Business support and advice updates

These are unprecedented times and as well as keeping you, your family, friends and colleagues safe, we know you have many pressing questions.

As accountants and business experts we are here to support you through this difficult time. We will be providing updated information on this page as and when we get it and we will be running a series of webinars, where we will focus on how to survive and plan for the future.

If there are specific matters that you wish to discuss then please just get in touch as our team is here to help in anyway they can.

SME Recovery Grants Available

Opens on Tuesday 15th September 2020

The Government has made £20m of funding available to boost small businesses recovery from the Coronavirus pandemic.

The Expression of Interest process opens at midday on Tuesday 15th September and is on a first come first serve basis, so don't miss out.

 

How much is the Recovery Grant?

It’s funded by the European Regional Development Fund (ERDF). The eligible SMEs can access grants of between £1,000 – £3,000 (up to £5,000 in exceptional circumstances) for specialist advice.

There is no obligation for businesses to contribute financially as the grant is fully funded.

First come, first serve

Given the current state of the economy, the scheme is guaranteed to be very popular. Therefore, funding is extremely limited.

Expressions of interest (EoI) should be made as soon as possible after the scheme opens.

There is no waiting list so decisions will be made on a first come, first served basis.

The gateway diagnostic will close when the expression of interest (EoI) limit has been reached.

If successful, how long will the business have to wait to receive the grant?

Grant payments will not be made until up to 10 weeks after the purchase of the item or service the business has paid and claimed for.

The business will be paid upon production of an invoice for the service.

The details

Who is eligible for this grant?

To be eligible for this grant:

  • Must be an SME (including third sector organisations, social enterprises and trading charities) based in Berkshire.
  • Needs to have been negatively impacted by COVID-19.
  • Must have the ability to survive following the impact of COVID-19.
  • Staff headcount must be below 250 FTE. Businesses with more than 250 employees will not be eligible.
  • Must have a balance sheet of below €43million.
  • Must have a turnover of below €50million.
  • If the business has received state aid in the last 3 years the total should not be in excess of €200,000. Businesses exceeding this level of state aid funding will not be eligible.

What expenditure is eligible?

The grant is available to help SMEs access one-to-one specialist advice to address their immediate needs. The grant must cover 100% of the cost of the service or product and cannot be used to part-fund expenditure.

Examples of eligible expenditure:

  • Review of the business strategy, including strategic and business plans
  • Coaching and mentoring in leadership and management development / Change management
  • The introduction of new technology – apps to help with forecasting, cashflow and budgeting, for example
  • Developing or revising marketing/digital strategies to reach new markets
  • Rebuilding a viable business model
  • Skills analysis and development plans
  • Employee engagement, welfare and wellbeing

Please note these are examples only and not an exhaustive list.

What will they need for their expression of interest (EoI)?

Please see a link to a thorough summary written by the Berkshire Business Hub giving you all the detail you need. The scheme will work in an identical way for each LEP and local government.

How will businesses be assessed?

Key eligibility checks will also take the following into account:

  • Their potential to respond/adapt/strengthen from the impact of COVID-19
  • The ability to identify opportunities to rebuild following the impact of COVID-19
  • The ability to deliver within the timescales available (one month)

Due to the high volume of EoIs expected, it may take up to 10 working days for full application forms to be sent. LEP or Growth Hub staff will not be able to provide an update on the status of your application.

For more detailed information and everything you need to know, this is the most comprehensive breakdown we’ve found. It’s written for Berkshire, but the grant is available for each local government and LEPs and will work in an almost identical way. https://www.berkshirebusinesshub.co.uk/kickstart-tourism-restart-recovery-sme-grants

This week saw the Chancellor announce some initiatives to get the economy moving again.

As usual the announcements are short on the exact details but we will bring you those when we hear more, but for now this is what we know....

 

Help for Jobs - what’s to know?

To spur the UK’s recovery from the coronavirus pandemic, the Chancellor presented his “Plan for Jobs”. What are the key employment points?

Job retention bonus. There will be a new one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed until at least 31 January 2021. Employees must earn above £520 per month on average between the end of the Coronavirus Job Retention Scheme and 31 January 2021. Payments will be made from February 2021 and further details about the bonus will be announced by the end of July 2020.

Kickstart. A new kickstart scheme in Great Britain will fund the direct creation of six-month work placements aimed at those aged 16-24 who are on Universal Credit and are deemed to be at risk of long-term unemployment. Funding available for each job will cover 100% of the relevant national minimum wage for 25 hours a week, plus the associated employers' NI and the minimum auto-enrolment employer pension contribution.

Traineeships. Employers in England who provide work experience placements for those aged 16-24 on traineeships will receive a payment of £1,000 per trainee.

New apprenticeships. From 1 August 2020 to 31 January 2021, employers in England will receive a payment of £2,000 for each new apprentice they hire aged under 25, and £1,500 for each new apprentice they hire aged 25 and over. These payments will be in addition to the existing £1,000 payment that the government already provides for new 16-18-year-old apprentices.

 

Questions

This has already raised a couple of questions amongst our Facebook group.

Q. What is the difference between a traineeship and an apprenticeship?

A. The difference between a traineeship and an apprenticeship is that a traineeship can be either a full-time or part-time employment based training arrangement, usually for around 12 months (apprenticeships usually last for three to four years) and is generally in a non-trade related area.

Apprenticeships have a number of strict criteria that need to be met in order to qualify.
https://www.gov.uk/take-on-an-apprentice

Q. Will we qualify for the job retention bonus if we've already brought an employee back to work?

A. So far we understand that as long as an employee has been furloughed for the minimum 3 week period some time between March and end of June, then you will qualify,

Q. Will we qualify for the job retention bonus if a furloughed employee comes back to work from furlough and then goes off on maternity leave?

A. Again we have no definitive details on such a scenario but we cannot see why this employee shouldn't qualify, as long as their Statutory Maternity Pay works out to be above the £520 per month threshold.
However, we will bring further details when we know them.

Q. Will the bonus apply to seasonal staff that are currently furloughed and will be kept on the books but won’t be earning in Jan as we close down for the winter?

A. This is a tricky question, as we were told that every employee that qualifies will need to earn above £520 per month between 1 November 2020 and 31 January 2021, so the answer would be no.
However, we now understand that they must have earned an average of £520 per month for that period. Now whether that means they will accept someone earning nothing in January but still having a 3 month average of £520 or above is currently unclear.

We have been promised detailed guidance by 31 July so will bring further details then.
Tax changes

While the Chancellor didn’t announce any changes to direct tax there was some welcome news of short-term measures to reduce indirect tax to stimulate business and house buying.
Here's the story so far...

VAT and hospitality. Two of the main benefactors of the measures announced by the Chancellor were the hospitality and tourism sectors. Apart from the government picking up as much as half the tab if you eat out during August, restaurants, cafes, hotels and visitor attractions will also be able to charge a reduced rate of VAT, 5% instead of 20%.

The idea is to lower prices to encourage more customers. Of course, it will be up to businesses whether they pass on the VAT reduction to customers or keep their prices the same and so more directly benefit from the VAT cut. We’re waiting for HMRC to publish the details of the VAT rate change, e.g. exactly what types of goods and services it will apply to. In the meantime, if you’re in the sectors affected, we can tell you that the reduced rate will apply from Wednesday 15 July until 12 January 2021 inclusive.

We’ll bring you the full details as soon as they are available so that you can make the necessary changes to your tills and other billing processes ready in time for 15 July.

Stamp duty land tax. The Chancellor confirmed the recently announced temporary changes to stamp duty land tax (SDLT). The measure only applies to purchases of residential properties in England and Northern Ireland. So far, the Welsh and Scottish governments haven’t announced changes to their equivalent taxes. The standard nil rate threshold for SDLT on residential property transactions will be increased from £125,000 to £500,000. This took effect for sales completing on 8 July and will apply to sales completing on or before 31 March 2021.

 

 

COVID-19 Business Updates 8 July 2020

Mini Summer Budget

This week saw the Chancellor announce some initiatives to get the economy moving again.

As usual the announcements are short on the exact details but we will bring you those when we hear more, but for now this is what we know....

 

Help for Jobs - what’s to know?

To spur the UK’s recovery from the coronavirus pandemic, the Chancellor presented his “Plan for Jobs”. What are the key employment points?

Job retention bonus. There will be a new one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed until at least 31 January 2021. Employees must earn above £520 per month on average between the end of the Coronavirus Job Retention Scheme and 31 January 2021. Payments will be made from February 2021 and further details about the bonus will be announced by the end of July 2020.

Kickstart. A new kickstart scheme in Great Britain will fund the direct creation of six-month work placements aimed at those aged 16-24 who are on Universal Credit and are deemed to be at risk of long-term unemployment. Funding available for each job will cover 100% of the relevant national minimum wage for 25 hours a week, plus the associated employers' NI and the minimum auto-enrolment employer pension contribution.

Traineeships. Employers in England who provide work experience placements for those aged 16-24 on traineeships will receive a payment of £1,000 per trainee.

New apprenticeships. From 1 August 2020 to 31 January 2021, employers in England will receive a payment of £2,000 for each new apprentice they hire aged under 25, and £1,500 for each new apprentice they hire aged 25 and over. These payments will be in addition to the existing £1,000 payment that the government already provides for new 16-18-year-old apprentices.

 

Questions

This has already raised a couple of questions amongst our Facebook group.

Q. What is the difference between a traineeship and an apprenticeship?

A. The difference between a traineeship and an apprenticeship is that a traineeship can be either a full-time or part-time employment based training arrangement, usually for around 12 months (apprenticeships usually last for three to four years) and is generally in a non-trade related area.

Apprenticeships have a number of strict criteria that need to be met in order to qualify.
https://www.gov.uk/take-on-an-apprentice

Q. Will we qualify for the job retention bonus if we've already brought an employee back to work?

A. So far we understand that as long as an employee has been furloughed for the minimum 3 week period some time between March and end of June, then you will qualify,

Q. Will we qualify for the job retention bonus if a furloughed employee comes back to work from furlough and then goes off on maternity leave?

A. Again we have no definitive details on such a scenario but we cannot see why this employee shouldn't qualify, as long as their Statutory Maternity Pay works out to be above the £520 per month threshold.
However, we will bring further details when we know them.

Q. Will the bonus apply to seasonal staff that are currently furloughed and will be kept on the books but won’t be earning in Jan as we close down for the winter?

A. This is a tricky question, as we were told that every employee that qualifies will need to earn above £520 per month between 1 November 2020 and 31 January 2021, so the answer would be no.
However, we now understand that they must have earned an average of £520 per month for that period. Now whether that means they will accept someone earning nothing in January but still having a 3 month average of £520 or above is currently unclear.

We have been promised detailed guidance by 31 July so will bring further details then.
Tax changes

While the Chancellor didn’t announce any changes to direct tax there was some welcome news of short-term measures to reduce indirect tax to stimulate business and house buying.
Here's the story so far...

VAT and hospitality. Two of the main benefactors of the measures announced by the Chancellor were the hospitality and tourism sectors. Apart from the government picking up as much as half the tab if you eat out during August, restaurants, cafes, hotels and visitor attractions will also be able to charge a reduced rate of VAT, 5% instead of 20%.

The idea is to lower prices to encourage more customers. Of course, it will be up to businesses whether they pass on the VAT reduction to customers or keep their prices the same and so more directly benefit from the VAT cut. We’re waiting for HMRC to publish the details of the VAT rate change, e.g. exactly what types of goods and services it will apply to. In the meantime, if you’re in the sectors affected, we can tell you that the reduced rate will apply from Wednesday 15 July until 12 January 2021 inclusive.

We’ll bring you the full details as soon as they are available so that you can make the necessary changes to your tills and other billing processes ready in time for 15 July.

Stamp duty land tax. The Chancellor confirmed the recently announced temporary changes to stamp duty land tax (SDLT). The measure only applies to purchases of residential properties in England and Northern Ireland. So far, the Welsh and Scottish governments haven’t announced changes to their equivalent taxes. The standard nil rate threshold for SDLT on residential property transactions will be increased from £125,000 to £500,000. This took effect for sales completing on 8 July and will apply to sales completing on or before 31 March 2021.

 

 

COVID-19 Business Updates to 30 June 2020

Coronavirus Job Retention Scheme (CJRS)

Flexible Furlough details released

A few weeks ago we informed you of the announcement regarding the gradual withdrawal of the furlough scheme.

We now have further clarification on how it is all going to work.

Claims from 1 July 2020 ("new rules")

In essence the concept of the scheme is the same, except that the government is trying to provide as much flexibility as possible to employers, to encourage them to bring employees back to work (and therefore not paid for by the taxpayer).

Unfortunately, this flexibility has meant that certain claims could become very complicated. To illustrate this complexity, the Government has provided 30 different examples to assist with the calculation. www.gov.uk/government/publications/find-examples-to-help-you-work-out-80-of-your-employees-wages/examples-of-how-to-work-out-80-of-your-employees-wages-national-insurance-contributions-and-pension-contributions#example-precalc1

The fundamental principle of the scheme is still that whilst employees are at work you will pay them in full as normal. Whilst they are on furlough leave you will pay them their furlough pay.

So what exactly does all this mean....

From 1 July, you can bring employees back to work who have been furloughed before this date, for at least three weeks, for any amount of time and any shift pattern, while still being able to claim a grant for any normal hours not worked. In other words, you have full flexibility over which hours furloughed staff work.

If you do decide to flexibly furlough employees, you’ll need to make sure that you agree this with your employee and keep a new written agreement that confirms the new furlough arrangement. You’ll also need to:

  • make sure that the agreement is consistent with employment, equality and discrimination laws
  • keep a written record of the agreement for five years; and
  • keep records of how many hours your employees work and the number of hours they are furloughed (i.e. not working) for six years (you must keep a copy of your records and calculations in relation to your claim to HMRC for six years).

The calculation.  HMRC’s online calculator can only be used for claims ending on or before 30 June. After this date, you will need to work this out for yourselves. This means that for any employees who you are flexibly furloughing, you’ll need to do a series of calculations to work out what the furlough pay will be for the usual hours that your employee is not working during your claim period.

COVID-19 Business Updates to 30 May 2020

Coronavirus Job Retention Scheme (CJRS)

Extension details released

A few weeks ago the Chancellor announced that the furlough scheme payments would be extended until 31 October, but with the employer being required to fund gradually increasing percentages of these payments, between 1 August and 31 October.

We've been waiting for confirmation of the precise details of the extension rules, which came at the weekend.

However, to our surprise, this gradual withdrawal of the scheme will be more gradual than we were originally lead to believe.

From 1 August employers must pay the employers NI and pension contributions, currently being covered by the government.
From 1 September employers must also pay 10% of the furloughed employees salary, plus the NI and pension costs and then from 1 October this will rise to a 20% salary payment, plus the NI and pension costs.

There are also rules around bringing employees back part time whilst being able to furlough them for the remainder of their normal working hours.

As there are quite detailed guidance of the new rules we have put together a fact sheet to provide you with further details.

Job Retention Scheme Factsheet

 

Self Employed Income Support Scheme

The government this weekend also confirmed that they will be extending the self employed income support scheme.

This will be extended for another 3 months and will be based on the same average profit calculation as the previous claim, but payments will be lowered to 70% of this calculation and limited to a total of £6,570 for the 3 months.

Applications for the second grant claim will open in August, with information available on gov.uk from 12 June.

If you haven't already made your claim for the first 3 month grant then applications for this will close on 13 July.

For further details we have put together a factsheet here

 

Local Authority Discretionary Business Grant

Earlier last month we announced a new discretionary grant for businesses with ongoing, fixed building-related costs, that were not eligible for the original small business rates cash grant etc

Fylde Council have now announced that these businesses can check whether they are eligible and apply via their website.

Check and apply here

Applications will close at 5pm on Monday 8th June, 2020.

COVID-19 Business Updates for 12 May 2020

The announcement from the Chancellor today confirmed the extension of the Coronavirus Job Retention Scheme.

The extension means the scheme will continue in it's current form, with the government continuing to fund 80% of your furloughed staff's wages, until the end of July.

Between August and the end of October they will offer support that will be shared with the employer.
The employee will continue to receive 80% of their monthly wage, up to the limit of £2,500, but instead of the government funding the full 80%, as they do currently, they will be looking at reducing this gradually, so maybe 60%, with the employer funding 20% and then down to 40/40 etc etc.
This second phase will be helping to get staff back to work perhaps on a part time basis.
The full details of the percentage support changes between August and October will be announced by the end of May, so we will bring you that when we have it.

COVID-19 Business updates for April

A round up of the latest announcements

New Bounce Back Loan Scheme

This newly announced scheme will cover loans to businesses needing to borrow between £2,000 and £50,000.

There will be no arrangement fees, it is 100% guaranteed by the government, with no interest charges or capital repayments for the first 12 months.

This scheme will be open for applications from Monday 4th May.

Check here on how to apply and for eligibility criteria.

 

Coronavirus Job Retention Scheme

The HMRC portal opened on 20th April, with more than 140,000 businesses applying for furlough payments to cover staff wages. Whilst the payment turnaround time was predicted to be approx 6 to 10 working days for the first claims, our clients received theirs within 4 to 5 days.

Applications can be made up to 14 days before the next pay day, providing your employees will be furlough for a minimum 3 week period at a time.

Whilst the scheme was originally set to be available for 3 months, this has now been extended to 4 months and will run to the end of June. We believe the government will review any possible extensions when more information is available.

 

Coronavirus Business Interruption Loan Scheme

Following the bad press received by banks for their unhelpful approach to applicants, this scheme has seen a very slow uptake so far.

Available for loans of up to £5m, this scheme requires more stringent eligibility criteria than the new Bounce Bank Loan, due to the size of loans being offered.

 

Small Business Rate Cash Grants

We believe the majority of these grants have now been received by eligible businesses, but unfortunately some are still waiting.

Each local authority appeared to have it's own application process, despite the government announcing that eligible businesses would be contacted directly by their relevant authority in the first instance. This lead to a fair amount of confusion amongst members of our online support group.

We have now had confirmation that whilst it is not repayable, as it's a grant and not a loan, it is however taxable as income to your business.

 

SME Directors

There was much debate at the outset about whether directors could furlough themselves under the job retention scheme, due to their statutory duties as a company director. This was finally cleared up, allowing them to continue to work on keeping the accounting records up to date, paying bills etc, but they are not allowed to generate income for the company in any way, during furlough.

However, this was only a slight help as most directors generally take only a small monthly salary and top their income up with dividends paid from profits. With the 80% furlough payments being based on salary only this leaves directors at a huge disadvantage.

There have been, and are still, calls for the government to provide support for directors under the more generous self employed income support scheme.

 

Self Employed Income Support Scheme

Whilst this scheme has taken the longest to action we have been told that HMRC will write out to those eligible for payment under the scheme in the middle of May, inviting them to apply for the scheme. Payments should then be sent out in early June

Scams

Very sadly, whilst this crisis has brought most people and communities together, there are a number of others that have decided now would be a good time to scam you!

Please be very careful.

 

 

COVID-19 Business updates for 28th March

Today the Business Secretary announced the relaxation of the insolvency rules, which could help businesses avoid liquidation due to coronavirus.

The wrongful trading rules were introduced into UK insolvency law in 1986 and make it an offence for a company director to continue to trade if they know the business is unable to void going into liquidation.

Wrongful trading is when the directors know their company doesn't have enough assets ie cash, stock, debtors and have no plans of how they will pay their creditors. It is unacceptable for directors to continue trading knowing they are worsening the position of their creditors and building further debt.

COVID-19 Business updates for 26th March

Self-employed Income Support Scheme

Today the Chancellor announced new, very generous support for the self-employed.

Those eligible for the scheme

  • Those who earn the majority of their income from self-employment
  • Had average profits of no more than £50,000 over the last three years
  • Those who were self employed during 2018/19 and are still self employed during 2019/20
  • If they report that their income has been negatively impacted as a result of coronavirus

 

If you match the above criteria then you will be eligible for a taxable grant equal to 80% of the average profits you reported across the three years, from April 2016 to April 2019, up to a limit of £2,500 per month.

If you have traded for less than 3 years, but meet all of the above criteria, then your average will be calculated on the length of time you have traded, up to 5 April 2019.

The government has chosen a policy that, for those self-employed people who can still carry on working at some level, is more generous than the Job Retention Scheme (JRS) for employees.

Self-employed people will be eligible for this scheme however small their fall in income whereas, as an employee, you cannot work at all if they want to qualify for the JRS.

As this self-employed income support scheme (SEISS) is so difficult to administer, the payment will not be made until June, but will be a lump sum covering 3 months.

This delay means that you may have to rely on borrowing or welfare benefits to cover short falls in income until the payment is made.

Monday 23rd March, 2020

'We must stay at home'

A guide to the new restrictions...

COVID-19 Business updates for 20th March

Coronavirus Job Retention Scheme

The scheme will mean any employer in the country, irrespective of size, including charitable organisations and not for profit organisations, will be eligible to apply. Employers can contact HMRC for a grant to cover 80% of wages of people who are not working but are retained on payroll, rather than being laid off. This will extend up to £2,500 pcm per employee.

The Coronavirus Job Retention Scheme will be backdated until 1st March 2020, and available for at least three months, with the Chancellor confirming that this period will be extended if required, and that unlimited funding will be made available for the scheme.

He advised that the first grants will be paid within a matter of weeks, and at the very latest before the end of April.

 

Coronavirus Business Interruption Scheme

The Business Interruption Loan Scheme, whereby the Government will guarantee up to 80% of the value (up to £5m) of loans introduced, will now be interest free for 12 months and will be available from Monday 23rd March.

The Chancellor advised that more measures would be announced during week commencing 23rd March to ensure that medium and larger businesses can also access this.

 

Deferral of VAT Payments

The Chancellor confirmed that he would be deferring the next VAT quarter payment until end of June 2020, which in real terms means that VAT incurred during this period will not be payable until the end of the 20/21 financial year.

 

Self Employed

The self-employed will now be able to access universal credit, in effect, providing them access to statutory sick pay (SSP).

Tax payments for the self-employed will also be deferred until the next self-assessment date (January 2021).

COVID-19 Business updates for 18th March

Improved measures announced after last week's budget.

In a joint statement today with the PM, the Chancellor set out some details of the economic response and promised more information and targeted action in the days ahead.

Sunak’s measures also included a package of direct support to businesses worth more than £20bn.

The £330bn loan guarantees are designed to provide access to loans “on attractive terms” for all businesses who need it. Larger businesses will be supported by a new lending facility agreed with the Bank of England.

Smaller businesses can access a big extension of the business interruption loan scheme which was first announced last week and the £3,000 cash grant for 700,000 small businesses announced in the Budget has been increased to £10,000.

There will be loans of up to £5m available, with no interest due for the first six months, and the scheme will be “up and running by next week”.

The Chancellor revealed significant investment to support businesses operating in the hospitality, leisure and retail sectors.

Cash grants of up to £25,000 to eligible businesses in the hospitality, leisure and retail sectors were also announced.

In addition, a business rates holiday previously announced for some businesses in those sectors has now been extended to all businesses, which will now pay no business rates for 12 months.