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THE CHANCELLOR’S STATEMENT 5.11.2020
Yet more changes to report as the Chancellor reacts to lockdown. Paul Phillips talks us through them:
Coronavirus Job Retention Scheme (CJRS)
CJRS will be extended until the end of March 2021 for all parts of the UK. For claim periods running to 31 January 2021, the UK Government will pay 80% of employees’ usual wages for hours not worked, up to a cap of £2,500 per month. The UK Government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.
Employers will need to pay all employer National Insurance Contributions (NIC's) and pension contributions. Employers can choose to top up their furloughed employees’ wages beyond the 80% paid by the UK Government for hours not worked, but they are not required to do so.
Part furlough will be allowed and claims when the systems are ready can only include employees for whom an RTI submission was made between 20 March 2020 and 30 October 2020. Detailed records of time worked MUST be kept for a period of 6 years
There are detailed rules concerning the claim and these can be found at: https://www.gov.uk/government/publications/extension-to-the-coronavirus-job-retention-scheme/extension-of-the-coronavirus-job-retention-scheme.
PLEASE ALSO NOTE THAT the final date for CJRS claims for the period up to 31 October is 30 November 2020.
Job Retention Bonus
It was also confirmed that the Job Retention Bonus will no longer be paid in February 2021, as CJRS will be available at that time. An alternative retention incentive will be put in place at the appropriate time.
Self-Employment Income Support Scheme (SEISS) Grant Extension
The extension will last for 6 months, from November 2020 to April 2021. Grants will be paid in 2 lump sum instalments each covering a 3 month period.
The third grant will cover a 3 month period from 1 November 2020 until 31 January 2021. The Government will provide a taxable grant calculated at 80% of 3 months average monthly trading profits, paid out in a single instalment and capped at £7,500 in total. This is an increase from the previously announced amount of 55%.
The Government has already announced that there will be a fourth grant covering February 2021 to April 2021. The Government will set out further details, including the level, of the fourth grant in due course.
The grants are taxable income and also subject to National Insurance contributions.
To be eligible for the scheme, self-employed individuals - including members of partnerships - must:
• have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
• intend to continue to trade and either:
◦ are currently actively trading but are impacted by reduced demand due to coronavirus
◦ were previously trading but are temporarily unable to do so due to coronavirus
Mortgage payment holidays will no longer end at the end of October. Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.
Businesses required to close in England due to local or national restrictions will be eligible for the following:
• For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;
• For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;
• For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks
These grants are to be administered by local councils.
For more detailed information please contact us on 020 8366 4200
THE CHANCELLOR’S STATEMENT 22.10.2020
Paul Phillips offers a useful summary of the latest Chancellor's Statement
The Chancellor has amended and upgraded previous job related statements. The revised positions are summarised below:
Job Support Scheme
The Job Support Scheme (JSS) will open on 1 November and run for six months, until 30 April 2021. The government has said it will review the terms of the scheme in January 2021. There are two variations to JSS – JSS Open and JSS Closed.
JSS Open will provide support to businesses that are open where employees are working shorter hours due to reduced demand.
Employees will need to work at least 20% of their usual hours. Employers will continue to pay employees for the hours they work, and the UK Government will pay a contribution of 61.67% of the usual pay for hours not worked, up to a maximum of £1,541.75 per month.
Employers will pay 5% of the usual pay for hours not worked, up to a maximum of £125 per month, and can top this up further if they choose. This means employees should receive at least two thirds of their usual pay for hours not worked.
The caps are reduced according to the proportion of hours not worked. Further guidance on this will be available on GOV.UK shortly.
Employers will need to cover all employer National Insurance and pension contributions.
JSS Closed will provide support to businesses whose premises are legally required to close as a direct result of Coronavirus restrictions set by one of the four governments of the UK. This includes premises restricted to delivery or collection-only services from their premises, and those restricted to providing food and/or drinks outdoors.
For JSS Closed, the UK Government will fund two thirds of employees’ usual wages for time not worked, up to a maximum of £2,083.33 per month. Employers will not be required to contribute, but they can top up the government’s contribution if they choose to. Employers will still need to cover all employer National Insurance and pension contributions.
Employers will be able to make their first JSS claim in arrears from 8 December, for pay periods ending and paid in November.
Please contact Valentino for assistance in these areas.
Self-Employment Income Support Scheme (SEISS) Grant Extension
As part of support for businesses through the Coronavirus pandemic, the UK Government has increased the support available under the SEISS Grant Extension - doubling the value of the first grant.
This brings support for the self-employed in line with that for employers under the Job Support Scheme Open.
The value of the first SEISS Grant Extension, covering the period November 2020 to the end of January 2021, will double. This means that the UK Government will provide an initial SEISS grant based on 40% of three months’ average trading profits, paid out in a single instalment, and capped at £3,750 in total.
To ensure that support will be targeted to those who most need it, SEISS Grant Extension will be available to self-employed individuals who temporarily cannot trade as well as those continuing to trade and facing reduced demand due to COVID-19.
HMRC will provide full details about claiming and applications in guidance on GOV.UK in mid-November.
Job Retention Bonus (JRB)
Employers will be able to claim a one-off payment of £1,000 for every eligible employee they furloughed and claimed for through the Coronavirus Job Retention Scheme (CJRS), kept continuously employed until at least 31 January 2021 and who meets the other eligibility criteria. Employers do not have to pay this money to their employee.
Employers will be able to claim the bonus between 15 February and 31 March. To do this they must have submitted PAYE information for the period up to 5 February 2021 on time.
Further guidance on the claim process will be published by the end of January 2021.
Claimed too much in error?
It’s important that employers check each claim is accurate before submitting it, and we would also recommend checking previous claims and repaying any amount over-claimed, so they will not have to pay interest and penalties if it is subsequently discovered they have claimed too much.
Please contact Valentino if you think this is appropriate. A voluntary declaration is less severe than discovery when penalties will apply.
The Chancellor's Statement
Paul Phillips offers a useful summary of the Chancellor's Statement
The Chancellor Rishi Sunak today outlined additional government support to provide certainty to businesses and workers impacted by coronavirus across the UK.
Job Support Scheme
A new son of furlough Job Support Scheme will be introduced from 1 November. Under the scheme, which will run for six months, the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand.
Employers will continue to pay the wages of staff for the hours they work - but for the hours not worked, the government and the employer will each pay one third of their equivalent salary. This means that employees will be paid at least two thirds of their salary per hour for every hour not worked.
Employees must be working at least 33% of their usual hours and the level of grant will be calculated based on an employee’s usual salary, capped at £697.92 per month.
To be eligible to apply for the grant, employees must:
• be registered on PAYE payroll on or before 23 September 2020
• work at least 33% of their usual hours during the first three months.
The Job Support Scheme will be open to businesses across the UK even if they have not previously used the Job Retention Scheme, with further guidance being published soon.
Employers must pay at least two thirds of employees’ salary for every hour not worked. Employers will need to fund the difference between this and the grant and pay National Insurance and pension contributions from their own funds.
Claims will open in December and grants will be paid on a monthly basis from this date.
The scheme is designed to sit alongside the Jobs Retention Bonus.
More information is available at this link, please click here.
Self-Employment Income Support Scheme (SEISS) Grant Extension
The Government is continuing its support for millions of self-employed individuals by extending the SEISS Grant.
Self-employed individuals and members of partnerships who are eligible for the SEISS, and who are actively continuing to trade but are experiencing reduced demand due to COVID-19, will be eligible for a further SEISS Grant to provide support over the winter months.
Grants will be paid in two lump sum instalments each covering 3 months. The first grant will cover a three-month period from the start of November 2020 until the end of January 2021 It will be a taxable grant to cover 20 per cent of average monthly trading profits, and capped at £1,875 in total.
An additional second grant, which may be adjusted to respond to changing circumstances, will be available for self-employed individuals to cover the period from February to the end of April - ensuring our support continues right through to next year.
More information is available at the following link, please click here.
VAT cut for tourism and hospitality sector extended
The government also announced it will extend the temporary 15% VAT cut for the tourism and hospitality sectors to the end of March next year.
Pay as You Grow flexible repayment system
The burden will be lifted on more than a million businesses who took out a Bounce Back Loan through a new Pay as You Grow flexible repayment system. This will provide flexibility for firms repaying a Bounce Back Loan.
This includes extending the length of the loan from six years to ten, which will cut monthly repayments by nearly half. Interest-only periods of up to six months and payment holidays will also be available to businesses.
They also intend to give Coronavirus Business Interruption Loan Scheme lenders the ability to extend the length of loans from a maximum of six years to ten years if it will help businesses to repay the loan.
ITSA Self-Serve Time to Pay
Many tax payers deferred their July 2020 Payment on Account, until 31 January 2021. As these tax payers will need to pay the deferred amount, plus any balancing payment and first 2020/21 payment on account, by 31 January 2021, their January tax bill may be larger than usual.
Taxpayers with self-assessment tax debts up to £30,000 and who need extra time to pay will be able to access this Time to Pay facility through GOV.UK and can get automatic and immediate approval. Those with self-assessment debts over £30,000, or who need longer than 12 months to repay their debt in full, will still be able to set up a Time to Pay arrangement but they will need to contact HMRC to set it up.
VAT Deferral New Payment Scheme
All deferred VAT was due to be paid at the end of March 2021. Businesses will be able to make 11 interest free smaller repayments in the 12 months to 31 March 2022.
For those that opt-in, this means that their VAT liabilities due between 20 March and 30 June 2020, will now need to be paid by end March 2022.
Coronavirus Job Retention Scheme – closes on 31 October
Please note that this scheme closes on 31 October and employers will need to make any final claims on or before 30 November. Employers will not be able to submit or add to any claims after 30 November.
Employers must keep the records that support the amount of CJRS grant they have claimed in case HMRC need to check it. Employers can now view, print or download copies of their previously submitted claims by logging onto their CJRS service on GOV.UK.
Taxation will not vanish
Paul Phillips offers some guidance on staying ahead of tax liabilities.
The 31st July normally is a period when the tax man knocks for his second instalment on account of income tax.
VAT payments due in April through June 2020 likewise have a deferment date until 31st March 2021.
The good news is that in the difficult days when no cash was coming in there was some help; the bad news is the liability does not go away.
The message therefore is to plan to settle the relevant liability when cash flow allows. For example you could set up a voluntary standing order to HMRC to clear the debt down over the period of grace.
If this is not possible, especially in respect of your next VAT liability, then it is worth speaking to HMRC Payment Support Service to agree a payment plan. They can be contacted on 0300-200-3835. You will need your VAT number, bank account details and a payment proposal.
The message from HMRC is clear – we have helped, now don’t bury your head. For more information feel free to contact us on 020 8366 4200
The Chancellor’s Summer Statement
Paul Phillips takes us through the latest economic stimulus initiatives from Rishi Sunak.
In order to protect employment and kick start the economy the Chancellor has announced the following:
Job Retention Bonus
To encourage retention of employees there will be a one-off payment of £1,000 to employers who have used the Coronavirus Job Retention Scheme (CJRS) for each furloughed employee who remains continuously employed until 31 January 2021
To be eligible, employees will need to:
• earn at least £520 per month on average for November, December and January.
• have been furloughed at any point and legitimately claimed for under the Coronavirus Job Retention Scheme.
• have been continuously employed until at least 31 January 2021.
If you are prepared to create new jobs for 16 to 24-year-olds the scheme will cover their wages (plus associated overheads) for six months. To qualify, these must be new jobs which offer at least 25 hours a week for youngsters paid the National Minimum Wage or above. Employers will need to provide training and support to find a permanent job. Employers can apply to benefit from this scheme from next month – August 2020.
Employers who create new apprenticeships for the next six-months will be eligible to claim a new grant. The scheme will pay £2,000 for each apprentice up to the age of 25 and £1,500 thereafter.
From 15 July 2020 until 12 January 2021, the UK government will cut VAT from 20% to 5% on any eat-in or hot takeaway food and drinks from restaurants, cafes and pubs, excluding alcohol. This VAT reduction also applies to all holiday accommodation in hotels, B&Bs, campsites and caravan sites, as well as attractions like cinemas, theme parks and zoos
Stamp Duty Land Tax (SDLT)
The threshold in England and Northern Ireland under which no SDLT is paid on the purchase of a main home is increased from £125,000 to £500,000, with immediate effect until 31 March 2021.
The Eat Out to Help Out Scheme
During August, diners can get 50% off Monday to Wednesday on meals and non-alcoholic drinks, up to £10 per person, when eating at participating restaurants, bars, cafes and other registered establishments
Green Homes initiative
From September 2020, home owners and landlords will be able to apply for a grant to make their home more energy efficient. The grant will cover at least two-thirds of the cost up to £5,000 per household. For low income households these grants will cover all costs up to £10,000.
For more information, search 'plan for jobs' on GOV.UK. or feel free to contact us on 020 8366 4200
Paul Phillips writes about the need for innovation and how your accountant can help.
So after a 30 year wait Liverpool (Congratulations!) have finally been crowned top-flight champions again! What does this tell us?
It provides evidence that a once great organisation can reinvent itself. But will it continue?
The same question can be asked of businesses. Just because a company had a successful product it cannot rest on its laurels. It needs in the words of Doctor Who not to self-exterminate but to continually regenerate (and innovate).
Whilst the company might develop its product lines it needs not only to assure itself of operational and manufacturing matters such as supply chains, and how these are affected by Covid-19 and Brexit, but also, and importantly, it needs to know about costs, cost structures and pricing.
This is where the much derided accountant can shift from being an overhead to a positive influence in the business. By having the right reliable data to hand, financial or not, decisions can be taken on a real time basis to the best advantage of the business.
Accounting software is now cloud based resulting in management being able to use business data to the business’ advantage. It no longer remains a secret held by the accounts department.
Speak to us (020 8366 4200) to see how we can assist you – a small investment can maximise your working capital and ultimately cash. As they say cash is king.
Paul Phillips writes about HMRC scammers and offers some advice on how to avoid them.
We often receive from clients comments that they have received emails calls or texts from HMRC advising of a tax refund. Banking details are asked for.
It is quite simple. HMRC do not contact tax payers in this manner.
If someone gets in touch claiming to be from HMRC, saying that financial help can be claimed or that a tax refund is owed, and asks you to click on a link or to give information such as your name, credit card or bank details, please do not respond. You can forward suspicious emails claiming to be from HMRC to email@example.com and texts to 60599.
Common scams are summarised by HMRC here.
Scammers have more opportunity during the Covid-19 outbreak to ply their “trade”. HMRC also provide a very useful link on how to keep safe during this period not only from scammers but in terms of general health. Details can be found at https://www.gov.uk/guidance/covid-19-staying-safe-online
Contact us now for more details on how we can help you.