Category: COVID-19

Our thoughts on Rishi’s statement yesterday

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The Chancellor’s update to the House of Commons yesterday made pretty grim listening. It’s not going to surprise anyone to hear that due to two national lockdowns and a myriad of local lockdowns, the economy has shrunk in 2020 by 11.3%. The economy is forecast to recover back to pre-pandemic levels in 2022.

You can look at this two ways. Either let it get you down. Or remember that after the Spanish Flu pandemic finished in 1920, Britain enjoyed the roaring 20s. In other words, better times are coming ahead. And we are here to help you get to those better times and enjoy the fruits of your labours.

Charlston

Apart from gloomy economic figures, the chancellor did announce some changes you need to be aware of:

  • The minimum wage (now rebranded as the National Living Wage) will increase in April to £8.91 an hour for people 23 and over. 16 and 17 year olds will see their pay go up to £4.62 per hour.
  • People with a defined benefit retirement scheme will see their pensions reduced from 2030. This is due to the pension payments, from 2030, which increase with the cost of living using a new cost of living calculation. Currently the cost of living is calculated using various measures, including the Retail Prices Index. Whereas from 2030, the cost of living will be calculated using the CPIH: The catchily titled “consumer prices index plus housing costs”. These changes will not impact the state pension.

Given that the country has its highest borrowing levels outside of war time, it is fairly certain that we will see in the next year or so rising taxation to help the treasury balance the books. We don’t know yet what taxes will be raised and what reliefs will be lowered. But expect – if the media is to be believed all these to be raised; Capital Gains Tax, Inheritance Tax, Income tax, and NI contributions for self-employed people.

We are already seeing some of this happening at HMRC. They are toughening up their stance on ‘time to pay’ agreements, as well as investing very heavily in fraud and tax investigations. As with all these things, if you are concerned about your cash flow or any potential irregularities please get in touch with us sooner rather than later. The earlier we find out about any problems the easiest it is for us to help mitigate the impact for you as a business owner.

What happens after lockdown?

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English Government announce new winter plan to beat COVID-19

This week seems to be a week of announcements from Boris. So, you may see a few updates from us too this week.

On Monday the English government published its winter plan to beat COVID-19. You can find the full text of the plan here. Having read through the plan it seems to be good news for most businesses.

The English government announced yesterday that:

  • Full lockdown will end on the 2nd Dec 2020
  • England will go back into the 3-tiered regional approach.

However, there are changes to those tiers. And on Thursday this week regions will find out what tier they are in.

So what will change?

  1. The stay at home requirement will end, with domestic and international travel being permitted again subject to guidance in each tier.
  2. Shops, personal care, gyms and the wider leisure sector will reopen.
  3. Collective worship, weddings and outdoor sports can resume, subject to social distancing.
  4. People will no longer be limited to seeing only one other person in outdoor public spaces – the rule of 6 will now apply as it did in the previous set of tiers.

How has the tier system changed? 

The changes to the tiers are as follows:

  1. Regardless of your tier the government would like working from home wherever possible.
  2. In tier 2, pubs and bars must close unless they are serving substantial meals along with accompanying drinks.
  3. In tier 3 all hospitality will close except for delivery, takeaway and drive-through. Hotels and other accommodation providers must close (except for specific exemptions, including people staying for work purposes or where they cannot return home. All indoor entertainment venues must also close.
  4. The 10pm closing time for hospitality has been modified to last orders at 10pm and closing time at 11pm. This allows customers to depart gradually and provides greater flexibility.
  5. In tiers 1 and 2, spectator sport and business events can now resume inside and outside with tight capacity limits and social distancing, providing more consistency with indoor performances in theatres and concert halls.

We will have more updates this week when we have more news on the tax updates from Rishi and any further updates planned by the government.

What is working from home relief?

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Working from home relief = FREE CASH

Due to the current pandemic, many businesses have been working from home this year (ours included). It looks like those who can work from home will be until March 2021 at the earliest.

We have also seen a change in attitude towards flexible working. It has become the ‘new normal’ and many employees may continue working from home in the future.

What many businesses haven’t realised is that they can get free cash from HMRC for working from home. WOW!

So what is working from home relief?

From 6 April 2020 employers have been able to pay employees up to £6 a week tax-free to cover additional costs if they have had to work from home. Employees who have not received the working from home expenses payment direct from their employer can apply to receive tax relief from HMRC.

Find out full details here –  www.gov.uk/government/news/54800-customers-claim-tax-relief-for-working-from-home.

In a very interesting twist Martin Lewis has reported that even if you work from home for just one week, you can still claim a whole years relief. This is a very public statement from Martin Lewis and we are certain that he has proof from HMRC. However there may be a caveat when HMRC realise what they have said.

Read his article here – https://blog.moneysavingexpert.com/2020/04/martin-lewis–working-from-home-due-to-coronavirus–claim-p6-wk-/

Our advice for employees 

If your employer is not paying the allowance, which they are not obliged to, log into the HMRC portal and make your claim. For basic rate tax payers this is worth £62.40 and higher rate tax payers it is worth £124.80. For 10 minutes of your time, it is worth doing!

Our advice for employers

You do not have to pay the allowance. However as we are coming into the festive season, why not incorporate the £6 per week into a Christmas Bonus? There are no PAYE or NIC deductions for the employer or employee making it a great treat for the end of this turbulent year.

What are the new business support schemes for covid-19?

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What are the new business support schemes for covid-19?

Yesterday the government announced more support for businesses and the self-employed. This blog takes you through the announcements and what it means for your business.

On the one hand, it is great to see the government making available this help. But this probably means we will see fairly strict lockdown conditions between now and March 2021. We hope we are wrong about this, but in your contingency/scenario planning, particularly in regard to cash, please extend this 4-week lockdown until the end of March. If you need help with your business planning, please get in touch.

Here are the full details from the Government’s announcement.

The Self-Employed Income Scheme

On 30th November you will be able to claim a grant for up to 80% of your profits, to cover you for Nov – Jan 2021. This is capped at £7500. They also declared there will be one more grant which will cover the period Feb – Apr 2021. Details are yet unknown of when this will be paid or for how much.

To receive these grants, you need to have received the previous grants.

The ‘Furlough scheme’

This has now been extended to the end of March. Which in effect means that we are unlikely to see the Job Support Scheme operational… You can Furlough any member of staff, as long as they were on the payroll before Oct 30th 2020. And the government will pay up to 80% of their wages, capped at £2500 per month.

As a result of extending the Furlough scheme the planned Jan 2021 ‘Job retention bonus’ of £1000 for any employee you Furloughed who you still employed has been deferred. Until when? Who knows?

Help with cash flow

If you haven’t taken a Bounce Back Loan or didn’t take the maximum amount available to you, you can now top this up. And you will be able to take out a CBIL or Bounce Back Loan now until the end of Jan 2021.

Mortgage payment holidays for those who haven’t taken a payment holiday will be available for 6 months, without this being noted on their credit files.

Remember that for many businesses the deferred Q2 VAT payments, general tax and self-assessment tax is now becoming due in the next few months. Please get in touch if you haven’t already identified how you will manage your cash to make these payments. We can put you in touch with finance providers or help you organise a time to pay agreement with HMRC.

What support is there for my business in lockdown 2?

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Last night the prime minister addressed the nation and announced a month long lockdown for England. Something we never considered happening in our lifetimes is now happening twice. Businesses all over the country are being forced to shut once again, and people told to stay home and save lives. If you own a business, the question now is ‘what support is available to help my business survive?’.

Firstly, we need to apologise as details are still very sketchy. Indeed, the government’s own website on the job retention schemes have not yet been updated after the Prime Minister’s announcement on Saturday evening. For more details about the support for businesses announced yesterday see the government’s press release here

This is what we are aware of at the moment:

  • The Coronavirus Job Retention Scheme or ‘Furlough’ as it has come to be known will be extended for another month on more favourable terms.
  • The replacement for Furlough, “The Job Support Scheme” due to start today, starts in early December after the Furlough scheme officially finishes.
  • A grant available to self-employed people affected by COVID-19 has also been doubled to 40% of profits, with a maximum grant of £3750 over a 3-month period.

There are still grants available for businesses with rateable premises who are forced to close due to local or national restrictions.

The good news for small business owners (if there can be a silver lining) is that now the government will put in the full 80% of wage costs, up to a max of £2500 per month, for furloughed employees, with employers only needing to cover the pension and NI contributions. And similar to the scheme rules from July, you can have your furloughed employees working part-time under the scheme.

You will be able to furlough anyone who has been on the payroll by 30th October 2020. And they don’t need to have been furloughed before. And similar to how the scheme has operated, you will make your furlough claims with your payroll submissions.

Businesses required to close in England due to local or national restrictions will still 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.

 

If you are based in Scotland, Wales or Northern Ireland, you will have money made available to you to replicate a similar grant scheme for closed businesses.

Let’s not forget….

We’ve all been here before. We know that it is a tough time for business owners. And there are no guarantees that this lockdown will stop after the 2nd December. However, we are here for you and have got your back.

 

More ‘forced’ business closures are on their way

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The chancellor, Rishi, on Friday popped up with an announcement of more support for businesses in the next 6 months. Sadly this announcement is a sure indicator, for businesses in areas where they are failing to get COVID-19 under control, that tougher lockdowns are about to hit their ability to trade. The news is also peppered with articles that the PM is going to announce tougher lockdowns for parts of the country on monday.

The announcements by Rishi have been designed for any business which is LEGALLY forced to close their premises as a result of any lockdown restrictions. If you can still trade but choose to not trade, this package of measures will, sadly, not apply to you. However, if you are a pub or restaurant who is forced to stop serving meals to diners sitting in, you can still claim on this scheme if you are able to offer a food delivery service or takeaway.

What is available?

For any employee who can not work because the employers’ premises are closed for a minimum of 7 consecutive days, the government will pay 2/3rds of their normal wage up to a max of £2100 per month. As with all of these grants, the payments are taxable and you, the employer, would be expected to cover employer NICS and automatic enrolment pension contributions. Similar to the Furlough scheme the wages can be claimed monthly in arrears. This scheme is open to employers from 1st November for 6 months.

Unlike the winter economy plan, this new extension to the government job support scheme seems to have been rushed through very quickly. Here are more details of the scheme Note the lack of branding for a key communications document! And the fact it is light on ‘how’ to actually claim…

In addition to the extension to the Job Support Scheme the government will increase the grants it pays to businesses in England legally forced to shut in local lockdowns. The grants are:

  • Small businesses with a rateable value of or below £15,000: £1300 per month
  • Medium-sized businesses with a rateable value between £15,000 and £51,000: £2000 per month
  • Large businesses can claim £3000 per month.

If you are concerned about the impact of lockdowns to your business, please get in touch. We can help you make sure your business survives this winter.

What does the update from Rishi mean for my business?

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Yesterday the chancellor delivered his Winter Economy Plan to the nation. And whatever the colour of your politics this was good news for small business owners. And many an accountant will be having a cheeky drink or 2 to celebrate the end of ‘Furlough’.

In this blog you will find the key headlines and how they impact your business:

If you want to read the full government documents:

Support for your cash flow

With the deferred VAT and tax payments shortly becoming due, the government has thrown businesses many lifelines. Or as we like to call it, cash flow support.

  • If you deferred your VAT which was due in March – June 2020, you can now choose to repay this in 11 equal instalments over the 2021/22 financial year.
  • The 2 loan schemes, CBILs and Bounce Back Loans now have the option to pay them back over a 10-year period. If you took out a Bounce Back Loan, this could reduce your payments by almost a half.
  • Businesses who took out a Bounce Back Loan also – once they have made 6 payments – have the option of pressing pause on their payments for up to 6 months. This can only be taken once.
  • If you haven’t taken out a CBIL or Bounce Back Loan these schemes have now been extended and will close to new entrants on 30th November 2020.

Extension of the temporary reduced VAT rate for hospitality and tourism businesses

This will now remain at 5% until 31st March 2021.

Help to retain jobs:

The Job Retention Scheme affectionately known as ‘Furloughing’ will still close in October. In its place on the 1st November comes The Job Support Scheme. This scheme will initially run for 6 months. It is very similar to long running schemes in Germany and France.

To qualify for the Job Support Scheme, your employee:

  • Must not be on a redundancy notice
  • Working at least 1/3rd of their normal working hours

And you as their employer must have a UK PAYE scheme in place, a UK bank account and is limited to SMEs or big businesses which can evidence they have been adversely impacted by COVID-19.

Here is how the scheme works… For every normal working hour, the employee doesn’t work, the government pays 1/3rd of their pay, and you the employer must also pay 1/3rd of their pay. The government contribution is capped at £697.92 per month. The employer will be reimbursed by the government in arrears. When we know how to apply to the scheme and submit your claims we will be in touch with further details.

More details of the scheme are here

Help for the self-employed

The self-employed grant scheme will be extended for another 6 months but limited to people already on the scheme. As the saying ‘every little helps’, but the pay outs have been vastly reduced for the extension. There will be 2 more grants. The 1st will be cover November to end of Jan and will cover 20% of average monthly profits. Up to a max. of £1875. We are assuming this will be paid out in Feb 2021. The second grant will cover the period from Feb to the end of April. Amount to be paid up is still to be determined by the government.

More details are here

How to prevent upwards delegation working remotely

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Do your staff members often come to you with questions or problems that they could potentially work out themselves just by using their initiative? More often than not, do you end up saying “just give it to me and I’ll get it done, it’ll be quicker?”

While it might be quicker to do this one task right now, what you’re actually doing is training your staff to be helpless. You’re training them to come to you when they are stuck instead of taking some time to work it out for themselves. Ultimately, this ends up taking up a lot more of your time.

To stop upwards delegation, especially now that many teams are working remotely, here are some quick tips for remote managers.

number 1

remote working requires more frequent and clear communication, especially when it comes to delegating tasks. Give clear briefs and explain the impact this task has on the work of others to inspire action.

Discussing important tasks or projects directly with your employee will ensure that they can ask any questions and you can address any concerns in real-time. It also allows you to set clear expectations and to have them confirm that they understand.


number 3

Monday.com, Zoom, Slack, What’s App…use virtual tools to communicate quickly and effectively with your whole team. Make sure that everyone has access so that they can see what is assigned to who and how they all relate together.

If an employee has an issue or needs help with a task, take the time to coach them through it. Instead of giving them the answer, ask them questions to help them get to a solution by themselves.

number 4
number 5

It’s a difficult time where everyone is craving some social interaction. Plus, who doesn’t love to be praised for good work? If a team member has done a good job or they’ve picked up a task really quickly or they’ve made a difference to your day, tell them. There’s nothing more powerful than positive reinforcement, especially when it comes to motivation.

‘What would you do if I wasn’t here?’

Stop saying “I’ll do it, it’ll be quicker” and start asking “what would you do if I wasn’t here?” Delegating isn’t an easy thing for most managers to do and it’s even harder when your whole team is working remotely, so don’t put even more pressure on yourself by taking on the tasks of your employees too. It may take some time investment in the immediate, but if you coach them through any issues as they arise, you’ll be training your employees to be innovative workers who will take the initiative.

Business meeting

New Grants To Boost Recovery Of Small Businesses

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Thousands of smaller businesses in England are set to benefit from £20 million of new government funding to help them recover from the effects of the coronavirus pandemic, the Minister for Regional Growth and Local Government has announced.

Small and medium sized businesses will have access to grants of between £1,000 – £5,000 to help them access new technology and other equipment as well as professional, legal, financial or other advice to help them get back on track.

The support will be fully funded by the Government with no obligation for businesses to contribute financially and the support will be fully funded by the government from the England European Regional Development Fund and distributed through local enterprise partnerships (LEP) Growth Hubs, embedded in local areas across England.

LEPs are voluntary partnerships between local authorities and businesses, set up in 2011 by the Department for Business, Innovation and Skills to help determine local economic priorities and lead economic growth and job creation within the local area.

Activities supported through the £20 million can include:

  • One-to-many events providing guidance to respond to coronavirus,
  • Grants (£1,000 – £5,000) to help businesses access specialist professional advice such as HR, accountants, legal, financial, IT and digital, and to purchase minor equipment to adapt or adopt new technology in order to continue to deliver business activity or diversify.

We will provide further details on how to apply for these grants in due course.

Watch this space!

Please see:  https://www.gov.uk/government/news/20-million-in-new-grants-to-boost-recovery-of-small-businesses?utm_source=d73de287-c359-4e20-b0ee-3f50952053fd&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

Hand with iPhone

What is the job retention scheme bonus?

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Employers will be able to claim a one-off payment of £1,000 for every employee they have previously received a grant for under the Coronavirus Job Retention Scheme (CJRS), and who remains continuously employed through to the end of January 2021.

To be eligible, the employee must have received earnings in November, December and January, and must have been paid an average of at least £520 per month, and a total of at least £1,560 across the three months.

As the employer, you will be able to claim the bonus after you have filed PAYE information for January 2021, and the bonus will be paid from February 2021. More detailed guidance, including how you can claim the bonus online, will be available by the end of September.

What you need to do now 

If you intend to claim the Job Retention Bonus you must:

  • ensure all your employee records are up to date
  • accurately report employees’ details and wages on the Full Payment Submission (FPS) through the Real Time Information (RTI) reporting system
  • make sure all of your CJRS claims have been accurately submitted and you have told HMRC about any changes needed (for example if you have received too much or too little).

Reminder of changes to CJRS

From 1 August 2020 CJRS continues to provide grants for furloughed employees but no longer funds employers’ National Insurance (NI) and pension contributions. You now have to make these payments from your own resources for all employees, whether furloughed or not. HMRC guidance has been updated to reflect these changes.

Making sure your data is right

It is important that you provide the data HMRC need to process your claim. Payment of your grant may be at risk or delayed if you submit a claim that is incomplete or incorrect. HMRC may be in touch to request employee data if it’s missing from your previous claims.

National Insurance numbers

You need to provide a National Insurance number (NINO) for all employees as part of your CJRS claim. The only exception is in the very limited circumstances where an employee genuinely does not have a NINO, for example if they are under 16 years old.

If you are claiming for an employee whose NINO you do not currently know, you can check their number by searching GOV.UK for ‘Check a National Insurance Number using basic PAYE Tools’.

HMRC can no longer accept claims for fewer than 100 employees by phone where you do not have all employee NINO’s unless the employees you are claiming for genuinely do not have these.

Claimed too much in error?

If you have claimed too much for a CJRS grant and have not repaid it, you must notify HMRC and repay the money by the latest of whichever date applies below:

  • 90 days after receiving the CJRS money you’re not entitled to
  • 90 days from when circumstances changed so that you were no longer entitled to keep the CJRS grant
  • 20 October 2020 if you received CJRS money you are not entitled to or if your circumstances changed on or before 22 July.