Coronavirus Health Crisis – financial advice and guidance
Please be assured that my team and I are here to support and help you make the right decisions at the right time to support you, your families, your investments, businesses and assets.
Whatever your situation, you can bet you will not be alone and we are here to help you get all the support you are entitled to. There is no doubt that we will all need resilience and patience to meet the challenges of the next few months, even years possibly, and the best way to do that is together.
For further clarification of the information below, or indeed, to go over any and all options, please just give me a call.
Do read our latest on The Positive Blogs, summarizing the latest updates and latest announcements for business, VAT and incentives.
Fraud and Scams
Sadly, yet predictably, there are a number of warnings being issued.
We have heard from clients that have had emails and texts suggesting they are due tax refunds, there are also telephone scammers suggesting that you owe money from a tax investigation and invite you to make a payment on account. Remember, the tax office will NEVER contact you by phone, text or email unless they have been in touch with you previously by letter, and even then it is very rare. They will never ask you to pay money over the phone or online, they will always leave it to you to organise. If in doubt call us and we can check and ensure any offer of support is legitimate.
For the latest information on scams visit the UK Government and OfCom websites and please report dubious emails to the National Cyber Security Centre (NCSC) simply by forwarding them on to: email@example.com.
Read the current information for employers in respect of a claim for wage costs through the UK Government Coronavirus Job Retention Scheme.
From 1 September HMRC will now pay 70% of usual wages up to a cap of £2,187.50 per month for the hours furloughed employees do not work.
What you need to do now
- Continue to pay furloughed employees 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. Employers will need to fund the difference between this and the CJRS grant themselves.
- The caps are proportional to the hours not worked. For example, if an employee is furloughed for half their usual hours in September, employers are entitled to claim 70% of their usual wages for the hours they do not work up to £1,093.75 (50% of the £2,187.50 cap).
- Continue to pay furloughed employees’ National Insurance and pension contributions from your own funds.
Parents returning from statutory maternity leave, paternity leave, adoption leave, shared parental leave and bereavement leave are broadly exempt from the CJRS furlough changes. So parents who are returning to work over the coming months will be eligible for the CJRS despite the scheme closing to new entrants on 30 June.
For October, the government will pay 60% of wages up to a maximum of £1,875. During these months employers will have to top up employees' wages to ensure they receive 80% of their wages up to the £2,500 cap.
Job Support Scheme (THE NEW FURLOUGH)
Please remember that the following is only if your business is forced to temporarily close due to local restrictions
The government’s Job Support Scheme (JSS) will be expanded to protect jobs and support businesses required to close their doors as a result of coronavirus restrictions, the Chancellor announced 9 October.
Under the expansion, firms whose premises are legally required to shut for some period over winter as part of local or national restrictions will receive grants to pay the wages of staff who cannot work The Governments aim is to protect jobs and enable businesses to reopen quickly once restrictions are lifted.
The government will support eligible businesses by paying two thirds of each employees’ salary (or 67%), up to a maximum of £2,100 a month.
Under the scheme, employers will not be required to contribute towards wages and only asked to cover NICS and pension contributions, a very small proportion of overall employment costs. It is estimated that around half of potential claims are likely not to incur employer NICs or auto-enrolment pension contributions and so face no employer contribution.
Businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of seven consecutive days.
The scheme will begin on 1 November and will be available for six months, with a review point in January. In line with the rest of the JSS, payments to businesses will be made in arrears, via a HMRC claims service that will be available from early December. Employees of firms that have been legally closed in the period before 1 November are eligible for the CJRS.
The scheme is UK wide and the UK Government will work with the devolved administrations to ensure the scheme operates across all four nations.
Job Retention Bonus
Employers will be able to claim a one-off payment of £1,000 for every employee they have previously received a grant for under the Coronavirus Job Retention Scheme (CJRS) and who remains continuously employed through to the end of January 2021.
To be eligible, the employee must have received earnings in November, December and January, and must have been paid an average of at least £520 per month, and a total of at least £1,560 across the three months.
You (or us) will be able to claim the bonus after filing PAYE information for January 2021, and the bonus will be paid from February 2021. More detailed guidance, including how employers can claim the bonus online will be available by the end of September.
What you need to do now (if we don’t assist with your claims)
If you intend to claim the Job Retention Bonus, you must:
- ensure all employee records are up to date
- accurately report employees’ details and wages on the Full Payment Submission (FPS) through the Real Time Information (RTI) reporting system
- make sure all of your CJRS claims have been accurately submitted and you have told HMRC about any changes needed (for example if you’ve received too much or too little).
For more visit: GOV.UK publications
Claimed too much in error?
If you have claimed too much for a CJRS grant and have not repaid it, you must notify HMRC and repay the money by the latest of whichever date applies below:
- 90 days after receiving the CJRS money you’re not entitled to
- 90 days from when circumstances changed so that you were no longer entitled to keep the CJRS grant
- 20 October 2020 if you received CJRS money you’re not entitled to, or if your circumstances changed on or before 22 July.
If you do not do this, you may have to pay a penalty. HMRC do understand mistakes happen, particularly in these challenging times, and will not seek out innocent errors and small mistakes for compliance action. They will act, however, against anyone who deliberately sets out to defraud the system or claims money they aren’t entitled to.
How to let HMRC know about claiming too much
If you have received more than you are entitled to, you can let HMRC know as part of your next online claim without needing to call us – the system will prompt you to add details on if you have received too much. For more information, search for ‘if you claim too much or not enough from the Coronavirus Job Retention Scheme’ on GOV.UK.
If you have received too much and do not plan to submit further claims – or you have claimed less than you were entitled to – please contact us by searching ‘Contact HMRC' on GOV.UK.
Employee Holiday Entitlement
Employees may carry over up to 4 weeks paid holiday into their next 2 holiday leave years, if they aren’t able to use up their holiday entitlement due to Coronavirus.
This would only apply if the employee is self-isolating or too sick to take the holiday before the end of the year, or if they have had to continue working and could not take paid holiday, but also includes if they have been furloughed and could not reasonably use it in their holiday year. In other words just about everybody!
If you are unsure how to manage employees holiday entitlement, just give me a call. You can also find information about using holiday during the Coronavirus crisis on the ACAS website.
If you are a company director that draws a small PAYE wage and takes the rest of your income from dividends, it has been confirmed that you are allowed to 'furlough' yourself. This would allow you to claim 80% of your gross monthly PAYE salary only, frustratingly dividends are not being taken into account.
Claiming furlough funding as a company director also means you should not work during the furlough period (minimum 3 weeks). You may only undertake "statutory duties" and "minor directorial duties", e.g. accounts preparation and submission. It would appear that pretty much anything else, such as talking to customers and suppliers, posting on social media, marketing activity and working on systems means you will not be able to make a claim.
You can furlough a number of times, so possibly work for one week and furlough for three, work a week then re-furlough, may be an option for you. Please be careful, if you work and claim furlough you will, in effect, be committing fraud.
Self-employment Income Support Scheme (SEISS)
Further to the first and second grants over the past six months, if you were eligible for the grants the Government is continuing its support for millions of self-employed individuals by extending the Self Employment Income Support Scheme Grant (SEISS). An initial taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus. The initial lump sum will cover three months’ worth of profits for the period from November to the end of January 2021. This is worth 20% of average monthly profits, up to a total of £1,875.
An additional second grant, which may be adjusted to respond to changing circumstances, will be available for self-employed individuals to cover the period from February 2021 to the end of April - ensuring our support continues right through to next year. This is in addition to the more than £13 billion of support already provided for over 2.6 million self-employed individuals through the first two stages of the Self Employment Income Support Scheme.
What you will need
- Self Assessment Unique Taxpayer Reference (UTR) – if you do not have this find out how to get your lost UTR
- National Insurance number – if you do not have this find out how to get your lost National Insurance number
- Government Gateway user ID and password – if you do not have a user ID, you can create one when you make your claim
- UK bank details (only provide bank account details where a Bacs payment can be accepted) including:
- bank account number
- sort code
- name on the account
- your address linked to your bank account
How to claim
If you’re eligible you’ll be able to make a claim. HMRC will contact you if you’re eligible.
It is not available to newly self employed people or those that trade as a limited company, in which they are directors who receive a salary and dividends. For directors, please check the Job Retention Scheme and speak to me.
The scheme only works through HMRC, please be aware of scams. If in any doubt, call us and please make sure you check with us about any figures they give you.
For the latest UK Government guidance to claim a grant through the Coronavirus self employment income support scheme check here.
VAT and tax cuts and deferrals
As part of the package, the government also announced it will extend the temporary 15% VAT cut for the tourism and hospitality sectors to the end of March 2021. This will give businesses in the sector - which has been severely impacted by the pandemic - the confidence to maintain staff as they adapt to a new trading environment.
In addition, up to half a million business who deferred their VAT bills will be given more breathing space through the New Payment Scheme, which gives them the option to pay back in smaller installments. Rather than paying a lump sum in full at the end March next year, they will be able to make 11 smaller interest-free payments during the 2021-22 financial year.
On top of this, around 11 million self-assessment taxpayers will be able to benefit from a separate additional 12-month extension from HMRC on the “Time to Pay” self-service facility, meaning payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.
Have a look at the current UK Government guidance for deferral of VAT payments due to the Coronavirus health crisis here.
If you were expected to make a personal tax payment on 31st July 2020, you can defer it until 31st January 2021 if you want to, simply don’t pay it in July.
In addition to expansion of the Job Support Scheme, the government is increasing the cash grants to businesses in England shut in local lockdowns to support with fixed costs.
These grants will be linked to rateable values, with up to £3,000 per month payable every two weeks, compared to the up to £1,500 every three weeks which was available previously. This could benefit hundreds of thousands of businesses, including restaurants, pubs, nightclubs, bowling alleys and many more.
This is a scheme for any business that has a business property on which they pay rates. For those that claim the Small Business Rate Relief the grant available is £10,000.
You should receive a letter from the council, which will invite you to complete an online form. You can apply before the letter arrives. A number of businesses have started to receive the £10,000 grants, so if you haven’t completed the form online at your local council website now’s the time to get it sorted out.
Other grants up to £25,000 are available for businesses in the Retail, Hospitality and Leisure sectors, as long as the rateable value of the property doesn’t exceed £51,000.
Hopefully this ceiling will be removed in the near future. There are also business rates holidays for these sectors and also Nursery’s in the 2020/21 year. Again, hopefully these reliefs will be extended to include other businesses as time goes on.
If you are in any doubt, please call me. You can see the Government advice on business rates during COVID-19 crisis here.
Discretionary Grant Fund for Small Business
This is a discretionary fund that has been set up to help certain small businesses that previously fell outside the scope of the business grant funds scheme. A good example would be a small bed and breakfast business that pays council tax rather, than business rates, but it could be any small business with ongoing fixed property related costs that don’t pay rates. Check out the Government website for more information on discretionary grant scheme, or call me.
Business Interruption Loans
Applications via your Business Banking for the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Loan Scheme and the Future Fund. This change aligns all the end dates of these schemes, ensuring that there is further support in place for those firms who need it.
Coronavirus Business Interruption Loan Scheme lenders can now extend the length of loans from a maximum of six years to ten years if it will help businesses to repay the loan.
If in doubt give me a call.
Business 'Bounce Back' Loans
You will struggle to find better terms for any loan considering how easy it is to apply, plus there is no Personal Guarantee which is a benefit in itself. The Chancellor announced he would be extending applications for the government’s coronavirus loan schemes that are helping over a million businesses until the end of November.
The loans are based on 25% of your last year’s turnover, up to a maximum loan of £50,000. There is no cost to set up, the repayments don’t start for 12 months and the government cover the first years interest.
The interest rate is 2.5% fixed. You can pay it back early if you want to.
The burden will be lifted on more than a million businesses who took out a Bounce Back Loan through a new Pay as You Grow flexible repayment system. This will provide flexibility for firms repaying a Bounce Back Loan. This includes extending the length of the loan from six years to ten, which will cut monthly repayments by nearly half. Interest-only periods of up to six months and payment holidays will also be available to businesses.
On a £50,000 loan that is a monthly repayment of £887, that’s starts in 13 months time, which means the total interest is only £3242.
The loan should be used for business purposes only, but that can be to refinance any other borrowings you may have, so it is an opportunity to pay off any high interest business loans or credit cards to save the interest, plus it removes any personal guarantees.
If you have more than one business with separate business accounts then you can apply for each business.
You should apply through your own business bankers, just Google Search Your Bank Name + Bounce Back Loan and you will find it. For some reason many banks aren’t advertising them, I wonder why?!
The application is ridiculously easy, all they ask for is your turnover, that’s it, the rest are your business details, seven questions, and you should get the money. We have several clients who have got £50,000 within 48 hours of applying.
Worse case it is money that is there for any emergencies over the next 12 months, you can always repay it in full if you don’t need it.
Please note, Barclays are struggling with them a little, their system is a bit clunky, but keep persevering.
I don’t believe in borrowing for the sake of it, but, if you can refinance anything, or you know that you will need any equipment or any other large purchase then it is worth considering. The idea of the loan is to help you bounce back, so the money can be used in any way to help that, whether it be for general expenses, capital expenses or helping refinance to reduce interest costs. If you are unsure at all just give me a call.
Small Business Grant Funding
Due to pay out in April, please check here for guidance from the UK Government small business support and grand funding during the Coronavirus health crisis.
If you are unsure if your qualify or how this my benefit you, just give me a call.
Landlords Guidance and Advice
Most commercial insurance policies are unlikely to cover pandemics or unspecified notifiable diseases, such as COVID-19.
However, those businesses which have an insurance policy that covers government ordered closure and pandemics or government ordered closure and unspecified notifiable disease should be able to make a claim (subject to the terms and conditions of their policy).
Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers.
Protection from Eviction for Commercial Tenants
Commercial tenants who cannot pay their rent because of COVID-19 will be protected from eviction. These measures will mean no business will automatically forfeit their lease and be forced out of their premises if they miss a payment up until 30 June 2020.
There is the option for the Government to extend this period if needed. Please be aware, this is not a rental holiday. All commercial tenants will still be liable for rent due.
Vehicles and MOTs
If you have a car, van and/or motorcycle that is due their MOT from 30 March 2020, it will have its MOT extended by six months. Check the New rules on MOT testing for light vehicles.
Increase to Working Tax Credits
Working tax credits have been increased by over 50% to £3,040 from the 6th April for the year to 5th April 2020, which is an approximate increase of £20 per week. Find more details about working tax credits.
If you want more detail about anything mentioned above, please have a look at the UK Government website offering guidance to employers and businesses about COVID-19 support for businesses.