What Support Is Available For The National Lockdown 5 November 2020?

Following on from the government announcements we thought we would reach out about what support is available so far, as we go into the national lockdown on Thursday:

Coronavirus Job Retention Scheme

  • CJRS (furlough) scheme extended to December paying 80% of employees wages up to £2,500.
  • Employers will be required to cover national insurance and pension contributions.
  • Full time and flexible furlough will continue to be available.
  • Neither the employer nor the employee needs to have previously accessed the Furlough scheme.
  • All employees on the employer’s PAYE payroll by 23:59 30 October 2020 will be eligible.

Mortgage payment holidays extended

Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday, and those that have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.

Business grants available

Businesses required to close in England due to local or national restrictions will be eligible for the following through their local authority:

– For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;

– For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;

– For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.

 

Self Employed Income Support Scheme

  • Claims window being brought forward from 14 December to 30 November which will cover the period November to January
  • For November it is worth 80% of average trading profits and for December it is worth 40% of average trading profits meaning the total level of the third grant is 55 per cent of trading profits. The maximum grant will increase to £5,160.
  • Claims must be done by individuals, accountants cannot do these

To be eligible for the Grant Extension self-employed individuals, including members of partnerships, must:

  • have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
  • declare that they intend to continue to trade and either:
  • are currently actively trading but are impacted by reduced demand due to coronavirus
  • were previously trading but are temporarily unable to do so due to coronavirus

 

Bounceback Loans & CBILS

 

Self Assessment Tax Deferrals

The July 2020 payment on account that was deferred to 31 January 2021 and amounts due by 31 January 2021 can be payable over a further 12 month period under a time to pay arrangement. This can be set up online by individuals here: https://www.gov.uk/difficulties-paying-hmrc

 

VAT Deferrals

Businesses that deferred their VAT during the period 20 March to 30 June 2020 to 31 March 2021 can now make smaller payments interest free up to 31 March 2022. You have to opt into this, you will find more info here: https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19

 

We hope that you find this round up useful. Things are changing daily so please always check the up to date guidance.

Self-Employment Income Support Scheme Grant Extension

Self-Employment Income Support Scheme Grant Extension

Due to the ongoing impact that Covid-19 has had on the self-employed the UK government has taken action to provide support. The Self-Employment Income Support Scheme (SEISS) Grant Extension will provide critical support to the self-employed in the form of two grants, which will both be available for 2 three month periods, the first covering November 2020 to January 2021 and the second covering February 2021 to April 2021.

Who can claim?

To be eligible for the extension self-employed individuals, including members of partnerships, must:

  • have previously been eligible for the SEISS first and second grant (but don’t have to have claimed the previous grant)
  • declare they intend to continue trade and either:
    • are currently trading but are impacted by reduced demand due to Covid-19
    • were previously trading but temporarily unable to do so due to Covid-19

What does it cover?

This extension lasts for six months, November 2020 to April 2021. The grants will be paid in two lump sums each covering a three-month period. The first grant covers the period from 1 November 2020 until 31 January 2021. The government will provide a taxable grant covering 40% of average monthly trading profits, paid in a single instalment covering three months’ worth of profits, but capped at £3,750 in total.

The government are providing the same level of support for the self-employed as is being provided for employees through the Job Support Scheme.

The second grant covers the period from 1 February 2021 until 30 April 2021. The government will review the level of the second grant and set this in due course. Both grants are taxable income and are subject to National Insurance contributions.

HMRC will provide full details about claiming and applications in guidance on GOV.UK in due course. Please see the SEISS page for latest updates.

What Is The Job Support Scheme?

The JSS (Job Support Scheme) has been put in place to aid those employers facing lower demand over the winter months due to Covid-19 and who will no longer be able to use the Coronavirus Job Retention Scheme. The JSS will apply from 1 November 2020 to 30 April 2021.

Under this scheme the state will contribute towards employees’ wages who are working fewer hours than normal. Employers will continue to pay staff wages for the hours they work, but for hours not worked the government and the employer will pay one third of this each. This means that employees who must work shorter hours will still be paid two thirds of the hours they don’t work. Employees must be working at least one third of their usual hours and will receive at least 77% of their normal pay (after three months the government will consider increasing the minimum hour threshold).

Government contributions will be capped at £697.92 per month and employers will be reimbursed in arrears for the government contribution. The grant will not cover Class 1 employer NICs or pension contributions which will remain payable by the employer.

 

Who qualifies for the scheme?

Employees must be on an employer’s PAYE payroll on or before 23 September 2020, however employees can cycle on and off the scheme and do not have to work the same pattern each month. There will be no requirement that they were furloughed under the CJRS. All small and medium businesses are eligible, however larger businesses will need to demonstrate they have been adversely affected by Covid-19.

Under the Job Support Scheme Employees cannot be made redundant or given notice of redundancy during the period for which their employer is claiming the JSS grant for them.

 

For more information please see the Job Support Scheme Factsheet 

How Can I Do Cash Flow Forecasting?

Monitoring cashflow for a business has never been more important, particularly due to the impact of Coronavirus.

There are softwares such as Fluidly and Float that link with Xero and can help to produce cash flow forecasts. The biggest issue that we come across when asked to do cash flow forecasts is Xero not being up to date. If Xero is not up to date then there isn’t data there to pull on to do the forecast. It’s like trying to bake a cake without the main ingredients, it just won’t work.

Utilising bank rules and data extraction software such as ReceiptBank should make the process of getting Xero up to date quickly and efficiently a lot easier. Once Xero is reconciled up to date we have real time data to draw upon. By using actual data to analyse cash flow trends you can better understand your customers, suppliers and business performance.

You can do short term or long term cash flow forecasts.

Short Term Cash Flow – Typically the day-by-day, week-by-week forecast using what you currently know about money due to come in, money due to go out and what’s in your bank. These are great for supporting businesses that have immediate uncertainty over their cash flow. Our clients have free access to 90 day cash flow forecasting using Fluidly which can help with short term cash flow.

Long Term Cash Flow – This method of cash flow forecasting uses the profit and loss statement and balance sheet as a basis for forecasting. Longer term forecasts can incorporate such things as economic peaks and troughs, inflation etc. Typically for businesses who require longer planning and more complexity.

Cash flow forecasts can also be used with scenarios, for example if you have staff on furlough can you actually afford to bring them back in? Cash flow forecasts and up to date financials are fast becoming a need to have rather than a nice to have as business owners look to track business performance and to see the impact of their decisions.

Self Employed Income Support Scheme Extended

The original Self Employed Income Support Scheme (SEISS) covered March – May and most people received their payments during May. Individuals can continue to apply for the first SEISS grant until 13 July. An extension has now been announced where the self employed can apply for a further grant in August if they have been adversely affected by the coronavirus crisis. 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.

If you’re eligible for the second and final grant, and your business has been adversely affected on or after 14 July 2020 you’ll be able to make a claim in August 2020. You can claim for the second grant even if you did not make a claim for the first grant.

Recent guidance released goes through how different scenarios can affect whether you should claim the grants.

For example if you worked on a building site and it closed during March & April so you couldn’t work but then went back to work as normal from May you would be adversely affected for the first Grant period but not for the second so should not claim the second grant.

Please read the guidance here before making your claims: https://www.gov.uk/guidance/how-different-circumstances-affect-the-self-employment-income-support-scheme?fbclid=IwAR0UuJ_JRC4Q6L1qnow6GFSCnvNH8VrXvKdJoLsnYzC0eMMu5VbqmmTkth0#adversely-affected-examples

It is likely that HMRC will seek to examine claims down the line so it is important that when you make the claim you are eligible.

 

 

Am I Eligible For The Self Employed Income Support Grant?

HMRC have released an eligibility checker today which you can use to check if you are eligible to claim the grant in June. Some people are able to put applications in from as early as 13th May 2020. In order to check eligibility please ensure you have to hand your UTR and National Insurance Number and click on the following link: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme#eligible

Emergency Grant Scheme for Staffordshire’s Micro Businesses

Staffordshire County Council have launched a limited £500,000 businesses fund, to support micro-businesses through the Covid-19 pandemic.

This grant fund is targeted at small, micro and one person businesses that are not eligible for the grants and rate relief packages offered by the government.

A total of £500,000 is available, with the maximum grant being £1,000. The grants will be awarded to eligible applicants on a first-come-first-served basis.

Visit https://bit.ly/2VA6z0o for more information on who is eligible and how to apply.

Self Employed – How Do I Claim Money In June For Coronavirus?

The self employed income support scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 a month. It will be available for 3 months, but may be extended.

It is not repayable as it is a grant not a loan and you can still be working or take on employment whilst you claim.

HMRC will be contacting those eligible by mid May and payments will be made in June. The online service you’ll use to claim is not available yet.

Who can Claim?

You can claim if you’re a self-employed individual or a member of a partnership and you:

  • have submitted your Self Assessment tax return for the tax year 2018 to 2019
  • traded in the tax year 2019 to 2020
  • are trading when you apply, or would be except for coronavirus
  • intend to continue to trade in the tax year 2020 to 2021
  • have lost trading profits due to coronavirus

You will need to confirm to HMRC that your business has been adversely affected by coronavirus. HMRC will as usual use a risk based approach to compliance.

Your trading profits must also be no more than £50,000 and more than half of your total income for either:

  • the tax year 2018 to 2019
  • the average of the tax years 2016 to 2017, 2017 to 2018, and 2018 to 2019

Other claims to consider would be Universal Credit and ESA to give you money in the meantime. For more information on these visit https://www.gov.uk/guidance/new-style-employment-and-support-allowance-detailed-guide

 

Coronavirus: Our Plan

There is increasing concern over the Coronavirus but here at Premier Tax Solutions we would like to reassure you that it is business as usual for us. We two key concerns: firstly, the health and safety of our staff, our clients and their families and secondly, the survival of our clients’ businesses during these financially testing times.

Continuity Of Service

As a business we have based ourselves in the cloud meaning that in the event of a lockdown situation our services can continue as normal. We will have a reduction in face to face meetings however we can hold these instead via telephone or face to face online.

Our telephone system is cloud based therefore all of our staff will still be at the end of a telephone should you require them.

As things change we will implement the necessary changes and follow government advice to ensure everyone’s safety.

Employee Safety

Each office has been provided with extra sanitary products where possible. If the need arises then we have a fully thought-through plan to roll out homeworking, during periods of self-isolation should staff be well enough to do so.

Client Support

We are all facing uncertain times where the virus could have significant impact on businesses now and over the coming months. If you have any concerns as to how the situation will affect your business please get in touch with your client manager. If you require help with things such as HR policies, IT Support, funding etc we have some really great businesses around us that are working hard to provide assistance to other businesses so we are more than happy to put you in touch with them.