National Lockdown Financial Support

As expected a financial support package has today been unveiled and we would assume; though cannot say for certain, there may be more support on the way.

In summary, there is 

  • one-off top up grants for retail, hospitality and leisure businesses worth up to £9,000 per property to help businesses through to the Spring
  • £594 million discretionary fund also made available to support other impacted businesses
  • comes in addition to £1.1 billion further discretionary grant funding for Local Authorities, Local Restriction Support Grants worth up to £3,000 a month and extension of furlough scheme

For more detailed guidance this can be accessed here.

Lockdown 2 Government Support Summary

This email takes you through the announcements and what it means for your business.

On the one hand it is great to see the government making available this help. But this probably means we will see fairly strict lockdown conditions between now and March 2021. We hope we are wrong about this, but in your contingency/scenario planning, particularly in regard to cash, please extend this 4-week lockdown until the end of March. If you need help with your business planning, please get in touch.

Here are the full details from the Government’s announcement.

The Self-Employed Income Scheme
On 30th November you will be able to claim a grant for up to 80% of your profits, to cover you for Nov – Jan 2021. This is capped at £7,500. They also declared there will be one more grant which will cover the period Feb – Apr 2021. Details are yet unknown of when this will be paid or for how much.

To receive these grants, you need to have received the previous grants and it is currently anticipated that this portal will open towards the end of this month.

The ‘Furlough scheme’
This has now been extended to the end of March. Which in effect means that we are unlikely to see the Job Support Scheme operational… You can Furlough any member of staff, as long as they were on the payroll before Oct 30th 2020. And the government will pay up to 80% of their wages, capped at £2,500 per month.

As a result of extending the Furlough scheme the planned Jan 2021 ‘Job retention bonus’ of £1,000 for any employee you Furloughed who you still employed has been deferred. Until when? Who knows?

Help with cash flow
If you haven’t taken a Bounce Back Loan or didn’t take the maximum amount available to you, you can now top this up. And you will be able to take out a CBIL or Bounce Back Loan now until the end of Jan 2021.

Mortgage payment holidays for those who haven’t taken a payment holiday will be available for 6 months, without this being noted on their credit files.

As with everything these days the above is all subject to change but this looks like what we will be working with for the weeks ahead as a minimum.

Additional grants???

There are meant to be more local authority grants coming but more details are yet to be released and these may be discretionary rather than automatic but watch out for updates from respective local authorities over the coming weeks and hopefully within the next 10 days or so.

We have also got a fantastic link below to what grants you could perhaps access but which are not so widely known which can be accessed here so please feel free to follow this link here to see what you could access.

Some inside information perhaps?

We have heard on the grapevine; though not confirmed, the following:

  1. The Government are allegedly working on a new support package which is currently going through the EFG and may mirror the current CBILs scheme but be more easily accessible but please note whilst we have heard this on good authority this is not guaranteed.
  2. Following on from the above the second BBL opportunity for some; it is widely known that the first bounce back loan was never intended to cover the lengthy period of uncertainty that we now face.  There are also now rumours of a second bounce back loan opportunity exceeding the original 25% of turnover/£50k limited to reflect the increased term that the original loan was never designed to cover.

Watch this space but we thought we would share these with you as they came from a source well connected within the Bank of England.

Lockdown 2 Update (Kind Of)

As promised we thought we would get another newsletter out following the weekend’s announcement.

There are a lot of rumours circulating though including uplifts in the claims that can be made by the self-employed, proposed extension of applications for the bounce back loans and CBILs loans to 31 January 2021 AND also allegedly a second opportunity to go and get an uplift in any bounce back loans you had previously accessed if you never utilised your full allocation first time round.

There is so much information circulating online at the minute and a lot in the small print that has either been missed or yet to be finalised.

We will provide you all with a more comprehensive and clearer update once everything has been signed off in Parliament which none of it has yet but this may not come until the end of this week or early next hence us providing this update now and hopefully some positive news in the pipeline for some extra support.

As ever we as a team are here for you and if you want to reach out and chat please feel free to call your client account manager.

Government's Winter support package

Additional Government Support Announcement – Further Update

Further Update on Government’s Winter Support Package

As is commonly the case further information has filtered through from the Government’s Winter support package and the two key areas; in additional to those already highlighted are what we are going to cover in this newsletter.

Self-assessment help

Self Assessment customers can now apply online to spread the cost of their tax bill into monthly payments without the need to contact HMRC.

The online self-serve ‘Time to Pay’ service, has been increased to £30,000 for Self Assessment customers, to help ease any potential financial burden they may be experiencing due to the coronavirus pandemic.

Once you’ve completed your tax return for the 2019-20 tax year, you can use the online self-serve ‘Time to Pay’ service through GOV.UK to set up a direct debit and pay any tax that is owed in monthly instalments, up to a 12-month period.

If you wish to set up your own self-serve ‘Time to Pay’, you must meet the following requirements:

  • no outstanding tax returns
  • no other tax debts
  • no other HMRC payments set up
  • your Self Assessment tax bill is between £32 and £30,000
  • it is no more than 60 days since the tax was due for payment.

If you do not meet these requirements, you might still qualify for Time to Pay, but you will need to call HMRC to set this up.

If you set up a ‘Time to Pay’ arrangement, you will have to pay interest on the tax paid late. Interest will be applied to any outstanding balance from 1 February 2021.

Further VAT help

The Chancellor has also now announced that businesses who deferred VAT due from 20 March to 30 June 2020 will now have the option to pay in smaller payments over a longer period.

Instead of paying the full amount by the end of March 2021, you can make smaller payments up to the end of March 2022, interest free.

You will need to opt-in to the scheme, and for those who do, this means that your VAT liabilities due between 20 March and 30 June 2020 do not need to be paid in full until the end of March 2022.

Those that can pay their deferred VAT can still do so by 31 March 2021.

External Virtual Client Events

In addition to our event being held on the 1 October we are delighted to share and invite you all to two further events that are detailed below:

Friday 9 October at 2pm
Is your business your pension?
To book click here

Thursday 8 October at 3pm
Why financial planning is important
To book click here

These are events are kindly being ran by our partners at St James’s Place so please feel free to book on directly or if you have any queries regarding either of these events then please just let us know again using the funding@gtaccountants.com e-mail address.

Surviving Another Lockdown (Partial Or Full)

A further lockdown

As we enter another state of lockdown in some shape of form; depending on what part and in which country you currently operate out of, we must stick together and that is the theme of our final newsletter for September.

We are going to focus on the positive support out there that we suggest you take advantage of so that we keep fighting, take the positives from the challenges faced and those that lie ahead whilst also recognising the strain it puts on us all so reach out for help where necessary.

We do however also appreciate that everybody is probably in a state of feeling overwhelmed to some extent hence we have focused on a handful of key areas this month to help you overcome this.

Cash flow support

Whilst we are uncertain as to what additional support there may or may not be from the Government we can realistically expect greater difficulty when it comes to collecting debt.

We have subsequently established a creditors services alongside an independent third party offering to support businesses in need that will not only do some digging around amounts you are concerned about receiving but will also chase these for you.

This initial exercise is absolutely free and from the cases we have seen so far; as this is handled externally to ourselves, a client recently received over £3,000 that they have previously written off and it cost them little more than £200 that was only taken upon successful collection of the debt.

If this is a concern for you, have any queries and/or just wish to discuss this further register your interest by e-mailing us at funding@gtaccountants.com

Group Event (Virtual I’m afraid)

Whilst we did initially hope some time soon we could commence face to face meetings and have this event as being a physical one we have had to think again but we won’t let it hold us back entirely.

In addition to the online community platform that we have established with Futrli Peer and for which you can access for no charge through this link here to chat with other business owners and get some tips, we are also doing more.

We as a firm will be the lead for Enterprise Nation where we bring business owners together through Zoom but this will be a great opportunity to just let off some steam and take away some great content and advice.

There is no charge for attending and the first virtual event is on 1 October from midday for an hour so if this of interest then why not book through the link here.

Going forward we are hoping to make this a monthly event and get some guest speakers along with hopefully some special offers from partners.  We will also keep those who attend aware of funding pots as these are shared with us in addition to sharing these with you by way of our newsletters.

External Virtual Client Events

In addition to our event being held on the 1 October we are delighted to share and invite you all to two further events that are detailed below:

Friday 9 October at 2pm
Is your business your pension?
To book click here

Thursday 8 October at 3pm
Why financial planning is important
To book click here

These are events are kindly being ran by our partners at St James’s Place so please feel free to book on directly or if you have any queries regarding either of these events then please just let us know again using the funding@gtaccountants.com e-mail address.

Today’s Government Announcement

Today’s Announcement

So whilst we would usually wait until a little more detail is released, we thought we would share what we know already as we appreciate the urgency with which some people need some clarification.

As we find out more we will release a further update so watch out for any further updates in your mailbox.

The highlights are as follows:

  1. The current furlough scheme will be replaced by a new jobs support scheme as of November and will run for 6 months.  Broadly speaking current guidance is suggesting that employees must work at least a third of their normal hours, the Government subsidising a third leaving the remaining third unpaid.  Further guidance will follow around this.
  2. The self-employed grant will be extended but the exact terms of this are yet to be clarified.
  3. The deadline for applying for either a bounce back loan or coronavirus business interruption loans has been extended to 30 November 2020.
  4. Greater flexibility around bounce back loans including the possible opportunity to extend the term over which repayments are made.
  5. For those struggling with bounce back loan repayments there will be the option to potentially take a payment holiday for up to six months and make interest only repayments.  Again we expect more detail to be released around this and restrictions around those who can take advantage.
  6. VAT will remain at 5% for hospitality and tourism until 31 March 2021.

Cash flow support

Whilst we are uncertain as to what additional support there may or may not be from the Government we can realistically expect greater difficulty when it comes to collecting debt.

We have subsequently established a creditors services alongside an independent third party offering to support businesses in need that will not only do some digging around amounts you are concerned about receiving but will also chase these for you.

This initial exercise is absolutely free and from the cases we have seen so far; as this is handled externally to ourselves, a client recently received over £3,000 that they have previously written off and it cost them little more than £200 that was only taken upon successful collection of the debt.

If this is a concern for you, have any queries and/or just wish to discuss this further register your interest by e-mailing us at funding@gtaccountants.com

Group Event (Virtual I’m afraid)

Whilst we did initially hope some time soon we could commence face to face meetings and have this event as being a physical one we have had to think again but we won’t let it hold us back entirely.

In addition to the online community platform that we have established with Futrli Peer and for which you can access for no charge through this link here to chat with other business owners and get some tips, we are also doing more.

We as a firm will be the lead for Enterprise Nation where we bring business owners together through Zoom but this will be a great opportunity to just let off some steam and take away some great content and advice.

There is no charge for attending and the first virtual event is on 1 October from midday for an hour so if this of interest then why not book through the link here.

Going forward we are hoping to make this a monthly event and get some guest speakers along with hopefully some special offers from partners.  We will also keep those who attend aware of funding pots as these are shared with us in addition to sharing these with you by way of our newsletters.

External Virtual Client Events

In addition to our event being held on the 1 October we are delighted to share and invite you all to two further events that are detailed below:

Friday 9 October at 2pm
Is your business your pension?
To book click here

Thursday 8 October at 3pm
Why financial planning is important
To book click here

These are events are kindly being ran by our partners at St James’s Place so please feel free to book on directly or if you have any queries regarding either of these events then please just let us know again using the funding@gtaccountants.com e-mail address.

Government Support. Self-employment grant. CBILs and Bounce Back Loans

Second and final self-employment grant

You can as of today now claim for the second and final self-employment grant.

Don’t forget this does not apply to limited companies I am afraid.

The second and final taxable grant made available by HMRC amounts to 70% of your average monthly trading profits and is again paid out as a single instalment covering 3 months worth of profits.

This payment is capped at £6,570 in total.

The claim can be made in the same was you made the first claim and it must be made by on or before 19 October 2020.

Further information regarding the claim and the making of it can be found here.

CBILs and Bounce Back Loans

We thought we best clarify; for the avoidance of confusion, the current deadlines in place by the Government as to when it is currently proposed that each scheme be closed:

CBILs – it is current proposed that this will remain in place up until the end of September 2020 but this may be extended.

Bounce back loans – it is current proposed that these will be available up until 4 November 2020 but again is subject to revision.

Please note that the above deadlines are in reference to applying for these so if you have either of these loans already, the agreement you already have will still stand until the end of the agreed term.

Additional funding you might not be aware of

The Government has recently announced an additional £20 million of suport that is being made available through local Growth Hubs and can be used to fund:
  • one to many events providing guidance as to how to respond to coronavirus
  • small grants to access specialist professional advice
  • small grants to cover the purchase of minor equipment to adapt or adopt new technology
More information can be found here.

Business Interruption Insurance

There has recently been a rather large court case regarding this that we believe is going to appeal but if you think you might be eligible for this and have previously been turned away we recommend that you speak with your insurance company again to clarify any impact on you.

What is a flexible furlough? How do I put employees on flexible furlough?

Yes we had another late Friday night update and a client with much greater HR expertise than us has kindly shared the following with us with regards to a number of questions that might be raised.

What is a flexible furlough?

From 1 July 2020, employers can bring furloughed employees back to work for any amount of time and any work pattern.

You will still be able to claim the furlough grant for the hours your flexibly furloughed employees do not work, compared to the hours they would normally have worked in that period.

How do I put employees on flexible furlough?

From 1 July 2020, only employees that you have successfully claimed a previous grant for will be eligible for more grants under the scheme.

This means they must have previously been furloughed for at least 3 consecutive weeks taking place any time between 1 March and 30 June 2020. For the minimum 3 consecutive week period to be completed by 30 June, the last day an employee could have started furlough for the first time was 10 June.

You should have a discussion with employees who you wish to place on the flexible furlough scheme because you will need to agree the arrangements of their part time work. The agreement should be confirmed in writing and you must keep a written record of the agreement for five years.

You do not need to place all your employees on furlough. In addition, you can continue to fully furlough employees if you wish.

How long can flexible furlough last?

Flexible furlough agreements can last any amount of time. This means that they do not need to last for a minimum of 3 weeks. However, the period that you claim for must be for a minimum period of 7 calendar days. Any flexible furlough period of less than this cannot be claimed for via the scheme.

Employees can enter into a flexible furlough agreement more than once.

What do I pay an employee on flexible furlough?

You will pay the employee for the hours they work, along with national insurance contributions and pension contributions for those hours.

The scheme will allow you to recover the remainder of wages to a maximum cap. Wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours.

The amount that the scheme will cover will begin to decrease from September 2020, and you will be responsible for all of the national insurance and pension contributions from August 2020, regardless of the employee being on flexible furlough.

Claims under the new scheme will be open from 1 July 2020.

When claiming for employees who are flexibly furloughed you should not claim until you are sure of the exact number of hours they will have worked during the claim period. This means that you should claim when you have certainty about the number of hours your employees are working during the claim period. If you claim in advance and your employee works for more hours than you have told HMRC about, then you will have to pay some of the grant back to HMRC.

What records do I need to keep?

You’ll need to keep records of how many hours your employees work and the number of hours they are furloughed during flexible furlough. For example, you will need to record that an employee who normally works for 37 hours a week is actually working for 15 hours and is furloughed for 22 hours.

Can my employees work for me during ‘down time’ in flexible furlough?

During flexible furlough, employees are not allowed to do any work for you or any linked or associated organisation during the periods that you record them as being on furlough.

Employees on flexible furlough can do training during the hours that they are recorded as being on furlough, but must be paid at least national minimum wage for those hours.

How do I calculate normal working hours?

If your employee is flexibly furloughed, you’ll need to work out your employee’s usual hours and record the actual hours they work as well as their furloughed hours for each claim period.

There are two different calculations you can use to work out your employee’s usual hours, depending on whether they work fixed or variable hours.

You should work out work out usual hours for employees who work variable hours, if either:

  • your employee is not contracted to a fixed number of hours
  • your employee’s pay depends on the number of hours they work

Where the employee’s working hours are fixed, or their pay does not vary with the amount of hours worked, the reference period for calculating their hours is the hours your employee was contracted for at the end of the last pay period ending on or before 19 March 2020.

Where an employee works variable hours, you will use the higher of:

  • the average number of hours worked in the tax year 2019 to 2020
  • the corresponding calendar period in the tax year 2019 to 2020.

 

Webinars (NOT TO BE MISSED)

One of the first and most important lessons that I have learnt is the time lost with family whilst I was working on the business and this is where Joe Laws of Joe Laws Photography will be joining us to discuss what he has planned to help people always appreciate this.  Already I have scheduled in our family photoshoot and these are memories that whilst might have in the past have been forgotten, but in the future, will always be remembered.

Family versus work versus you
Book here to join us at 11.30 on Thursday 18 June.

In our second webinar, planned for two weeks’ time on Thursday 25 June, I will be discussed what I think lies ahead and what we can potentially anticipate.

What to expect next
To join click here on Thursday 25 June at 11am where I will discuss my thoughts and make this as interactive as possible for those attending to help people plot a route forward.

Don’t forget that you can register for webinars previously missed by clicking on the links on past newsletters to access a recording, going to our website, or visiting our company YouTube channel.

Government Support Update

Rather than rush to get this out to you on Friday evening, we’ve taken a closer look at this and the detail then followed so can now summarise the latest announcements below.

Furlough changes
From 1 July 2020, businesses will be given the flexibility to bring furloughed employees back part time. This is a month earlier than previously announced to help support people back to work.

Individual firms will decide the hours and shift patterns their employees will work on their return, so that they can decide on the best approach for them – and will be responsible for paying their wages while in work.

The scheme updates mean that the following will apply for the period people are furloughed:

  • June and July: The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything.
  • August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.
  • September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.
  • October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.

Self-employment income support scheme extension
Rishi Sunak announced last week that the Self-Employment Income Support Scheme will be extended – with those eligible able to claim a second and final grant capped at £6,570.
Those eligible under the Self-Employment Income Support Scheme (SEISS), which has so far seen 2.3 million claims worth £6.8 billion will be able to claim a second and final grant in August. The grant will be worth 70% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total.

New Funding/further updates

Local authority grants:

It now appears that local authorities are gradually starting to drip feed out the discretionary grants that we mentioned on previous newsletters though they appear to each be operating at different speeds.  If you feel like you fell between the cracks then contact your local authority today for an update or keep an eye on their website.

There is also other financial support still out there that is not all directly related to COVID-19 with us including just a handful below:

General support for start-ups and those businesses looking to grow:

https://nbsl.org.uk/
https://www.rtcnorth.co.uk/

A great resource for finding grants generally:
https://www.grantfinder.co.uk/

The challenges we can expect next

The Easy Part Has Now Passed. Whilst we won’t deny the fact that the past few weeks and months have been challenging; as we fast approach a further announcement regarding the potential easing of lock down, more troubled times await us in the business world.

I have said on a number of occasions already that the business curve is most definitely behind the health curve and will be very different to it also.

We don’t say this to make people feel uneasy as we want to remain calm, but we don’t want people to grow complacent over the coming weeks and months.  To maintain this calm, we must retain control to the best of our ability and that means not letting up as we strike back against the current challenges that we have faced and those that still await us.

Let’s first start with some fairly obvious issues that lie ahead:

  1. These Government-backed loans will need repaying and whether they are 80% backed or 100% backed, if they are not repaid, it will impact your credit rating as a minimum.
  2. Aside from the loans, the Government has provided significant financial support such as local authority grants, furlough payments, self-employed grants etc.  These will all need to repaid but indirectly; in some shape or form, and we expect this to be via any or all of the following:
    1. Increase in personal tax rates
    2. Increase in company tax rates
    3. Increase in national insurance
    4. Increase in VAT

Some of these may come subtly through the reduction of some allowances and some may just be in terms of a hike in rates such as a jump in company tax from 19% to 30% would not be beyond the realms of possibility.  Whilst it would unreasonable and probably unlikely that these hikes will come immediately; we would be shocked if they don’t come at all, and whilst some industries might benefit from some respite such as hospitality, they may also not benefit at all nor may anybody be given any degree of leniency.

  1. Whether you have accessed any of the financial support or not, we cannot realistically see any way in which you will not be part of the repaying of it!

There are then the operational challenges that may await such as:

  • Suppliers reducing or revoking credit terms
  • Delivery timescales for materials being longer
  • Staff not wanting to return to work
  • Customers delaying orders, cancelling them or wanting extended credit
  • All of the above and more!

You might even think a lot of the above might not apply to you but it will impact you in some way or another as prices just in day to day life with regards to shopping are likely to rise!

Our key message and support

The support you have benefited from to date must continue in some shape or form to help you through the times we have ahead.  We encourage you to engage with us over the coming days and weeks to discuss this support in greater detail as we grow our team and other resources to be able to deliver this on an ongoing basis for you.

We know concerns will remain and cost will be a barrier for some if not many, but we have worked hard to find solutions to this that we can discuss at the same time.

Remember these two messages

  1. With the government support to date and the announcements made and pending, they may have whetted our appetite with regards to more positive times ahead, but it will not go far enough to quench our thirst.
  2. Finally, never forget – calm is the word but not complacency.

Webinars (NOT TO BE MISSED)

With us coming back of the bank holiday we have focused on just the one webinar this week that is ran alongside our software partner that assists with cash flow management.

Cash flow planning beyond COVID-19
Friday 29 May, Midday (book here)

Would you like to have the answers to all of the questions I have raised in the section above?

Join us for this webinar to hear how we as a business have adapted, how other businesses have adapted and how you too could to not just survive but really strike-back!

Get in touch to find out how we can help you build your business legacy

If you are looking to shape your businesses future through a strategic approach to accountancy we’d love to hear from you.