NEWS & UPDATES IN THE ACCOUNTING WORLD
COVID-19 LOCKDOWN 3 - HERE WE GO AGAIN!
6th January 2021
As England and Scotland return to a state of national lockdown what does it mean for businesses around the country?
In reality, the rules for businesses which are permitted to stay open are no different. “Work from home if you can” has been emphasised so if it’s not been implemented as fully as possible, now’s the time for a review.
Other measures are the same as before: social distancing, high levels of hygiene, ventilation, screens, etc.
The main message in this lockdown is again to stay at home unless you have a reasonable excuse, for example for work or education purposes.
Those who are clinically extremely vulnerable or were shielding under previous guidance are strongly advised to work from home and if that is not possible they have been advised that they should not attend work.
Employers have not been given similar advice, for example they are not told to prevent such workers attending. However, should you become aware that someone is at increased risk, you should review your risk assessment, consider alternative and lower risk roles, or make changes which enable those staff to work from home.
As mentioned in our last briefing, the furlough scheme has been extended until the end of April 2021. Employees who are unable to work or work from home directly due to COVID-19, or childcare requirements now that schools have closed should be eligible for furlough.
The full list of businesses which can stay open and those which must close can be found here:
JOB RETENTION SCHEME EXTENDED
14th November 2020
Employers small or large, charitable or non-profit, are eligible for the extended Job Retention Scheme, which will continue until 31st March 2021.
The Coronavirus Job Retention Scheme will remain open until 31 March 2021. From 1 November 2020 you can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month.
You can claim for employees who were employed on 30 October 2020, as long as you have made a PAYE RTI submission to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
Claims from 1 November 2020 must be submitted by 11.59pm 14 calendar days after the month you’re claiming for. If this time falls on the weekend then claims should be submitted on the next working day.
Claim for furlough days in Claim must be submitted by
November 2020 14 December 2020
December 2020 14 January 2021
January 2021 15 February 2021
February 2021 15 March 2021
March 2021 14 April 2021
Please contact us for more information, or help with any furlough applications.
3rd November 2020
Businesses with premises registered for business rates (including those who receive small business rates relief) required to close in England due to local or national restrictions will be eligible for the following:
For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;
For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;
For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.
We will provide information about how to claim for these grants when the information is released.
3rd November 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.
JOB SUPPORT SCHEME BECOMES MORE GENEROUS
23rd October 2020
It’s just been announced that employers will be expected to pay 5% of the cost of unworked hours under the Job Support Scheme (JSS) instead of the 33% originally communicated.
When originally announced, the JSS required employers to pay one third of their employees’ wages for hours not worked. Employees were required to be working 33% of their normal hours. But today’s announcement reduces the employer’s contribution to those unworked hours to 5% and cuts the minimum hours requirement to 20%. This means that staff working just one day per week will be eligible.
For more information please click on the Find out More link below:
MORE GRANTS FOR THE SELF-EMPLOYED
22nd October 2020
HMRC has published guidance on two new coronavirus- related grants for the self-employed that it will be administering. Who will be entitled to claim and when?
There will be two further rounds of grants and HMRC’s initial guidance sets out the terms and conditions for these (Click on 'The Next Steps' icon for more details).
Qualifying conditions. To qualify for the third and fourth rounds of SEISS, you must:
have been eligible for the previous SEISS grants, even if you didn’t claim them
be actively trading when you make your claim and intend to continue trading; and
be “impacted by reduced demand due to coronavirus” in the qualifying period. This condition differs slightly from previous grants and HMRC will shortly be publishing guidance on what it means in practice. We’ll keep you informed of any updates.
Qualifying periods. The qualifying period for the next grant runs from 1 November 2020 to the date you make a claim. The qualifying period for the fourth grant is expected to start on 1 February 2021 and end on the date of your claim.
How much? HMRC will use the information it already has about your business profits to work out the amount of each new grant. The third grant will be equal to 20% of your average monthly trading profits, capped at £1,875 and paid as a lump sum.
The amount of the fourth grant hasn’t been set. HMRC says it will review it nearer to the start of the qualifying period. As with the previous SEISS grants, these will count as income for tax and NI purposes.
You will be allowed to claim the grants if you were eligible for the previous ones and your business continues to be negatively affected by coronavirus. They will be payable for two three-month periods starting on 1 November 2020.
JOB RETENTION BONUS
7th October 2020
Job Retention Bonus: guidance published
The government has published two new guidance documents about its forthcoming Job Retention Bonus.
What key additional information do we now have?
The Job Retention Bonus (JRB) is designed to encourage employers to retain furloughed (and flexibly furloughed) employees in their employment after the Coronavirus Job Retention Scheme (CJRS) ends on 31 October 2020. The government will essentially pay you £1,000 for every furloughed employee who remains in your continuous employment until 31 January 2021. You can claim this one-off taxable bonus after you’ve filed PAYE returns for January 2021. The bonus is for you - you don’t have to pass it over to your employees.
All remaining CJRS claims must be made on or before 30 November 2020.
The additional information we now know includes that:
to be a qualifying employer, you must have a PAYE scheme registered on HMRC’s Real Time Information (RTI) system, have made an eligible CJRS claim in respect of the employee and have complied with your obligations to file PAYE accurately and on time under RTI reporting for employees between 6 April 2020 and 5 February 2021
you can claim the bonus in respect of qualifying employees, i.e. those who: (1) you’ve made an eligible CJRS claim for at some point; (2) are continuously employed from the end of the period covered by your most recent CJRS claim for them until at least 31 January 2021; (3) are paid a total of at least £1,560 (gross) across the three tax months from 6 November 2020 to 5 February 2021, with at least one payment of taxable earnings (of any amount) being received in each of those three tax months; and (4) aren’t serving contractual or statutory notice of termination of their employment (including notice of retirement) on 31 January 2021
your bonus claim needs to be presented in a six-week window between 15 February and 31 March 2021 (and information will be provided by the end of January 2021 on how to access the online claim service on GOV.UK)
no bonus claim may be made in respect of an employee if it is “abusive or otherwise contrary to the exceptional purpose” of the JRB
you can still claim the JRB if you make a claim for that employee through the Job Support Scheme.
Please feel free to contact us for more information on the Job Retention Bonus.
NEW LOCAL LOCKDOWN PAYMENTS AND TAX
3rd October 2020
Local lockdown grant.
Businesses in England required to close because of government imposed local lockdowns or restrictions are entitled to a new grant on top of any other coronavirus-related support they receive. However, businesses which are closed because of a nationwide ban, e.g. nightclubs, do not qualify. Check with your local authority if you think you are eligible.
Business rates link. The amount of grant depends on the rateable value of your business premises. If your premises has a rateable value of £51,000 or more, you are entitled to £1,500 for each property you occupy for each three-week period you’re required to close. Businesses with properties with a lower rateable value are entitled to £1,000.
Tip. If you rent your premises but someone else is responsible for the business rates you can also claim the grant. Plus, if you’re not required to close because of a local lockdown but are hit financially as a side-effect, you can apply to your local authority for a discretionary payment.
Direct tax consequences. As with all other central and local government coronavirus-related grants, the payments received count as taxable income as far as profits are concerned but are outside the scope of VAT.
VAT REPAYMENT TERMS EXTENDED
24th September 2020
Due to the second wave of coronavirus, the terms for paying deferred VAT from early 2020 have been made more generous.
On 24 September 2020, Chancellor Rishi Sunak announced that businesses which had taken advantage of the VAT deferral incentive from earlier in 2020 would no longer be required to pay the deferred amount back in full by 31 March 2021. Instead, there will be an interest-free instalment option to permit payments to be spread over eleven months.
The VAT deferral scheme affected payments that were due between 20 March 2020 and 30 June 2020. Originally, the amount deferred was required to be made good to HMRC by 31 March 2021. If your business took advantage of this, consider whether you would benefit from the new instalment option.
SEISS EXTENDED UNTIL APRIL 2021
28th September 2020
The government has announced that the self-employed will receive taxable grants to cover November 2020 to April 2021 if their business has been affected by coronavirus. Are you eligible?
Who can get the grant? The scheme has only been extended for those that are currently eligible for the Self-Employment Income Support Scheme (SEISS) and are actively continuing to trade but are facing reduced demand due to coronavirus. If you have not claimed a grant under the SEISS so far, but were eligible to, you can still claim the new grant. The key difference between this grant and the previous ones is that you must be actively trading, it does not appear to be available if you would be trading but are not able to due to Coronavirus.
How much will you be paid? The first grant will cover a three-month period from the start of November until the end of January. The government will provide a taxable grant covering 20% of average monthly trading profits, paid out in a single instalment covering three months’ profits. The maximum amount is £1,875 for three months, so to get the full amount you would need to have average profits of £37,500 per annum. The second grant will cover the start of February until the end of April. The government will review the level of the second grant and set this in due course.
How do you apply? HMRC has not yet released details of how to apply but with the previous grants, individuals were contacted directly by HMRC. We will update this with more details as soon as they come in from HMRC.