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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.

post august grant

Government Support. Self-employment grant. CBILs and Bounce Back Loans

Second and final self-employment grant

You can as of today now claim for the second and final self-employment grant.

Don’t forget this does not apply to limited companies I am afraid.

The second and final taxable grant made available by HMRC amounts to 70% of your average monthly trading profits and is again paid out as a single instalment covering 3 months worth of profits.

This payment is capped at £6,570 in total.

The claim can be made in the same was you made the first claim and it must be made by on or before 19 October 2020.

Further information regarding the claim and the making of it can be found here.

CBILs and Bounce Back Loans

We thought we best clarify; for the avoidance of confusion, the current deadlines in place by the Government as to when it is currently proposed that each scheme be closed:

CBILs – it is current proposed that this will remain in place up until the end of September 2020 but this may be extended.

Bounce back loans – it is current proposed that these will be available up until 4 November 2020 but again is subject to revision.

Please note that the above deadlines are in reference to applying for these so if you have either of these loans already, the agreement you already have will still stand until the end of the agreed term.

Additional funding you might not be aware of

The Government has recently announced an additional £20 million of suport that is being made available through local Growth Hubs and can be used to fund:
  • one to many events providing guidance as to how to respond to coronavirus
  • small grants to access specialist professional advice
  • small grants to cover the purchase of minor equipment to adapt or adopt new technology
More information can be found here.

Business Interruption Insurance

There has recently been a rather large court case regarding this that we believe is going to appeal but if you think you might be eligible for this and have previously been turned away we recommend that you speak with your insurance company again to clarify any impact on you.
resources 15.06

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.

resources 02.06

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/

banks loan 3 may

Bounce Bank Loan Update: Webinars

Continuing on from our newsletter earlier this week we just wanted highlight a few things that have been picked up since:

  • There has been further guidance issued which can be found here
  • The record time between application and receipt of funds has been 7 hours so there is the opportunity to access this money very quickly
  • Although the application process is very straight-forward, unless you are 100% confident in the figure you need and why, then please do not apply without first speaking with us
  • If you have not yet applied, we strongly suggest you consider this as this is a great opportunity to use this funding if you have a justifiable reason for doing so, so please do not ignore this
  • We have heard on the grape vine; though this may be incorrect, that this loan will disappear before the CBILS loan, so don’t delay too long, though we don’t have any fixed timescales just yet
  • For those that have accessed the larger CBILS loan; thus taking more than the £50k limit, we are seeking guidance from the banks as to whether a repayment could be made by an imposed bank deadline to bring this debt to £50k or less then switch this across to the bounce bank loan scheme thus benefiting from the lower rate of interest.  We wouldn’t suggest you do anything reference this yet though so don’t start contacting your bank reference switching as we are still unsure as to what the future months hold.

In short, don’t ignore this and speak with us if you want some guidance and assistance.

With everything that has been going on; and if you are still unsure as to what support you can get access to, why not try this Government link that can be accessed here to self-assess what you might have missed and can get access to.

Self-assessment grant eligilibility

First of all, the portal is still not live and we have no further information regarding this other than are told that this should be live by the middle of this month.

There is an eligibility status check that you can use though that can be accessed here and you can set up your personal government gateways at the same time if you do not have one already.

Webinars (NOT TO BE MISSED)

As promised, we have lined up a fantastic range of speakers that perfectly dovetail the support that we have already provided to help you ‘Strike-back’ when this time passes and not just make a difference now but make an ever lasting impression and actually come back stronger.

For next week we have the following webinars for you to book onto:

Strike Back Strategy Session – Survive and Thrive with Steven Briginshaw
Tuesday 12 May, 11AM (book here)

Are you in the thick of this lock-down and have a number of things you want to do but not sure what to do, when by and what the impact of these decisions would be?  If so, this is the webinar for you.

In this session we will be focusing on how you take the necessary actions and are held accountable for this spare time you have to not just know your numbers, but improve your numbers, your business and ultimately you personally.

You should have already seen the information we have shared about the Clarity software but if you want to watch our webinar on this click here.

Your Marketing Bounce Back with Ford Henderson
Wednesday 13 May, 10.30AM (book here)

Are you struggling with marketing your business in the current climate and even uncertain as to whether it is ethical that you do market your business?

In this session we will be looking at how you can shake up your marketing and you know how I have already mentioned that you should take your business, turn it upside down and put it back together again, well this adds onto this how you then know what your marketing plan will look like to get the financial return for the changes you’ve made.

We’ve known Ford for some time and worked alongside him but if you want to know a little bit more information about him and his business, you can access his website here.

Leading Your Team To Strike Back with Alison Reynolds
Thursday 14 May, 11AM (book here)

If you have furloughed your team; have you considered how their morale will be when they return to work?  If you haven’t furloughed your team have you considered how they might be feeling right now; whether they are working remotely are not?

More than ever you are going to need your team around you; pulling in the right direction, when lock down is lifted and Alison will go through not just what should be done now but what should be done moving forward also.

For a little bit more information about Alison and her business; aside from the fact she is amazing and has worked with our team, you can access her website here.

There are more amazing webinars to follow over the remainder of this month so keep an eye on these newsletters.

 

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.
Screenshot 2020-04-24 at 16.24.35

COVID-19 Update (26 March 2020)

Can we first of all say a massive thanks for all of the positive comments that have been shared with the firm and the team regarding the support we have provided so far and the support we have discussed that is still to come.  We will continue to work effortlessly to support you in these troubled times.

Two things first which we are commonly being asked and for which we can just give up an update (kind of):

  • We are still awaiting further guidance regarding the 80% funding towards furloughed staff and are hoping we get this imminently and as soon as we do we will share this rather than just share the various interpretations that are currently circulating over the internet.
  • There is expected to be a big announcement today for which we will share tomorrow once we have interpreted this with regards to the self employed but we know no more than you do at the current time.

Now what we can update you on today is the banks apparent stance when it comes to the Government-backed lending and that is what we wanted to share.

The key messages are:

  • Certain backs will force you to first apply for normal commercial funding and only if this is unsuccessful will they signpost you down the Government-backed route.
  • We do know of at least one bank; which is Barclays, who as of yesterday were first sending people down the Government-backed route.
  • From having spoken with a number of senior guys within the banks; we’re told banks are currently being allowed to decide their own approach with regards to the approach they take.
  • If you are going to try and suddenly jump ship in terms of banks to try and increase your chances of accessing the Government-backed loans then good luck as this transition process appears to be more lengthy than ever and in the meantime banks will naturally and understandably prioritise their own customers ahead of others.
  • Following the global issues that COVID-19 it is causing the banks;who are already massively under-resourced as we would expect, to be even more stretched, and the fact that call centres in India have been closed down due to the service not being deemed ‘essential’ across there will only slow down the application process further.

Our recommendation to clients is contact your bank the best you can and try to establish what information is needed.  Also, try to understand which approach they will be adopting.  Then fill in this short questionnaire that can be found here and liaise with us so that we can best support you should your first option not come through.

Alongside the rush to get this Government-backed funding from the banks and the soon to be announced measures to support the self-employed, we are soon expecting a deluge of requests for information from clients.

As mentioned above, and ask acknowledged by clients already, we face the same battles as a lot of clients and continue to go over and beyond existing letters of engagement for no additional charge.

However, can we kindly ask that if you are being asked for information that you already have/have had access to can you please ensure that you have this ready rather than ask us to supply this again.

We haven’t yet; but if we are regularly asked for information already supplied and repeating work, then this will only stretch us further and side tracks our efforts where they would be better spent that could subsequently be to the detriment of the long-term future of other clients including yourself. 

If this is ever the case we would have to consider revisiting how we are supporting clients including potentially charging for work that we repeating as we will not stand by and allow this to happen.

Let’s continue to work together in the best interests of one another.

We thank you for you your patience, support and kind words to date and we look forward to this time passing.

Stay safe and stay healthy!