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We wanted to give you an update following the Chancellor’s announcements today, to support workers and businesses, after further lockdown measures were rolled out earlier this week.
Whilst, as always with Government announcements, the devil is in the details and this will only emerge once the dust settles, we wanted to share the headlines with you, at this stage and will update you further as we hear more.
Please note that in line with the latest Government guidance, to ensure both you and our team remain safe and well we have taken the reluctant decision to close our offices again. They are now open by appointment only, but our preference is to e-meet now.
You can continue to drop records off and there are places at our offices where you can do this safely and securely but do let us know if you are doing this so we can ensure they are picked up and processed as soon as possible.
Please be reassured especially at this time that we are here and we want to help you in any way we can.
Today’s Announcements
Job Support Scheme
As expected there are no further extensions to the furlough, or Job Retention Schemes, which comes to an end in October. However, this will be replaced by the new Job Support Scheme, reflecting the change in the support needed to reduce mass job cuts. This will be available from November and will last at least six months.
Here where an employee works reduced hours due to the reduce demand, their employer will pay them for the hours they work and they will be compensated by their employer and the Government, up to one-third of the lost pay each (capped at £697.92 per month).
The workers must do at least a third of their normal hours and where someone does this minimal amount, they will still get 77% of their normal pay. All small and medium-sized businesses are eligible, but larger businesses will only be eligible where they have experienced reduced turnover, due to the pandemic. Perhaps most importantly, it will be open to employers across the UK, even if they have not previously used the furlough scheme. The government will pay a maximum of 22% of someone’s wages, down from 80% at the start of the furlough scheme.
Government-Backed Loans
Interestingly both the Bounce Back Loans (CBBLS) and Coronavirus Business Interruption Loan Scheme (CBILS) will have their repayment period increased from six to ten years, cutting the monthly repayments by nearly half, under the slogan of “pay as you grow” loans. Interest-only payments will also be allowed for a period and the deadline for applying for these will also be extended until the end of November and potentially December.
Businesses struggling to make repayments can also suspend repayments altogether for six months and will not see their credit rating suffer as a result.
Self-Employed
The Self-Employed Income Support Scheme (SEISS) will be extended to a third grant, in line with the above. The grant will cover three months’ worth of profits for the period from November to the end of January and will cover 20% of average monthly profits up to a total of £1,875. We also understand that a further grant may be available to the self-employed to cover February 2021 to the end of April, depending on circumstances.
Unfortunately, there is no change in the eligibility criteria and the definition of “Self-Employed” is the same as previous grants.
Other Measures
Other points raised included:
- 5% VAT for the tourism and hospitality industries will be extended from January 2021 to 31 March 2021;
- If you deferred your VAT previously, you will be able to pay this balance back over 11 smaller interest-free instalments; and
- HMRC have been instructed to provide more time for income taxpayers to pay their self-assessment tax return bills if they are unable to do so. Self-Assessment second payments on account which were due by 31 July 2020 but deferred to 31 January 2021 will now be able to be spread over 12 months from January. For personalised assistance in navigating changes to payment schedules and managing self-assessment tax returns, consider consulting with a knowledgeable self-assessment accountant.
Other Useful Information
Redundancies
If you are going to be forced to make difficult decisions on your team with the furlough scheme coming to an end, let us know if we can help with preparing redundancy calculations.
Remember the usual terms and conditions of employment, minimum wage and health & safety (to name but a few) rules all still apply during this difficult time. If you need in-depth help, we’d be happy to refer you to one of our strategic partners, who will be able to help you further.
Local Lockdown Grants
There is a new grant available for businesses in England, who are required to close due to local lockdowns or targeted restrictions. The grant of up to £1,500 (£1,000 for smaller businesses) is provided every three weeks.
Kickstart Scheme
This scheme is designed to support 16 to 24-year-olds find job placements where they are currently on Universal Credit and at risk of being long-term unemployed. Funding is available to cover:
- 100% of the National Minimum Wage for 25 hours a week;
- Associated Employer National Insurance contributions; and
- Employer minimum auto-enrolment contributions
The scheme has a minimum of 30 job placement requirements. However, this can be addressed, if you work with a representative (who themselves hit this target), so you don’t have to employ 30 people directly yourself.
Companies House
Whilst the time limit for filing limited company accounts has been increased from nine months to twelve months after the year-end, remember there is no extension on the tax return filing deadline and payment deadline with HMRC, which remain twelve months after the year-end and nine months and one day after the year-end respectively (although if it is your first set of accounts you are submitting it might be slightly different).
From 10 September Companies House also resumed the voluntary strike-off process which had been temporarily on hold. And from 10 October, they will be resuming the compulsory strike-off, where they believe a company is no longer carrying on business or in operation.
Fraud is Always Fraud
We are expecting to see a huge surge in checks and investigations owing to the level of fraud which HMRC believe occurred during the Coronavirus Support Scheme, in particular with Furlough, government-backed loans and SEISS.
For example, HMRC is already investigating more than 27,000 furlough scheme claims which could be wrong or fraudulent and they believe £3.5bn has been given out wrongly or fraudulently. 80,433 firms have already handed back over £215m.
Fraud is still fraud, even at times like these. If you think you could have a problem, please get in touch with us today, to talk about what we can do to resolve it.
Software Promotion
Are you interested in using Cloud-Based Accounting Software in your business but don’t currently use one? Or are interested in changing your existing provider? If so, we are offering 50% off if you sign-up to either Quick Books or Xero through us for the rest of the calendar year (Quote: SOFTWARE50).
Some of the many advantages of cloud-based software include:
- Access to your financials anywhere in the world with wi-fi, from your computer, tablet, or phone;
- Better controls of your financial processes at your fingertips;
- Bank feeds to greatly reduce time doing your books, including bank rules to automate bank reconciliations;
- Additional functionality through endless Apps;
- Cost and time-effective solution, which is easy to share and collaborate with;
- High levels of security with no need to back-up; and
- Less paperwork so better for the environment
…to name but a few of the advantages.
Do get in touch with us if you are interested in finding out more, setting up a demo or booking some training.
Big Belly Buster
With just a week to go with the Big Belly Buster Challenge Jon has five pounds left to lose to ensure he hits his target of four stone lost in three months, so it’s going to go down to the wire! However, Jon is keeping motivated by the £’s being raised for every pound he loses, as it is all for the amazing Ark Cancer Centre Charity, in Basingstoke. Thank you very much to everyone who has already kindly donated.
Your donation will help to provide the care and support that local cancer patients, their families and loved ones need and deserve. The cancer treatment centre enhances the care received by patients and their families throughout their cancer treatment. Core treatments together with complementary therapies are provided in a calm and uplifting environment for patients, their friends and family.
Black and White Accounting
This is a difficult time for everyone and we must come together to get through this. Our thoughts are with you, your family and your friends especially at this time.
If there is anything we can do to help you at this difficult time, please do get in touch by contacting Black and White Chartered Certified Accountants, populate the “Got a Question” form on the right, or call us on 0800 140 4644.
