Self employed? You have a month to claim the last SEISS grant

Heads up for the self-employed – HMRC have urged eligible self-employed traders to get their paperwork in order to apply for the fifth and final grant under the Self-Employment Income Support Scheme (SEISS) before September.

The payment, which covers the period 1 May 2021 and 30 September 2021, can be applied for online on HMRC’s website.

But beware, unlike previous SEISS grants, these grants will be determined by how much a trader’s self-employment turnover has been reduced in the 2020/21 tax year.

What does that mean?

Despite the fact that the grant covers a period of five months, the level of grant will only be worth 80% of three months’ average trading profits, capped at £7,500 for those with a turnover reduction of 30% or more.

For those with a reduction in turnover of less than 30%, the grant will be worth substantially less -  30% of three months average trading profits, capped at £2,850.

HMRC will require two years’ of turnover figures to calculate the grant amount, including your turnover for the period April 2020 to April 2021 and your turnover from either 2019 to 2020 or your turnover from 2018 to 2019 to use as a reference.

Turnover includes the business takings, fees, sales or money earned or received but will exclude previous SEISS grants, Eat Out to Help Out payments and local authority/devolved administration grants.

It sounds complicated but actually the HMRC have provided guidance on their website on how to calculate the turnover figure and the periods which it should cover.

And although we can’t apply for the grant on your behalf, we can help guide you through the figures.

Am I eligible?

To be eligible you must meet all criteria in stages 1, 2 and 3.

Stage 1: Your trading status and when you must have traded

You must be a self-employed individual or a member of a partnership.

You must also have traded in both tax years:

• 2019 to 2020

• 2020 to 2021

You cannot claim the grant if you trade through a limited company or a trust.

Stage 2: Tax returns and trading profits

You must have:

• submitted your 2019 to 2020 tax return on or before 2 March 2021

• trading profits of no more than £50,000

• trading profits at least equal to your non-trading income

Non-trading income is any money that you make outside of your business. For example, if you also have a part-time job or pension.

If you’re not eligible based on the trading profits in your 2019 to 2020 return, HMRC will look back at previous years.

Stage 3: Deciding if you can claim

When you make your claim you must tell the HMRC that you:

• intend to keep trading in 2021 to 2022

• reasonably believe there will be a significant reduction in your trading profits due to the impact of COVID-19 between 1 May 2021 and 30 September 2021

We can help

Like I explained, we can’t do the SEISS application for you but we can help you where your accounts are concerned.

Remember, HMRC are likely to be checking grants, so it is strongly recommended for applicants to keep detailed and robust records.

What’s more, as with the previous SEISS support, the grants are taxable and the fifth grant will need to be included on your 2021/22 tax return.

We can sort all this out for you as we would usually.

Furlough and SEISS is winding down – are you prepared?

Furlough and the Self-Employed Income Support Scheme have protected many of us for the last 18 months – but all good things have to come to an end.

When the four-week delay to lockdown easing was announced moving Freedom Day from June 21 to July 19, many hoped there would also be a delay to the timeline surrounding the support schemes too.

After all, limits on numbers for sporting events, pubs and cinemas remain in place, while rules around masks won’t be lifted just yet.

However, furlough and SEISS were one aspect of life that faced “no changes”, despite the financial uncertainty surrounding a delay to restrictions easing. 

So what’s in place now – and how long will it last?

The timeline

The SEISS and furlough scheme will end in September as expected, but support will dwindle during the summer months. 

Currently, the Government is paying up to 70 percent of wages up to £2,187.50 a month as part of the Job Retention Scheme, with employers having to subsidise 10 per cent of wages for hours not worked up to £312.50 per month.

Contributions will fall again to 60 percent up to £1,875 in August and September with employers required to contribute 20% up to £625 per month.

After this, support will end all together for people on furlough and self-employed workers claiming the grant. 

What else?

Hard-hit hospitality, leisure and retail companies have benefited significantly from the business rates holiday and the ban on commercial evictions – but the latter has now ceased.

Landlords now have the potential to take tenants to court again for not paying rent - despite many still being impacted by restrictions. 

Firms who have paid no business rates until the end of June, now get a 67 percent discount with a £2million cap until the end of the financial year on April 6, 2022. 

Sector leaders and trade union groups have called for full support measures to be extended, but the Government has decided against it. 

Getting back to work

More than one million workers came off furlough in the four weeks between the end of April and the end of May, which coincided with the start of restrictions being lifted and non-essential retail, restaurants and pubs reopening.

New figures published show 2.4 million people moved off the scheme between the end of February and the end of May as businesses reopened.

This month’s ONS Business Impact of Covid-19 Survey show numbers of those still on furlough or flexi-furlough have fallen with estimates that between 1.3 and 1.9 million people still receiving support.

The number of employees on payroll is at its highest level since last April, business and consumer confidence have improved significantly and economic growth is outperforming expectations.

However, there is the possibility that as Furlough finishes completely, there will be a rise in unemployment as businesses who have struggled throughout the pandemic fail to re-establish themselves.

Can we help?

We are here to help with anything relating to furlough and SEISS and can advise you on how to manage your accounts as the country starts to get back to normal. Don’t hesitate to get in touch if you need financial guidance as you navigate the next few months.

WANT A CASH BOOST FOR TAKING ON STAFF?

While many of you might feel like you are still riding the rough waves of Covid, there are others who have made it to calmer shores.

Those might be looking for ways to anchor that stability and consider how to grow. One option on the table is taking on more staff – but that might seem risky when we are still facing a lot of ifs and buts about the immediate future.

However, there are ways to employ without the associated financial risk.

Funding for staff

From this month onwards employers of all sizes in England can apply for extra funding to help them take on new apprentices, in the latest drive to revolutionise the skills and training offer across the country.

The boost to the apprenticeship incentive scheme was confirmed by the Chancellor and allows businesses to claim £3,000 for each new apprentice hired as a new employee until 30 September.

The cash incentive is designed to help more employers invest in the skilled workforce they need for the future, as part of the government’s Plan for Jobs.

Employers can choose how to spend the cash, for example, covering uniform or travel costs for the apprentice.

Why take on an apprentice?

Apprenticeships are a fantastic way for employers large and small to grow their businesses and will continue to play a key role in our economic recovery.

Young people can earn while they learn, build confidence, skills and experience under mentorship and get to grips with the world of work sooner.

Meanwhile, businesses who employ apprentices quickly realise that they can be moulded and shaped in their area of expertise, to deliver the exact skills the business needs.

In short, apprenticeships are an affordable way to recruit and a great way to future-proof your business growth.

 How to get involved

You can apply for new apprentices who joined your organisation from 1 April 2021 and any who join up until 30 September 2021. They must have an apprenticeship start date of 1 April 2021 to 30 November 2021.

You must set up an apprenticeship service account.

The incentive payment is in addition to the £1,000 employers already receive for hiring an apprentice aged 16 to 18 years old or under 25 with an education, health and care plan or who has been in the care of their local authority.

To receive the full payment, the apprenticeship must last for at least one year.

The payment is different to apprenticeship levy funds, so you can spend it on anything to support your organisation’s costs. For example, on uniforms, your apprentice’s travel or their salary. You do not have to pay it back.

You can apply for the incentive payment after you add new apprentices to your apprenticeship service account.

Payments will be made in two equal instalments for each apprentice. The first payment is due after an apprentice completes 90 days of their apprenticeship and the second is due after 365 days.

How we can help

As usual, we are here to help you with finances and accounts relating to new staff. Keep us informed as and when you grow and we will do everything we can to continue to support you.

Less than a month left to join VAT Deferral New Payment Scheme

Almost all businesses have been affected by lockdowns over the last year and are now looking for ways to boost their recovery as the easing of restrictions continues.

As the economy awaits the next boost from further relaxation on the roadmap out of lockdown, there are still things you can do to support your business with its recovery.

The most urgent of these has a looming deadline – June 21st is your last chance to join the new online payment scheme to spread the cost of their deferred VAT.

If you don’t opt into the scheme, your VAT bill is due in full on 30th June 2021.

What is it?

Over half a million businesses deferred £34 billion in VAT payments due between March and June 2020 under the VAT Payment Deferral Scheme and businesses had until 31 March 2021 to pay this deferred VAT.

However, if they could not afford to do so, they could go online from 23 February to set up a new payment scheme and pay by monthly instalments to spread the cost.

This was called the VAT Deferral New Payment Scheme.

The new payment scheme is part of the government package of support worth over £350 billion to help protect millions of jobs and businesses during the pandemic and as we emerge on the path to recovery.

Is it worth doing?

Absolutely.

The VAT Deferral New Payment Scheme means businesses can now manage their cashflow by paying their deferred VAT more gradually, continuing to protect jobs across the UK as we emerge from the pandemic.

The March, April and May joining dates have passed, but businesses can still spread their payments across up to eight equal monthly instalments, interest-free, if they join by 21 June 2021.

Payments can easily be set up via the VAT Deferral New Payment Scheme portal.

Eligible businesses that are unable to use the online service can call the HMRC Coronavirus Helpline on 0800 024 1222 to join the scheme until 30 June 2021.

Businesses may be charged a 5% penalty and/or interest if they don’t join up to the scheme online by 21 June, or pay in full by 30 June, or contact HMRC to make an arrangement to pay by 30 June 2021.

Businesses should also contact HMRC by 30 June 2021 if they need to agree extra help to pay.

What do I need?

Before joining, you must:

·        have your VAT registration number

·        create your own Government Gateway account (if you do not already have one)

·        submit any outstanding VAT returns from the last four years – otherwise you’ll not be able to join the scheme

·        correct errors on your VAT returns as soon as possible

·        make sure you know how much you owe, including the amount you originally deferred and how much you may have already paid

To use the online service, you must:

·        join the scheme yourself, your agent cannot do this for you

·        still have deferred VAT to pay

·        be up to date with your VAT returns

·        join by 21 June 2021

·        pay the first instalment when you join

·        pay your instalments by Direct Debit

Helping you make the most of your money

We can’t help you join this scheme – you have to do this yourself. But we can keep you informed of what help is out there for you as your continue to get your businesses up and running again.

If you need any help, advice or support, do not hesitate to get in touch. We will do our best to answer questions and solve problems.

THERE IS STILL MONEY OUT THERE FOR BUSINESSES STRUGGLING IN THE PANDEMIC

There has been a lot of help out there for businesses struggling to get through the fallout of the COVID-19 pandemic. But some of you have fallen through the cracks – unable to access grants that you might need to stay afloat.

What’s more, the Small Business Grant Fund, the Retail, Hospitality and Leisure Grants and Local Authority Discretionary Grants which ran through the initial lockdown period have now largely expired.

But your hope for getting a slice of the government cash pie isn’t over yet.

The Restart Grant and the Additional Restrictions Grant could be the lifelines you have been looking for.

The Restart Grant

From April 2021, one-off Restart Grants of up to £6,000 per premises were made available to non-essential retail businesses that were ordered to close during lockdown.

Businesses within the hospitality and other sectors opening later, such as accommodation and leisure, were also offered grants of up to £18,000 per premises.

This grant funding was earmarked for  the cost of reopening safely.

Eligibility

Your business may be eligible if it is:

• based in England

• rate-paying

• in the non-essential retail, hospitality, accommodation, leisure, personal care or gym sectors

• trading on 1 April 2021

You cannot get funding if your business:

• is in administration, insolvent or has been struck off the Companies House register

• has exceeded the permitted subsidy allowance

The Additional Restrictions Grant

The Additional Restrictions Grant (ARG) provides local councils with grant funding to support businesses that are severely impacted by restrictions, and that may or may not be in the business rates system.

Previous guidance for the Additional Restrictions Grant indicated that businesses must have been trading before relevant restrictions were introduced in order to be eligible. This is no longer the case. All businesses that are trading and meet other eligibility criteria may apply to receive funding under this scheme. There is no starting date from which businesses must have been trading in order to qualify for grant funding.

Local councils can determine which businesses to support and determine the amount of funding provided from the ARG scheme.

Some councils have completed their first few rounds of funding and have still be left with quite a substantial surplus. This means that the criteria for applying for this funding is constantly changing.

Eligibility

Local councils have the freedom to determine the eligibility criteria for these grants.

This could include:

• businesses which do not pay business rates

• businesses that have not received wider grant support

• businesses from all sectors that are severely impacted by restrictions

You cannot get funding if:

• your business is in administration, insolvent or has been struck off the Companies House register

• you have exceeded the permitted subsidy allowance

What is the subsidy allowance?

You cannot apply for the Restart Grant or the ARG if you have already exceeded the personal subsidy allowance. But what is this?

The new domestic subsidy allowance for the COVID-19 business support grants took effect on 4 March 2021. Applications made prior to that date are subject to the previous rules.

The subsidy allowances are as follows:

• Small Amounts of Financial Assistance Allowance – you’re allowed up to £335,000 (subject to exchange rates) over any period of three years

• COVID-19 Business Grant Allowance – you’re allowed up to £1,600,000

• COVID-19 Business Grant Special Allowance - if you have reached your limits under the Small Amounts of Financial Assistance Allowance and COVID-19 Business Grant Allowance, you may be able to access a further allowance of funding under these scheme rules of up to £9,000,000, provided certain conditions are met

Grants under these three allowances can be combined for a potential total allowance of up to £10,935,000 (subject to exchange rates).

How to apply

If you haven’t exceeded your allowance and think you could be eligible for these grants, it’s worth exploring further.

To understand the specifics of your local authority, you would need to visit their website and look at the application process. Even if you don’t fit the bill now, you might do eventually as the council continues to allocate the money.

Still working from home? You can claim tax relief for the whole of this year and backdate it too

In the last year millions of us have been told to work from home for a period of time – whether a few weeks or months on end.

But many of you haven’t claimed tax relief that you are due as a result.

The benefit is offered to workers told by their employer to work from home – provided they have not received home expenses payments directly from their company.

What’s more, HMRC has just announced that you can claim it for the whole of this year and backdate for 2020/21 too – even if you only worked a single day from the comfort of your kitchen.

What is it?

There are rules about what extra costs you can and can't claim the working from home tax relief for. 

The allowance is designed to cover costs heating, metered water bills, home contents insurance, business calls or a new broadband connection.

They do not include costs that would stay the same whether you were working at home or in an office, such as mortgage interest, rent or council tax.

There are two options.

For the current tax year, you can claim £6 a week without having to show or provide any evidence of the extra costs you've incurred by working from home. For most people, this is likely to be the most straightforward option.

The amount of tax relief you get depends on what income tax band you are in.

If you pay the 20 per cent basic rate of tax and claim tax relief on £6 a week you would get £1.20 per week in tax relief, which is 20 per cent of £6. 

A higher, or 40 per cent, rate taxpayer can get £2.40 worth of tax relief a week if they claim for the £6 a week worth of extra costs incurred by working from home.

For the entire tax year, the total work from home tax relief would be around £62 for basic rate taxpayers, or around £124 a year for higher rate taxpayers, assuming the £6 a week option is selected. 

Alternatively, you can choose to claim for the exact sum of extra costs you incur working from home each week, if this is more than £6 a week. 

To do this you'll need evidence such as receipts, bills or contracts.

You may also be able to claim tax relief on equipment you’ve bought, such as a laptop, chair or mobile phone.

How do I apply?

Business owners can advise their staff to submit their own claims.

Last October, HMRC launched an online portal offering employees a hassle-free way to claim the relief without the need to provide receipts or to make complicated calculations.

Many people failed to apply – perhaps because they were unaware of the scheme or maybe because the sum is so small.

But as the months have gone on - and let's face it, few of us expected to still be in this situation more than a year on - it may be worth adding to the pennies.

And what’s more, it’s not too late to sign up.

The tax relief scheme is being extended for the entirety of the 2021/22 tax year and anyone eligible to claim the work from home for tax relief last year can also still do so.

This means eligible taxpayers can now apply for the work from home tax relief for both the 2020/21 and current tax year.

The Government is still advising people to work from home if possible, meaning millions of people are likely to be eligible.

The application process is pretty quick and straightforward but you'll need a 'Government Gateway' user ID and password to claim. You can create a user ID if you do not already have one. 

If successful, the claim will alter your tax code and you should start seeing your pay packet rise slightly as the tax relief kicks in.

If you need any help – or advice on any other tax relief options – give us a call.

New interest-free VAT deferral payment scheme to help firms ease COVID cashflow woes

It feels like the initial announcement of VAT deferrals in 2020 took place in a different age.

The permitted delay of VAT payments due between 20th March and 30th June 2020 was just one part of a rescuing rush of government motions designed to soften fiscal blows dealt by the pandemic.

Yet, three lockdowns, two furlough extensions and a truckload of grants and loans later, the original deadline of 31st March 2021 for making these delayed VAT payments is right around the corner.

And as, hopefully, so too is the beginning of the end of these turbulent times, the government has made another update on VAT deferrals that will provide some firms with one more vital boost.

The deferral payment scheme

Although businesses still have the option to pay their deferred VAT in full by 31st March 2021, the government has announced that eligible businesses can join a new VAT deferral payment scheme.

This new scheme will allow firms to pay their deferred VAT in equal instalments, all delightfully interest-free.

Those who opt to use the new scheme, which will function in the form of an online service that will be open between 23rd February and 21st June 2021, can choose the number of instalments they would like to pay their deferred VAT in, depending on how soon they join.

Who can take advantage of this

Businesses that are already on the VAT Annual Accounting Scheme or the VAT Payment on Account Scheme will be invited to join the new payment scheme ‘later in March 2021’.

Any other businesses wishing to join the new payment scheme must:

• Join the scheme themselves and not do so via an agent

• Still have deferred VAT left to pay

• Be up to date with their VAT returns

• Pay the first instalment when they join

• Pay their instalments by Direct Debit or contact the COVID-19 helpline if they cannot

• Join by 21st June 2021

Before joining the scheme, businesses must have or create a Government Gateway account, correct errors on their VAT returns as soon as possible, submit any outstanding VAT returns from the last four years and know how much of their VAT has been deferred.

How this affects you

If your business deferred VAT payments last year, the government’s new payment scheme offers a great way for you to protect your cashflow and avoid what may be a stinging one-off payment after months of depressed demand.

The government’s interest-free support packages have helped many businesses survive the pandemic thus far, and another interest-free offering displays once more that they are willing to take a hit to allow businesses to stand taller when this is all over.

How can we help you?

Although we are unable to enrol your business onto the new VAT deferral payment scheme, KBL Accounts are at hand to help you correct or compile VAT returns in preparation if you are considering joining the new scheme.

Financial support in Lockdown 3.0

As we begin a new year, we also approach one year of coronavirus in the UK.

While Christmas provided some much-needed respite for many families, baubles were taken down alongside hope of a more ‘normal’ start to the year as a third national lockdown was announced.

Yet, for the first time in this pandemic, the end is in sight.

The nation is jabbing its way back to normality as Boris Johnson announced that pedals were to the metal for 13 million of the UK’s most vulnerable people to be vaccinated over the next few weeks.

Unfortunately, the order to stay at home and close certain businesses will have a fiscal impact on firms that have already had to sacrifice so much over the last 12 months.

It is for that reason that Chancellor Rishi Sunak announced a further £4.6bn of funding for struggling businesses to help see them through to a more stable springtime.

The businesses eligible

Sunak announced that this new funding package is available to businesses in retail, hospitality and leisure that have had to close due to new lockdown restrictions.

These businesses, including our favourite restaurants, cafes and gyms, have endured a yo-yo year of opening and closing as the government tried to minimise both the health and financial impacts of the pandemic.

Sectors such as tourism and travel were less than impressed with the support offered to them in 2020 as restrictions wiped out bookings.

Businesses in these industries will be hoping that this financial support will take them to a summer much closer to ‘business as usual’.

Other types of businesses affected by the new lockdown will also be supported by a new ‘discretionary fund’.

The support available

Businesses in the UK who operate in those sectors will receive one-off grants of up to £9,000 per business premises. An estimated 600,000 premises are expected to benefit, costing the government £4bn.

The grants to closed businesses will equate to £4,000 for premises with a rateable value of £15,000 or under, £6,000 for those worth between £15,000 and £51,000 and £9,000 for properties valued at over £51,000.

The discretionary fund offers £594m to other businesses not in these sectors that may have felt the impact of new restrictions.

This new package will work in tandem with the extension of the furlough scheme until April and the £3,000 per month closed businesses can already receive from the Local Restrictions Support Grant.

What it means for you

Some businesses in the retail, hospitality and leisure sector may have questioned their chances of surviving a third lockdown.

But a one-off cash grant that increases for higher-rated premises should go quite some way towards helping these businesses on what they hope will be the final stretch.

By furloughing staff, taking advantage of the current monthly grant scheme and applying for one of the new one-off grants, some of the businesses affected will be able to survive the latest restrictions before Sunak’s March Budget hopefully reveals long-term support for financially scarred firms.

However, many businesses will also be expecting an extension to the business rates holiday and of the 5% VAT rate.

Sunak is yet to confirm these extensions and may not do so until the March Budget. Our advice would be to take advantage of the support he has confirmed until then.

How can we help you?

KBL will continue to support you and your finances on what we hope will be one last push towards a return to normality.  

Everything you need to know to prepare for 2021

I’m sure you’ll all join me in breathing a sigh of relief that this year is finally coming to an end.

But before we sign off completely from 2020, I just wanted to make sure everyone was geared up for 2021.

There are still a number of schemes that you and your business can benefit from which could help manage the continued effects of the ongoing pandemic.

It’s vital that you take advantage of all the help you can – especially because none of us are 100% sure what lies ahead.

Here we have provided an overview of every financial boost that can be accessed by struggling businesses. If you need advice on which to adopt and which to avoid, we are here to help.

The tier restrictions

You need to keep an eye on these after the Christmas break because there are likely to be some shifts and your area may face tighter restrictions.

In a bid to protect jobs and businesses, the government has put in place a raft of support measures which cover businesses forced to close as a result of the tier restrictions and for those that have seen custom fall away because of the pandemic.

There are also a number of grants and loans available depending on each local authority.

Find out which tier you are in here

The furlough scheme

The Coronavirus Job Retention Scheme - or Furlough Scheme - has been extended to March 2021.

This allows you to furlough employees who will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month.

Employers have flexibility to use the scheme for employees for any amount of time and shift pattern, including furloughing them full-time.

Find out how to claim furlough support for staff here

Help for the self-employed

The Self-Employment Income Support Scheme (SEISS) has been increased to meet 80% of trading profits covering November to January for all parts of the UK.

This is calculated based on 80% of three months’ average trading profits, paid out in a single instalment and capped at £7,500.

The Government has announced a further grant is expected to follow covering February to April so watch this space.

How to claim the Self Employed Income Support Scheme

Grants for businesses forced to close

This will be an important one for areas falling under tier 3 post-Christmas. Businesses which are forced to close due will receive up to £3,000 per month, depending on their rateable value, under the Local Restrictions Support Grant (LRSG Closed).

They can apply for up to £1,500 for every 14 day period of closure.

Grants for businesses that have stayed open

On top of that, there is help for businesses severely impacted by temporary local restrictions under the Local Restrictions Support Grant (LRSG Open).

Eligible businesses can apply for a cash grant of up to £2,100 for each 28-day period.

For nightclubs, live music venues and adult entertainment businesses

The Local Restrictions Support Grant (LSRG Sector) supports businesses that have been closed since March.

Eligible businesses including nightclubs, dance halls, discos, adult entertainment venues and hostess bars are entitled to a cash grant of up to £1,500 for each 14-period of closure. It is available from local authorities.

Grants for other businesses

The Additional Restrictions Grant (ARG) supports businesses that are not covered by other grant schemes or where additional funding is needed.

It is down to individual local authorities to determine eligibility but is designed to support:

·        businesses which supply the retail, hospitality, and leisure sectors

·        businesses in the events sector

·        business required to close but which do not pay business rates

Applicants can visit their own local authority website for more information. Please note that it’s likely that the first phase of this funding has closed. However local authorities are now in the stages of determining the second phase of this grant so it’s worth keeping an eye on.

Business loans

Loan schemes continue to be available to struggling businesses. The application deadline for loan schemes has been extended to the end of January 2021.

These are:

·        Bounce Back Loan – which helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000. The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.

·        The Coronavirus Business Interruption Loan Scheme (CBILS) – which also helps small and medium-sized businesses to access loans and other kinds of finance up to £5 million. The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months.

·        The Coronavirus Large Business Interruption Loan Scheme (CLBILS) – which helps medium and large sized businesses to access loans and other kinds of finance up to £200 million. The government guarantees 80% of the finance to the lender.

·        The Future Fund – which provides government loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors. These convertible loans may be an option for businesses that rely on equity investment and are unable to access other government business support programmes because they are either pre-revenue or pre-profit.

Those businesses that have already accessed the Bounce Back Loan Scheme but have not borrowed their maximum amount can now apply to top-up their existing loan.

Other help

Don’t forget that there is reduced VAT for hospitality, accommodation and attractions until the end of March 2021.

There is also business rates relief for hospitality, retail, leisure and nurseries until the end of March 2021 in England.

And finally…

We know it has been a shocking year and that you have all struggled in one way or another to manage the fallout. We continue to be here for you in 2021 to guide you through any further upheavals and help you keep your finances on track.

The Spending Review – and what it means for you

As an accountant, I know better than anyone that your outgoings cannot exceed your income.

So I watched Rishi Sunak deliver his 2020 Spending Review in the House of Commons yesterday with interest.

After all, how on earth was he going to recover from the borrowing the country has done to get through the pandemic this year – and, more importantly, would recovering this money hit us all hard in the years ahead?

Well, it’s a mixed bag and in case you missed it - or if you think you may have mistaken one of Rishi’s billions for his trillions - here is a summary of this year’s Spending Review and how it might impact you.

Economic growth

The Chancellor stated that forecasts from the Office of Budget Responsibility (OBR) suggest that the economy will shrink by 11.3% this year.

Unsurprisingly, this would be the biggest decline in three centuries. Sunak also says that it will take until the end of 2022 for the UK economy to return to its pre-pandemic size.

Estimates suggest that GDP will grow by 5.5% next year, then 6.6% in 2022, 2.3% in 2023, 1.7% in 2024 and a further 1.8% in 2025.

In July, when some may have hoped a second lockdown would never arrive, the OBR foresaw a 12.4% drop in GDP this year. This compares to estimates from the beginning of November which suggested a fall of 11% in 2020.

What it means to you

Recession and a period of austerity is likely. The Chancellor mentioned that there would be ‘long-term scarring’ to the UK’s economy, with his review indicating its impacts could continue until as late as 2025. So, don’t expect to be rid of Rishi once you’ve had your vaccine.

Borrowing

As expected, Sunak says this year’s budget deficit will be the highest level in peacetime history, at £394bn, or 19% of GDP.

He says that borrowing will remain at £164bn in 2021 and around £100bn for the remainder of the financial forecast.

In July, the OBR estimated a budget deficit of £322bn for 2020-21. It had also previously estimated that the national debt across all budgets would be £2.2tn in 2020-21 – a whopping 104.1% of GDP.

What it means to you

It is bound to mean tax increases are looming. Rishi Sunak continued to stress that the current climate was ‘an economic emergency’ and that this level of borrowing was justified as it helped to prevent further damage. But we have to pay it back somehow.

Public sector pay

In one of the most highly-anticipated parts of his Spending Review, the Chancellor delivered news that was met with disappointment and dismay across the nation – pay rises for the public sector are going to be paused next year, with the exception of over one million NHS doctors and nurses.

For these 2.1million public sector workers - who earn below the national median wage of £24,000 - a pay rise of at least £250 a year. Not much, is it?

In an attempt to protect political balance, the Chancellor explained that he could not justify an across-the-board pay rise for public sector workers in order to ensure fairness between the public and private sectors.

What it means for you

Nothing unless you are a nurse earning below the national median wage of £24,000.

However, he also revealed that the national living wage would be increased to £8.91 per hour and extended to over-21s. This means you will need to review what you are paying your staff.

Spending

The Chancellor emphasised the point that day-to-day departmental spending will rise by 3.8% (around £14.8bn), the fastest rate of growth in 15 years.

He revealed that the UK government will match EU funding for regional development post-Brexit. Next year, funding for communities to pilot programmes will become available.

In order to help hire 50,000 new nurses, Sunak says that the core health budget will grow by £6.6bn. He also says that the budget for schools will increase by £2.2bn.

As he closed his Spending Review, the Chancellor also announced that next year’s investment in infrastructure will total £100bn. He plans to deliver the highest level of sustained investment in 40 years.

And finally, Sunak announced that a new £4bn fund will be available to local areas to allow them to bid for the funding of local projects.

Local councils will question whether £4bn will stretch far enough after years of underfunding devolved governments.

What it means for you

Figures often only go so far to reassuring the population – the proof will be in the pudding in the months and years ahead as to whether we are able to effectively recover from the impact of the pandemic.

How can we help you?

We will continue to support you or your business if you are affected by any of the Chancellor’s announcements.

As we head into the future with only worrying predictions to guide us, KBL are here to steer your finances into a more positive direction.

What help is there for the self-employed as we head into another lockdown?

Last lockdown, self employed workers had an anxious wait to find out if there would be any financial help available for them.

But thankfully, the Prime Minister hasn’t left us all in a panic this time, insisting that self-employed workers will be able to claim government support worth 80% of trading profits ahead of the new national measures coming into force tomorrow.

In order to reflect the extension of the furlough scheme for employed workers through November, Boris Johnson announced support for the self-employed will also be boosted throghout the new month-long lockdown.

What does this mean?

Under the Self-Employed Income Support Scheme (SEISS), eligible workers can currently claim support covering 40% of their average earnings from last year to cover a period of three months, capped at £3,750.

The new enhanced scheme will open for applications from the end of November and cover 80% of trading profits for that month.

Including the new higher November grant, it means the November-January payment will be at 55% of profits, up to a maximum of £5,160.

However, as eligibility criteria will be the same as for previous grants, critics said it still meant as many as 2.9 million freelancers, contractors and newly self employed people would remain excluded.

What other help is there?

The SEISS continues to be just one element of a package of support for the self-employed.

In addition to this you can also access other elements of the package which includes Bounce Back Loans, tax deferrals, rental support, mortgage holidays, and other business support grants.

As with the previous SEISS, we cannot apply for this on your behalf. However, we can offer you advice on this or any of the other areas of your finance that you may be struggling with.

Further economic support announced as we head into another lockdown

For many of us it feels a bit like déjà vu.

Here we are facing another national lockdown and with it closure of all businesses except for those providing essential goods, a ban on mixing with other households and renewed fears about the health and wellbeing of our friends and family.

The difference this time round is that we are no longer new to the scenario – we know what to expect. And on top of that, we have been reassured that there will be economic support available to see us through.

So let’s look at this in more detail.

Furlough and finances

This is the big one. The Coronavirus Job Retention Scheme has been extended for a month with employees receiving 80% of their current salary for hours not worked.

This means the extended furlough scheme is more generous for employers than it was in October.

Employers small or large, charitable or non-profit, are eligible for the extended Job Retention Scheme and businesses will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time.

The Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends.

Who is eligible?

This extended Job Retention Scheme will operate as the previous scheme did, with businesses being paid upfront to cover wages costs.

The level of the grant will mirror levels available under the CJRS in August, so the government will pay 80% of wages up to a cap of £2,500 and employers will pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work.

As under the current CJRS, flexible furloughing will be allowed in addition to full-time furloughing.

Further details, including how to claim this extended support through an updated claims service, will be provided shortly.

Business Grants

In addition, business premises forced to close in England are to receive grants worth up to £3,000 per month under the Local Restrictions Support Grant.

Businesses required to close in England due to 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.

On top of this, £1.1bn is being given to Local Authorities, distributed on the basis of £20 per head, for one-off payments to enable them to support businesses more broadly.

What about homeowners?

Mortgage payment holidays will no longer end as of October 31st.

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.

The FCA will announce further information soon.

How we can help

If you are new to furlough – or an old hat – we are here to help you manage the claim and the payments to employees. We can also advise you on how to apply for any business grants to get you through the winter.

None of us know the impact this second wave will have on our country – let alone our individual businesses.

But here at KBL Accounts we would like to help you as much as we can. If you want to talk through your business finances in more detail with a member of our team, we would be happy to offer you the best advice. We will do our best to help you get through this lockdown and keep your business afloat.

Help for businesses continues

A new day, a new announcement. That seems to be the “new normal” since we were faced with the disruption of this pandemic way back in March.

The latest involves a new government Covid scheme to pay up to half of wages for workers hit by restrictions after growing unrest from firms in tier two areas.

Businesses in tier two areas, particularly in the hospitality sector, had complained that they would be better off if they were under tier three restrictions.

They argued that although they would be forced to close, they would benefit from greater government support.

I can appreciate that right now this won’t affect all of our clients – many of you are still in tier one areas – but for those of you who are (or who may be further down the line) we have put together an outline of what it means.

What is the Job Support Scheme (JSS)?

This was put in place to replace furlough from November onwards.

When originally announced it involved employers paying a third of their employees' wages for hours not worked, and required employers to be working 33% of their normal hours.

But today Rishi Sunak made some changes to this policy.

The revision reduces the employer contribution to those unworked hours to just 5%, and reduces the minimum hours requirements to 20%, so those working just one day a week will be eligible.

That means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.

Employers will continue to receive the £1,000 Job Retention Bonus.

The scheme will, as before, be open to all small businesses and larger businesses that can show an impact on revenues.

The facts

• The JSS starts to operate from 1 November and covers all of the UK. For every hour not worked, the employee will be paid up to two-thirds of their usual salary.

• The government will provide up to 61.67% of wages for hours not worked, up to £1541.75 per month.

• Employers using the scheme will also be able to claim the Job Retention Bonus (JRB) for each employee that meets the eligibility criteria of the JRB. This is worth £1,000 per employee.

Self-employed grant

Today’s announcement also increases the amount of profits covered by the two forthcoming self-employed grants from 20 per cent to 40 per cent, meaning the maximum grant will increase from £1,875 to £3,750.

This is a potential further £3.1 billion of support to the self-employed through November to January alone, with a further grant to follow covering February to April.

The facts

• The government will provide two taxable SEISS grants to support those experiencing reduced demand due to COVID-19 but are continuing to trade, or temporarily cannot trade.

• It will be available to anyone who was previously eligible for the SEISS grant one and grant two and meets the eligibility criteria.

• Grants will be paid in two lump sum instalments each covering three months. The first grant will cover a three-month period from the start of November 2020 until the end of January 2021. The government will pay a taxable grant which is calculated based on 40% of three months’ average trading profits, paid out in a single instalment and capped at £3,750.

• The second grant will cover a three-month period from the start of February until the end of April 2021. The government will review the level of the second grant and set this in due course.

Business Grants

On top of this, the Chancellor announced approved additional funding to support cash grants of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert level areas.

These grants will be available retrospectively for areas who have already been subject to restrictions, and come on top of higher levels of additional business support for Local Authorities moving into Tier 3 which, if scaled up across the country, would be worth more than £1 billion.

These grants could benefit around 150,000 businesses in England, including hotels, restaurants, B&Bs and many more who aren’t legally required to close but have been adversely affected by local restrictions.

The facts

• The government are providing additional funding to allow Local Authorities (LAs) to support businesses in high-alert level areas which are not legally closed, but which are severely impacted by the restrictions on socialising.

• LAs will receive a funding amount that will be the equivalent of:

-        For properties with a rateable value of £15,000 or under, grants of £934 per month.

-        For properties with a rateable value of between £15,000-£51,000, grants of £1,400 per month.

-        For properties with a rateable value of £51,000, grants of £2,100 per month.

• This is equivalent to 70% of the grant amounts given to legally closed businesses (worth up to £3,000/month).

• Local Authorities will also receive a 5% top up amount to these implied grant amounts to cover other businesses that might be affected by the local restrictions, but which do not neatly fit into these categories.

• It will be up to Local Authorities to determine which businesses are eligible for grant funding in their local areas, and what precise funding to allocate to each business – the above levels are an approximate guide.

• Businesses in Very High alert level areas will qualify for greater support whether closed (up to £3,000/month) or open.

So what are you entitled to?

This depends on what tier you fall into.

The alert levels - "medium", "high" and "very high" - are applied depending on local infection rates, and the government has released a full list of areas and which tier they fall under.

The medium alert level will cover most of England and will consist of the current national measures, including the rule of six and the 10pm curfew.

The high alert level reflects interventions in many areas subject to local restrictions, preventing mixing between different households indoors. Two households can meet in a private garden - rule of six and social distancing rules apply. Essex and London have recently been added to this list

The very high alert level will mean, at a minimum, the closure of pubs and bars and a ban on social mixing indoors and in private gardens.

What next?

Detailed guidance on the expanded JSS is expected in advance of the scheme coming into force on Sunday November 1st.

• For more information on the JSS see the Job Support Scheme Open Factsheet

• For more information on the self employed help, see the HMRC website

• For more information on Business Grants see the Government’s Business Grants Factsheet

If you think you might be eligible for help and want some guidance, give us a call today.

RISHI’S NEW LIFELINES – AND HOW THEY MIGHT HELP

As usual the phone has been ringing off the hook – and once again Rishi Sunak is to blame.

The Chancellor unveiled his winter recovery plan yesterday – with plans for how the government will top up the wages of workers and support small businesses through the latest surge in covid-19 cases.

Some are already complaining that the measures don’t go far enough but what’s important to us is to make sure that each and every one of you that is eligible for help, gets it.

So let’s take you through the highlights and how they might give you and your company a boost.

The Jobs Support Scheme

This replaces the Coronavirus Job Retention Scheme (also known as the furlough scheme) and will see workers get three quarters of their normal salaries for six months.

The aim is to stop mass job cuts and support those three million employees who are currently on partial or full furlough leave.

The furlough scheme ends on October 31st and there were fears that on that date, mass redundancies would take place as employers who couldn’t afford those staff would ditch them altogether.

This programme aims to combat that, supporting viable jobs rather than jobs that only exist because the government is subsidising wages.

Under furlough, the government paid 80% of a monthly wage up to £2,500 while this scheme means the government will meet 22% of that wage.

How will it work?

Under the scheme, the government subsidises the pay of employees who are working fewer than normal hours due to lower demand.

All staff eligible will work at least a third of their usual hours and employers will pay staff for the hours they work. For the hours the employee can’t work, the government and employer will each cover a third of their pay. The grant is capped at £697.92 per month.

All small and medium sized businesses will be eligible but larger businesses will only meet the criteria if their turnover has fallen in the crisis.

The scheme starts in November.

Loan repayments – pay as you grow

This is the next bit of big news.

Mr Sunak also announced that that have borrowed money through the government loan scheme will have more time to repay than previously thought.

Businesses that took out the Bounce Back loans now can repay over 10 years rather than six.

What’s more, if you haven’t applied, the time to take the government up on the option has extended to the end of the year.

Repaying your loan over 10 years is a “pay as you grow” idea and allows businesses to reduce their average monthly repayments on the loan by almost half.

Businesses will also have the option to move temporarily to interest-only payments for periods of up to six months - an option which they can use up to three times - or to pause their repayments entirely for up to six months - an option they can use once and only after having made six payments.

 This gives companies the flexibility to deal with any cash flow crises or other unforeseen issues which might impact their ability to meet the repayment schedule.

A boost for hospitality

If you are in hospitality, you are likely to be affected by the new 10pm curfew on pubs, bars and restaurants so the government has extended a helping hand in your direction too.

This involves extended tax cuts for hotels, holiday accommodation and some attractions with a temporary 5% rate now due to expire on March 31 instead of January 1st.

And those who are self-employed…

The government recognises the continued impact that COVID-19 has had on the self-employed and has taken action to provide support with an extension to the Self Employed Income Support Scheme grant.

The grant will be limited to self-employed individuals who are currently eligible for the SEISS and are actively continuing to trade but are facing reduced demand due to COVID-19.

It will last for six months, from November 2020 to April 2021 and will be in the form of two taxable grants.

The first grant will cover a three-month period from the start of November until the end of January. This initial grant will cover 20% of average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £1,875.

The second grant will cover a three-month period from the start of February until the end of April. The government will review the level of the second grant and set this in due course.

On top of this, for those who are self-employed and others who use the income self-assessment programme, there has been an extension to the deadline of tax payments over 12 months from January.

Taxpayers with up to £30,000 of Self-Assessment liabilities due will be able to use HMRC’s self-service Time to Pay facility to secure a plan to pay over this period.

This means that Self-Assessment liabilities due in July 2020 will not need to be paid in full until January 2022.

Any Self-Assessment taxpayer not able to pay their tax bill on time, including those who cannot use the online service, can continue to use HMRC’s Time to Pay Self-Assessment helpline to agree a payment plan.

What about VAT?

Finally, firms can choose to defer VAT taxes which were due in March and pay over 11 smaller repayments without interest.

As usual we are here to help you with any – or all – of the above and will keep you informed of any updates or news on anything that can help you ride through this difficult period. Just drop us a line on email enquiries@kblaccounts.com or call us today on 01394 617594

Kickstart your workforce and prepare for local lockdown – Autumn updates for business owners

Like you, we are not quite sure what’s happening from one day to the next in terms of local and national lockdowns.

But also like you, we are focusing not just on the present but on the future too.

After all, like all businesses we have to plan. And planning in the middle of a global pandemic means keeping on top of all the benefits available to you and structuring your team for the most effective delivery.

Bringing staff back

Official figures show that the furlough scheme has worked: saving jobs and helping more than half of employees back to work already.

By the time the scheme closes, it will have been open for eight months, with support continuing in the form of the Job Retention Bonus which kicks in from November and supports the wages of staff brought back to work.

The £1,000 Job Retention Bonus is equal to a 20% wage subsidy for the employment costs of the average person previously furloughed, but for those on lower incomes, it’s 40% of wage costs over the three-month period to the end of January 2021.

The government is also creating new roles for young people through the £2 billion Kickstart scheme.

Can you increase staff?

The Kickstart Scheme is now open to employers, creating hundreds of thousands of new, fully subsidised jobs for young people across the country.

The six-month placements are open to those aged 16-24 who are claiming Universal Credit and at risk of long term unemployment.

So how can they benefit you?

Well, if you have the capacity to expand, this is an excellent and cost-effective option.

Employers will receive funding for 100% of the relevant National Minimum Wage for 25 hours a week, plus associated employer National Insurance contributions and employer minimum auto-enrolment pension contributions.

There is also £1,500 per job placement available for setup costs, support and training.

However, applications must be for a minimum of 30 job placements.

Don’t panic on that score though. Before you rule yourself out completely based on this, you can apply on behalf of a group of employers.

Ad, if you do it this way, you can get £300 of funding for each job placement to support with the associated administrative costs of bringing together these employers.

You can find someone to apply for the grant on your behalf by using on of the Kickstart gateways here – https://www.gov.uk/guidance/find-someone-to-apply-for-a-kickstart-scheme-grant-on-your-behalf

The job placements created with Kickstart funding must be new jobs. They must not:

·        replace existing or planned vacancies

·        cause existing employees or contractors to lose or reduce their employment

The roles must be:

·        a minimum of 25 hours per week, for six months

·        paid at least the National Minimum Wage for their age group

·        should not require people to undertake extensive training before they begin the job placement

What other help is available?

If you are not in a position to expand right now and are starting to worry about the impact of any further lockdown, you won’t be alone.

While Suffolk remains relatively safe from local lockdown right now, what this virus has shown us is that it is entirely unpredictable.

If its any consolation, should businesses in our area be required to shut because of local interventions they will now be able for a new grant.

To be eligible, a business must have been required to close due to local Covid 19 restrictions. The largest businesses will receive £1,500 every three weeks they are required to close. Smaller businesses will receive £1,000.

Each payment will be made for a three week lockdown period. Each new three week lockdown period triggers an additional payment.

These grants provide businesses with a safety net as they temporarily close their doors.

As usual, our team is here to help you with any or all of the areas above. Just drop us a call on 01394 617594 or email enquiries@kblaccounts.com

What’s new for those of you still struggling with the COVID fallout?

Just because lockdown is easing and life is starting to return to normal, doesn’t mean businesses, entrepreneurs and sole traders are not still trying to find their feet.

We are fully aware that lots of you are still managing on tight budgets, reduced staff and experiencing a drop in sales – not to mention worrying about the impact of the recession we now find ourselves in.

With that in mind, it’s vital you stay abreast of the financial benefits you are entitled to as the furlough scheme and the self-employment income support scheme tail off.

So where are we at?

I’M AN EMPLOYER

There are many of you who have staff on furlough and will be aware that for August, the government will continue to pay 80% of employees’ wages, capped at £2,500.

However, from August, employers take back the responsibility of paying national insurance and pension contributions, representing 5% of employment costs.

Things ramp up a bit from September.

The government will begin to phase out the furlough scheme by decreasing payments by 10% and decreasing the maximum payment by £313.

Employers will then be able to claim 70% of employees’ wages, capped up to £2,187, representing 14% of employment costs.

From October 2020, the government will pay 60% of wages capped up to £1,875, a further decrease of £312, representing 13% of employment costs.

This means many of you will be starting to make decisions on whether to bring employees back to work (and there is another financial perk for this) or consider making redundancies.

The perks of re-employment

The Chancellor announced a new job retention bonus as part of its Plan for Jobs 2020 which said that employers who bring workers back from furlough and retain them in employment until the end of January 2021 will qualify for a £1,000 bonus.

Further guidance on the scheme was published on 31 July but if you have missed it, we are here to fill in the gaps.

In short, it makes it clear that bonuses will only be paid for employees that were eligible for the scheme and to qualify for the bonus, the employee would need to remain continuously employed through to the end of January 2021 and earn an average of £520 per month over that period.

The employee must have earned something during each of these months, and only earnings recorded through HMRC Real Time Information (RTI) records can be counted.

A bonus will not be paid for any employee who is serving a contractual or statutory notice period that started before 1 February 2021, even if they are still employed on 31 January.

As well as affecting employees who have been given notice of dismissal before this date, this means that an employer may lose out on the bonus if an employee resigns shortly before it would have become payable.

The bonus amount is the same for each employee irrespective of the employee’s actual wages.

It’s hoped the perk will make employers reconsider making redundancies and, if the bonus is not enough by itself to avoid redundancies, an employer may wish to use it in combination with temporary pay or hours reductions to make it work for everyone concerned.

I’M SELF EMPLOYED

Good news for you then.

The Self-Employment Income Support Scheme has been recently extended which means you will be able to claim the second grant.

Once again, we cannot do it for you. But once again, we are here to help you in any way we can.

What is it?

Chancellor Rishi Sunak introduced the Self-Employment Income Support Scheme in March to help keep people earning money during the coronavirus.

The grant initially covered 80 percent of a self-employed person’s monthly trading profits, capped at £7,500 covering a period of three months.

HMRC opened the scheme for applications in May, ahead of schedule, and the first grant covered the months of March, April and May.

Mr Sunak later announced self-employed people will be able to claim for a second and final grant from August.

The scheme has been extended to accept applications for the second grant until October 19, 2020.

The grant will be worth slightly less than the first grant, at 70 percent of average monthly trading profits over three months.

The second and final self-employed grant is capped at a total of £6,570.

What now?

As of August 17, you can apply for a second grant.

The online service to make a claim is now available, and HMRC state you should make your claim from the date they give you.

Those eligible will receive their final grant within six working days of making a claim.

The eligibility criteria remains the same as for the first grant, with people needing to have had trading profits of no more than £50,000, making up at least half of their total income.

How we can help

Unlike the furlough scheme, we can’t make applications for SEISS on your behalf. To apply visit https://www.gov.uk/guidance/claim-a-grant-through-the-self-employment-income-support-scheme

You will need your:

•             Self Assessment Unique Taxpayer Reference (UTR) – if you do not have this find out how to get your lost UTR or call us and we will try to help

•             National Insurance number – if you do not have this find out how to get your lost National Insurance number

•             Government Gateway user ID and password – if you do not have a user ID, you can create one when you make your claim

•             UK bank details (only provide bank account details where a Bacs payment can be accepted) including:

o             bank account number

o             sort code

o             name on the account

o             your address linked to your bank account

As always, we are on the end of a phone and willing to help in whatever way we can. Give us a call on 01394 617594.

The Budget plans to boost spending post lockdown – but how does it help you?

As predicted, the phone has been ringing off the hook since the mini Budget unveiled a host of perks to kickstart the economy post-lockdown.

We know you have questions. So we have worked hard to get our heads around what was said – and what it means for you.

1.      Everyone gets 50% off in restaurants - between Monday and Wednesday in August.

This is good news for those of you in the hospitality sector. Diners will get 50% off their meal at restaurants across the UK through August in a state-funded discount scheme.

Eat Out to Help Out is designed to boost public confidence and get people out and about again.

What you need to do: Individual firms will register on a government website and apply to claim the money back, based on what they sell. It is for eat-in food only and doesn't apply to takeaways.

Guidance on the Eat Out scheme will be published on July 13 and the portal is due to open for firms to participate on the same day. It will apply to the purchase of food and non-alcoholic drinks up to £10 per person from restaurants, pubs, bars, cafés and similar premises across the UK.

2.      Pubs and hotels will be cheaper as VAT is temporarily slashed

In another boost to the hospitality industry, qualifying businesses will see VAT slashed from 20% to 5% on food, accommodation and attractions.

The cut will come into force from July 15 and last until January 12 - making a trip to the pub or a family day out cheaper.

What you need to do: Further guidance is due shortly.

3.      Stamp Duty for homebuyers is being slashed - immediately

Right now there is no Stamp Duty on house purchases below £125,000. Today, effective immediately, the government is increasing the threshold to £500,000.

What you need to do: The Stamp Duty cut will take effect from midnight tonight and last until March 31.

4.      Bonus for bosses

While he did not extend the government’s furlough scheme beyond October, Rishi Sunak vowed to pay employers £1,000 for every member of staff they keep as the scheme ends.

What you need to do: More detail is expected by the end of July but full guidance is only due in the Autumn.

To qualify, employees must be paid at least £520 a month on average in each month from November to January - the equivalent of the lower earnings limit in National Insurance.

Employers will get a £1,000 bonus if they bring someone back off furlough - and employ them continuously until January. But it is thought there's nothing legally to stop firms claiming the bonus, then making people redundant on February 1.

5.      Six-month job placements for young people

The government has set aside £2billion to subsidise thousands of six-month work placements.

Under the “kick-start” scheme 16 to 24-year-olds on Universal Credit will be eligible for six-month placements with the state covering 100% of the minimum wage for 25 hours a week.

What you need to do: Fuller guidance is promised towards the end of July or start of August to explain how the Kick-start scheme will work and how employers – as well as the young people they offer placement to - can benefit.

6.      A bonus for companies who employ trainees

On top of the Kick-start scheme, more than £100 million is to be invested in traineeships for 18-24 year olds.

The government will introduce a temporary payment of £2,000 to employers in England for each new apprentice they hire aged under 25.

If the apprentice is over 25 the bonus will be £1,500.

What you need to do: This bonus applies from 1 August 2020 to 31 January 2021. There is more information to come on how to apply.

7.      Homeowners helped to make houses greener

Home owners will get £2billion of vouchers to insulate homes as part of Chancellor Rishi Sunak ’s plans to create more than 100,000 green jobs.

The Green Homes Grant scheme will provide extra work for plumbers, builders and tradesmen and help the Covid-hit economy recover.

Homeowners will be able to spend the cash on loft, wall and floor insulation, eco-friendly boilers, heat pumps, double or triple-glazed ­windows, low-energy lighting and energy-efficient doors.

What you need to do: The scheme will go live in September.

8.      Green jobs in construction, engineering and design

Some £1bn will be spent on 'greening up' public buildings including schools, hospitals and social housing.

And there'll be a £50 million pilot scheme to retrofit social housing with heat pumps, insulation and double glazing, to make them more environmentally friendly.

What you need to do: This will be great news for the built environment sector which is set to receive more guidance on work and tenders in this area in due course.

A final word from us

As we receive further information on each of the promises made, we will work with businesses in the hospitality sectors, those seeking to employ new staff or re-introduce furloughed workers and those in the built environment industries to benefit.

As always, we will keep you informed as we hear more.

EXTENSION TO THE UK FURLOUGH SCHEME BRINGS HOPE TO STRUGGLING BUSINESSES

As you can imagine, the potential for the end of the furlough scheme has been at the forefront of the minds of lots of UK business owners this week after the Prime Minister’s address on Sunday.

I have had lots of difficult and upsetting conversations with you all about what happens if, as originally planned, it were to close at the end of next month.

What was clear in all our minds was that, if it were to be scrapped before lockdown was lifted, it would result in millions of jobs losses up and down the country.

Thankfully we can all breathe a collective sigh of relief therefore.

Today Chancellor Rishi Sunak was able to reassure employers and employees by announcing that the programme will run for further four months as coronavirus crisis continues.

What does this mean for you?

In a nutshell, this will allow you to continue to furlough workers with support from the government until the end of October.

There will be no changes in the system until the end of July – the government 80% of the wages of furloughed workers – up to £2,500 a month.

But from August the scheme – which will continue for all sectors and regions – will introduce greater flexibility for firms to bring staff back to work.

As you are all aware, under the current scheme furloughed employees cannot work so this is quite a change.

It is likely to mean employees could be furloughed part-time and employers will therefore need to “share with the government the cost of paying salaries” according to the latest announcement.

This will allow the level of state support to gradually taper away as businesses reopen and stabilise.

The devil is in the detail

We know that the scheme is currently costing the government about £14bn a month.

It is therefore unsurprising that there will be an expectation on employers to eventually share the burden furloughed workers’ wages.

However, we do not have any details on how this will take shape.

We are also in the dark about whether the support package for the self-employed - also launched to run for three months – will also be extended.

What we do know is that the furlough scheme has protected about 7.5 million jobs at almost one million companies in the UK – workers which will be needed to rebuild our economy once we come out the other side of this crisis.

How can we help you?

We will continue to support you if you make the decision to furlough any of your staff, plan to extend their furlough period or want to look at ways to bring staff back to work and share some of the salary cost.

We will be looking at the detail in any changes to the scheme as and when these are announced. We will then inform you of your options.

We can help you navigate the online portal on the HMRC website and access the benefit and ensure you adapt according to the changes to make sure you are getting the best of the benefit for both your company and your staff.

HOW TO APPLY FOR THE SELF-EMPLOYMENT INCOME SUPPORT SCHEME

I work with hundreds of self-employed workers and I know how patiently you have all been waiting for information on help from the Government in the wake of the coronavirus pandemic.

I’m here to give you good news and bad news today.

The good news – the scheme is launching

The Self-employment Income Support Scheme (SEISS) - designed to assist individuals who are classed as being self-employed through the outbreak of coronavirus - is going live next week.

The scheme allows self-employed individuals to claim a taxable grant of 80% of their average monthly trading profits up to £7,500.

The bad news – accountants can’t claim on your behalf

Unlike the furlough scheme, the self-employed cannot ask their accountant to make the claim on their behalf.

This will be frustrating for many of you who have always relied on us to help you with your paperwork.

Trust me, it’s frustrating for us too. But this newsletter is aimed at making this process as simple as possible for you.

What you need to do next

The online service will be available from 13 May. But you can check if you are eligible from today! Just use this link.

If you qualify, HMRC will tell you the date you can make your claim from. If your claim is approved you’ll receive your payment within 6 working days.

When checking if you are eligible, you will be asked to input your Unique Taxpayer Reference and National Insurance number.

If you have lost your Unique Taxpayer Reference number click here to find out how to retrieve it. If you can’t find your NI number you can click here for help. If we have completed your tax returns in the past, we may be able to provide you with both your UTR and NI number – just give us a quick call.

You will then be asked to sign into your Government Gateway account.

To do this you need your Government Gateway user ID and password. A lot of self-employed people may not have done this before but if you do not have a user ID, you can create one when you check your eligibility – the form will take you through this.

Please do this well before the May 13th launch date using this link – you do not want not be waiting until the last minute to make sure you have all the information you need to apply.

A final note

While we cannot submit the claim on your behalf, we are here to answer any questions you have.

CAN NEW LOANS HELP BUSINESSES BOUNCE BACK FROM THE BRINK?

It continues to be a stressful time for many businesses – large and small.

But while we are all in the midst of waiting on grant cash, furlough repayments and loan applications, there is now another lifeline in the pipeline so-to-speak.

Earlier this week, small and medium-sized businesses affected by coronavirus were told they could apply for loans of between £2,000 and £50,000 through a new Bounce Back Loan scheme.

The scheme opens on Monday (4 May).

How does it work?

The Bounce Back Loan scheme will see the government guarantee 100% of the loan and there will be no fees or interest payable for the first 12 months.

Loan terms will be up to six years, with no repayments due during the first 12 months and the scheme will be delivered through a network of accredited lenders.

The government has said it will work with lenders to agree a low interest rate for the remaining loan period.

Am I eligible?

Participants can apply for a loan if their business:

• is based in the UK

• has been negatively affected by coronavirus

• was not an undertaking in difficulty on 31 December 2019.

The following businesses are not eligible:

• 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

• Any business already claiming funding under the Coronavirus Business Interruption Loan Scheme (CBILS).

Is it all its cracked up to be?

As far as the packages the government has already put in place to support struggling businesses, the one causing the most problem seems to be access to the Coronavirus Business Interruption Loans.

Many firms have told us that they can’t get these emergency loans because some banks are using personal guarantees in the form of savings and mortgages to secure lending to small businesses or putting in place punishing interest rates that made it impossible for companies to borrow money.

It remains to be seen whether this will also be the case for bounce back loans too.

Most telling will be how quickly the system can deliver cash payments and how receptive lenders will be to processing applications quickly and without the level of checks that have been evident for other schemes.

It will also be interesting to see how the system can cope with the number of applications anticipated.

If you need further advice on this – or any of the other financial measures in place at this time – contact us today.