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.
The Chancellor has announced three changes to the job retention scheme:
- From 1 July 2020, the scheme will be made more flexible to enable employers to bring previously furloughed employees back part time and still receive a grant for the time when they are not working.
- From 1 August 2020, employers will have to start contributing to the wage costs of paying their furloughed staff and this employer contribution will gradually increase in September and October.
- The scheme will close to new entrants from 30 June.
Flexible furloughing starts on job retention scheme
On 1 July, changes to the Coronavirus Job Retention Scheme (CJRS) saw flexible furloughing introduced, so employees will no longer have to be furloughed for a minimum period of three weeks. Following the change the CJRS has more flexibility to allow claims on a pro rata basis. Employers will be able to permit employees to work some of the week and be furloughed for the rest. An employee needs to have been furloughed for at least three consecutive weeks between 1 March and 30 June to be eligible for furlough from 1 July. Additionally, after 1 July, employers may be subject to a cap on the number of employees that can be claimed for in a CJRS claim they are able to make. The CJRS changes have effect from 1 July until the closure of the scheme on 31 October.
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.
Additionally, from 1 August, the level of the grant will be reduced each month. From August the employer will need to pay employer national insurance and pension contributions for the time the employee is furloughed. For August, the government will continue to pay 80% of wages up to a maximum of £2,500 proportional to the hours the employee is furloughed. For September, the government will pay 70% of wages up to £2,187.50, and 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.
The CJRS will be followed by a Job Retention Bonus, which will be introduced to help firms keep furloughed workers in employment. This will see UK employers will receive a one-off payment of £1,000 for each furloughed employee who is still employed as of 31 January 2021. To qualify for the payment, employees must earn above the Lower Earnings Limit (£520 per month) on average between the end of the Coronavirus Job Retention Scheme and the end of January 2021.
Internet link: GOV.UK publications
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 Employed Support Scheme
The Chancellor also announced plans to extend the Self-Employment Income Support Scheme (SEISS) for those people whose trade continues to be, or is newly, adversely affected by COVID-19 (Coronavirus). Eligible self-employed people will be able to claim a second and final SEISS grant in August; this will be a taxable grant worth 70% of their average monthly trading profits for three months, paid out in a single instalment and capped at £6,570 in total.
The eligibility criteria for the second grant will be the same as for the first grant. People do not need to have claimed the first grant to claim the second grant: for example, the business may have been adversely affected by COVID-19 (coronavirus) more recently.
Claims for the first SEISS grant, which opened on 13 May, must be made no later than 13 July. If you haven’t already made that claim do please contact us. We cannot do the claim for you but we can help you work through the process.
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.
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.