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resources - Covid Guide April

Small Business COVID-19 Help Guide

Now more than ever, as a small business owner you need to know the key numbers to focus on and how to make them better. Understanding the key metrics in your business means you can form a plan that you can work towards in the short term, that will get you through to the long term.

Read more about  Small Business COVID Help

COVID-19 Strike Back

How are you and your business approaching the current climate? We are helping clients ‘Strike-Back...

april 10

COVID-19 Strike Back.

Now that the dust has settled and we should have digested the support there and how we access this; though some finer details are still yet to be clarified, let’s hit back with all of this rather than feel sorry for ourselves and our business.  If you don’t, you more than likely won’t have a business to return to.

To start with we are ecstatic that we can now share our co-branded document that has been produced alongside one of our software providers that has a walk-through of how best you can do this.  This can be found here.

Following on from this, I am going to run two further 30 minute LIVE work-out webinars without the spandex next week:

  • Understanding and improving your cash flow in such troubled times (register here)
  • Pivoting your business to bounce back (register here)

Please note that neither of these sessions will be recorded.

Following on from this I am opening up the diary for the team for the week commencing 20 April 2020 for you to have a 30 minute one-to-one free session to discuss anything we cover next week in more detail.

To summarise our four step approach from next week to strike back:

  1. Register for our deep-dive into improving your cash flow
  2. Register for pivot your business session
  3. Schedule a 30 minute on to one session in the diary

Please note that if steps 1 to 2 have not been followed we will not have the meetings as time is of the essence and we need to be best prepared to make the most from the 30 minutes that we have.

Just to stress, now is not the time to stand still, it is the time to strike back!

A friend or contact in need

Never has it been more important to stick together in such times and no more than ever we are here for you to support you however we can.

Can we kindly ask that you listen out across social media, in your circle of friends and contacts, for anybody who too would benefit from the same support that you too are receiving.

Even if they just registered for our newsletter; which they can do by just clicking onto our website here, or if they were to take advantage of our newly introduced and dedicated COVID-19 (click here) and Cash Flow SOS page (click here), you would be helping them out.

Together, we can get through this.

Further guidance

Following our previous e-mail people have been asking for further guidance around:
  • Help for the self-employed (to book on click here)
  • Furloughing of staff (to book on click here)

As a result of this we will be doing two separate 30 minute live webinars next week covering the above two areas and will add access to finance to each of them also.

To book on, click either of the respective links above.

Finally – Client Exchange (APRIL ONLY)

Don’t worry we are not exchanging any clients.

During such unprecedented times we are going to support one another and we won’t always be able to do this for free.

We can however help one another out in exchange for goods/services to the value.

In light of this; and only for the remainder of this month as a trial, if you need some assistance but are struggling financially, can you email what you need to enquiries@gtaccountants.com and we will try to see if we can match you up with another customer.

Please note this is not a free advertising tool but instead to help those clients in need so that we can be specific.

If you are looking to advertise, let me know and I will do a separate client-led newsletter with content provided by you so you can advertise your services but by way of a newsletter rather than direct e-mail as I don’t think any of us would appreciate being sold to in the current climate unless we were looking to buy.

 

april 1

Coronavirus Business Interruption Loan Scheme (CBILS)

Having started getting involved in applying for the CBILS and having applied ourselves, we thought we would provide with an update after the Government announcement.

The recently launched Coronavirus Business Interruption Loan Scheme (CBILS) has now been significantly expanded along with changes to the scheme’s features and eligibility criteria. The changes mean even more smaller businesses across the UK impacted by the Coronavirus crisis can access the funding they need.

Importantly, access to the scheme has been opened up to those smaller businesses who would have previously met the requirements for a commercial facility but would not have been eligible for CBILS. This significantly increases the number of businesses eligible for the scheme. The expanded scheme will be operational with lenders from Monday 6th April 2020.

The CBILS website remains the best source of up to date information and we would direct any queries here rather than to ourselves.

New scheme features

  • No personal guarantees for facilities under £250k: Personal guarantees of any form cannot be taken under the scheme for any facilities below £250k.
  • Personal guarantees for facilities above £250k: Personal guarantees may still be required, at a lender’s discretion, but recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied.
  • A Principal Private Residence (PPR) cannot be taken as security to support a personal guarantee or as security for a CBIL backed facility.
  • Security: For all facilities, including those over £250,000, CBILS can now support lending to smaller businesses even where a lender considers there to be sufficient security, making more smaller businesses eligible to receive the business interruption payment.

After some of the horror stories we had seen, it is great to now have this clarity and the fact that some banks had been offering APR’s at 29%; yes 29%, we believe the Government has clamped down on this.  We also believe that fewer business should now be getting forced down the commercial loan route first.

Don’t forget though it is all about responsible lending and if repayment is likely to be beyond the 12 month period then other options might be more suitable and actually cheaper.

A friend or contact in need

Never has it been more important to stick together in such times and no more than ever we are here for you to support you however we can.

Can we kindly ask that you listen out across social media, in your circle of friends and contacts, for anybody who too would benefit from the same support that you too are receiving.

Even if they just registered for our newsletter; which they can do by just clicking onto our website here, or if they were to take advantage of our newly introduced and dedicated COVID-19 (click here) and Cash Flow SOS page (click here), you would be helping them out.

Together, we can get through this.

Final note

We have already mentioned this once but don’t forget to cancel those direct debits in respect of your VAT and self-assessment.

Finally, all submissions with regards to VAT and self-assessment remain so we still need everything we required beforehand so please just note this.

 

april 1

Import update on HMRC direct debits

We thought we should send an update out, given how quiet things have been over the past few days.

In short, the detail behind the Government announcements is where there is change hence there has been very few updates and thus our newsletters may become more sporadic again over the coming weeks.  Don’t worry though, if anything new comes to light for us to urgently share we will continue to do so.

One important update though; can you please cancel any direct debits to HMRC in respect of your VAT or self-assessment if you plan to take advantage of the ‘deferring payment’ otherwise money will still be taken automatically. 

As we continue to focus more on the detail and roll out of everything introduced by the Government, we are asking everybody take advantage of any extra time they have on their hands to ask themselves the following:

  • If you could start your business from scratch today; knowing what you have learnt and with the resources that you have accumulated, how would you structure it differently?  What will you do differently going forward?
  • Given the troubled times we are now facing; if you had known in advance that they were coming, what would you have done differently to prepare?

Now that we can start to focus on what changes need to be made, finance accessed etc. we can focus on how we bounce back positively on the other side of this so you will notice a change in direction in terms of being more upbeat again as we take on you the next step of making the best of a horrible situation.

A friend or contact in need

Never has it been more important to stick together in such times and no more than ever we are here for you to support you however we can.

Can we kindly ask that you listen out across social media, in your circle of friends and contacts, for anybody who too would benefit from the same support that you too are receiving.

Even if they just registered for our newsletter; which they can do by just clicking onto our website here, or if they were to take advantage of our newly introduced and dedicated COVID-19 (click here) and Cash Flow SOS page (click here), you would be helping them out.

Together, we can get through this.

Further help on it’s way

Whilst we have provided you all with a deluge of updates and information we acknowledge that we can do more.

Naturally we are stretched significantly as it is so would like to get this help out to as many of you at the same time as possible but appreciate that a newsletter may not always be the best method.

In light of this, we propose to run a series of live webinars; that will be not be more than say 30 minutes in length; allowing for a 15-20 minute update from us and 10 minutes for questions.

The most popular areas that we are being asked about and that we would look to run a live webinar on include:

  • assistance for those that are self-employed
  • furloughing staff
  • access to finance including government grants
If any of these are of interest, please e-mail us at enquiries@gtaccountants.com and we will set up a group live webinar subject to demand.
summary covid19

COVID-19 Summary (28 March 2020)

Wow, it has been quite a week and I appreciate that we have been sending quite a few newsletters with updates so we thought we would summarise where things are here.  In addition, we have provided more detail below this regarding furloughed employees and finally provided an update regarding accessing the government grants.
The Chancellor has set out a package of temporary, timely and targeted measures to support public services, people and businesses through this period of disruption caused by COVID-19.

This includes a package of measures to support businesses including:

  • a Coronavirus Job Retention Scheme
  • deferring VAT and Income Tax payments
  • a Self-employment Income Support Scheme
  • a Statutory Sick Pay relief package for small and medium sized businesses (SMEs)
  • a 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England
  • small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
  • grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
  • the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
  • a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
  • the HMRC Time To Pay Scheme

More detailed guidance around each of the areas above can be found here

Furloughing Employees Update from HMRC

What is it?

It is a grant for employers to help fund employee wages, where certain conditions are met, that has temporarily been put in place for 3 months initially, but this may be extended.

Note that this is a grant and not a loan, so it will not be repayable.

Which Businesses can claim?

  • It is open to all UK employers who have created and started a PAYE payroll scheme on 28th February 2020
  • Any UK organisation can claim it is not based on profits but business must have a UK bank account
  • Special rules apply to those public sector employers, who are funded primarily from public grant funding, mainly as they are expected to still be delivering a public service.  Please do seek further guidance around this area though if you think it might impact you.

Which employees are eligible?

  • To claim for an employee that you decide to furlough, they must have been on your payroll as at 28 February 2020 and this is includes various types of contract such as full time, part time etc.
  • We understand the furloughing of employees can be done on an individual basis, however, you need to be aware of employment law, particularly around discrimination.
  • The scheme also covers employees who were made redundant after 28 February 2020, as long as they are rehired by their employer.
  • Employees on unpaid leave cannot be furloughed, unless they were placed on unpaid leave after 28 February.
  • Employees on sick leave or self-isolating should get Statutory Sick Pay, but can be furloughed after this, whilst employees who are shielding in line with public health guidance can be placed on furlough.
  • If the employee is on maternity leave and receiving maternity pay, SMP or maternity allowance, this will continue.  However, if you top the statutory payment up this can be claimed back through the furlough scheme as long as both parties agree; this also applies to other statutory payments such as Statutory Adoption Pay

Employee salaries and entitlements

  • During the furlough period the employee’s wages will still be subject to the normal income tax and national insurance deductions etc
  • If your employee reduces their hours, then they are still deemed to be  working for you, so the scheme will not apply.
  • If your employee has more than one employer they can be furloughed for each job. Each job is separate and the cap applies to each employer individually based on current guidance.
  • A furloughed employee can take part in volunteer work or training, as long as it does not provide services to, or generate revenue for, or on behalf of your organisation.
  • Employees that have been furloughed have the same employment rights as they did previously.
  • The government has also announced changes to carrying over annual leave, allowing workers up to 2 years to take unused holiday, for more info click here.

Making a claim

  • Employees will have had to have been furloughed before any claim can be made.
  • The reclaim amount which will be repaid into employers’ bank accounts by BACS, that is likely to be in arrears, can be up to 80% of an employee’s regular wage plus on-costs up to a maximum amount of £2,500.  Therefore a maximum amount that can be claimed is £2,500 salary plus on-costs for employer’s National Insurance and the required minimum pension contributions.  Employers will need to pay 80% of normal, regular salary without bonuses, commission etc. included or £2,500 whichever is lower. We are awaiting further guidance from HMRC on the calculation of the NI and pension contributions on the subsidised wages paid, so expect further updates on this one.
  • There are a couple of calculation methods for those on variable pay, either the same month’s earnings in the previous year, or average monthly earnings for the year (pro rata for less than a year)
  • As a worker will have been furloughed National Minimum Wage and National Living Wage will not be relevant unless training is being undertaken whilst furloughed
  • Once the scheme has been closed by the government, HMRC will continue to process remaining claims before terminating the scheme
  • Payments received by a business under the scheme are made to offset these deductible revenue costs and thus will be taxed as income.
  • Businesses can deduct employment costs as normal when calculating taxable profits for Income Tax and Corporation Tax purposes.
  • There are a number of data items that HMRC will require when making a claim via their portal.  It isn’t yet clear what the portal might look like, or the format required for the data.

If you would like to share guidance with your employees to help them understand this legislation, please ask them to visit: https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme

 

Some further queries you might have

 

Do employers have to backdate the 80% March payment values in April payroll/tax year 2020/21 or does it all have to be completed on the March payroll tax year 2019/20?

Currently, our understanding is that furloughing applies from the date that you notify your employees that they are being furloughed, not the date that you make the payments. Our suggestion would be to notify your employees now that you intend to furlough, with the amount that you intend to pay. Naturally guidance around this might change and we always recommend you take professional HR advice around this.

If a worker is furloughed, can they be brought back into work early if say work commitments change? 

Yes, we believe you can bring back your employees early but again take HR advice around how this is worded to enable the option to be considered at some point during the period of being furloughed.

For owner/Directors who are on the payroll, will they be treated as employees or self-employed?

Legally, directors of a limited company are employees and should be treated as such.  Like employees, any claim will be based in the same way BUT WILL NOT take account of any dividends.

If it is a single director company, are they eligible for this scheme?

Based on the latest ICAEW interpretation of the HMRC guidance; as HMRC are silent on this matter, they too are eligible and can make a claim provided they meet the same eligibility criteria that other employees need to meet.

Will you guys help us out as a business when this scheme is launched fully?

Of course we will and just watch out for further guidance coming but we will coordinate this all as part of the payroll process.

For those clients that handle payroll themselves internally, we will also help you through the same process if you wish so you’re not alone.

Any further questions that you might have which are are not covered above; and any action taken regardless, we always suggest is taken with the sign off of a qualified HR person with the above to act as a guide as to what can be interpreted from what HMRC has issued.  Use this accordingly to plan ahead, we will keep things right with regards to the declaration and reclaiming of amounts from HMRC then; you alongside an HR expert, can ensure the paperwork and implementation side of things can be handled correctly.

Don’t forget, as clients of ours, you have access to unindemnified advice from the HR team at Avensure or you can contact ACAS whose details are here.

As local authorities start to develop varying strategies around issuing the grant funding being provided by the Government, we suggest all businesses who feel that they meet the eligibility requirements contact their local councils through their websites to lodge a claim.

Grant Update

The links for Newcastle, North Tyneside, South Tyneside and Northumberland Council Councils can be found below:

Newcastle City Council click here
North Tyneside Council click here
South Tyneside Council click here
Northumberland County Council click here

The process seems quite straightforward and we have already lodged our claim but any queries around this please direct these towards your local authority.