Lockdown 2 Government Support Summary (Along With Some Inside Info)

This email 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 £7,500. 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 and it is currently anticipated that this portal will open towards the end of this month.

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 £2,500 per month.

As a result of extending the Furlough scheme the planned Jan 2021 ‘Job retention bonus’ of £1,000 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.

As with everything these days the above is all subject to change but this looks like what we will be working with for the weeks ahead as a minimum.

Additional grants???

There are meant to be more local authority grants coming but more details are yet to be released and these may be discretionary rather than automatic but watch out for updates from respective local authorities over the coming weeks and hopefully within the next 10 days or so.

We have also got a fantastic link below to what grants you could perhaps access but which are not so widely known which can be accessed here so please feel free to follow this link here to see what you could access.

Some inside information perhaps?

We have heard on the grapevine; though not confirmed, the following:

  1. The Government are allegedly working on a new support package which is currently going through the EFG and may mirror the current CBILs scheme but be more easily accessible but please note whilst we have heard this on good authority this is not guaranteed.
  2. Following on from the above the second BBL opportunity for some; it is widely known that the first bounce back loan was never intended to cover the lengthy period of uncertainty that we now face.  There are also now rumours of a second bounce back loan opportunity exceeding the original 25% of turnover/£50k limited to reflect the increased term that the original loan was never designed to cover.

Watch this space but we thought we would share these with you as they came from a source well connected within the Bank of England.

Job Support Scheme Update

This may have crept under the radar for some last week but there was a subtle very positive tweak by Rishi Sunek in an announcement last week that we wanted to highlight.

The Job Support Scheme; as you all know, comes in from 1 November to replace the current furlough scheme and will run for six months.

The change is that the minimum hours required for employees to work has dropped from 33% to 20% and the employer contribution for non-worked hours has dropped from 1/3 to 5%.

The full and updated summarised factsheet can be found here along with the eligibility criteria and we have attached the more detailed guidance here also.

Government's Winter support package

Additional Government Support Announcement – Further Update

Further Update on Government’s Winter Support Package

As is commonly the case further information has filtered through from the Government’s Winter support package and the two key areas; in additional to those already highlighted are what we are going to cover in this newsletter.

Self-assessment help

Self Assessment customers can now apply online to spread the cost of their tax bill into monthly payments without the need to contact HMRC.

The online self-serve ‘Time to Pay’ service, has been increased to £30,000 for Self Assessment customers, to help ease any potential financial burden they may be experiencing due to the coronavirus pandemic.

Once you’ve completed your tax return for the 2019-20 tax year, you can use the online self-serve ‘Time to Pay’ service through GOV.UK to set up a direct debit and pay any tax that is owed in monthly instalments, up to a 12-month period.

If you wish to set up your own self-serve ‘Time to Pay’, you must meet the following requirements:

  • no outstanding tax returns
  • no other tax debts
  • no other HMRC payments set up
  • your Self Assessment tax bill is between £32 and £30,000
  • it is no more than 60 days since the tax was due for payment.

If you do not meet these requirements, you might still qualify for Time to Pay, but you will need to call HMRC to set this up.

If you set up a ‘Time to Pay’ arrangement, you will have to pay interest on the tax paid late. Interest will be applied to any outstanding balance from 1 February 2021.

Further VAT help

The Chancellor has also now announced that businesses who deferred VAT due from 20 March to 30 June 2020 will now have the option to pay in smaller payments over a longer period.

Instead of paying the full amount by the end of March 2021, you can make smaller payments up to the end of March 2022, interest free.

You will need to opt-in to the scheme, and for those who do, this means that your VAT liabilities due between 20 March and 30 June 2020 do not need to be paid in full until the end of March 2022.

Those that can pay their deferred VAT can still do so by 31 March 2021.

External Virtual Client Events

In addition to our event being held on the 1 October we are delighted to share and invite you all to two further events that are detailed below:

Friday 9 October at 2pm
Is your business your pension?
To book click here

Thursday 8 October at 3pm
Why financial planning is important
To book click here

These are events are kindly being ran by our partners at St James’s Place so please feel free to book on directly or if you have any queries regarding either of these events then please just let us know again using the funding@gtaccountants.com e-mail address.

Surviving Another Lockdown (Partial Or Full)

A further lockdown

As we enter another state of lockdown in some shape of form; depending on what part and in which country you currently operate out of, we must stick together and that is the theme of our final newsletter for September.

We are going to focus on the positive support out there that we suggest you take advantage of so that we keep fighting, take the positives from the challenges faced and those that lie ahead whilst also recognising the strain it puts on us all so reach out for help where necessary.

We do however also appreciate that everybody is probably in a state of feeling overwhelmed to some extent hence we have focused on a handful of key areas this month to help you overcome this.

Cash flow support

Whilst we are uncertain as to what additional support there may or may not be from the Government we can realistically expect greater difficulty when it comes to collecting debt.

We have subsequently established a creditors services alongside an independent third party offering to support businesses in need that will not only do some digging around amounts you are concerned about receiving but will also chase these for you.

This initial exercise is absolutely free and from the cases we have seen so far; as this is handled externally to ourselves, a client recently received over £3,000 that they have previously written off and it cost them little more than £200 that was only taken upon successful collection of the debt.

If this is a concern for you, have any queries and/or just wish to discuss this further register your interest by e-mailing us at funding@gtaccountants.com

Group Event (Virtual I’m afraid)

Whilst we did initially hope some time soon we could commence face to face meetings and have this event as being a physical one we have had to think again but we won’t let it hold us back entirely.

In addition to the online community platform that we have established with Futrli Peer and for which you can access for no charge through this link here to chat with other business owners and get some tips, we are also doing more.

We as a firm will be the lead for Enterprise Nation where we bring business owners together through Zoom but this will be a great opportunity to just let off some steam and take away some great content and advice.

There is no charge for attending and the first virtual event is on 1 October from midday for an hour so if this of interest then why not book through the link here.

Going forward we are hoping to make this a monthly event and get some guest speakers along with hopefully some special offers from partners.  We will also keep those who attend aware of funding pots as these are shared with us in addition to sharing these with you by way of our newsletters.

External Virtual Client Events

In addition to our event being held on the 1 October we are delighted to share and invite you all to two further events that are detailed below:

Friday 9 October at 2pm
Is your business your pension?
To book click here

Thursday 8 October at 3pm
Why financial planning is important
To book click here

These are events are kindly being ran by our partners at St James’s Place so please feel free to book on directly or if you have any queries regarding either of these events then please just let us know again using the funding@gtaccountants.com e-mail address.

Today’s Government Announcement

Today’s Announcement

So whilst we would usually wait until a little more detail is released, we thought we would share what we know already as we appreciate the urgency with which some people need some clarification.

As we find out more we will release a further update so watch out for any further updates in your mailbox.

The highlights are as follows:

  1. The current furlough scheme will be replaced by a new jobs support scheme as of November and will run for 6 months.  Broadly speaking current guidance is suggesting that employees must work at least a third of their normal hours, the Government subsidising a third leaving the remaining third unpaid.  Further guidance will follow around this.
  2. The self-employed grant will be extended but the exact terms of this are yet to be clarified.
  3. The deadline for applying for either a bounce back loan or coronavirus business interruption loans has been extended to 30 November 2020.
  4. Greater flexibility around bounce back loans including the possible opportunity to extend the term over which repayments are made.
  5. For those struggling with bounce back loan repayments there will be the option to potentially take a payment holiday for up to six months and make interest only repayments.  Again we expect more detail to be released around this and restrictions around those who can take advantage.
  6. VAT will remain at 5% for hospitality and tourism until 31 March 2021.

Cash flow support

Whilst we are uncertain as to what additional support there may or may not be from the Government we can realistically expect greater difficulty when it comes to collecting debt.

We have subsequently established a creditors services alongside an independent third party offering to support businesses in need that will not only do some digging around amounts you are concerned about receiving but will also chase these for you.

This initial exercise is absolutely free and from the cases we have seen so far; as this is handled externally to ourselves, a client recently received over £3,000 that they have previously written off and it cost them little more than £200 that was only taken upon successful collection of the debt.

If this is a concern for you, have any queries and/or just wish to discuss this further register your interest by e-mailing us at funding@gtaccountants.com

Group Event (Virtual I’m afraid)

Whilst we did initially hope some time soon we could commence face to face meetings and have this event as being a physical one we have had to think again but we won’t let it hold us back entirely.

In addition to the online community platform that we have established with Futrli Peer and for which you can access for no charge through this link here to chat with other business owners and get some tips, we are also doing more.

We as a firm will be the lead for Enterprise Nation where we bring business owners together through Zoom but this will be a great opportunity to just let off some steam and take away some great content and advice.

There is no charge for attending and the first virtual event is on 1 October from midday for an hour so if this of interest then why not book through the link here.

Going forward we are hoping to make this a monthly event and get some guest speakers along with hopefully some special offers from partners.  We will also keep those who attend aware of funding pots as these are shared with us in addition to sharing these with you by way of our newsletters.

External Virtual Client Events

In addition to our event being held on the 1 October we are delighted to share and invite you all to two further events that are detailed below:

Friday 9 October at 2pm
Is your business your pension?
To book click here

Thursday 8 October at 3pm
Why financial planning is important
To book click here

These are events are kindly being ran by our partners at St James’s Place so please feel free to book on directly or if you have any queries regarding either of these events then please just let us know again using the funding@gtaccountants.com e-mail address.

Government Support. Recovery SME Grant (UPDATE)

Not surprisingly, the opening of the application process for this funding led to a crashing of the website on Tuesday of last week.

There has now been an update released saying that your ability to access this funding will in part be determined by ballot with the timing of these ballots varying from one local authority to another.

For your area feel free to follow this link here and make a note in your diary so you don’t miss the window as there is little room for manoeuvre.

Further Detail Behind Latest Government Announcement

Most of you will have already seen the headlines last week but we wanted to digest this and get a little more detail behind the proposals before we expanded on them and we still await some further details as of today.

In summary though:

  • Incentives to retain staff following the end of furlough
  • Temporary reduction, until 31st March 2021, in stamp duty so that houses under £500k are exempt
  • The Eat Out To Help Out Scheme across August for participating restaurants
  • Temporary VAT reduction
  • Incentives to help young people into the workforce through apprenticeships and traineeships (more information still to follow regarding this so contact us if you wish to discuss further)
  • The COVID-19 Job Retention Scheme or as most of us know it… Furloughing
    The Government is now incentivising companies to bring back their furloughed staff and keep them until at least Jan 2021. For every furloughed member of staff, you bring back to work, continuously employ and pay over an average of £520 a month for Nov/Dec/Jan, the government will give your business £1,000.The money will be granted once you have submitted your payroll RTI submission for January 2021. This could be a very welcome cash bonus for many businesses though in our opinion could have been better spent as we personally aren’t sure jobs would be kept open this long given the size of the grant.  A thankless task; we know and the Government have done a great job but we think this one will not hit the mark.More information is expected regarding this by 31 July and full guidance is going to be published in the Autumn we’re told.

    Stamp duty change
    An increase in the Stamp Duty Land Tax (SDLT) threshold in England and Northern Ireland – increasing the threshold under which no SDLT is paid on the purchase of a main home from £125,000 to £500,000, with immediate effect until 31‌‌‌ ‌March 2021.

    The Eat Out To Help Out Scheme across August for participating restaurants
    during August, diners can get 50% off Monday to Wednesday on meals and non-alcoholic drinks, up to £10 per person, when eating at participating restaurants, bars, cafes and other establishments that have registered

    VAT changes for eat in/takeaway food, hospitality and leisure (just not alcohol)
    Of course, we wholeheartedly applaud the reduction in VAT to 5% for these categories from July 15th to 12th Jan 2021. The accountant in us would have preferred the reduction to take place at the beginning or end of a month, but that’s just life!

    The UK government will cut VAT from 20% to 5% on any eat-in or hot takeaway food and drinks from restaurants, cafes and pubs, excluding alcohol. This VAT reduction also applies to all holiday accommodation in hotels, B&Bs, campsites and caravan sites, as well as attractions like cinemas, theme parks and zoos.

Flexible Furlough Calculations

As you are all aware, we have submitted all furlough claims to date for no charge.

Following the introduction of ‘flexible furlough’ and the complexity of the calculations behind this, there will now be a charge for the calculation element of this if you wish to take advantage because of the additional time involved at our end.

If you wish to make these calculations personally, you too would then need to then make the claim as we professionally cannot make a claim for which we were not responsible for.

All other standard furlough claims will continue to be made for no additional charge.

Free Xero training

Xero are kindly hosting a series of free training sessions to a limited number of people so if this of interest then please get in touch as the topics are changing on a week to week basis.

Webinar

What to expect next (financially and operationally)
This week we are speaking at the North East Expo event which this year is naturally being hosted online so to register for this free event just follow this link here where I will discuss my thoughts and make this as interactive as possible for those attending to help people plot a route forward both financially and operationally.

Last; but by no means least, welcome three new additions

I’ve resisted any pictures but we now welcome Kate, Triveni and Fraser to the team who actually started at various times through lockdown but that is the end of our latest recruitment drive; for now, so we thought it a good time to introduce them and if you see an e-mail in your mailbox from them it is genuine.

What is a flexible furlough? How do I put employees on flexible furlough?

Yes we had another late Friday night update and a client with much greater HR expertise than us has kindly shared the following with us with regards to a number of questions that might be raised.

What is a flexible furlough?

From 1 July 2020, employers can bring furloughed employees back to work for any amount of time and any work pattern.

You will still be able to claim the furlough grant for the hours your flexibly furloughed employees do not work, compared to the hours they would normally have worked in that period.

How do I put employees on flexible furlough?

From 1 July 2020, only employees that you have successfully claimed a previous grant for will be eligible for more grants under the scheme.

This means they must have previously been furloughed for at least 3 consecutive weeks taking place any time between 1 March and 30 June 2020. For the minimum 3 consecutive week period to be completed by 30 June, the last day an employee could have started furlough for the first time was 10 June.

You should have a discussion with employees who you wish to place on the flexible furlough scheme because you will need to agree the arrangements of their part time work. The agreement should be confirmed in writing and you must keep a written record of the agreement for five years.

You do not need to place all your employees on furlough. In addition, you can continue to fully furlough employees if you wish.

How long can flexible furlough last?

Flexible furlough agreements can last any amount of time. This means that they do not need to last for a minimum of 3 weeks. However, the period that you claim for must be for a minimum period of 7 calendar days. Any flexible furlough period of less than this cannot be claimed for via the scheme.

Employees can enter into a flexible furlough agreement more than once.

What do I pay an employee on flexible furlough?

You will pay the employee for the hours they work, along with national insurance contributions and pension contributions for those hours.

The scheme will allow you to recover the remainder of wages to a maximum cap. Wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours.

The amount that the scheme will cover will begin to decrease from September 2020, and you will be responsible for all of the national insurance and pension contributions from August 2020, regardless of the employee being on flexible furlough.

Claims under the new scheme will be open from 1 July 2020.

When claiming for employees who are flexibly furloughed you should not claim until you are sure of the exact number of hours they will have worked during the claim period. This means that you should claim when you have certainty about the number of hours your employees are working during the claim period. If you claim in advance and your employee works for more hours than you have told HMRC about, then you will have to pay some of the grant back to HMRC.

What records do I need to keep?

You’ll need to keep records of how many hours your employees work and the number of hours they are furloughed during flexible furlough. For example, you will need to record that an employee who normally works for 37 hours a week is actually working for 15 hours and is furloughed for 22 hours.

Can my employees work for me during ‘down time’ in flexible furlough?

During flexible furlough, employees are not allowed to do any work for you or any linked or associated organisation during the periods that you record them as being on furlough.

Employees on flexible furlough can do training during the hours that they are recorded as being on furlough, but must be paid at least national minimum wage for those hours.

How do I calculate normal working hours?

If your employee is flexibly furloughed, you’ll need to work out your employee’s usual hours and record the actual hours they work as well as their furloughed hours for each claim period.

There are two different calculations you can use to work out your employee’s usual hours, depending on whether they work fixed or variable hours.

You should work out work out usual hours for employees who work variable hours, if either:

  • your employee is not contracted to a fixed number of hours
  • your employee’s pay depends on the number of hours they work

Where the employee’s working hours are fixed, or their pay does not vary with the amount of hours worked, the reference period for calculating their hours is the hours your employee was contracted for at the end of the last pay period ending on or before 19 March 2020.

Where an employee works variable hours, you will use the higher of:

  • the average number of hours worked in the tax year 2019 to 2020
  • the corresponding calendar period in the tax year 2019 to 2020.

 

Webinars (NOT TO BE MISSED)

One of the first and most important lessons that I have learnt is the time lost with family whilst I was working on the business and this is where Joe Laws of Joe Laws Photography will be joining us to discuss what he has planned to help people always appreciate this.  Already I have scheduled in our family photoshoot and these are memories that whilst might have in the past have been forgotten, but in the future, will always be remembered.

Family versus work versus you
Book here to join us at 11.30 on Thursday 18 June.

In our second webinar, planned for two weeks’ time on Thursday 25 June, I will be discussed what I think lies ahead and what we can potentially anticipate.

What to expect next
To join click here on Thursday 25 June at 11am where I will discuss my thoughts and make this as interactive as possible for those attending to help people plot a route forward.

Don’t forget that you can register for webinars previously missed by clicking on the links on past newsletters to access a recording, going to our website, or visiting our company YouTube channel.

Government Support Update

Rather than rush to get this out to you on Friday evening, we’ve taken a closer look at this and the detail then followed so can now summarise the latest announcements below.

Furlough changes
From 1 July 2020, businesses will be given the flexibility to bring furloughed employees back part time. This is a month earlier than previously announced to help support people back to work.

Individual firms will decide the hours and shift patterns their employees will work on their return, so that they can decide on the best approach for them – and will be responsible for paying their wages while in work.

The scheme updates mean that the following will apply for the period people are furloughed:

  • June and July: The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything.
  • August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.
  • September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.
  • October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.

Self-employment income support scheme extension
Rishi Sunak announced last week that the Self-Employment Income Support Scheme will be extended – with those eligible able to claim a second and final grant capped at £6,570.
Those eligible under the Self-Employment Income Support Scheme (SEISS), which has so far seen 2.3 million claims worth £6.8 billion will be able to claim a second and final grant in August. The grant will be worth 70% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total.

New Funding/further updates

Local authority grants:

It now appears that local authorities are gradually starting to drip feed out the discretionary grants that we mentioned on previous newsletters though they appear to each be operating at different speeds.  If you feel like you fell between the cracks then contact your local authority today for an update or keep an eye on their website.

There is also other financial support still out there that is not all directly related to COVID-19 with us including just a handful below:

General support for start-ups and those businesses looking to grow:

https://nbsl.org.uk/
https://www.rtcnorth.co.uk/

A great resource for finding grants generally:
https://www.grantfinder.co.uk/

Webinars: finance, cash flow, Government support

Building on what might lie ahead, please do make a point of registering for as many of these webinars as possible; even if you just access the recording at a later date.

Protect and build a better business and life
Tuesday 2 June, 2pm (book here)

Covid-19 has forced us all to rethink.  Our teams have been working in different ways, our customers have wanted to interact with us differently, and our supply chains have been disrupted.

Join us for our “Protect and Build Better” webinar, where we’ll share a 5-step framework for delivering short-term actions while looking forward and (re)building a business based on purpose, values, and profitability.

We’re only at the start of the financial struggles, we have a long road ahead!
Wednesday 3 June, Midday (book here)

As uncertain times ahead loom, but a degree of optimism returns, we must be cautiously optimistic.

Join our webinar where we consider several ‘what-if’ scenarios around cash flow, Government support and how best to act to avoid losing your business.

Finance not just for today but for the future
Thursday 4 June, 11am (book here)

With the amount of financial support out there it is very easy to consider that once accessed that is it – job done!

We need to be looking at our finances on an ongoing basis and putting these to work and ensure the right sort of finance is accessed at the right time and utilised in the right way.

In this webinar we will cover some common mistakes currently being seen and look at how best you can structure financially for what lies ahead in these uncertain times.

Get in touch to find out how we can help you build your business legacy

If you are looking to shape your businesses future through a strategic approach to accountancy we’d love to hear from you.