Category: Business Support

Following a rapid rise in COVID infections, from today 5th January 2021, England has been placed into a new lockdown. Following this the Chancellor has announced £4.6 billion lockdown grants of new lockdown grants to help support businesses forced to close. The lockdown in England is expected to last until March with a review not due to take place until the February half-term. There are also similar lockdowns across Scotland, Wales and Northern Ireland.

https://www.gov.uk/government/news/46-billion-in-new-lockdown-grants-to-support-businesses-and-protect-jobs

The new financial support announced sees the introduction of a new one-off top-up grant for retail, hospitality and leisure businesses worth up to £9,000 per property. The intention is to help businesses keep afloat until the Spring. This means that some 600,000 business premises across all nations of the UK will receive the one-off cash payment.

The amount businesses in England will be able to claim from their Local Authority for one-off top-ups depends on their rateable value:

• Small businesses with a rateable value of or below £15,000 will be able to claim £4,000.
• Medium-sized businesses with a rateable value between £15,000 and £51,000 will be able to claim £6,000.
• Larger businesses with a rateable value over £51,000 will be able to claim £9,000.

£4.6 Billion Lockdown Grants Announced and The Chancellor also announced that another £594million will be added to a discretionary fund to help support other firms affected. The money will be allocated to Local Authorities and the Devolved Administrations to support other businesses not eligible for the grants outlined above.

The Chancellor, Rishi Sunak said:

‘The new strain of the virus presents us all with a huge challenge – and whilst the vaccine is being rolled out, we have needed to tighten restrictions further. Throughout the pandemic we’ve taken swift action to protect lives and livelihoods and today we’re announcing a further cash injection to support businesses and jobs until the Spring.

This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.’

The previously announced grants package for businesses is still available and the above measures are in addition to this.

Feel free to contact us to book an appointment if you are looking to know more about this news.

What Is A Reasonable Excuse For Making A Late Furlough Claim? HMRC may accept a claim made after the deadline if you had a reasonable excuse for failing to make a claim in time.

https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme

HMRC’s list of example excuses is as follows:

• your partner or another close relative died shortly before the claim deadline
• you had an unexpected stay in hospital that prevented you from dealing with your claim
• you had a serious or life-threatening illness, including Coronavirus related illnesses, which prevented you from making your claim (and no one else could claim for you)
• a period of self-isolation prevented you from making your claim (and no one else could make the claim for you)
• your computer or software failed just before or while you were preparing your online claim
• service issues with HMRC online services prevented you from making your claim
• a fire, flood or theft prevented you from making your claim
• postal delays that you could not have predicted prevented you from making your claim
• delays related to a disability you have prevented you from making your Furlough Claim
• an HMRC error prevented you from making your claim

If you are looking to know more about this, feel free to contact us.

People use different vehicles for investment for example building a pension fund, a portfolio of shares or deposits with our bank or building society. Most of these investment options reward us for our participation by offering income (usually in the form of interest or dividends) or by demonstrating capital growth (share prices increasing).

Accordingly, there are three components to our investments: the capital sum we invest, any growth in the value of the capital sum invested or rewards (interest or dividends) paid by banks or companies in which we hold shares.

What we do with these rewards, particularly interest and dividends, is key to the speed with which our investments grow.

The reason for this is the impact of compound interest.

If the average return on your investments is say 3%, paid as dividends or interest, if you withdraw these payments your investments will maintain their capital value and over time inflation may reduce the purchasing power of this capital value as the value of money decreases.

Whereas, if you reinvest rewards, future returns will compound, and you are more likely to counter the effects of inflation.

Over short term periods these effects are small, but over longer periods the impact of compounding can be dramatic.

If you are looking to know more about this, feel free to contact us.

EU Importers/Exporters Would Need A Customs Agent?

The businesses which only buy and sell goods from and to the EU but not from any non-EU country probably would have no experience of dealing with the raft of red tape involved in clearing goods through customs and settling any duties or VAT payable.

The businesses will need to abide by the new regulatory situation from 1 January 2021 which is only a matter of weeks from now. They will need to employ someone or appoint a customs agent to undertake the necessary chores.

For most businesses, the latter option may be preferred. The Government has anticipated this need and there is a list of UK customs agent available.

https://www.gov.uk/guidance/list-of-customs-agents-and-fast-parcel-operators#list-of-customs-agents

If you transport goods on behalf of EU or UK businesses, back and forth across the English Channel, the regulations your drivers will need to comply with from 1 January 2021 are significant.

Government has again stepped up and provided detailed guidance. You can Google and download a PDF copy of their Transporting goods between the UK and EU in a no-deal Brexit: guidance for hauliers on the GOV.UK website.

The outcome of current trade talks with the EU is still uncertain. However, whatever the outcome of these talks, UK firms involved in the acquisition and/or transport of goods to and from the EU will need to abide by the new regulations imposed as a result of our exit from the European Union.

If you would like to know more about it, feel free to contact us.

There is quite a lot of changes around the furlough scheme since it started. The government published details of the New Furlough Scheme rules on 10^th November 2020 which deal with the following steps:

1. Check if you can claim
2. Check which employees you can put on furlough
3. Steps to take before calculating your claim
4. Calculate how much you should claim
5. Claim for your employees’ wages online
6. Report a payment in PAYE real-time information (RTI)

Have a look at our Payroll services.

From 1 July 2021, the level of grant will be reduced and you will be asked to contribute towards the cost of your furloughed employees’ wages. To be eligible for the grant you must continue to pay your furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they spend on furlough.

The table below shows the level of government contribution available in the coming months, the required employer contribution and the amount that the employee receives per month where the employee is furloughed 100% of the time.

Wage caps are proportional to the hours not worked.

Full details of these steps are set out at https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

If you need further information; feel free to contact us.

In anticipation of the tough winter ahead the Prime Minister announced further support for business which mainly revolves around Coronavirus Job Retention Scheme (CJRS) and other grants.

Coronavirus Job Retention Scheme 

The Coronavirus Job Retention Scheme (CJRS) commonly known as the furlough scheme will be extended until December with employees receiving up to 80% of their salary for hours not worked. The exact date when the extended scheme will finish has not yet been confirmed.

https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-

The furlough scheme had been wound down over the last few months, with Government support reduced to 70% of wages in September and 60% in October before the scheme was due to come to an end on 31 October 2020. It had been announced that the CJRS would be replaced by the Job Support Scheme (JSS), a scheme that would have topped up wages for people returning to work on reduced hours. The introduction of the JSS has now been put on hold until the CJRS extension ends.

The main feature of the CJRS extension announced to date is set out below:

• People who are unable to work will receive up to 80% of their wages during the new lockdown. This payment is subject to a maximum of £2,500 per employee (for hours not worked). Employers will have the discretion to top-up the payments if they so wish.
• The scheme is expected to apply across the UK, in England, Wales, Scotland and Northern Ireland even where the regions are subject to different lockdown restrictions.
• Employers will be required to pay employer NICs and pension contributions for their employees whilst on furlough.
• Flexible furloughing, whereby employers can bring back employees to work part-time will be allowed. Employers will have to pay employees for the hours they work but can still use the scheme to cover any normal hours where employees are furloughed.
• Businesses will be paid upfront by the Treasury to cover wages costs. However, there will be a short period whilst the Government changes the legal terms of the scheme and updates the system. During this time businesses will be paid in arrears.
• To be eligible, employees must have been registered on their employers PAYE payroll by 23:59 on 30 October 2020. This means a Real Time Information (RTI) submission notifying payment in respect of that employee must have been made to HMRC on or before 30 October 2020.
• All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.
• Further details on how to make a claim are expected to be released shortly. There will be no gap in eligibility between the previously announced end date of the scheme on 31 October 2020 and this new extension.

Mortgage holidays:

It has also been confirmed that mortgage payment holidays will no longer end as planned on 31 October 2020. 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.

Cash grants:

It had been previously announced that businesses in England that are forced to shut as a result of a lockdown will be eligible for grants of up to £3,000 per month payable every two weeks. Businesses will be eligible to claim after two weeks of closure.

The amount businesses will be able to claim from their local authority depends on their rateable value:

• Small businesses with a rateable value of or below £15,000 will be able to claim £1,334 per month or £667 per two weeks.
• Medium-sized businesses with a rateable value between £15,000 and £51,000 will be able to claim £2,000 per month, or £1,000 per two weeks.
• Larger businesses will be able to claim £3,000 per month, or £1,500 per two weeks.

Further support for businesses:

The government is providing an additional £1.1bn to Local Authorities in England, distributed on the basis of £20 per head. These payments are designed to help Local Authorities to support businesses more broadly.

Self Employed Income Support Scheme Extension (SEISS):

No further changes to support measures for the self-employed have been announced. The most recent announcement confirmed that the grants for the self-employed will be extended based on 40% of previous qualifying earnings.

The initial lump sum will cover three months of profits from 1 November 2020 calculated as 40% of average monthly profits, up to a maximum total of £3,750. The extended scheme will apply for 6 months from 1 November 2020 with an initial taxable grant made available to those who continue to trade and meet the eligibility requirements.

An additional second grant will be made available from 1 February 2021 to 30 April 2021. The level of this second grant amount is subject to review and will be set in due course.

If you are looking to know about this; feel free to contact us.

The Job Support Scheme (JSS) Open scheme is available from 1 November 2020 for businesses that remain open but with employees working reduced hours. Employees must work at least 20% of their usual hours, paid as normal, in order to qualify for the JSS Open. The employee will then receive 66.67% of their normal pay for hours not worked. Employees will therefore forego one-third of their pay for the hours that they have not been working.

The contribution for hours not worked will be made up of contributions from the employer and government. The government will fund up to 61.67% of wages for hours not worked per employee whilst the employer will fund a further 5%.

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To be eligible for the grant for open businesses, employer must have confirmed employees in writing (or reached collective agreement with a trade union where the relevant terms are determined by collective agreement) that they have agreed and been put on a JSS Open temporary working agreement. The written agreement must be in place before the temporary working agreement commences. The agreement can be set out in advance of Health Protection Regulations being put in place by a UK government.

The JSS Open is available to all small and medium-sized businesses, but larger businesses have to meet a financial impact test to demonstrate that their turnover has fallen as a result of the pandemic.

A large employer is defined for this purpose as a legal entity with 250 or more employees across their payrolls on 23 September 2020. If the employer’s turnover has remained equal or has decreased compared to the previous year, then they will qualify. This test only needs to be taken once before the employer’s first claim for the Job Support Scheme.

Large employers who are VAT registered and submit quarterly VAT returns should compare the total sales figure on their VAT return, which is due to be filed and paid between 31 August 2020 and 7 November 2020, with the total sales figure from the same quarter in 2019. There are similar measures for employers who submit VAT returns on different staggers. Further guidance is expected to be published shortly for large employers who are not VAT registered.

Any charity with 250 or more employees that is registered with a UK charity regulator or are exempt from such registration is not required to carry out the test and will be considered eligible for the scheme.

If you are looking to know more about it; feel free to book a no-obligation call us.

HMRC has claimed that they have put certain procedures to control the abuse of newly announced JSS. There are significant concerns that between 5%-10% of claims made under the CJRS were fraudulent or made in error.

There are additional anti-fraud measures in place to help prevent fraudulent claims made under either the JSS Open or JSS Closed. In order to help make the new JSS more secure, checks will be put in place and payments claimed may be withheld if HMRC suspects a claim to be ineligible. Whilst this may help reduce fraudulent claims it leaves the employer having to fund the government grant which will be paid in arrears.

https://www.gov.uk/guidance/check-if-you-can-claim-the-job-support-scheme#who-can-claim

Other measures announced by HMRC to combat fraud under the JSS include:

The amount of any overpayment by the employer must be paid back to HMRC where a claim contains incorrect information.

The full amount of any grant must be repaid if a claim is found to be fraudulent. Penalties of up to 100% of the amount over claimed may be applied where appropriate. Click here for our Payroll Services

HMRC will consider publishing the details of employers who are charged a penalty because of a deliberately incorrect Job Support Scheme grant claim.

HMRC intends to publish the names of employers who have used the scheme.

The public can report fraud to HMRC if they have evidence to suggest an employer is abusing the scheme.

Employees will be able to check if their employer has made a claim relating to them via their Personal Tax Account.

If you are looking to know about it; feel free to book a no obligation contact us.

New Financial Support Measures Announced

The Chancellor, Rishi Sunak, has delivered his third major statement to the House of Commons in less than a month. This followed the Winter Economy Plan on 24 September and further announcements on 9 October that expanded the scope of the Job Support Scheme and introduced new grants for businesses forced to close because of local or national lockdown measures.

In his third statement delivered on 22 October, the Chancellor has significantly revised previously announced measures to help protect jobs across the UK whilst the country faces a fresh spike of the virus and a winter of uncertainty.

These measures are intended to offer increased support through the existing Job Support and self-employed schemes and to expand the availability of business grants to support companies in Tier 2 areas of England.

https://www.bbc.co.uk/news/business-54644241

1. Job Support Scheme

Under the original terms of the Job Support Scheme, due to start on 1 November 2020, employees would have had to work at least one-third of their hours, paid as normal, in order to qualify. The government and employer would then each have covered one-third of any remaining hours the employee is not working.

Under the revised scheme announced today, the employer contribution to those unworked hours has been reduced to just 5% (from 33%), and the minimum hours requirements for staff has been reduced to 20% (from 33%). The Government will now fund up to 61.67% of wages for hours not worked, up to a maximum payment to £1,541.75 per employee.

These changes mean an employee will need to work just one day a week to be eligible for the scheme. The use of the scheme will be available to businesses in all alert levels.

The previously announced Job Retention Bonus, allowing qualifying businesses to claim a £1,000 for each CJRS participating employee, will remain. Employers can claim both the Job Retention Bonus and funding through the Job Support Scheme.

The Job Support Scheme will replace the existing Coronavirus Job Retention Scheme (CJRS) which ends on 31 October.

2. Self-Employment Income Support Scheme Grant Extension

The Chancellor also announced that the grants for the self-employed are to be doubled to 40% (from 20%) of previous qualifying earnings.

The initial lump sum will cover three months of profits from 1 November 2020 calculated as 40% of average monthly profits, up to a maximum total of £3,750.

The extended scheme will apply for 6 months from 1 November 2020 with an initial taxable grant made available to those who continue to trade and meet the eligibility requirements.

An additional second grant will be available from 1 February 2021 to 30 April 2021. The level of this second grant amount is subject to review and will be set in due course.

3. Business grants

The Chancellor also announced an extension to the business grant measures previously announced for businesses in England that are forced to shut as a result of lockdown measures.

This extension to the scheme could benefit some 150,000 businesses in the hospitality, accommodation and leisure sector who are not legally closed but who are severely impacted by Tier 2 restrictions in England. These grants can be backdated to August in affected areas.

These businesses will be eligible for cash grants of up to £2,100 per month. The grant figures are based on 70% of the grant amounts (up to £3,000) provided to businesses that are closed.

The amount affected businesses will be able to claim from their local authority depends on their rateable value:

• Small businesses with a rateable value of or below £15,000 will be able to claim £934 per month.
• Medium-sized businesses with a rateable value between £15,000 and £51,000 will be able to claim £1,400 per month.
• Larger businesses will be able to claim £2,100 per month.

It will be up to Local Authorities to decide exactly which businesses are eligible to receive the grants. Local Authorities will also receive a 5% top up to help other affected businesses.

If you need further information; feel free to book a free consultation with us.