require you to provide bank details, to set up a direct debit, HMRC are insisting that you do this yourself – however we will help and guide you.
We will be in touch before 23 February to give final details on how to access the HMRC portal. Where we prepare your VAT returns we will also confirm the outstanding amount.
If you have any questions please contact us.
8 February 2021: Update on Small Business Support available during the Coronavirus outbreak
- An option to extend the length of the loan from 6 years to 10
- Make interest-only payments for 6 months, with the option to use this up to 3 times throughout the loan term
- Pause repayments entirely for up to 6 months
27 January 2021: Update on Small Business Support available during the Coronavirus outbreak
Grant Payment Date for the Self Employed
The 3rd SEISS grant opened on 30 November 2020 for those who were eligible on the earlier two claims would automatically qualify for this scheme. The application for the grant is closing on Friday 29th January 2021 and if you have not already done so we recommend you apply for this (subject to your qualification eligibility to do so) ASAP. As before we are, unfortunately, not allowed to make claims for you.
There is a 4th grant to be released with more details becoming available on the grant early March 2021.
Additional Restrictions Grant
Local Authorities have been provided with funds to support business who have been told to close their business in the latest lockdown.
Local Councils have been given the freedom to determine the eligibility of who receives the ARG. Guidance from Government indicates that the following could qualify under the ARG scheme even if they have not been legally forced to close – as long as the business is severely impacted by the restrictions in England they must be considered under the scheme:-
- Business which supply the retail, hospitality, and leisure sectors
- Businesses in the tourism and events sector
- Businesses required to close but do not pay business rates
Exclusions from the fund are businesses in administration, insolvent or have been struck off the Companies House register, businesses that have reached their permitted subsidy limit and newly established businesses after the Tier System was introduced. If you do become insolvent you must inform your local council of the change in situation.
To apply for this scheme, you need to visit your local authority website. For the following districts we have been able to identify the following details on the ARG funds they are distributing:
Gloucester City Council – scheme opens on 1 February 2021
Cheltenham Borough Council – scheme date not shown
Tewkesbury Borough Council – scheme date not shown
Cotswold District Council – scheme is open
Stroud District Council – scheme date not shown
The Kickstart Scheme
The scheme was initially announced for employers seeking to employ 30 or more people. From 3 February 2021 the threshold will be removed – this will make the scheme available to anyone looking to employ someone to grow their business.
The scheme is Government funded to create new job placements for 16-24 year olds on Universal Credit and are at risk of long-term unemployment. The Government fund covers the following fully: –
- 25 hours per week (for 6 months) hourly pay set at either the National Minimum Wage or the National Living Wage
- Employer National Insurance contributions due on the hours paid
- Employer pension contributions under the Auto-Enrolment scheme
- Start dates can be staggered up until the end of December 2021
The employer is incentivised further by a £1,500 job placement fund for setup costs and to support the young person to develop their employability skills. Funding is obtained via the Kickstart gateway who apply for this direct to the Department for Work and Pensions (DWP).
Criteria for these placements are that they should not replace existing or planned vacancies or cause existing employees a reduction in their working hours.
To find a Kickstart Gateway, follow the link below: –
Coronavirus Job Retention Scheme (CJRS)
The CJRS scheme was extended until 30 April 2021. Most employers are aware of this but is important to stress that you can furlough (either fully or flexibly) an employee at any time up to 30 April 2021 as long as the employee was on a submitted RTI to HMRC between 20 March – 30 October 2020
The flexibility of the furlough scheme that was introduced in July remains and this is of great benefit to you and your business. The claim process has changed slightly in that there is a strict 28-day claim period for the month the claim falls in.
Furlough claims made by employers are now being published by The Government and can be found on the link below. The employers name only is currently listed and this is part of The Government’s campaign to stop fraudulent claims being made.
Please note, employment rights will continue to be retained by your employees and this should always be factored into any decision making at the earliest stages.
Test and Trace Support Payment
In England if you are self-isolating because you tested positive for Coronavirus or because the NHS Test and Trace/NHS COVID-19 app informed you to do so and you are unable to work from home you may be entitled to a payment of £500 to assist you during the self-isolation period. This support is available for both the employed and self-employed but is subject to income levels. To apply you should apply via your local council website.
Please note: this support is NOT available if you are self-isolating because you returned to England from abroad.
5 January 2021: Update on Small Business Support available during the Coronavirus outbreak
Happy New Year from all of us at SkyBridge
So, here we are again in lockdown. Frustrating, worrying, confusing, inconvenient – call it what you may but it is what it is and we have to deal with it. Everyone has their own way of coping with things but just to remind you that we are here to help so please feel free to phone, email or arrange a Zoom meeting just to have someone to bounce things off or a shoulder to cry on but also to plan for the future and develop a strategy to get through this and bounce back.
The Chancellor has announced a support package of up to £9,000 per property (a sliding scale depending on the rateable value) for businesses in the Retail, Hospitality and Leisure industries. These grants will be administered by your local authority so please keep an eye on their website for guidance on whether you have to apply or if they will make an automatic payment – this may vary from area to area. As with previous grants they do not have to be repaid but they are taxable income.
For those not in any of the above sectors funds are also being made available to local authorities to award discretionary grants where business are affected. Again please keep an eye on your authority’s website or give them a call as you will certainly have to apply for these funds. Do it early as funds may be limited.
In addition to this the furlough scheme is still in operation and currently runs until the end of April. If we are not already making furlough claims for you please keep us up to date if you are having to furlough people so that we can remind you how it works and help – in short you can furlough people for part or all of their working hours and receive 80% of their normal salary for the furloughed hours. The business still has to pay normal rates for hours worked and ALL of the national insurance and pension contributions.
Bounce Back (up to £50,000) and CBILS (£50,001 to £5m) loans are still available until the end of March. These loans are still interest free for the first 12 months with no repayments during that time. However, please discuss with us first if you are thinking of taking out a loan as, although it may sound like a good idea in the short term, it may not be the best solution for you in the long term.
A reminder for those of you who are self-employed and have been affected by Covid on or after 1 November 2020 and have not yet claimed the third grant – you only have until 29 January to do this. We are not allowed to make the claim for you but we can help if needed.
The Chancellor has said that he will review support packages in his budget on 3 March but that is a long way away for some people I know.
There is light at the end of the tunnel in terms of the vaccine but the train is still moving slowly.
Please stay strong, keep safe and remember we are here to help if we can.
6 November 2020: Update on Small Business Support available during the Coronavirus outbreak
Following on from the Chancellor’s update on additional support given to businesses who are adversely affected due to Coronavirus restrictions, more detail has been released on the extension to the CJRS (Furlough Scheme).
CJRS – extended
The CJRS scheme which was closed on 31 October 2020 has now been extended until 31 March 2021. The announcement yesterday confirmed that the Government will subsidise businesses up to 80% of their employees gross wages if they are unable to work (this is either in part or full time). Employers will have to cover the cost of the employer’s national insurance and pension contributions if applicable. This is subject to a policy review in January 2021 where it is expected that the subsidy received from the Government will gradually reduce as it did from August of this year. The maximum claim is capped at £2,500 pcm per employee per month.
If you had made any employees redundant prior to 31 October 2020 due to the then deadline of the CJRS scheme closing you can rehire and refurlough employees as long as they were employed on the company payroll as of 23 September 2020. This means that employees who have newly started for your business may now be eligible to be furloughed.
The flexibility of the furlough scheme that was introduced in July remains and this is of great benefit to you and your business. The claim process also remains unchanged.
Please note, employment rights will continue to be retained by your employees and this should always be factored into any decision making at the earliest stages.
Job Retention Bonus
The CJRS bonus retention of up to £1,000 per employee that you retained on your company payroll (subject to the qualifying minimum payment per month) has also been delayed with no timeline given as to when this bonus is to be paid to employers.
Grant Payment Dates for the Self Employed
The 3rd SEISS grant has now been enhanced to provide support of up to 80% of trading profits covering November 2020 to January 2021. The grant is the average of 3 months trading profits at 80% subject to a capped level of £7,500 per grant claim.
Importantly, the grant scheme opens from 30 November 2020 and those who were eligible for the earlier two claims will automatically qualify for this scheme. As before we are, unfortunately, not allowed to make claims for you.
Guarantee Loan Schemes
If you applied for a Bounce Back Loan and did not apply for the maximum amount of £50,000 you are now able to apply for the difference to top up your existing loan subject to the loan amount not exceeding 25% of annual turnover. This facility will become available from next week.
Mortgage and consumer credit payment holiday extension
Borrowers affected by Coronavirus and have not yet had a mortgage payment holiday will be entitled to a 6 month holiday without this affecting their credit file. The payment holiday periods are set in 3 month periods. Should you need to extend your payment holiday after the 6 month period you will need to speak with your lender and any subsequent extension will affect your credit rating.
Local Authority Support
Local Authorities are being provided with funds to support business who are adversely affected by the lockdown:
Business registered for business rates – if you are forced to close during this period then grants of up to £3,000 per month, depending on rateable value, will be available
For other businesses – a discretionary grant may be available. Each local authority may have different criteria so you will have to check with your local authority
Again, unfortunately, we cannot make claims on your behalf but are happy to help completed forms if necessary. Please check your Local Authority website for more information. Cheltenham BC are currently saying:
Following the announcement that a national lockdown in England will come in to force on Thursday 5 November we are waiting for more information from the government about grant schemes and reliefs for businesses affected.
Details about eligibility criteria and how to apply will be on this page when we know more.
Use of home – tax relief
As most employees have been asked to work from home during the Coronavirus outbreak then (as long as your household costs [electric/gas] have increased) you can claim £6 a week as an expense which will give you tax relief of £1.20 (for basic rate taxpayers), this totals £62.40 in a year for a basic rate taxpayer.
The rules have changed this year in that you only need to have worked 1 day at home to be able to claim the whole years allowance in full.
To claim this allowance you can do this on your Self Assessment Tax return if you complete one or follow the link below:-
Where we complete your tax return we will include a claim if applicable.
27th October 2020: Update on Small Business Support available during the Coronavirus outbreak
Following on from the Chancellors update on additional support given to businesses who are adversely affected due to Coronavirus restrictions, more detail has been released on the Job Support Scheme Open and the current Coronavirus Job Retention Scheme (now to be known as Job Support Scheme Closed).
Job Support Scheme Open
The scheme has been introduced to commence with effect 1 November 2020. To qualify employees who were on the payroll between 6 April 2019 and 23 September 2020 and have been included on one RTi submission in that period. The implication to this is that the employee does not have to be employed for the entire period stated. Gov.uk guidance also states that the employee must be employed on 23 September 2020 and if they had been made redundant then subsequently rehired (by the same employer) then they are eligible for this scheme. This does now open the scheme for agency workers and contractors subject to IR35.
The rules have now changed in that the employee has to work a minimum 20% of their normal working hours (this cost is expected to be met by the employer in full). The remaining element of hours not worked is then split into contributions by the employer, Government and an unpaid element by the employee. There is a maximum salary cap of £3,125 pcm.
There are maximum contribution levels that both the employer and Government will make each month towards this scheme. The employer is capped at £125 pcm in addition to the hours worked (paid at normal rates) with the Governments contribution capped at £1,541.75 pcm. The employer will be liable for all employer national insurance and pension contributions due.
The scheme is open to all small and medium sized businesses without restrictions but for large employers they must provide evidence that their business has been adversely affected before they can use the job support scheme (this can be evidenced from VAT return submissions by HM Revenue and Customs). Large employers are also being strongly discouraged from paying dividends to shareholders, or using share buy-back schemes, whilst they are using the job support scheme.
Job Support Scheme Closed
Under this scheme the Government will contribute towards 2/3rds of the normal pay of furloughed employees who cannot work (due to Government Tier restrictions in place) up to a maximum of £2,083.33 per month.
The employer is to contribute towards retaining their employee by paying the employers national insurance and pension contributions where applicable.
Grant Payment Dates
Crucially the CJRS had let employers claim in advance of paying employees to aid their cashflow. Both of the new schemes are retrospective claims and the first claim window is only open from 8 December 2020. Each claim period is for a minimum 7 day period but employees can be added into/out of the JSS Open scheme in a similar pattern as the flexible furlough pattern introduced from July 2020.
The claim cannot be submitted prior to the employee being paid and the RTi being submitted (this is to reduce fraudulent claims).
Please contact us to discuss the impact this will have on your business as this is not a simple process and the underlying employment rights that would be retained by your employees should always be factored into any decision making at the earliest stages.
28th September 2020: Update on Small Business Support available during the Coronavirus outbreak
3 August 2020: Update on Small Business Support available during the Coronavirus outbreak
Self-Employment Income Support Scheme – 2nd and final grant
- If your business was adversely affected on or after 14 July 2020 by COVID19 then you will be able to make a claim for the second and final grant from the Government from 17 August 2020. The definitions of adversely affected are as follows: –
- 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’re unable to work because you:
- 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 in to work
- one or more of your contracts have been cancelled
- you had to buy protective equipment so you could trade following social distancing rules
There are scenarios to this test which can be found on this link
- This time, the scheme awards a taxable grant worth 70% of your average monthly trading profits, paid out in one single instalment which is capped at £6,750. As with the first grant, HMRC will contact the individual if they are eligible for this grant. You can make a claim for the second grant even if you didn’t apply for the first grant.
Eat Out To Help Out
- Staring today and during the whole of August 2020 on a Monday – Wednesday participating restaurants, pubs, cafes etc will be able to claim from the Government the proposed 50% discount (capped to a maximum of £10 per person) on food and non-alcoholic beverages purchased. The participating venue owner will need to claim the discount in full, from the Government via an online form so there is no need for the customer to do anything other than enjoy!
Job Retention Scheme
- The first significant change to employers is implemented in August 2020. From 1st August 2020 employers will now have to contribute and pay the employers national insurance and pension that is incurred in employing their employees.
When to wear a face covering
Late on Friday 31 July 2020 the Government announced that face coverings would be required in the following settings from 8 August 2020 within England, although early adoption is encouraged before it is mandatory.
- funeral directors
- premises providing professional, legal or financial services
- bingo halls
- concert halls
- museums, galleries, aquariums, indoor zoos or visitor farms, or other indoor tourist, heritage or cultural sites.
- nail, beauty, hair salons and barbers – other than where necessary to remove for treatments
- massage parlours
- public areas in hotels and hostels
- place of worship
- libraries and public reading rooms
- community centres
- social clubs
- tattoo and piercing parlours
- indoor entertainment venues (amusement arcades, funfairs, adventure activities e.g. laser quest, go-karting, escape rooms, heritage sites etc)
- storage and distribution facilities
- veterinary services.
- auction houses
As we fall within the second bullet point, we will now require clients who enter our building to wear a face covering. Should we hold a face to face meeting with you in our office we will also be wearing a face covering at the same time.
14 July 2020: Update on Small Business Support available during the Coronavirus outbreak
Chancellors Summer Statement – 8 July 2020
Last week the Chancellor announced more schemes to help boost our economy. Headline announcements that may have been missed are as follows:-
Changes to VAT rate for restaurants, hotels and attractions
From tomorrow (15 July 2020) VAT is reduced from 20% to 5% on selected areas to help support the hospitality industry. Sectors where there are changes are:-
- Food and non-alcoholic drinks in restaurants, pubs and cafes
- Hot takeaway food and hot takeaway non-alcoholic drinks
- Accommodation in hotels and B&Bs
- Admission to attractions such as theme parks and cinemas
Eat Out To Help Out
- During August 2020 on a Monday – Wednesday participating restaurants, pubs, cafes etc will be able to claim from the Government the proposed 50% discount (capped to a maximum of £10 per person) on food and non-alcoholic beverages purchased. The participating venue owner will need to claim the discount in full, from the Government via an online form.
Job Retention Scheme
- A one-off payment of £1,000 per furloughed employee. The criteria for the employer to receive this payment is that the employee must have been retained by the employer and paid a minimum of £520 pcm from the point of being un-furloughed until the end of January 2021. Upon HMRC receiving the relevant RTi submission for this period (n.b. the latest filing date is 19 February 2021). There will be checks and balances made by HMRC by using this submission in order to quantify and substantiate the claim for the employer. Payments will be made from February 2021 and greater detail is to be released on this scheme by HMRC at the end of July 2020
Support for Young Workers
- Kickstart Scheme is an introduction to support 16 to 24 year olds currently on Universal Credit and are deemed as at risk of long-term unemployment. Employers will receive 100% funding to cover the relevant National Minimum Wage (age dependent) for 25 hours a week work as well as the additional employers National Insurance and pension contributions (automatic enrolment pension). Companies who join the scheme have to prove that the jobs they are making available are not replacing existing positions and are “above and beyond any jobs” the employer was expected to create. This is an application process and more detail will be released on how to apply for this scheme shortly.
- £2,000 grant for employers per apprentice under 25 hired, dropping to £1,500 for those aged 25 and over. This scheme starts on 1 August 2020 and will remain in place until 31 January 2021 (this is for England only).
- £1,000 grant per trainee for employers who take on new trainees aged 16-24 (again this is only available in England).
Stamp Duty Reduction
- With effect from 8 July 2020 until 31 March 2021 the threshold for stamp duty on residential property purchases in England and Northern Ireland has risen from £125,000 to £500,000. This is a potential maximum £15,000 saving on property purchases. This will not affect transactions which took place prior to 8 July 2020. Anyone purchasing an additional property will still have to pay the additional 3% levy (on the current stamp duty level) on the whole purchase price.
Green Homes Grant
- There is an available Grant of up to £5,000 per household for projects to make homes more energy efficient. Installation of double glazing, insulation to walls/lofts and solar panels have all been noted as potential green options for a homeowner. The grant is restricted to support 2/3rds of the cost to the homeowner capped at the £5,000 maximum grant.
- Low income households may be eligible for a grant up to £10,000 subject to meeting the criteria set by the Government
- Landlords will also be able to qualify on this scheme
- Scheme is to start in September 2020 and the grant is paid as a voucher when the work has been approved.
17 June 2020: Update on Small Business Support available during the Coronavirus outbreak
Coronavirus Job Retention Scheme (CJRS)
Following on from calls from businesses the Chancellor announced that flexible furloughing will be introduced from 1 July 2020. This means that if you have previously furloughed a member of staff prior to the cut-off date of 30 June 2020 you will now be able to ask them to work for you on an ad hoc basis whilst your business returns to normal trading levels.
A quick example is a member of staff who is contracted to work for you for 40 hours a week. You want to bring them back to work for you for 16 hours in a week to meet demand for your customers. You should pay this employee 100% of their normal pay for 40% of the weekly contracted pay. The remaining 60% is subject to furlough rates of 80% capped at £2,500 per calendar month – the furlough rate of 80% or £2,500pcm remains unchanged but is calculated on a pro rata basis for the proportion of the unworked hours.
Example workings – Monthly salary for employee is £3,500 pcm. They work 40% of their contracted monthly hours for you – the employer must pay the employee £1,400 for the 40% contracted hours worked in the calendar month. The furlough element is then calculated as 60% x £2,500 = £1,500 for the furlough element. The employee will have a total gross salary on their payslip for the month of £2,900. This is obviously lower than the £3,500 normal monthly salary but higher than the £2,500 the employee would have received whilst being furloughed only.
The Government will continue to support the furlough grant in full for July before a sliding scale is introduced. From August, all but the employers National Insurance and pension is received by the employer to cover payroll costs, before reducing to 70% from the Government in September and 60% from Government in October when the scheme ceases. This change will impact cash flow and careful consideration for your business needs to be made prior to making any significant changes with your employees.
Self-Employment Income Support Scheme (SEISS)
The scheme is being extended and a further taxable SEISS grant will be paid in August – this is the final grant to be paid under this scheme. It will be reduced to 70% of an average monthly trading profit figure for 3 months to a capped level of £6,750 in total.
The claim is to be made by the self-employed person and cannot be applied for by their agent as it may trigger a fraud alert which will result in significant delays in the payment being made if they do. The scheme requires the applicant to confirm that their business has been adversely affected on or after 14 July 2020. At the time of this claim you can apply for the first and final grant at the same time even if you hadn’t already claimed earlier when the scheme was originally released.
1 June 2020: Update on Small Business Support available during the Coronavirus outbreak
Coronavirus Job Retention Scheme (CJRS)
On Friday 29th May the Chancellor, Rishi Sunak MP, announced that Flexible Furloughing will be implemented from 1 July 2020.
This flexibility will allow employers to bring back employees to cover initial, smaller workloads (whilst the business community is slowly starting to recover from lockdown), in a managed fashion. This means you could bring an employee back into full time paid employment for a couple of days a week and the remaining days will be covered (up to 80% of their capped wage) by the Government. If there isn’t any work for your employees, they can remain on the Furlough Scheme and the grant can be claimed under the existing rules.
Employer Contributions will start to support the CJRS from 1 August 2020. The changes to the existing scheme are as follows: –
- For June and July – the Government will continue to pay 80% of wages up to a cap of £2,500 as well as the employers national insurance and employers pension contributions. The employee cannot work whilst on furlough for the grant claim. Employers must pay for the hours they work
- From August, the Government will continue to pay 80% of wages up to the cap of £2,500 but not cover employers national insurance and employers pension contributions.
- From September, the Government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work. The employer will have to pay the employers national insurance and employers pension contributions.
- From October, the Government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work. Employers are still responsible for both the employers national insurance and pension contributions payable.
- The cap on the furlough grant will be proportional to the hours not worked
- The scheme will close at the end of October 2020
Important things to note – the scheme will be closed to new entrants from 30 June 2020. From this point onwards, you will only be able to furlough employees that you have furloughed for a full 3 week period prior to 30 June 2020. The last cut off date to furlough employees will be 10 June 2020. Late claims can be made by 31 July 2020 in respect of the periods relating to 30 June 2020.
This will have both a positive and negative impact to businesses coming out of lockdown and we advise that you should discuss your requirements on employee levels with us for cashflow purposes.
Self-Employment Income Support Scheme (SEISS)
After many calls that the scheme should be extended in line with the CJRS, the Chancellor also announced a change to this scheme on Friday.
The scheme is being extended and a further taxable SEISS grant will be paid in August – this is the final grant to be paid under this scheme. It will be reduced to 70% of an average monthly trading profit figure for 3 months to a capped level of £6,750 in total.
The claim is to be made by the self-employed person and cannot be applied for by their agent as it may trigger a fraud alert which will result in significant delays in the payment being made if they do.
26 May 2020: Update on Small Business Support available during the Coronavirus outbreak
Statutory Sick Pay Claim
The Government have announced that the scheme to apply for the Statutory Sick Pay (SSP) claim for employers who paid employees SSP who had self-isolated due to having COVID-19 symptoms. The claim can be made by making a claim on HM Revenue and Customs online service on the following link: –
You can only claim under the scheme if you meet the following criteria:-
- You are claiming for an employee who’s eligible for sick pay due to Coronavirus
- You have a PAYE payroll scheme that was created and started on or before 28 February 2020
- You had fewer than 250 employees on 28 February 2020 across all your PAYE payroll schemes
- You can claim for the same employee for the job retention scheme and the Coronavirus Statutory Sick Pay Rebate Scheme but not for the same period of time.
Normally your employee would provide you with a doctor’s fit note after the first 7 days off due to illness, however, these rules have been relaxed for this claim. If your employee has shown symptoms of COVID-19, in order to make the claim, your employee should either provide you with an Isolation Note from NHS 111 or a letter from the NHS/GP telling them to stay at home for at least 12 weeks because they are at high risk of severe illness from Coronavirus if they are able to do so.
The scheme covers all types of employment contracts, including: –
- Full-time employees
- Part-time employees
- Employees on agency contracts
- Employees on flexible or zero-hour contracts
- Fixed term contracts (until the date their contract ends)
There is no close date to this scheme currently.
If we process your payroll, we will make the claim on your behalf.
Salesforce Small Business Grants
Enterprise Nation have announced an initiative that will offer eligible small businesses the opportunity to receive a £5,000 grant to help them during the COVID-19 outbreak. This scheme is only open to Limited Companies.
To be eligible for this grant the following criteria needs to apply to you and your business: –
- Be registered at Companies House
- Been established for at least 12 months
- Have not received any other cash grant during 2020 in relation to COVID-19 from any Government
- Be based in the UK with a British bank account
- Have between 2 and 50 employees
- Meet all other eligibility requirements as stated in the grant programme terms here
The scheme is open at different times during June-August. Central England applications are open from 1 – 7 June, South of England open from 15 – 21 June, Scotland from 29 June, Wales from 13 July and North of England from 27 July. Please check on the website to see which area you fall into under this initiative. Full details can be found on the link below: –
6 May 2020: Update on Small Business Support available during the Coronavirus outbreak
Here is a reminder of my 4 step plan for getting ourselves back into the swing of things when the time is right:
The speed of the lock down was a shock, bringing uncertainty and worry throwing many into survival mode.
More information has allowed us to Adjust to the new way of life however that affects each one of us.
Moving on from the Adjust phase it is time to make future plans to be ready when the lock down ends. What lessons have been learned, what will you do differently? What are your plans? What preparations do we need to make?
Be ready to go when we get the green light to start again.
Most people are in the Future Planning stage where you have time on your hands to think about your business and about what the future holds, what changes you could make, what needs to be done to start up again, to let customers/clients know that you are open for business, etc.
I would like to suggest a short exercise.
Take a sheet of paper and write down at least 3 things that you really like and enjoy about your business. Having done that take no more than 5 minutes to write down everything (and I mean everything) you can think of that would allow you to do more of these things that you enjoy. Don’t stop and think “well that could not be done” – just write everything down, however ridiculous, and then take time afterwards to create a plan from those ideas.
Next write down at least 3 things that you do not enjoy or like doing in your business. Again, take 5 minutes and write down everything you can think of that would enable you to change or stop doing the things you don’t like and then create a plan.
Let me share a true story with you from a few years ago.
A good sized business with sales of £2m per year and making reasonable profit – but the two directors were working seven days a week and not happy.
Looking behind the numbers one customer accounted for 40% of their business – ie £800k of sales per year. A lot of money. This customer was very difficult to deal with – last minute orders, changing orders, rude, slow payers, expecting them to jump when they asked for something, etc, etc. No one liked working with them but £800,000 of sales was a big number.
This went on for years until they got some advice and did a bit of analysis. Although this customer accounted for 40% of sales they actually only contributed 5% of net profit because they drove the price down and incurred higher service costs because of their inefficient way of ordering.
To cut a long story short – they ditched the customer and here is what happened:
- Yes, sales and profits dipped initially
- Within 12 months they had taken on £300,000 of new business with customers who were good to work with and who paid the full price – so profits actually went up.
- They had fewer orders to deal with because turnover was lower which in turn meant lower stock levels releasing cash flow and reducing pressure of work
- Staff morale went up significantly
- The directors got their weekends back
4 May 2020: Update on Small Business Support available during the Coronavirus outbreak
Bounce Back Loan
After a slow start the application process to receive a loan which is 100% guaranteed by the Government between £2,000-£50,000 has so far proven be to quite a straightforward process to follow with your bank. It has been confirmed that there is no limit of the size of business that can apply, only that the loan is aimed at smaller businesses and sole traders. The loan is restricted to no more than 25% of the annual business turnover subject to the highest maximum loan value of £50,000. The business must be based in the UK.
Key factors to note on the loan are as follows: –
- No set up or early repayment fees
- Interest for the first year of the loan is covered by the Government
- There is effectively a repayment holiday for the first 12 months of the loan period
- The loan period is between 1-6 years
- The facility has been set at 2.5% per annum
Not all banks are offering Bounce Back Loans at this stage. In the first instance check with your own bank but if they are not offering the loans you can apply through other banks, although there may be further questions to answer.
Self-Employment Scheme Grant
The release date has now been confirmed as starting on 15th May 2020. To check if you are eligible the following link can be used
The first few simple questions require your unique taxpayer reference number (UTR) and National Insurance number. From this you are then guided to register for a Government Gateway account or log in using your details on an existing account.
Unfortunately, the system will not allow us to make a claim on your behalf. If you need your UTR and/or National Insurance number, please email us and we will provide the missing information to you.
Top-Up to Local Business Grand Funds Scheme
The Government have announced a further 5% uplift to the £12.33bn fund already announced to support Small Businesses who have small business rates relief or whose industry fell in the retail, hospitality and leisure. The scheme announced has given discretionary powers to make payments to other business who may not have fallen into the existing categories but are suffering economic hardship due to the COVID-19 outbreak.
Such businesses that local authorities have been instructed by the Government to prioritise are businesses in shared spaces, regular market traders, small charity properties (that would meet the criteria for Small Business Rates Relief) and Bed and Breakfasts that may pay council tax rather than business rates.
The businesses must be small (fewer than 50 employees) and need to demonstrate that their business has seen a significant drop of income due to the Coronavirus restriction measures.
There will be three level of grant payments, with the maximum being £25,000. Grants of £10,000 will be made at the discretion of the local authority. The Government will be issuing further guidance on this to local authorities shortly. Again, we will keep you updated on further guidance when it is released.
1 May 2020: Update on Small Business Support available during the Coronavirus outbreak
Bounce Back Loan
Unfortunately, despite the loan being live for businesses to apply for from 9am Monday May 4th there is still no further detail as to how you apply for the loan and any restrictions/qualifying criteria that will be in place at the time of application.
Personal Protective Equipment – PPE
As of today’s, date (1 May 2020) VAT on essential PPE for COVID-19 is temporarily scrapped for 3 months (current expiration date for VAT relief will end 31 July 2020). The new VAT rate to be applied to PPE sales is Zero Rate during this time.
There is NO import duty on PPE shipments from overseas either – this was announced to speed up the process of importing and distributing PPE within the UK for the front-line workers.
Time for your new venture?
If you are unfortunately one of the many that have not been covered by the current Government support available, you may be considering what you can do. Now may be the time for you to set up your own business and strike out on your own. There is support available for this which is backed by the Government. A Start Up Loan for your business is available for amounts between £500 and £25,000. The loan is an unsecured personal loan and comes with free support and guidance to help write your business plan. Successful applicants will receive up to 12 months free mentoring as well.
To qualify for this loan all of the following must apply: –
- you live in the UK
- you’re 18 or over
- you have (or plan to start) a UK-based business that’s been fully trading for less than 24 months
There aren’t any application or early repayment fees to this loan but there is a current charge of fixed interest rate of 6% over the period term of 1-5 years.
Applications can be made from the following link
28 April 2020: Update on Small Business Support available during the Coronavirus outbreak
Bounce Back Loan
Yesterday, the Rt Hon Chancellor of The Exchequer, Rishi Sunak MP, announced the release of a bounce bank loan scheme to be in operation from 9am on Monday 4th May. The loan is available to SME’s who wish to borrow between £2,000 and £50,000.
The Government will guarantee 100% of the loan. There will not be any arrangement fees and interest charged for the first 12 months will be covered by the Government as part of the scheme. The loan term is in line with the CBILS scheme in place and loan terms will be up to 6 years.
You will be eligible for the scheme as long as you are based in the UK, have been negatively affected by Coronavirus and your business was not in financial difficulty on 31 December 2019.
The scheme requires filling in a two page self certification from online and is reported that SME’s will have guaranteed access of the loans within 24 hours of applying.
The loan is not available to the following businesses:-
- banks, insurers and reinsurers (but not insurance brokers)
- public-sector bodies
- further-education establishments, if they are grant funded
- state-funded primary and secondary schools
You cannot apply for this loan if you have already applied under the CBILS scheme but it may be possible to transfer it to a Bounce Bank Loan scheme with your lender until 4 November 2020.
If you are considering taking a loan and wish to discuss this, or need help applying next week, please feel free to contact us.
Coronavirus Job Retention Scheme
We are pleased to have helped over 60 local businesses apply for the grant which has now started to be received by them to help pay for their furloughed staff. If you have not already applied or need assistance with this, please contact us and we will assist you with this process free of charge.
The scheme was extended by the Chancellor to now cover furloughed staff until the end of June 2020.
Employers can take staff out of furlough to help their businesses start the process of rebuilding ready for when lockdown steps change. If you choose to take staff out of the furlough scheme then normal pay and working conditions are operational. This step should be done with social distancing and other safety precautions adopted to protect your employees. You can (should you need to) furlough your employee again after this work has been completed and it is no longer viable to pay them. The furlough process will start again and is for a minimum 3 week period.
20 April 2020: Coronavirus Job Retention Scheme Update
16 April 2020: Update on Small Business Support available during the Coronavirus outbreak
Coronavirus Job Retention Scheme Further Details
The latest announcement released yesterday was to clarify the qualifying dates to enable employees to be be furloughed using the Government scheme. You can only claim for furloughed employees that were on your PAYE payroll on or before 19 March 2020 AND who were notified to HM Revenue and Customs on an RTI submission on or before 19 March 2020.
An RTI Submission is an electronic notification to HMRC informing them of employee payments and deductions in a tax month. This means, if you pay your employees between 6 February 2020 and 5 March 2020, then they will have been included on the RTI Submission that was with HM Revenue and Customs by 19 March 2020. If you did not pay new employees before 19 March 2020 they will not have been included in an RTI Submission at that point and will not qualify to be furloughed.
Further clarification has been provided for Directors and the Furlough Scheme. It had been announced that Directors could be furloughed and still perform statutory duties of the limited company. This had discounted the fact that Directors would still need to contact accountants to prepare VAT returns and Payroll as well as maintain the bank during this time – necessary duties. Further guidance now indicates that necessary duties as well as statutory duties can still be carried out by a Director who has been furloughed. This gives a little hope to those who had previously been considered as not covered on the scheme. Directors should now speak with their accountants and seek guidance as to whether they should be entered onto the furlough scheme.
Further Explanation on Universal Credit (UC)
Universal Credit is awarded with the following criteria: –
- It is a means-tested benefit and takes into account the income of the claimant and their partner. If your partner’s income is too high, you may not be eligible for a claim
- There is a savings limit of £16,000. If your savings are between £6,000 – £16,000 then this will restrict the claim that you are entitled to as it will be included in the UC claim
- UC is designed to cover claimants both in and out of work
- UC is based on monthly assessments
- Payment is usually made 7 days after the end of the assessment period. This meaning there is a 5 week waiting period for the first payment
- UC has elements to the claim that cover housing costs (rent), childcare, children disabilities and carers
If you have been furloughed you can still apply for UC and it can be as high as £1,500 a month subject to you meeting the necessary criteria.
14 April 2020: Update on Small Business Support available during the Coronavirus outbreak
Support for Charities
On Wednesday 8th April the RH Chancellor of the Exchequer, Rishi Sunak, announced a £750 million package to support charities across the UK to ensure they can continue their vital work. The £750 million pot will be split across three fronts. Firstly, £360 million will be directly allocated by government departments to charities providing key services and supporting vulnerable people during the crisis. Secondly, £370 million will be made available to small and medium-sized charities (to be made available via a grant to the National Lottery Community Fund for such charities in England) and is to support charities at the heart of local communities that have been delivering food, essential medicines and providing financial advice etc. Lastly, the remaining £20 million will be the minimum donation the Government will be donation to the BBC’s Big Night In charity appeal to be held on Thursday 23rd April. If donations on the night exceed £20 million from the public, the Government have pledged that they will match the donated amount from the public regardless of the total amount donated. The BBC’s Big Night In is a combined event from Children In Need and Comic Relief and both charities will split the donated money in half to support the local causes each specific charity already helps.
Coronavirus Job Retention Scheme Further Details
As previously noted, the Coronavirus Job Retention Scheme that agents will be able to access the portal from 20 April 2020. HM Revenue and Customs are actively seeking assistance from agents to assist clients with this process when it is finally live. We at SkyBridge Accounting Limited have offered to apply for the scheme for all clients we process payroll for and all clients who have a payroll scheme in place but may need assistance with it. Crucially you also need to be enrolled for PAYE online with the Government Gateway. If you currently aren’t enrolled, you will need to do so ASAP as this is taking up to 10 working days for the scheme to be operational – again this is something we can assist you with completing on your behalf.
When applying under the scheme you will need the following: –
- Your employer PAYE reference number
- The number of employees being furloughed
- National Insurance Numbers of the employees being furloughed
- Names of the furloughed employees
- Payroll/works number of the employees (if applicable)
- Your unique taxpayer reference number (as an individual, partnership or limited company operating a payroll scheme under PAYE) or company registration number
- The claim period (start and end)
- Amount claimed (per the minimum length of furloughing of 3 consecutive weeks)
- Your bank account number and sort code
- Your contact name
- Your phone number
Further Explanation on Coronavirus Self Employed Grant
Trading profits will be established from submitted tax returns. Total trading income (turnover) will be used less allowable business expenses and capital expenditure. Example of allowable business expenses include: –
- Office costs (stationery or phone bills)
- Travel costs (fuel, parking, train or bus fares)
- Clothing expenses (uniforms)
- Staff costs (salaries or subcontractor costs)
- Things you buy to sell on (stock or raw materials)
- Financial costs (insurance or bank charges)
- Business premises costs (heating, lighting, business rates)
- Advertising or marketing (website costs)
- Training courses (refresher courses)
The calculation is then averaged over 3 years or the length of time you have traded in the three tax return periods the scheme is being applied over (2017, 2018 and 2019 Self-Assessment Tax Returns). If the average period meets the criteria set by the Government for the scheme then you should be able to apply for the support. You will be contacted by HM Revenue and Customs some time in May when they have established the taxpayers that can apply to the scheme.
8 April 2020: Update on Small Business Support available during the Coronavirus outbreak
Hot off the Press!
We have been notified from HM Revenue and Customs that the Coronavirus Job Retention Scheme that agents will be able to access the portal from 20 April 2020. We anticipate (as do HM Revenue and Customs) that this scheme will be inundated with applications. HM Revenue and Customs are actively seeking assistance from agents to assist clients with this process when it is finally live. We at SkyBridge Accounting Limited have offered to apply for the scheme for all clients we process payroll for and also all clients who have a payroll scheme in place but may need assistance with it.
HM Revenue and Customs are not offering a normal phone service for this scheme as they are fully aware that they will not be able to cope with the demand (they too have restricted staff capacity due to the coronavirus outbreak affecting their staff). The service will be released with a self-serve guidance in place – again, this is where HM Revenue and Customs are seeking the support of payroll agents.
Welcome Tax Year 2020-2021!
Monday saw the dawn of a new tax year start, in these uncertain times it may have passed many people by but it is still a significant date.
You still need to file and submit your 2019-2020 Self-Assessment Tax Return no later than midnight 31 January 2021 and pay any outstanding liabilities by this date as well. This date is going to become more significant than ever before. If you are one of the many tax payers that are going to take advantage of deferring the second payment on account for your tax liability which is due on 31 July 2020; your tax liability payment due on 31 January 2021 may equal to one whole years tax becoming due plus any underpayments if your 2020 financial year was a better year than the previous year. This is only one month after Christmas (yes I have mentioned it already!) where most people have restricted funds coming into their household.
We advocate the early submission of your 2019-2020 Self-Assessment Tax Return because the tax is not due for payment any earlier than 31 January 2021, but it does give time to plan how you budget putting the tax liability to one side so that you do not struggle to find what can be a significant amount of money when cash flow is tighter.
It is also worth noting that other normal filing deadlines are still in existence. Even if you are unable to pay a tax liability (PAYE or VAT) you still need to submit all necessary returns on time. There is no deferment on late filing fines/penalties that HM Revenue and Customs are able to issue. It is best to make sure that you provide us with all the necessary information we require to ensure that your filing commitments are met.
6 April 2020: Update on Small Business Support available during the Coronavirus outbreak
Coronavirus Business Interruption Loans
Further announcements have been made in conjunction with the Government and banking sector and the CBIL Scheme.
The Government will provide lenders with a guarantee of 80% on each loan and are also covering the first 12 months of interest payment and any lender-levied fees.
The requirement for a personal guarantee on the remaining 20% is not required on loans up to £250,000. If you require funding greater than £250,000 a personal guarantee capped at the 20% in excess of the loan taken will be required by lenders.
The Government have also made it clear to lenders that small businesses should not be denied loans.
Our advice is to speak with us (or your advisor) before you enter into any loan agreements to ensure that this is the best option for you and your business.
Coronavirus Job Retention Scheme update
Further clarification has been released late on Friday regarding employees that may be eligible to be placed on furlough whilst the outbreak has imposed lockdown restrictions on our lives. The following employees may be suitable for furlough but it is important to remember that you should follow the normal redundancy process when determining and identifying such employees entering the scheme (these should be confirmed with your legal advisor):-
- Employees can be re-employed if you made them redundant or they stopped working for you after 28 February 2020. They can then be furloughed, and a claim can be made under the scheme
- Shielding employees (if they are unable to work from home) and you would otherwise have had to make them redundant
- Employees of fixed term contracts can be furloughed also as long as you extend or renew their contract during the furlough period. If this is not actioned, then future claims under the scheme would no longer be allowable
- Employees with caring responsibilities and are unable to work (i.e. employees that need to look after children) can also be furloughed
The claim of up to £2,500 pcm or 80% of an employees gross salary should include the following normal contractual obligations and calculations on variable pay guidance is to be used to calculate the claim for your specific employee:-
- Past overtime
- Compulsory commission payments
However, discretionary bonus (including tips), commission payments and no-cash payments should be excluded.
Clarification has also been given on apprenticeship wages under furlough. Apprentices can be furloughed in the same way as an employee and can also continue to train whilst furloughed. However, you MUST pay your apprentices at least the Apprenticeship Minimum Wage, National Living Wage or National Minimum Wage as appropriate for all the time they spend training.
The claim portal is still not available, and we are aware that it may not be operational until the end of April 2020 and we advise you (as an employer) that you are contractually obliged to pay your employees their wages even if they are furloughed. This may cause temporary cash flow problems that you had not considered due to the scheme’s release and timing of grants being issued to employers.
2 April 2020: Update on Small Business Support available during the Coronavirus outbreak
Small Business Rates Relief
Following on from yesterday’s update – we have seen a client in receipt of the Small Business Rates Relief grant. This was distributed from Tewkesbury. This is a reassuring sign that support is coming.
The Government have clarified details regarding policy exclusions regarding cover for pandemics. There are some policies that will cover Government ordered closure and pandemics or Government ordered closure and unspecified notifiable disease. If the wording is included in your commercial insurance policy, you should speak with your insurer about making a claim subject to your specific terms and conditions of your own insurance policy. COVID-19 was added to the list of notifiable diseases on 5 March 2020 which may now mean that your policy does not cover the outbreak.
Time To Pay
The number to call HM Revenue and Customs if you are a business who has outstanding tax liabilities is 0800 024 1222. They will require the reference regarding the tax you are stating you cannot pay i.e. your PAYE accounts office reference number if you are unable to pay your PAYE bill. They will then defer this tax liability up to 1 July 2020. The helpline is on limited times during the outbreak between 9am – 4pm Monday – Friday.
Please remember this is a deferral and the tax you are postponing payment for will become due at a later date when the outbreak and lockdown conditions have passed.
1 April 2020: Update on Small Business Support available during the Coronavirus outbreak
Small Business Rates Relief
We have been notified by a couple of clients who have contacted Cheltenham BC that whilst the online form is now available, a call to the offices does result in the form being emailed directly to the small business. The online form can be found here
Tewkesbury Borough Council’s online form is now operational and can be found here https://www.tewkesbury.gov.uk/forms/covid-19-small-business-grant-fund
Cotswold District Council’s form is now live on their website and can be found here https://www.cotswold.gov.uk/business-and-licensing/coronavirus-business-and-licensing/
Forest of Dean District Council’s form is now live on their website and be found here https://www.fdean.gov.uk/business/coronavirus-business-and-licensing/
Gloucester City Council has still not managed to collate an online form and recommend that enquiries on eligibility need to be directed to firstname.lastname@example.org
Stroud District Council are also directing enquiries to email@example.com – please email a contact name, number, address of the property and the account reference if know on emails
31 March 2020: Update on Small Business Support available during the Coronavirus outbreak
Carrying over annual leave and new rules to calculate annual leave
On Friday 27th March The Business Secretary, Alok Sharma, announced that an amendment to regulations will be made to allow annual leave to be carried over into the next 2 years. Almost all workers are entitled to 28 days holiday (including bank holidays) each year. However, if you are placing employees on furlough or they are self-isolating during the outbreak they will still accrue their statutory rights regarding annual leave even if they are not able to use them. Small businesses need to consider the impact that this amendment to annual leave will mean to their business for the upcoming 2 leave years. It should be noted that an employer has an obligation to ensure that their workers have an adequate opportunity to take their holiday. This holiday cannot be replaced with a payment in lieu unless the worker is leaving employment.
Upcoming changes to changes in holiday pay calculations are still to be introduced from 6th April 2020. This change extends the period in which holiday pay is calculated from the previous 12 weeks of work to the previous 52 weeks.
Contactless amount increase
A quick reminder that with effect of Wednesday 1st April 2020 the contactless cash amount will increase from £30 to £45.
30 March 2020: Update on Small Business Support available during the Coronavirus outbreak
Coronavirus Job Retention Scheme
Late Thursday 26th March an update was released on how the scheme is to work and clarification on the claim has been provided. It was confirmed that either 80% or a maximum £2,500 monthly grant for employees will be used as the gross salary for the month whilst in the Coronavirus Job Retention Scheme. Any additional costs incurred by the employer for statutory obligations such as Employers National Insurance and Pension can be claimed in addition to the salary in use on the scheme by the employer.
Who can claim?
All businesses, charities, recruitment agencies (agency workers paid through PAYE) and public authorities.
What employees does the scheme cover?
The scheme covers all employees who were on the PAYE payroll as of 28 February 2020. If you have made an employee redundant after this date, if you rehire them to your payroll scheme, they will be eligible for the Job Retention Scheme – or furloughed as is now more commonly known. If you have employed new employees in March then they cannot be furloughed nor can a claim be made under the scheme.
What can the employee do whilst on Furlough?
To be eligible for the subsidy grant (Furlough), an employee is not able to undertake any work for the organisation that has placed the employee on furlough.
How to enter the Furlough stage
As an employer you should discuss with your staff and make any necessary changes to their employment contract by agreement. You need to write to your employees confirming that they have been furloughed and keep a record of this communication.
Statutory Sick Pay – SSP
Employees on sick leave or self-isolating should get SSP for the period they are sick, then they can be furloughed afterwards. Employees who are shielding in line with public health guidance can be placed on furlough. Employees still have to meet the normal rules to qualify for SSP – this being an average earning of £118 for the previous 8 weeks pay and will need to provide an isolation note to support the claim (these can be provided by NHS 111).
Working out pay
For full time and part time salaried employees this is a simple calculation of 80% on their basic salary. The grant will not be calculated on overtime, bonuses or commission payments. The cap is set at £2,500 pcm per employee.
If you pay your staff on an hourly or varied rate, then the claim is made on either of the higher of these options, still to the maximum of £2,500 pcm:-
- The same month’s earnings from the previous year
- Average monthly earnings from the 2019-20 tax year (if the employee started part way through the tax year then the calculation is to be pro-rata of earnings to date).
How to make a claim
To make a claim via the HMRC portal when it is up and running in April, you will need the following:-
- ePAYE reference number
- number of employees being furloughed
- the claim period (start and end date)
- amount claimed (per the minimum length of furloughing of 3 weeks)
- your bank account number and sort code
- your contact name
- your phone number
The grant will be paid direct to your UK bank account once HMRC have received your claim and you are eligible for the grant.
When the scheme ends as an employer you must make a decision on your circumstances as to whether employees can return to normal duties. If not, it may be necessary to consider redundancy.
During the Furlough period, employees still have the same rights as they would normally. This includes all statutory entitlements, rights against unfair dismissal and to redundancy payments.
27 March 2020: Help for the Self-Employed
Yesterday the RH Rishi Sunak MP, Chancellor of the Exchequer announced measures are similar to the Coronavirus Job Retention Scheme for the Self-Employed. The criteria to claim are as follows:
- Available to self employed individuals who have submitted a 2018-19 Self-Assessment tax return and have traded in the year
- Extension period of 4 weeks from 26 March 2020 to submit your 2018-19 Self-Assessment – the Tax Return if you haven’t submitted this before the filing deadline of 31 January 2020, you have up to 23 April 2020 to submit your late 2019 Self-Assessment Tax Return
- You must have been trading when you apply or would have been trading had it not been for COVID-19
- You intend to continue to trade during the tax year 2020-2021
- You have lost trading/partnership trading profits due to COVID-19
The taxable grant will be calculated as follows and you should meet one of the two criteria:
- Your trading profits/partnership trading profits must be less than £50,000 in 2018-19 tax year. Your trading profits must be more than half of your total taxable income
- You should have average trading profits in 2016-17, 2017-18 and 2018-19 of less than £50,000. These trading profits should constitute more than half of your average taxable income
Crucially – if you started trading between 2016-19 the calculation will be average over the years HM Revenue and Customs have received a filed Self-Assessment Tax return (the £50,000 limit will still apply).
Applications are not available just yet. HM Revenue and Customs will contact the taxpayer if they are eligible for the scheme and invite you to apply online. You do not need to contact HM Revenue and Customs. After your application has been received HM Revenue and Customs will inform you how much taxable grant you will receive.
Details of the grant
Self-Employed taxpayers will receive a grant of 80% of the average profits from the tax years 2016-17, 2017-18 and 2018-19 up to a maximum of £2,500 per month for an initial 3 month period. The payment will be made in one instalment directly to your bank account. The taxable grant is not expected to be available until 1 June 2020.
Self-employed or Employed?
You are self-employed if you do not receive any income from the PAYE scheme and your income is generated (usually) from more than one customer.
You are employed if you are a director of a small business and receive your remuneration via a mix of salary (under PAYE) and dividends. Unfortunately, there is no further assistance to small business owners presently other than any entitlement to Small Business Rates Reliefs or the Coronavirus Job Retention Scheme.
26 March 2020: Update on Small Business Support available during the Coronavirus outbreak
Further to the announcement that VAT payments for the period between 20 March 2020 and 30 June 2020. To ensure that payment is not taken automatically by HMRC we suggest that if you have a direct debit instruction in place you should cancel the direct debit with your bank in sufficient time to stop HMRC automatically collecting the payment. You should be able to do this from your online banking. You will be given until 31 March 2021 to pay any liabilities that have accumulated during the deferral period.
VAT refunds and reclaims will still be paid by the Government as usual.
Contactless Cash Limit increase
The spending limit for contactless card payments is to be increased from £30 to £45 with a national roll-out beginning on 1 April 2020. The increase comes in good time as an increasing number of retailers are only accepting contactless or card payments in their stores.
Self-Assessment July 2020 Payment Deferral
The Government announced that self-assessment taxpayers who are due to pay a second payment on account by 31 July 2020 can defer this payment to 31 January 2021 without any penalties or interest being applied to the late payment. This is not an automatic option and you must apply using the Time To Pay scheme explaining that you are unable to afford the payment due to temporary financial distress as a result of Coronavirus. We will remind you of this nearer the time.
25 March 2020: Update on Small Business Support available during the Coronavirus outbreak
It is about this time of a month that employers have or are going to pay their staff. Some employers have already had to lay their staff off and these employees, if now retained on a company payroll, should be identified as furloughed – ensuring support for both employer and employee. We are still waiting for HMRC to create the online portal to enable us to claim the grant for furloughed employees and will update you as soon as it is available.
What should an employer do is an employee has symptoms or is self-isolating because of COVID19?
Guidance is that a note should be obtained from NHS 111. However, if this is not possible, normal fit to work notices are not necessarily required under such difficult times. The Government is paying for two weeks SSP (currently £94.25 a week) and we expect this to be repaid via the PAYE system. However, if your contract of employment includes “contractual” or “occupational” sick pay this may mean your employee is entitled to pay subject to their terms and conditions of their contract of employment – we advise you check this section with your HR advisor to ensure you remain compliant to employment legislation. Statutory annual leave is still accrued during the period of sick leave and can be taken during the period of sick leave.
The basic requirement for an employee to qualify for SSP is as follows:-
- They must have an employment contract
- They must have done some work under their employment contract
- The must have earned an average of at least £118 a week over the previous 8 weeks, if they have worked for less than the 8 weeks, the employee still qualifies but at a lower rate
- Must give you notice that they are off sick
Universal Credit or Employment and Support Allowance
If you are not able to claim any statutory benefits via your employer you may be able to claim for universal credit or employment support allowance. To do so you need to apply online using the following links:-
Extension to the filing deadline at Companies House for 3 months
From 25th March 2020 businesses will be able to apply for a 3 month extension for filing their statutory accounts at Companies House. This initiative is to assist businesses prioritising and managing the impact of Coronavirus to their organisation first and foremost. Businesses must apply for this extension and should cite issues around COVID-19 and your application will automatically and immediately granted an extension. Applications are made through a fast-tracked online system which will take just 15 minutes to complete. The following link takes you to the application for the extension to your filing deadline:-
As month end deadlines approach we will be in touch with clients to discuss this option and deal with it for you,
Paying your tax bill
If you have a tax bill due shortly and will not be able to pay it due to restricted cash flow in the current times, it is advisable to contact HM Revenue and Customs as soon as possible to avoid penalties – interest will not be applied at this time as announced by the Chancellor.
Please call HMRC Coronavirus Helpline on 0800 015 9559 to inform them. As with most other organisations HMRC are under huge pressures with staff off for varying reasons so be prepared for your call to be some time before it is answered.
£500 million hardship fund for vulnerable household to provide council tax relief
The Government have announced a £500 million Hardship Fund to provide council tax relief to vulnerable people and households most affected by Coronavirus. The Fund will go to local authorities in England to enable them to reduce the 2020 to 2021 council tax bills of working age people receiving Local Council Tax Support.
Text message from the Government
Yesterday the Government has sent messages to all mobile phones in conjunction with the mobile phone operators. The message from the Government is as per the image below. Unfortunately, if you receive a message stating you are due a refund because of Coronavirus this is a SCAM, please do not reply or click on any links in this message.
24 March 2020: Announcement from RH Boris Johnson, Prime Minister
Following on from the public announcement made by the Prime Minister last night, the United Kingdom has been asked to keep contact to a minimum and go into a voluntary lockdown. What this means is the following business types are allowed to remain open BUT social distancing should be maintained whilst at these premises.
- Supermarkets and other food shops
- Health shops
- Pharmacies including non-dispensing pharmacies
- Petrol Stations
- Bicycle shops
- Home and Hardware shops
- Launderettes and Dry Cleaners
- Car rentals
- Pet shops
- Corner shops and newsagents
- Post offices
Below is the link to the list of businesses and premises which have been told to close as of 23 March 2020.
Help for the Self Employed
There are notices being shared on social media sites about possible government assistance that may become available to the 5 million self-employed people in the UK. As of today’s date, other than the deferment of the July 2020 tax payments and the ability to claim Universal Credit at the SSP rate, the Chancellor has so far not announced any further assistance to the Self Employed. If you do find that your income has stopped, we advise that you claim the Universal Credit as other benefits do normally become available upon this claim. We are still hopeful that assistance to the self employed will be announced in the coming week.
The Government has announced that commercial tenants who cannot pay their rent because of Coronavirus will be protected from eviction. The Government are aware that many landlords and tenants are already in communications regarding voluntary arrangements regarding rental payments whilst struggling with cashflow at this time. The current Coronavirus Bill going through Parliament will offer business protection from being forced out of their premises if they miss a rent payment in the next three months. The commercial tenant will still be liable for the unpaid rent after this period so it is advised that communicating and agreeing some payment over this period is best. This bill amendment covers commercial leases in England, Wales and Northern Ireland and is intended to remain in place until 30 June 2020 unless an extension is needed.
Working Tax Credits
Working tax credits are to be increased by £1,045 to £3,040 for the tax year to 5 April 2021. The amount a claimant or household is entitled to is dependent upon their circumstances.
The Government has suspended normal franchise rules for train service operations for the next 6 months. The rail service will continue to run, abeit at a reduced rate due to demand. If you have purchased an advance ticket or hold a season ticket you can claim a refund for the time unused on your tickets. You should contact your retailer for details on how to claim the refund.
The “Techforce19” challenge has been implement to provide funding of up to £25,000 per company to support those who need to stay at home during the outbreak. This funding is NOT available to the public. The programme is looking for digital solutions that can be launched in the coming weeks. Such solutions are outlined below:-
- Providing remote social care – eg, by locating and matching qualified carers to those in need
- Optimising the volunteer sector – eg, by developing tools to recruit, train and coordinate local volunteers into clinical and non-clinical workers
- Improving mental health support – eg, by making it easier to discover and deliver mental health services and support
- Any other solutions to ease pressure on services and people during this time
23 March 2020: Update on Small Business Support available during the Coronavirus outbreak
Grant to cover 80% of wages costs
Crucially, this announcement was hugely welcomed as it will help businesses retain their employees whilst there is a downturn in trading activities. The grant is on offer to employers with a PAYE scheme and they are in the position that they will no longer be able to offer paid employment to their staff. This was identified by the Chancellor as identifying them as Furloughed. The word furlough is an American word but refers largely to terminology we would use in the UK as “leave” or “sabbatical”.
To be able to claim the grant via the PAYE system in the next couple of weeks as an employer you need to follow these steps:-
- Send the employee home as they are no longer expected to work for your business
- If your contract of employment with your employee has a lay off clause then you do not need to seek agreement for this process
- If you DO NOT have a lay off clause in your contract of employment then you should seek consent with your employee. If your employee refuses to enter this stage, you could make your employee redundant.
These steps retain the employee on your payroll and crucially mean that when businesses recover from the shutdowns currently in place, they are not without the necessary employees to operate their businesses as normal.
Please note the grant is either 80% of the total costs (to include National Insurance and pension costs) up to a maximum of £2,500 per employee per month. It is also being backdated to 1 March 2020.
Deferring VAT payments
The Chancellor also announced that VAT payments due between 20 March 2020 and 30 June 2020 are to be deferred and collection will become due by the end of the financial year. There is no action required by yourself as this will automatically be actioned by HM Revenue and Customs
Deferring July 2020 Self Assessment Payments on Account
Some relief available for self employed and those with Self Assessment tax liabilities becoming due by 31 July 2020. The Chancellor has announced that this collection period has been delayed with payments now becoming due with the normal instalment on 31 January 2021. Please note that this will see some taxpayers with a significant tax bill to pay by 31 January 2021.
Cornoavirus Business Interruption Loans Scheme (CBILS)
The Chancellor announced that the scheme he introduced on 17 March 2020 will become available from this week and there will be a 12 month interest free period for businesses who enter into one of these loans. These loans will be administered by the banks who ultimately make the decision on granting the loan or not.
The Government have announced that businesses that have cover for both pandemics and government-ordered closure should be covered by their insurance policy. The Government advice issued on 17 March 2020 asking people to avoid pubs, theatres etc is sufficient to make a claim on your insurance policy as long as all other terms and conditions are met. This has also been confirmed by the insurance industry.
Help for the Self Employed
Other than the deferment of the July 2020 tax payments and the ability to claim Universal Credit at the SSP rate, the Chancellor has so far not announced any further assistance to the Self Employed. If you do find that your income has stopped, we advise that you claim the Universal Credit as other benefits do normally become available upon this claim. We are hopeful that assistance to the self employed will be announced in the coming week.
20 March 2020: Update on Small Business Support available during the Coronavirus outbreak
Yesterday, the Bank of England took an unprecedented step and have reduced the Bank’s interest rate to its lowest ever rate to 0.1%. This is a good message for the business community.
A list of key workers and options for vulnerable children to remain in school during the outbreak have been released today. The list is larger than anticipated and welcomed. The following link takes you to the list of key workers, where only one parent needs to be in one of the positions for their child/ren to remain at school should they wish.
More financial support
Later today we expect to hear from RH Rishi Sunak, Chancellor of the Exchequer who is expected to outline greater financial support to businesses and employees. We will release an update with a summary of any additional support after the announcement.
We are here to help and whilst we may not all be based in the normal office as we are actively following Government guidance for working from home, it is service as normal.
Please feel free to share our updates to your wider circle as well.
19 March 2020: Update on Small Business Support available during the Coronavirus outbreak
It has been announced that the Small Business Rates Relief grant will be available early April 2020 and those who are eligible will receive a letter from their local authority with more details about the claim in its content.
Please note, as far as we are aware at this time, the grant of £10,000 is only available to businesses who have registered for business rates with their local authority.
Coronavirus Business Interruption Loan Scheme
It has also been announced that the loans will be made available in the week commencing 23 March 2020 and will be provided by the partners (main high street lenders and others shown on the partners page on the British Business Bank website link below). Your application is still made via the main high street lenders with businesses indicating that they wish to borrow using the new CBILS
With the closure of school-based education for children with effect from close of school Friday 20 March 2020, as an employer you are obliged by law to let your employee to take time off work to help care for their child. There is no time limit to how much time can be taken off by your employee to care for their child, the legislation refers to this being “reasonable”. During this time there is no statutory minimum payment in place that your employee should be paid, unless your workplace policy stipulates that this time will be paid. It is preferable to look at working from home options for your employees to help minimise the impact to both your business and their finances. Please note that the ability to work from home would then have to be open to ALL employees regardless as to whether they have children or dependants to look after.
18 March 2020: Update on Small Business Support available during the Coronavirus outbreak
A business rates holiday for the 2020/2021 tax year has been introduced for the retail, hospitality and leisure businesses in England.
Further, businesses trading in retail, leisure and hospitality sectors with a rateable value of between £15,000 and £51,000 will be eligible for a grant of £25,000. Enquires on eligibility to the grant should be directed to your relevant local authority.
For small companies already exempt from paying small business rates, there is access to a fund which can provide them with a one-off cash grant of £10,000. Current advice is that the local authorities know the businesses that fall into this category and will be writing to them shortly with details on the process on how to claim the grant.
Coronavirus Business Interruption Loan Scheme
Further to the introduction of a charge free agreement with the British Business Bank with the Government guaranteeing 80% of the loan. The initial loan amount was £1 million, yesterday RH Rishi Shunak, The Chancellor of the Exchequer, raised the loan level to £5 million. The loans will become available in the forthcoming weeks but are not available immediately. The following link directs you to the British Business Bank website to provide more guidance. However, please remember that this is a loan and it will need to be repaid in accordance with the terms you have entered into them with.
Statutory Sick Pay (SSP)
Guidance has been issued regarding SSP for people who are self-isolating due to Coronavirus symptoms, because someone in their household has Coronavirus symptoms or they have been told to do so by a doctor or NHS 111. All people affected by self-isolation should do so for 14 days and will all be covered by the Coronavirus SSP rules. There may be a contractual difference from this rate of pay and is subject to the terms and conditions of the individual employees contract of employment.
For more advice, please follow the link to the ACAS advisory page below
Change in permission for Pubs and Restaurants to trade as a takeaways
Planning rules have been relaxed during the Coronavirus outbreak so that existing Pubs and Restaurants can continue their business but as a hot food takeaway outlet. The measures will apply only to hot food and drinks. Serving alcoholic drinks are still subject to existing licensing laws. This measure will last for a period of up to 12 months only. Businesses are responsible for informing their local planning authority when the new use begins and ends.
17 March 2020: Change to working hours from 18 March 2020
Our whole office will still be working as normal in these times (whether at home or in the office), however, we will be introducing temporary measures for the office in this time. The temporary measures will be as follows: –
- Face to Face meetings cancelled and replaced with telephone or video conferencing where possible
- Pre-arranged appointments only to our office between 9:30 – 4:30 Monday – Thursday (lunchtime appointments will not be possible)
We trust that you understand the introduction of our temporary measures to protect our colleagues and their families, as well as the wider community.
16 March 2020: Update
Coronavirus is a changing position with the UK and the world. At SkyBridge Accounting we are taking all necessary steps as given by the Government regarding the safety of our team and the wider community.
We remain open and will continue to do so whilst guidance from the Government is that this is the correct position to take. We have always been pro-active in our flexible working and can all work at home whilst still providing the normal level of service.
Whilst our office remains open, we will review whether it is sensible to hold face to face meetings with clients or offer a virtual meeting over Skype or other such methods.
We will be releasing guidance as to financial support the Government is offering to businesses and external sources that we have access to. Please contact to discuss any business concerns that you have.
We wish you all well in these challenging times.
16 March 2020: Update on Small Business Support available during the Coronavirus outbreak
Statutory Sick Pay
With immediate effect SSP for employees will be repaid for all small businesses with under 250 employees by the Government. As yet, this has not been clarified how this will be repaid. Our instinct is that this will be claimed back against PAYE/NIC due for other employees. Best practice is that the employee would normally provide you with a self-certificate/sick note. However, if the employee is symptomatic with COVID19 then receipt of a self-certificate/sick note is not necessary.
Current self-isolation guidance should be followed by the employee. SSP current rate is £94.25 and only payable to employees who earn more than £118 per week. If you have employees that are paid less than £118 per week, then they are able to make a claim for either Universal Credit or Contributory Employment and Support Allowance – the weekly rate for this is £73.10 for employees aged >25 years old.
Self-employed people facing self-isolation can make a claim for Universal Credit or Contributory Employment and Support Allowance.
Businesses trading in retail, leisure and hospitality sectors with a rateable value of less than £51,000 will not be paying rates in 2020-21 for their business premises.
For small companies already exempt from paying small business rates, there is access to a fund which can provide them with a cash grant of £3,000. As yet, there aren’t any details as to how this can be claimed. When details are available we will provide an update.
Coronavirus Business Interruption Loan Scheme
The Chancellor of the Exchequer announced in the budget onWednesday 11th March 2020 support from the Government via the British Business Bank. The Government will now guarantee 80% of the value of bank loans made to small businesses. These borrowings may be for businesses struggling to pay salaries, bills or for new stock during the outbreak. There would normally be a 2% charge on this guarantee payable by the borrower annually from the scheme but this fee will be waived at this time. It is important to note that you are effectively entering into a credit agreement and the loan will have to be repaid like any other loan you would take out.
Time to Pay Arrangements
As a small business if you are unable to pay your tax bill in one instalment when it becomes due. HM Revenue and Customs are offering to defer the 3.5% annual interest charge on the deferred tax payment period. Again, this is a loan that you are entering into and it will remain payable in full until it is cleared. This arrangement is negotiated on an individual basis over the phone with the dedicated team at HM Revenue and Customs calling 0800 0159 559 to enter into an arrangement.
Reduced working hour arrangements
Some small businesses may not be able to pay their employees the normal salary level during the outbreak and they may enter a negotiated reduced working hour arrangement with them. This is best entered into with the guidance of a HR professional to ensure that all arrangements are robust for both employee and employer. We can assist you in this matter by recommending the relevant professionals to assist you on this.
At this time it is always wise to go back to your insurance policy and review whether your policy includes Business Interruption in the policy. There may be exclusions in your Business Interruption policy that covers a pandemic such as Coronavirus – the best course of action is to contact your insurer or broker to discuss this and how/when (if any) claim can be made.
Updates for Employees, Employers and businesses
The following links should be reviewed regularly for any updates to Government advice on the changing position with COVID-19