IR35 is only for Limited companies. IR35 determines whether the contract from your customer to your company should be treated as an employment contract or a company contract.
An employment contract will mean that you personally are deemed to be employed by the customer and a company contract will mean that the company is deemed to have the contract.
The main points to consider when determining if your company has contracts within the IR35 legislation is:
The best way to check if your contract comes under the IR35 determination is to complete the questions on the below HMRC link and then give a copy to the customer to ensure that you are taxed in the correct way.
Click on ‘If the off-payroll working rules (IR35) apply to a contract’
EMPLOYMENT STATUS is for sole traders to determine whether you are actually a sole trader or are in fact employed.
The main points to consider when determining if you are self-employed or employed are:
The best way to check if your contract comes under the employed or self-employed status is to complete the questions on the below HMRC link and then keep a copy of this determination in case your employment status is ever questioned. Click on ‘If some work is classed as employment or self-employment for tax purposes’
Unfortunately, we are unable to advise on your contracts, however once you have determined where you stand (IR35, employed or self-employed), we can then advise you on how to proceed.
The Job Retention Bonus is a one-off payment to employers of £1,000 for every employee who they previously claimed for under the furlough scheme, and who remains continuously employed through to 31 January 2021. Eligible employees must earn at least £520 a month on average between the 1 November 2020 and 31 January 2021. Employers will be able to claim the Job Retention Bonus after they have filed PAYE for January and payments will be made to employers from February 2021.
WHICH EMPLOYERS CAN CLAIM THE JOB RETENTION BONUS – An employer will be able to claim the Job Retention Bonus for any employees that were eligible for the Coronavirus Job Retention Scheme and they have claimed a grant for. Employers should ensure that they have:
Employers must keep their payroll up to date and accurate and address all requests from HMRC to provide missing employee data in respect of historic Coronavirus Job Retention Scheme claims. Failure to maintain accurate records may jeopardise an employers claim.
HMRC will withhold payment of the Job Retention Bonus where it believes there is a risk that Coronavirus Job Retention Scheme claims may have been fraudulently claimed or inflated, until the enquiry is completed. Employers will be able to claim for employees who:
Employers can claim the Job Retention Bonus for all employees who meet the above criteria, including office holders, company directors and agency workers, including those employed by umbrella companies. The above criteria must be met regardless of the frequency of the employees pay periods, their hours worked and rate of pay.
EMPLOYEES WHO HAVE RETURNED FROM STATUTORY PARENTAL LEAVE – If an employee was on statutory parental leave, returned after 10 June 2020 and was claimed for under the scheme then the employer will be able to claim the Job Retention Bonus in respect of that employee provided the other eligibility criteria are met
EMPLOYEES WHO ARE ON FIXED TERM CONTRACTS – If an employee is on a fixed term contract and was claimed for under the scheme then their employer can claim the Job Retention Bonus in respect of that employee provided the other eligibility criteria are met. Contracts can be extended or renewed without affecting eligibility for the bonus, provided that continuous employment is maintained.
HOW EMPLOYERS CAN CLAIM THE JOB RETENTION BONUS – You can claim the Job Retention bonus from February 2021, through GOV.UK. More detail about this process will be published in guidance by the end of September 2020.
HOW MUCH EMPLOYERS WILL BE ABLE TO CLAIM – The Job Retention Bonus will be a one-off payment of £1,000 to the employer for every eligible employee that is claimed for. The bonus will be taxable, so the business must include the whole amount as income when calculating their taxable profits for Corporation Tax or Self-Assessment.
WHAT EMPLOYERS SHOULD DO NOW IF THEY INTEND TO CLAIM THE JOB RETENTION BONUS – Employers should ensure that their employee records are up-to-date, including accurately reporting their employees details and wages on the Full Payment Submission (FPS) through the Real Time Information (RTI) reporting system. Employers should also make sure all of their Coronavirus Job Retention Scheme claims have been accurately submitted and any necessary amendments have been notified to HMRC.
The first grant is now closed (it closed on 13 July 2020), but the second and final grant will open for applications on 17 August 2020. Here is what you need to know about the second grant:
Applications will open 17 August 2020. You will not be able to apply before then. It will be worth up to 70% of your trading profits. It is capped at £2,190 a month and is taxable. As it is a grant, you will not need to pay it back.
You do not need to have claimed the first grant to receive the second grant. And if you have claimed the first, you can still claim the second as long as you are eligible. To be eligible for the second grant you need to have been adversely affected by coronavirus on or after 14 July 2020 to claim it. Adversely affected can be anything from loss of work, unable to work because of sickness due to coronavirus, your supply chain has been interrupted, fewer customers or clients, your staff are unable to come in to work, expenses for PPE, childcare issues etc.
Grants are based on your profits over three tax years. This is based on an average of the tax returns for 2016/17, 2017/18 and 2018/19. You must have filed a tax return for 2018/19. This means you must have been self-employed prior to 6 April 2019. The last possible moment to file a 2018/19 tax return was 23 April 2020 (the deadline had been extended from 31 January 2020). If you only had a few months self-employment on your 2018/19 return, this will be counted as your total profit for the year – the Government will not pro-rata it based on your monthly profits.
You must earn more than 50% of your total income from self-employment. This must have been the case for either your 2018/19 tax return or, if not, the average of your 2016/17, 2017/18 and 2018/19 tax returns. Income from property, dividends, savings, pensions and taxable benefits all count as non-trading income and, to qualify for the SEISS, the total of these combined must NOT exceed 50% of your total income
Your average trading profit must be less than £50,000/year. Those whose average annual trading profit is more than £50,000 (to be specific, £50,000.01 and above) will not be able to get any support from this scheme.
For both these requirements, the Government says it will first check your 2018/19 tax return – if you met the requirements that year, you will be eligible.
However, if you earned more than £50,000 (or earned less than half of your income from self-employment) in 2018/19, the Government will then check your 2016/17 and 2017/18 tax returns, if you filed them for those years. If on average over the three years you earned less than £50,000 and made more than half your income from self-employment, you will still be eligible.
Unlike the employee scheme (furlough), here you CAN keep working. You do not need to prove coronavirus impact, though you will need to declare your business has been impacted on or after 14 July 2020. HMRC is introducing checks to prevent fraud.
You can also apply for and get universal credit (SEISS does not make you ineligible). But once you start receiving self-employed income support too then this will be classed as income, meaning the amount of universal credit you receive will decrease. But you will NOT have to pay back previous months of universal credit because of your SEISS payment. If you can wait, in some cases it could be worth delaying your SEISS application to maximise your universal credit award.
Britons eating out will get discounted food, house buyers will pay less stamp duty and companies will get bonuses for retaining workers under the chancellors plans to kickstart the UK economy.
In his summer economic update to the House of Commons, Rishi Sunak warned the UK is facing profound economic challenges as a result of the coronavirus crisis.
A sobering thought is the fact that the UK economy has shrunk 25% in just two months – the same amount it grew in the previous 18 years.
Rishi Sunak has unveiled a £30bn package of measures. These include:
A £1,000 bonus for each worker that companies bring back from furlough and employ through to January next year.
A kickstart scheme to directly pay firms to create jobs for 16 to 24-year-olds. Firms will be paid by the Treasury to employ people aged 16-24, for 25 hours of work a week for up to six months. The chancellor will pay employers the entire cost of the minimum wage for those they give temporary jobs to under the scheme, which is open to people on Universal Credit being helped by a work coach.
Cash for businesses to take on trainees and apprentices. For the next six months, the government will also pay employers to create new apprenticeships, with a new payment of £2,000 per apprentice and a £1,500 bonus for businesses to hire apprentices aged 25 and over. In addition, firms will be paid £1,000 to take on new trainees.
Immediate cut to stamp duty up until 31.03.21 with no charge on property transactions below £500,000.
A cut in VAT on food, accommodation and attractions from 20% to 5% from 15 July until 12 January. This affects food from restaurants, cafes and pubs, as well as accommodation in hotels, B&Bs, campsites and caravan sites, and attractions such as cinemas, theme parks and zoos.
An Eat Out to Help Out discount of up to £10 per head to get Britons back to restaurants. Meals eaten at any participating business, Monday to Wednesday during August, will receive 50% off, with up to a maximum discount of £10 per head for everyone, including children.
Question:- Are you using your software efficiently?
We have a client who does his own bookkeeping – marking off Sales Invoices through the Bank Feed and doing the same with his expenses. Due to the fact that he is not able to use the Software correctly, he had doubled up on his sales income plus posted expenses incorrectly.
This came to light when he asked us to check his figures and file his VAT return. Obviously, the VAT calculated was completely incorrect. As the income had been double up, this caused the VAT return to show that he owed HMRC double the amount of money. The time that it took to sort out this mess was considerably more than if we had completed the bookkeeping in the first place. So not only had he spent time doing the bookkeeping, we had to charge him more money for sorting out the mess!
Whilst you would think that I am happy to charge higher rates as the job took longer for us to complete, this is not how we roll at BKS. We want to support our clients by carrying out their bookkeeping requirements as quickly, yet efficiently as we can, thereby keeping their bill to a minimum.
BKS Accounts are able to offer training on software, but I would say, if you are not a bookkeeper, you will not be able to carry out the bookkeeping as efficiently as a bookkeeper could on your behalf.
My client raged (albeit not directed at us) that the Software is advertised saying “anybody can use it”. Of course they advertise their product like that – they want you to buy into it! It may say on “the tin” that the software is easy to use, anybody can use it, this is simply not true. The software data is only ever going to be as good as the person’s knowledge who is inputting the information. If you are not a bookkeeper mistakes will be made, which WILL cost you money.
We are able to offer bookkeeping services, as little as a few hours a month, quarterly, to a weekly visit or a couple of days a week. It may seem to be an overhead. It absolutely is not. Not only will it save you time, money throughout the year through mistakes not occurring, give you the freedom to do what you are good, it will also bring your year end accountancy fee down considerably as everything will be clean and tidy for the accountant to look at.
Please get in touch if you have bookkeeping requirements. I promise you will not be sorry. We have a wealth of knowledge and experience in helping our clients both with bookkeeping and analysing your numbers on your behalf with a view to cutting out expenses that are not required. We can help you understand your numbers! Give you information that will help you to grow your business such as how much your overheads are i.e. costs that do not generate a sale but are necessary to run your business.
Please call us for a free no obligation consultation.
To qualify for the second SEISS grant the business must be adversely affected by the coronavirus pandemic on or after 14 July 2020. Here we explain what this will mean in practice.
The Chancellor announced on 29 May that the SEISS would be extended with a second tranche of money available from August. We were promised further details on this second grant on 12 June, but little new information has emerged so far. We still do not know when the online portal will open for the second SEISS grants. But we do know the amount of the grant will be calculated at 70% of the average profits of the taxpayer, capped at £2,190 per month, and payable for three months. The other conditions to qualify for the second grant remain the same as for the first SEISS grant.
ADVERSELEY AFFECTED – The main addition to the HMRC guidance for SEISS is further emphasis on the requirement for the business to have been adversely affected by the coronavirus pandemic as a pre-condition for claiming the grant. The exact meaning of adversely affected is left to HMRC to interpret, as there is no definition of this term in the HMRC SEISS Direction published on 30 April. It is possible that a further HMRC direction will be published before applications open for the second SEISS grant.
To be considered adversely affected, HMRC says a business must have either temporarily stopped trading, or has been scaled back, and it suggests three possible causes for this reduction or cessation in trade as:
Those three categories broadly cover supplies, sales, and staff, but there could be other reasons for a reduction in profits, such as increased costs. For example, many businesses have had to undertake more cleaning, install screens and signage, and provide protective equipment to staff. The HMRC guidance does not appear to consider these increased costs as being adversely affected, but it certainly would be, as at the margins such cost increases could mean the business is no longer viable. In addition, HMRC states that the business will have been adversely affected if the owner(s) cannot work because they are:
In all cases, the taxpayer should keep records of how and why they believe their business has been adversely affected, and for which periods.
CONTINUE TO WORK – HMRC emphasises that the self-employed taxpayer can continue to work in their business while receiving the SEISS grant, which is in stark contrast to the conditions for directors of their own companies. If directors choose to furlough themselves and claim CJRS for their pay, they must cease all productive work for their company and any connected businesses, while they are furloughed.
TIMING – HMRC provides no guidance on how long the period of non-trading has to last for, or by what percentage the normal level of trading business has to reduce by, for the business to qualify as adversely affected. One could argue that a cessation of trading for as little as a few days would be enough. Accurate recording of the timing of trading conditions and costs for the business will be crucial, as the second SEISS grant can only be claimed if the business is adversely affected on or after 14 July 2020. It would appear that the government clearly many businesses to bounce back to near normal operation from July onwards, and it does not want to continue paying business support grants unnecessarily. We currently do not know how long the second SEISS grant will remain open for. However, we do know that the first SEISS grant must be claimed by 13 July 2020, so if you have not already put a claim in for it, so do quickly.
TAX HIT – Your tax agent is not able to claim the SEISS grants on behalf of their clients, but we can help our clients understand whether their business has been adversely affected, and calculate the tax hit. The SEISS grant is taxable income for 2020/21, so the tax will be payable by 31 January 2022.
For construction industry subcontractors, who are used to receiving their income with CIS-tax deducted at 20% or 30%, the SEISS grant will be a cashflow fillip as no tax is deducted at source. This means those CIS subbies may well have tax to pay for 2020/21 rather than be due a tax refund.
UNIVERSAL CREDIT has provided vital support to many Britons who are currently on a low income or have found themselves out of work. However, there could be additional benefit support for claimants.
Universal Credit is a living support payment, and often provides a helping hand to those struggling with several costs. It is particularly helpful due to the difficult financial circumstances many are facing at present. The Department for Work and Pensions (DWP) provides successful claimants with a monthly payout to help them meet their everyday needs. While Universal Credit varies from person to person, there is a standard basic allowance the government has outlined.
Single people who are 25 or over can receive £409.89 in monthly standard allowance.
Those in a couple over the age of 25 receive £594.04 per month to split between them.
Additional funds are provided to those who have children, health needs, disabilities or who are struggling to meet bill payments.
However, the government has also outlined additional support which claimants may be entitled to. This is dependent upon personal circumstances, however, may provide a lifeline for those who need extra assistance. People who receive the benefit may also qualify for assistance with health costs. This is the case if they receive Universal Credit and either had no earnings, or net earnings of £435 or less in their last assessment period.
However, Britons may also be eligible for health cost help if they receive the payment including an element for a child, or have limited capability for work, and had no earnings or net earnings of £935 or less in the last assessment. Additional help for claimants also comes in the form of assistance for children. Healthy Start vouchers are available to those who are pregnant or have a child under the age of four, with Best Start Foods available to those in Scotland. Free school meals and free early education for two year olds may also provide vital aid.
Sadly, due to the outbreak of COVID-19, many more Britons are having to plan funerals for their loved ones. While the expenses of this event can often snowball, those claiming Universal Credit could also be entitled to a Funeral Expenses Payment. If the person passed away on or after April 8, 2020, claimants could get financial support of up to £1,000. This could help with important costs such as burial fees, important documentation, flowers or the coffin.
Many Britons also have to meet the regular costs of utilities within their home. Universal Credit claimants can also be entitled to assistance with this, through payments such as WaterSure – to cap bills for those with a water meter – and the Affordable Warmth Obligation for energy saving improvements. It is important to note Universal Credit claimants may opt to apply for a different benefit which does not take savings or income into account. This can be found through new style Jobseekers Allowance, or new style Employment and Support Allowance.
The government also provides Britons with an online benefits calculator which assists potential claimants in finding out how much they could be entitled to. Please see the link below.
Chancellor Rishi Sunak has given us more information about the extension of the Coronavirus Job Retention Scheme .
There are 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.
PART TIME FURLOUGHING – From 1 July 2020, businesses using the scheme will have the flexibility to bring previously furloughed employees back to work part time – with the government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August. This flexibility comes a month earlier than previously announced to help people get back to work.
Employers will decide the hours and shift patterns their employees will work on their return, and will be responsible for paying their wages in full while working. This means that employees can work as much or as little as the business needs, with no minimum time that they can furlough staff for. Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing. If employees are unable to return to work, or employers do not have work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules.
EMPLOYER CONTRIBUTIONS – From August, the government grant provided through the job retention scheme will be slowly tapered.
IMPORTANT DATES – It is important to note that the scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30 June.
This means that the final date by which an employer can furlough an employee for the first time will be 10 June for the current three-week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.
If your employer requires you to work at home, you can – and have always been able to – claim for increased costs due to working from home, eg, heating and electricity.
Right now, due to COVID19, many businesses have closed their workplaces which means across the UK millions of staff are temporarily required to work from home, and therefore are eligible to claim for increased costs. HMRC says it will consider claims from employees working at home due to coronavirus measures if their usual workplace is closed.
The easiest way to apportion these costs is to simply claim a rate of £6/week. If your costs are higher, of course you can claim more. There are two ways to do this:-
Your Employer can give you the £6 per week allowance (more if appropriate) which would be a tax free payment.
Alternatively you can make an independent claim for the expenses incurred due to necessary working from home, by completing a P87 form, which means that the expenses will be deducted from your taxable income. This can be completed through your Government Gateway account or by filling out a postal P87 form.
If you are simply claiming the £6 per week, HMRC have said that there will be no need to justify that figure – meaning you are not required to keep receipts or prove information. If you worked from home for a full year the impact of claiming the £6 per week would give you tax savings of £62 per year for basic 20% tax payers.
If you believe you have higher increased costs then you can claim more, but you will need evidence of the increased costs.
To fill in the form you will need your Employers name and PAYE reference (which you can find on your payslip or P60), and your job title. For postal P87s, you will also need your national insurance number. The key section for filling in is titled USING YOUR HOME AS AN OFFICE. Assuming you are not eligible for tax relief on other work related expenses, like uniform tax rebates, simply leave the rest of the form blank. If it has been necessary to buy a printer or paper etc, you can claim for these expenses but would need to keep the receipts.
You claim retrospectively on expenses incurred. So, if you are only at home due to coronavirus, it is best to wait until you are back at work (or a few months anyway) then make the whole claim at once. Your tax code will likely be adjusted so you pay less tax over the year, as opposed to you getting a direct refund.
Once the form has been submitted, you will usually hear back from HMRC within a couple of weeks.
The Government grant to self employed individuals whose businesses have been adversely affected by coronavirus has now been extended and eligible people will be able to claim a second and final grant in August.
The first grant opened for applications on Wednesday 13th May. It covers 3 months, March, April and May, and the grants are worth up to 80% of profits, capped at £2500.00 per month, or £7500.00 in total. You can still apply for this first grant, but the Government has now said that you will need to do so by Monday 13 July
As of Sunday 24 May there had already been 2.3 million claims worth £6.8 billion. HMRC says the paymens will arrive in bank accounts within 6 workings days of a completed application, so many will now have received payments for the first grant.
The second grant is a lump sum that will cover 70% of 3 months of trading profits, but this time it is capped at £6,570. Applications for this second grant will open in August.
The Government has made available further grant funding for businesses that share working spaces who missed out on existing coronavirus support schemes. They missed out because these businesses simply pay rent and are not registered for business rates.
The new grant is called The local authority discretionary grant fund, being worth £617 million in total – a 5% increase on the £12.33 billion already pledged.
Businesses such as market traders, street food pop-ups and those using co-working office spaces could be eligible for this new grant.
I have looked on the Medway Council website and they are saying you will be able to apply for a discretionary grant online from 1pm on Tuesday 26 May. You have until midday on Friday 5 June 2020 to complete your application.
If your application is successful, HMRC aim to make grant payments from late June onwards.
Never have we ever before experienced life that has changed so dramatically in such a short space of time, with us now having to accept that some of the changes are the new norm. With lock down rules slowly lifting, and grocery shops becoming easier to navigate, emerging from this crisis is a trend for businesses to keep their staff working from home, at least for the foreseeable future, and perhaps on a permanent basis.
Business have been forced into a situation where it was a case of work from home or the business will cease trading. However, what has taken people by surprise, is that it works! I have several friends who always said they would not have the discipline to work from home, but have in actual fact found that they are far more productive at home than they would have been in the office.
Clearly, a great number of businesses do not have the luxury or choice of being able to work from home. However, if your business could function remotely, this is an opportunity to cut your overheads by a substantial margin.
A benchmark that is increasingly being used by business decision makers is the rent to sales ratio to measure the impact of the cost of leasing commercial real estate space (office, retail or warehouse). This is also sometimes known as the occupancy cost ratio. The base rent to sales ratio is a great way to decide if a location makes economic sense to rent. This rent to sales ratio will vary from 2% to 20% depending on the type of business you are in. For example retailers should target a base rental rate that is no more than 5% to 10% of gross annual sales, where a law firm may find a rent to revenue ratio of 15% acceptable.
So, as you can see, the saving could be up to 20% of your annual turnover, making your business immediately more profitable.
Facebook have announced they will permanently embrace remote work, even after coronavirus lockdowns ease. Mark Zuckerberg said the world’s largest social network would start aggressively opening up remote hiring, expecting that about half its workforce would work remotely over the next five to 10 years.
Zuckerberg said in a recent interview We’re going to be the most forward-leaning company on remote work at our scale.
Facebook with its more than 48,000 employees working in 70 offices across the globe, is so far the largest tech company to embrace long-term or permanent remote work in response to coronavirus pandemic. Twitter have also announced that employees will be allowed to work from home forever with Amazon extending its work-from-home policy until at least early October.
So it’s time to ask …….. Have my staff successfully worked from home, and could we as a business make this a permanent policy. It could be that some businesses would still need a hub, perhaps taking the shape of smaller premises where staff could touch base on a periodic basis. This could still cut rent costs by a worth while margin.
As I say, this is food for thought and I would encourage you to look carefully at adopting this approach, if it works for you as a business.
The online service you’ll use to reclaim Statutory Sick Pay will be available from 26 May 2020.
If you are an employer, find out if you can use the Coronavirus Statutory Sick Pay Rebate Scheme to reclaim employees coronavirus-related Statutory Sick Pay.
The Coronavirus Statutory Sick Pay Rebate Scheme will repay employers the SSP paid to current or former employees.
The repayment will cover up to 2 weeks starting from the first qualifying day of sickness.
Click on the link below to find out further information
Pre-application stage – Emails, SMS messages and letters are being sent to taxpayers who HMRC thinks may be entitled to claim an SEISS grant. These are expected to arrive during the week beginning 4 May 2020, some letters may not be received until the following week. Each taxpayer will receive one form of contact either by email, SMS or letter, depending on the data that HMRC hold for you.
This initial contact explains what the you need to do to be ready to claim when the claims portal opens on 13th May 2020.
HMRC is contacting all those who may be eligible, but not all recipients will in fact be eligible. HMRC has selected the cases based on the information in the self assessment tax returns filed by the taxpayers and has carried out the necessary calculations and eligibility checks based on those figures. However, HMRC will not necessarily know whether the taxpayer meets the following conditions of the scheme:
HMRC has provided an eligibility checker to help taxpayers to confirm whether they are eligible
Eligibility checker – The eligibility checker is available on the following link and is open to anyone to use, not just those who have been contacted by HMRC
The taxpayer enters their self assessment UTR and national insurance number and the checker confirms whether they are eligible. The taxpayer does not need to enter any information about their income. At this stage it also gives you a date that you can claim from as HMRC is staging the claim dates. The checker does not give any information about the amount of grant available. The checker does not require the taxpayer to log in to their government gateway account but, in the background, it does look at the tax return information held on HMRC’s system. The taxpayer is asked to provide an email address for further correspondence.
The eligibility checker can be used by agents who know their client’s self assessment UTR and national insurance number.
How to apply – Applications will open to taxpayers on a staged basis between 13 and 18 May, with the portal opening on different days for different taxpayers. HMRC will email taxpayers who have provided an email address (when using the eligibility checker or previously) to confirm when the portal is open for them. Taxpayers can also use the eligibility checker to find out whether the application portal is open for them. Taxpayers then log in to their government gateway account (or select the option to create an account) to complete the application process. They are presented with a detailed calculation and are asked to:
The taxpayer does not need to provide any information about their income – the calculations are all done by HMRC based on the tax returns submitted. HMRC will check the claim and expects to make payments from 25 May 2020 within six working days of the application being submitted.
Boris Johnson has promised that the government will next week publish a comprehensive plan on reopening businesses, with professional bodies working through the weekend to help draw up detailed guidelines on working during lockdown. Large parts of the economy remain closed because of concerns that companies may not be able to adequately protect their workers, but the government is keen for firms to return to work where possible in order to cushion the blow to the economy. The government is due to announce its latest decision on whether to extend lockdown conditions on 7 May, although there is little expectation of any major relaxation of rules, with health services still under pressure. However, the prime minister on Thursday said he expected to present a comprehensive plan on how to get the UK economy moving as well as providing childcare for workers, allowing travel to work and allowing safer work within businesses.
The business secretary, Alok Sharma, has been gathering views from businesses and lobby groups on guidelines that should be implemented, giving details of how different sectors should adapt. The advice is expected to cover different types of workplace, such as factories, offices, shops, logistics and outdoor work such as farming and mining. While there is no legal impediment to companies returning to work – aside from non-essential retail and public venues that have been explicitly shut down – some businesses are concerned they could face a backlash in the absence of a clear signal from the government. Here is how the different anti-coronavirus measures could work:
Factories Any work that cannot be done with social distancing should be done with workers standing either back to back or side by side – rather than face to face. Cleaning of work surfaces will be more regular and shifts should be staggered to prevent large congregations of workers at factory gates or in rest areas – in which 2-metre distancing will be enforced. The carmaker Vauxhall has made face masks and eye protection compulsory at all times. However, sources in other industries have said the government is unlikely to mandate this across the country, given the need to prioritise personal protective equipment for the NHS.
Offices There is little prospect of a return to working en masse in offices in the coming weeks, with working from home still encouraged among those who can do so. However, for those who must return to offices, desks will be spaced out and start times could be staggered to prevent rush hour crowding on public transport.
Retail Britons have already become familiar with distancing requirements in shops deemed essential by the government. The British Retail Consortium and the Usdaw union have drawn up guidance that covers issues ranging from limiting access to public toilets, to the installation of protective screens at tills and keeping changing rooms permanently closed in clothes shops in order to prevent contamination.
Delivery services Warehouses and trucking companies have been in demand like never before as people are stuck at home. Within warehouses safe practices are almost identical to factories, while delivery drivers who interact with consumers as part of their job need to wait for the customer to pick up packages at a safe distance.
Outdoor work In farms, quarries and mines, workers should work side by side if they are unable to carry out their jobs 2 metres apart, and enclosed spaces such as machinery cabs should have windows left open to allow for ventilation. The sale of goods – such as farm produce – should not encourage the gathering of crowds, with online orders and deliveries recommended.
Construction Some housebuilders had faced protests over continuing work during lockdown, with concerns that some parts of the job are impossible to do while maintaining 2-metre distancing. However, the housing minister, Robert Jenrick, last week gave clear guidance to the construction industry that it should return to work if possible. The housebuilder Taylor Wimpey is manufacturing a bespoke face shield, which will attach to a construction hard hat and will be used on all its sites for two-person tasks. Large sites such as the Hinkley Point C nuclear power station will have split shifts to reduce overlap.
Transport and tourism While transport is not thought to be among the sectors to be covered by new business department guidance, any large move back to work will require more public transport. Bus and train companies are hoping for continued government funding to allow them to operate with empty seats – a costly move – to preserve 2-metre distances. Any recovery of the airline industry is likely to be more reliant on international agreements. However, the Hungarian budget airline Wizz Air on Thursday said masks would be compulsory on its flights from now on, with limited flights to resume from Luton airport on 1 May. The Ryanair boss, Michael O’Leary, has rejected the idea of leaving the middle seat empty on planes in order to maintain physical distancing.
Hospitality There is little expectation that public gatherings will be allowed for months, given the focus on reducing the potential for coronavirus to spread. The JD Wetherspoon pub chain plans to reopein in June, although few analysts believe that is likely. Any pre-vaccine reopening would need strict social distancing and cleaning routines – if customers could be persuaded to return.
Businesses will be allowed to apply for “bounceback” loans of up to £50,000 from Monday 4th May, which can be approved after filling out a short online form, with funds deposited into bank accounts within 24 hours. Rishi Sunak announced the new scheme to the House of Commons yesterday amid fears that thousands of small firms faced running out of cash imminently during the coronavirus pandemic.
What is the “bounceback” loan scheme? It is a new scheme for small and micro businesses who can, from 9am on Monday 4 May, apply for up to £50,000 of financing from their lender to help them through the Covid-19 crisis. Companies can apply for a minimum of £2,000 and a maximum of one quarter of their last financial years turnover, with a cap of £50,000. The loans will be 100 per cent backed by the government, unlike under the Coronavirus Business Interruption Loan Scheme which is 80 per cent state-backed. This means that the process for applying will be significantly quicker and less bureaucratic than CBILS which has been heavily criticised for not getting money to businesses quickly enough. The scheme is aimed at small businesses but the Treasury has not set a size limit on companies that can apply. Therefore, companies that want a small loan quickly may choose to apply for a bounceback loan rather than a CBILS.
How do I apply for a bounceback loan and how long will it take to get money? Applications are around two pages long and are submitted through an online form from Monday 4th May. Only basic details are required to verify the company exists and is eligible. Company directors self-certify that the information they provide is correct and their lender then decides whether or not to approve the loan. Companies may be required to provide a tax return in a small number of cases. Only businesses that existed on 1 March 2020 can apply. Money should be in a business account around 24 hours after an application has been approved.
What does 100 per cent government-backed mean? Banks will not have to absorb losses on loans taken out by companies that later cannot repay all of the debt. If a business cannot repay, and the funds cannot be recouped through normal means, the state will take a loss.
How much will a bounceback loan cost? The government will cover interest and fees for the first twelve months, and businesses will not be required to repay any of the loan balance during that time. After that, interest rates will be “very low”, according to the Treasury, with a loan typically paid back over five years.
Can I apply for a CBILS and a bounceback loan? No, each firm can only take out one or other form of loan. The CBILS scheme allows for larger sums to be borrowed – up to £5m per business – but requires a lengthier application process with more stringent checks. However, companies that have already obtained a CBILS loan for £50,000 or less may be able to switch it over to a bounceback loan which will be 100 per cent government-guaranteed, rather than 80 per cent.
It is my understanding that a company which obtains a bounceback loan will later be able to convert it to a CBILS loan (and therefore take out a larger amount) if the application to do so is approved by their lender.
Why has the government started up another, separate loan scheme? The primary existing loan scheme, CBILS, has been criticised because many of the companies most in need of funds were being rejected or simply told not to apply as they were not eligible. One of the key issues is that a business must be deemed “viable” by a bank. Given the extraordinary economic circumstances caused by the virus and lockdown measures in place to halt its spread, a large number of businesses were simply unable to demonstrate viability. For example, how could a catering company, reliant largely on summer events which have now been cancelled, demonstrate that it was “viable” going forward?
As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme. Company directors owe duties to their company which are set out in the Companies Act 2006. Where a company (acting through its board of directors) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed. Where one or more individual directors’ furlough is so decided by the board, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned.
Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, i.e. they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.
This also applies to salaried individuals who are directors of their own personal service company (PSC).
You can claim for employees that were employed as of 19 March 2020 and were on your PAYE payroll on or before that date; this means that you will have made an RTI submission notifying us of payment of that employee on or before 19 March 2020
Employees that were employed as of 28 February 2020 and on payroll (i.e. notified to us on an RTI submission on or before 28 February) and were made redundant or stopped working for you after that, and prior to 19 March 2020, can also qualify for the scheme if you re-employ them and put them on furlough
How to claim
As you prepare to make a claim, please note:
The online claim service will be launched on GOV.UK on 20 April 2020 – please do not try to access it before this date as it won’t be available
The only way to make a claim is online – the service should be simple to use and any support you need available on GOV.UK; this will include help with calculating the amount you can claim
You can make the claim yourself even if you usually use an agent
Claims will be paid within 6 working days.
HMRC cannot answer any queries from employees – they will need to raise these with the Employer directly
Information you will need before you make a claim
I’ve just watched Boris Johnson, having left hospital, giving his address to the nation. He was quite candid, sharing how he wondered if he would survive COVID 19, personally thanking 2 nurses who remained at his bedside for 48 hours, thereby saving his life. He brought a message to the UK saying that the NHS is the BEATING HEART OF THIS COUNTRY, and that they are INCONQUERABLE AND POWERED BY LOVE.
To be part of the NHS must be, on the one hand a complete honour, whilst the flip side of this honour is that all the people who are working on the front line, whether for the NHS or other professions, are taking the risk of contracting Covid 19, in order to serve the rest of the country. This is taking one for the team to another level!
We could never imagine last Easter and all the Easters before to be so very different to this one! Social distancing, pleas to stay at home to protect our NHS, watching the news and hearing the climbing death figures from COVID 19. The Vatican, on the most important day of the Christian calendar, was today people free. People are desperately missing their friends, families and colleagues. Never before has Social Media been more relevant with even my own father, who is totally against facebook, signing up to be able to watch and participate in his church service. We are able to video call family and friends, join groups to sing Karaoke together and take part in virtual quiz nights.
There are some advantages to having the very core of our lives disrupted to the point where we are not at liberty to go out. Families are spending more time together. People are being forced to slow down. I have spoken with several friends and colleagues who have said they have had to take a sharp look at their own lives and learn to slow down, having worked their a***s off for the last goodness knows how many years! They are using this as an opportunity to take a deep breath and re-think their individual life styles.
Some things for me personally remained the same as previous years. Barbeque with a cheeky glass of wine, followed up by an even cheekier nap for an hour!
As far as business support goes, I can say that the small business grant funding of £10,000 is now being paid out to businesses. The portal for reporting your furloughed workers will be available from 20th April. The Business Interruption loan remains difficult to access, with the government looking at ways to make your applications more viable.
Tax returns are being submitted as per usual with the Tax Rebates being released as per any previous year’s timescale.
BKS Accounts are here to answer any questions you may have about how to keep your businesses afloat during these unprecedented times.
HAPPY EASTER ALL
The portal for reporting your furloughed workers will be ready to launch 20.04.20.
Agents are being informed of this now and it will be made public shortly, at which point HMRC will be contacting businesses to advise them what they need to do next.
HMRC have said they are expecting phone demand to be beyond their capacity to offer a normal service. Therefore, they say, the service is designed to be self-serve with guidance in place. Please shout if there is anything that BKS Accounts can do to support you to claim the money back through the portal.
The latest guidance on CJRS can be found on GOV.UK by searching for “Coronavirus Job Retention Scheme”.
HMRC will also be providing further information on our support for businesses and workers over the coming weeks, including more detail on the Coronavirus Self Employment Income Support Scheme.
HMRC is working day and night, prioritising the need to get the financial support out to those who need it.
The chancellor, Rishi Sunak, has banned banks from requesting personal guarantees for emergency loans to small businesses amid growing government concern that lenders have been slow in meeting demands for help.
There has been a rapid increase in the number of universal credit claims suggesting many small companies have already collapsed since the economy was locked down. Therefore Sunak has combined a new package of support for business with a warning to banks that they had to move more quickly.
Sunak announced his coronavirus business interupption loan scheme (CBILS) – under which the government underwrites loans to companies – just over two weeks ago, but has now been forced to admit that support was not arriving quickly enough and was failing to reach all the companies that required it.
The chancellor said that under the revised plan:
The Treasury said the chancellor would be speaking to bank chief executives next week to discuss how the schemes are working and “ensure everybody is playing their part”.
Sunak, the Bank of England governor, Andrew Bailey, and the interim head of the Financial Conduct Authority, Christopher Woolard, told UK bank chiefs last month to take “all action necessary” to make sure government-backed loans were benefiting households and businesses as planned.
The chancellor said: “This is a national effort and we’ll continue to work with the financial services sector to ensure that the £330bn of government support, through loans and guarantees, reaches as many businesses in need as possible.”
While the government’s official line is that great progress is being made in providing much-needed support to businesses that have been badly affected by the closure of large chunks of the economy, the chancellor has listened to the employers’ bodies calling for the scheme to be more comprehensive, less bureaucratic and speedier.
Therefore is you’ve struggled to get help through the CBILS, it may be worth giving it another go so to speak, as it would appear that the loan may be more attainable than it was a couple of weeks ago.
We are living in a world that we do not recognise at the moment. Since the arrival of COVID 19 all of our lives have pretty much been turned upside down. What with home schooling, queueing to go shopping for our groceries, restaurants shutting (I for one am missing eating out!) and the closure of most general stores, we have all been affected in some way. Since Monday we have been on a semi lock-down which currently is allowing us to continue to travel to and from work if we cannot work from home. I wonder if this will become stricter in the coming weeks with the cases and deaths from what is becoming known as the “invisible virus” escalating daily.
The Chancellor has set out a package of temporary, timely and targeted measures to support public services, people and business through this period of disruption caused by COVID 19.
There are other help measures that I have not listed as I feel that the ones above are the measures that are most helpful to small businesses.
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