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Please find below all updates and current news regarding the changing circumstances surrouding the COVID-19 outbreak.
Following the announcement that the Coronavirus Job Retention Scheme (CJRS) has been extended until March, it has been confirmed that the Job Retention Bonus (JRB) has been delayed.
The Job Retention Bonus was originally announced in July and was intended to provide one-off taxable bonus to an employer of £1,000 for each eligible employee that was furloughed but kept continuously employed until 31 January 2021. However, as a result of the CJRS being extended to 31 March 2021, it has been confirmed that a retention incentive will be deployed at the 'appropriate time'.
We do not currently have any indication on timescales or whether there will be any changes to the scheme. Therefore we anticipate that further guidance will be released in due course.
Check back here for the latest updates.
Further to our previous post, yesterday (05/11/2020) Rishi Sunak announced a further change to the Coronavirus Job Retention Scheme (CJRS), also known as the Furlough Scheme.
The key points to note are:
Of course, the new Job Support Scheme was due to cover the period 1 November to 31 March, therefore it remains to be seen whether this will be introduced after March or at all.
We will post details on our social media pages once the full guidance is received so please follow/connect with us to receive updates:
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As you may expect, the announcement of a second national lockdown has resulted in some further changes to the support measures in place for individuals and businesses. The key points are as follows:
It was previously announced that the Coronavirus Job Retention Scheme (also known as the furlough scheme) would come to an end on 31 October. This was set to be replaced by the new Job Retention Scheme from 1 November onwards. However, following the announcement of a second national lockdown, it was confirmed that the current scheme will remain in place for another month (until 30 November) and the new Job Support Scheme will be introduced on 1 December.
The support provided under the CJRS has been scaled back over the past few months, however this will be increased back to 80% for furloughed employees.
The key points under the scheme are:
As was previously the case, it is important that employers keep detailed records of an employee's pay and any hours not worked to make the claim.
It was previously announced that self employed individuals eligible for the SEISS would be entitled to 40% of their average trading profits for the November, December and January. The month of November has now been increased to 80% in line with the furlough scheme.
The key points are:
Businesses required to close in England due to local or national restrictions will be eligible for the following grants:
As with the previous lockdown, these grants will be administered by local authorities. Therefore we would advise eligible businesses to review their local authority website for further guidance and details on any application process.
Finally, it was also announced that the option of agreeing a mortgage payment holiday will no longer end on 31 October as previously announced. Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six month holiday. Those who have already started a mortgage payment holiday will be able to top up to six months without this being recorded on their credit file.
As always, please do not hesitate to get in touch should you require any further information.
The existing Coronavirus Job Retention Scheme (or Furlough Scheme) will finish at the end of October as originally planned. However, this will be replaced by a new Job Support Scheme from 1 November. The details we have so far are:
As with previous announcements, further guidance is likely to be released in the coming weeks.
This afternoon, Rishi Sunak announced a series of measures to 'kick-start' the economy in the wake of the Coronavirus pandemic.
A summary of the key announcements include:
We expect further details for each announcement to be released shortly.
Many individual taxpayers will soon be receiving a Self-Assessment statement from HM Revenue & Customs. This statement will have a payslip attached to it in respect of the 2nd payment on account for the 2019/20 tax year. This second payment on account would usually be due for payment by 31 July 2020 to avoid any interest and charges being levied by HMRC.
Virtually all individuals will have felt the effect of Covid-19 in one form or another. As a result, as part of their coronavirus support measures, HM Revenue & Customs are allowing UK registered tax payers who are finding it difficult to pay the second payment on account for 2019/20, an option to defer this tax payment until up to 31 January 2021.
If you choose to defer the July 2020 payment, you do not need to inform HMRC, no action is required and HMRC will not levy interest or penalties on the deferred amount, provided it is paid on or before 31 January 2021.
Many taxpayers will view this as a welcome interest-free cash flow support provision from HMRC.
However, please remember that the tax will still fall due by 31 January 2021. If the option to defer the July payment on account is taken up, then by 31 January 2021 there would potentially be up to three tax payments falling due on this date, being - the deferred 2019/20 2nd payment on account; any balancing tax liability owed for 2019/20; and the 1st payment on account for the 2020/21 tax year.
Therefore, it is important to view the July tax deferral option as merely a matter of timing.
Individual taxpayers can choose to make the 2nd payment on account by 31 July 2020.
However, before instinctively logging into their online bank accounts to pay this second payment on account, I urge taxpayers to ask themselves a question; is this the correct amount to pay?
The payment on account system was originally devised as a method of spreading the financial hardship of paying a tax bill in two instalments across the year. However, if a tax liability for the tax year turns out to be lower than the payments on account made during the year, it can be quite galling to realise that you have overpaid an unnecessary amount of tax to HMRC. In addition, there can be a time delay by HMRC in processing repayments, perhaps the money would be better off staying in the individual's bank account, rather than with the Revenue? Especially given these unprecedented times.
The solution: have your 2019/20 Self-Assessment tax return prepared at the earliest opportunity.
If the overall tax liability for 2019/20 is less than the expected payments on account for the year, a claim can be made to reduce the 2nd payment on account and therefore reduce the payment required to be made to HMRC.
By preparing the tax return at the earliest opportunity, the actual tax liability for 2019/20 will be calculated, along with the potential reduction in the July payment (which cannot increase). This will also give the individual an increased amount of time to prepare or save for any tax due by the next payment deadline, being 31 January 2021.
The chancellor Rishi Sunak confirmed some changes to both the Coronavirus Job Retention Scheme (CJRS) (also referred to as the Furlough Scheme) and the Self Employed Income Support Scheme.
As expected, it was confirmed that the scheme 'cannot continue indefinitely' and employers will be required to start contributing to the cost from 1 August. To ease the burden on employers, there will be a staggered withdrawal:
The scheme will close from the end of October.
Throughout the full period to the end of October, employees will remain entitled to at least 80% of their usual wage (subject to the maximum limits).
It was previously announced that the scheme would be more flexible from 1 August to enable employees to return to work part-time. This change will now be implemented a month earlier from 1 July. From this date, employees can work on a part time basis and will be paid in full by an employer for the days worked, with the remaining days still covered by the furlough scheme.
In order to make this change, employers will be unable to furlough any further employees from 10 June.
It was also confirmed that the Self Employed Income Support Scheme would be extended for a further three months. In August, qualifying individuals will be able to make a claim for a further grant covering the three months from 1 June to 31 August.
As was previously the case, the grant will be paid in a single lump sum based on previous average profits but at a rate of 70% (subject to a maximum total grant of 6,570 pounds).
Detailed guidance will no doubt follow in due course.
It has been confirmed that a new online service will launch from 26 May to enable small and medium-sized employers with fewer than 250 employees to recover Statutory Sick Pay (SSP) payments they have made to their employees.
The Coronavirus Statutory Sick Pay Rebate Scheme was announced as part of a package of support measures for businesses affected by the COVID-19 outbreak.
The scheme will reimburse employers for Statutory Sick Pay (SSP) paid to current or former employees if they are unable to work because they either:
The repayment will cover up to 2 weeks starting from the first qualifying day of sickness, starting on or after:
13 March 2020 - if your employee had coronavirus or the symptoms or is self-isolating because someone they live with has symptoms
16 April 2020 - if your employee was shielding because of coronavirus
The weekly rate from 6 April 2020 is 95.85 pounds (the previous rate was 94.25 pounds). An employer can choose to pay more than this amount, however the difference cannot be reclaimed.
To prepare for the claim, employers should collate a list of any applicable SSP payments made to employees during this period.
As part of the coronavirus support package for businesses, the chancellor announced a number of different business rates reliefs and/or cash grants.
The measures are:
A business rates holiday for businesses operating in the retail, hospitality and/or leisure industry.
Cash grants for eligible businesses operating in the retail, hospitality and and/or leisure industry.
A business rates holiday for eligible nursery businesses.
A cash grant for businesses qualifying for Small Business Rate Relief (SBRR), Rural Rate Relief (RRR) or tapered relief.
Further details and the eligibility criteria for each scheme is detailed separately below:
You are eligible for the business rates holiday if your business is based in England and operates in the retail, hospitality and/or leisure sector.
Properties that will benefit from the relief will be occupied properties that are wholly or mainly being used:
as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
for assembly and leisure
for hospitality, as hotels, guest & boarding premises or self-catering accommodation
A detailed list of the businesses that the government consider qualifying can be found in the local authority guidance (page 5-8):
Expanded_Retail_Discount_Guidance_02.04.20
The Retail and Hospitality Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to 25,000 pounds per property.
You are eligible for the grant if:
your business is based in England
your business is in the retail, hospitality or leisure sector
your business has a rateable value of under 51,000 pounds
Eligible businesses in these sectors with a property may qualify for the following grants:
10,000 pounds - for properties with a rateable value of up to 15,000 pounds.
25,000 pounds - for properties with a rateable value between 15,000 pounds and 51,000 pounds.
You can find your rates valuation at the following link:
https://www.gov.uk/correct-your-business-rates
Properties that will benefit from the relief will be occupied properties that are wholly or mainly being used:
as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
for assembly and leisure
as hotels, guest and boarding premises and self-catering accommodation
Again, a full list can be found within the local authority guidance provided above.
There is also a business rates holiday for qualifying nurseries in England for the 2020 to 2021 tax year.
You are eligible for the business rates holiday if:
your business is based in England
Properties that will benefit from the relief must be:
occupied by providers on Ofsted's Early Years Register
wholly or mainly used for the provision of the Early Years Foundation Stage
The government will provide funding for local authorities to support small businesses that already pay little or no business rates because of Small Business Rate Relief (SBRR), Rural Rate Relief (RRR) and tapered relief. This is known as the Small Business Grant Scheme. This will provide a one-off grant of 10,000 pounds to eligible businesses to help meet their ongoing business costs.
You are eligible if:
your business is based in England
you are a business that occupies property
you are receiving Small Business Rate Relief or Rural Rate Relief as of 11 March.
All of the above schemes are administered by the local authority. It was initially announced that the relevant local authority would contact eligible businesses, however some local authorities have decided to operate an applications process. Therefore if you believe your business will be eligible but have not been contacted by your local authority, we would recommend you enquire about the application process.
Further to our previous updates on the Coronavirus Business Interruption Loan Scheme (CBILS), the Chancellor Rishi Sunak has made changes to the scheme to ensure that finance is more readily available to assist businesses struggling with cash flow issues.
The key changes announced are:
These changes will apply to finance already offered under the scheme to ensure that all businesses receive the same level of government protection.
New alternative finance lenders are also being accredited under the scheme to create more choice and diversity for smaller businesses.
In addition a new scheme has been announced for larger companies. The new scheme is being referred to as the Coronavirus Large Business Interruption Loan Scheme. The scheme will provide a government guarantee of 80% to enable banks to make loans of up to 25 million pounds to firms with an annual turnover between 45 million pounds and 500 million pounds. Further details on the scheme are expected later this month.
The Chancellor will be speaking to bank chief executives next week to ensure the schemes are working and finance is readily available.
Please do not hesitate to contact us should you have any questions or require assistance with preparing cash flow/profit projections or forecasts which may be required as part of the application process.
Further to our previous post in relation to the Coronavirus Business Interruption Loan Scheme (CBILS), we understand that chancellor Rishi Sunak is currently reviewing the scheme and an overhaul is expected in the coming days.
The scheme has been widely criticised as it has proved too difficult for businesses to obtain the finance that is urgently required.
Under the scheme as it currently stands, a key issue is that the lender is required to evaluate whether the business could obtain finance on normal commercial terms before providing the option of borrowing under the scheme. Of course, borrowing under normal commercial terms is likely to be more costly for a business as a result of arrangement fees and interest charges. Whereas, under the scheme, there are no arrangement fees and the loan is interest free for the first 12 months.
We expect the chancellor to address this issue and it is being reported that the requirement to assess the business for a normal commercial loan will be removed.
We are also aware that a number of lenders are unwilling to provide the loans without the inclusion of a personal guarantee. Again, it is expected that the chancellor will address this within his announcement.
We will provide full details in due course once the announcement takes place.
In the meantime, please do not hesitate to get in touch if we can be of assistance.
Coronavirus Business Interruption Loan Scheme (CBILS):
We understand that chancellor Rishi Sunak is currently reviewing the business interruption loan scheme and an overhaul is expected in the coming days.
The scheme has been widely criticised as it has proved too difficult for businesses to obtain the finance that is urgently required.
Under the scheme as it currently stands, a key issue is that the lender is required to evaluate whether the business could obtain finance on normal commercial terms before providing the option of borrowing under the scheme.
We expect the chancellor to address this issue and it is being reported that this requirement will be removed to make the scheme more accessible.
A further issue is that the majority of lenders are insisting on personal guarantees before providing funds. Given the economic uncertainty, many businesses aren't willing to proceed on these terms, making the scheme ineffective. Again, we expect the chancellor to address this issue within the announcement.
We will provide full details in due course once the announcement takes place.
In the meantime, please do not hesitate to get in touch if we can be of assistance.
It was originally announced that all self employed taxpayers would be able to defer their July payment on account in order to ease cash flow in the wake of the coronavirus outbreak. This deferral has now been extended to all taxpayers.
Therefore any taxpayer with a payment on account due by the end of July may defer the payment until 31 January 2021.
This is an automatic offer and no application is required. If you would prefer to make the payment in the normal manner you can continue to do so. However, for those who choose to defer, no penalties or interest will be charged.
Please note, this is a deferral only and not a reduction in the liability, therefore the amount due at 31 January 2021 will be higher.
We would urge all individuals to submit their 2019/20 self assessment tax returns as early as possible. This won't alter the due date of any payments but will give certainty over the amounts due so that time to pay arrangements can be agreed with HMRC where necessary.
The chancellor has announced his eagerly anticipated support package for self-employed individuals. The key points from the announcement are as follows:
Full details will be provided in due course once available.
HM Revenue & Customs (HMRC) have now issued guidance relating to the VAT deferral for payments arising between 20th March 2020 and 30th June 2020 if there is a direct debit in place. To ensure no payment is made to HMRC, the direct debit with your bank must be cancelled. This should be done as far in advance before the VAT payment is due to be made - otherwise HMRC will automatically collect it.
Once the VAT deferral period has expired, the direct debit must be set up again for future VAT returns and corresponding VAT payments. Agents cannot set up the direct debit payments on behalf of taxpayers.
The VAT liability in this deferral period has to be repaid to HMRC no later than 5th April 2021. Any VAT registered business not affected by COVID 19 can choose to continue making their VAT payments as normal.
All VAT returns are still due to be submitted on time in this deferral period.
If you have any questions or concerns, please do not hesitate to get in touch.
The previously announced Coronavirus Business Interruption Loan Scheme (CBILS) is now live.
This is a new scheme which has been set up to provide loan facilities of up to 5m pounds for smaller UK businesses who are experiencing cashflow difficulties as a result of COVID-19.
A summary of the key features of the scheme can now be found on the British Business Bank website:
Please note, the scheme is only available to UK businesses meeting the following conditions:
If the lender would be willing to offer finance to the business on normal commercial terms, without the use of the scheme, they will do so.
The finance is to be arranged directly through one of the British Business Banks 40+ accredited lenders, which includes most high street banks.
The advice is for each business to approach their own provider in the first instance. The relevant bank is likely to have information on their website about the application procedure.
Each lender will have their own requirements, however, it is expected that businesses will require a proposal, which could include cashflow/profit forecasts and projections.
Please do not hesitate to get in contact should you have any questions or require assistance with the proposal.
Take care and stay safe.
On Friday evening the Chancellor Rishi Sunak announced further support measures to combat the financial impact of the COVID-19 outbreak.
New measures are being announced regularly, however in some cases, the finer details as to how and when these schemes will operate are still to be revealed. A summary of the information released to date has been included below and further details will be provided once available.
The measures announced Friday evening are as follows:
For any businesses facing cashflow issues, the business interruption loan scheme should be available this week with further details expected today. It is anticipated that this will provide businesses with adequate resources in the short-term until other measures are up and running (such as the job retention scheme).
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Please do not hesitate to contact us should you have any questions regarding the above measures or any other concerns. We are here to support our clients during these difficult times.
Further to the budget last week, yesterday evening the government announced further support measures for individuals and businesses affecting by the COVID-19 pandemic. The new measures increase the value of the rescue package to 330billion pounds in an effort to support the economy. Chancellor Rishi Sunak also stated that if demand is greater than the initial 330billion pounds, he will go further and provide as much capacity as required.
The support measures announced yesterday and within the budget include:
The government will support small and medium-sized businesses with the extra costs of paying COVID-19 related Statutory Sick Pay. The refund will be limited to two weeks per employee. Employers should maintain records of staff absences in order to reclaim the refund but should not require employees to provide a GP note.
The existing systems are not designed to facilitate such refunds, therefore the government will work with employers over the coming months to set up a repayment mechanism.
The government had already announced the Business Rates retail discount would be increased to 50% in 2020-21. To support small businesses affected by COVID-19 the government is increasing it further to 100% for 2020-21. The relief will also be expanded to the retail, leisure and hospitality sectors for 12 months. Originally only businesses in those sectors with a rateable value below 51,000 pounds would be eligible but this will now apply to those above this threshold.
The government has also already announced the introduction of a 1,000 pounds Business Rates discount for pubs with a rateable value below 100,000 pounds in England for one year from 1 April 2020. To support pubs in response to COVID-19 the discount will be increased to 5,000 pounds.
Many small businesses pay little or no business rates because of Small Business Rate Relief (SBRR). To support those businesses, the government announced during the budget that they will provide 2.2billion pounds of funding for Local Authorities in England. This will provide 3,000 pounds to around 700,000 business currently eligible for SBRR or Rural Rate Relief, to help meet their ongoing business costs. This figure has now been increased to 10,000 pounds.
Businesses and self-employed individuals in financial distress will receive support with outstanding tax liabilities.
HMRC have now set up a dedicated helpline to agree payment plans. Late payment penalties and interest may also be cancelled.
A business interruption loan scheme will be introduced temporarily to assist businesses with cashflow issues. The government will provide lenders with a guarantee of 80% on each loan to ensure these are more accessible. The scheme will support loans of up to 5million pounds in value (this was initially set at 1.2million pounds in the budget).
The controversial roll-out of the new private sector IR35 regime will be delayed by a year until April 2021.
For individuals who have COVID-19 or have to self isolate in accordance with government guidance, SSP will be paid from the first day of sickness rather than the fourth, which is normally the case.
Guidance has been issued to employers advising them to use their discretion not to require medical evidence for COVID-19 related absences.
Support will be provided for those who are ineligible for Statutory Sick Pay, including individuals who are self-employed.
'New style' Employment and Support Allowance will be payable for people directly affected by COVID-19 or self-isolating according to government advice from the first day of sickness, rather than the eighth day.
People will be able to claim Universal Credit and access advance payments where they are directly affected by COVID-19 (or self-isolating), without the current requirement to attend a jobcentre.
During the outbreak, the requirements of the minimum income floor in Universal Credit will be temporarily relaxed for those directly affected by COVID-19 or self-isolating according to government advice for the duration of the outbreak, ensuring self-employed claimants will be compensated for losses in income.
The government will provide Local Authorities in England with 500million pounds of new grant funding to support economically vulnerable people and households in their local area. The government expects most of this funding to be used to provide more council tax relief, either through existing Local Council Tax Support schemes, or through complementary reliefs.
For individuals who are in financial difficulty due to the coronavirus, mortgage lenders will offer a three-month mortgage 'holiday'.
We expect to receive further announcements in the coming days. Some possible measures include:
We will be providing regular updates across our social media.
Please follow us on Twitter and LinkedIn to ensure you are kept up to date.
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If you are not on social media but would like to receive regular updates, please let us know and this can be arranged.
If you have any questions, please do not hesitate to get in touch.
We will be here to support our clients during these uncertain times.