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.
Fraud and Scams
Sadly, yet predictably, there are a number of warnings being issued.
Be very cautious about any websites or cold calls offering loans, grants, payouts or other subsidies, they will either be phishing scams or, possibly, take a good percentage of any pay outs to undertake the work, and you really don’t need to use them. The vast majority of the financial help will either be automatic, or, the Government will contact you directly to get the appropriate information.
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: firstname.lastname@example.org.
Read the current information for employers in respect of a claim for wage costs through the UK Government Coronavirus Job Retention Scheme.
If you haven't yet issued 'furlough' letters to employees, please talk to us, we can support you with guidance and template letters. This will mean your employees are entitled to be paid at 80% of their gross monthly salary up to a cap of £2,500. They must have been employed as at 19th March 2020.
If we prepare your wages for your business then we will be making the claim for you as well. All we need is a copy of the furlough letter for each employee furloughed and we can work it from there.
Calculating the amounts due in anything but the most straightforward of examples has been very tricky, and we do this week in week out! I dread to think how many businesses have calculated their own incorrectly. We have continued to answer a vast array of differing questions on a multitude of different situations, so if you are unsure about anything just give me a call.
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.
The Government portal to claim furlough wages should be up and running in late April. We will keep you up dated. If we do your directors wages will be in touch with your shortly.
Self Employed Support Scheme
Now brought forward with staggered claim dates, payments should be made within six days. This scheme is capped at earnings of a maximum of £50k a year and is for people who are classed as self employed, in other words you will have completed a personal tax return for the year to 5th April 2019 and completed the pages for self employment or partnerships. It also requires three years' worth of self employed accounts and will be calculated on your declared profits.
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.
To be calculated on 80% of the monthly average of your last three years declared profits, up to a maximum of £2,500. We are not sure if, or whether, HMRC will use the figures before capital allowance claims for equipment/vans etc. to avoid skewing the figures. Any payout will arrive in June and you will be contacted by HMRC, you don't have to contact them. 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.
Deferral of VAT Scheme
There is currently the opportunity to defer your current VAT payment. If you want to defer your VAT, just don't pay it. If you have a Direct Debit set up you need to cancel this, otherwise the payment will still be made automatically. This will be constantly under review. Just remember that all VAT will eventually have to be paid by 31st March 2021 latest. Again, talk to me to decide what may be best for you.
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.
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
Contact your business bankers, but be prepared for a wait, the banks have spent the last few years getting rid of a lot of bank workers, so the sudden unexpected request for loans they have been struggling to get through the work. Keep persevering, it should get easier as time goes on.
Again, 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 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, it is a loan for six years in total.
The interest rate is 2.5% fixed. You can pay it back early if you want to.
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.