APH Accountants COVID-19 Business Support Update 01/06/20
Apparently, we have enjoyed the sunniest spring since records began in 1929, the beaches and parks have been super busy, and the good weather looks set to continue for a few days yet.
Please also spare a thought for Colin who is suffering from a tooth abscess, Colin has been busy though landscaping his mums garden, but he knows he needs to start thinking about the inevitable return to work soon as the lockdown restrictions continue to ease. After such a prolonged absence it’s not going to be easy getting back into work mode for some.
At APH we have never been busier with new clients flooding in, Furlough claims, Bounce Back loans, Self Employed Income Support Grants and the new tax year, which means many of you Self-Employed need your Self-Assessments doing! If you need any help or support, your Year End Accounts doing or your Self-Assessment, might be better to get them all sorted before you are back in the thick of work. Please get in touch if you need help or advice with anything.
The Governments support, whilst not pleasing everyone has been incredible, they had a 35,000 call backlog last week which they are getting through and even if we/you haven’t been able to get through when needed, they do come back to you and have been extremely helpful where possible, don’t forget they are working from home, so in some calls the kids are screaming, dogs are barking and on one call the ladies tumble dryer had broken and sounded like she had a concrete mixer on the go!
The furlough scheme has helped 8.4 million workers, 1 Million Employers and has cost £15 billion so far. The bounce back loans have been hugely successful with over £14 billion being handed out to date. The Self-Employed Income Support Grant has seen 2.3 million claims at a cost of £6.8 billion.
Despite the huge effort by the Government, the above effort is dwarfed by the £500 billion cost to bail out the banks from the 2008 Financial crises. Hopefully the austerity measures needed for the economy to recover from Covid-19 will not be as long lasting!
We have digested some of the latest announcements from Rishi on Friday night and we would like to share them with you in our newsletter today.
Yep, grab a cup of tea or coffee or better still in this weather, an ice-cold beer or glass of wine and read through to see if any of this relates to you and your business.
We are doing our level best to answer every single query – but if we have missed anything please do get in touch with APH Accountants Wirral. Our contact details are below.
Office Number: 0151 630 4542
Paul White: 0151 556 7247
Helen White: 0151 556 7241
Matt Newman: 0151 556 7246
Carla Ashley: 0151 556 7244
Kerry Roe: 0151 556 7240
Dave Parry: 0151 556 7245
Danielle Levy: 0151 556 7243
Katy Holmes: 0151 556 7249
Lauri Murphy: 0151 556 7248
- Business Support
- CJRS – Furlough Scheme Extension (Flexible Furloughing)
- CJRS – Current Furlough Scheme Update
- Self Employed Income Support Grant Extension
- Self Employed and Universal Credits
- Statutory Sick Pay Scheme
- Bounce Back Loans
- Cloud Accounting
- Fee Protection
1. Business Support
For those that don’t know the gov’s website now includes a business support finder. The website is much cleaner and easier to find information on what support is available to you and your business and covers the Government support packages from Furloughing staff to Loans and Grants that are available
See the link below
2. CJRS – Furlough Scheme Extension (Flexible Furloughing)
The main points from the latest announcements are:
- The Scheme has been extended to the 31st October
- From the 1st July, employers will be able to bring in workers part-time and pay them for the time worked and furlough them for the time they don’t
- From 1st August employers will not be able to claim the Employers National Insurance and Pensions Element of their Furlough Claims and must therefore pay for this themselves
- From 1st September Employers to start paying 10% of the Furlough Claim – Therefore claim will be capped at £2,190 per employee per month
- From 1st October Employers to start paying 20% of the Furlough Claim – Therefore claim will be capped at £1,875 per employee per month
- If employers don’t contribute – neither will the government.
- The scheme will be closed to new entrants from the 30th June and will therefore only apply to existing employers who have furloughed staff
- At present there is no guidance on how the Employer will pay the 10% & 20% contributions – More guidance will be issued later
This is a real win for some businesses however the hospitality industry has been particularly hard hit by the lockdown, and it will face further difficulties because of the need to maintain social distancing and potential future customer reticence to return when pubs and restaurants reopen. However, these extra measures will protect more jobs and ease the path back to full operation and profitability in the long run.
Cash-strapped employers must decide if they can take on an increasing burden from August to keep workers for whom there may be little or no work.
Further guidance on the scheme can be found here
3. CJRS – Current Furlough Scheme Update
We have made all the claims for May now, so you should have received your payments. If you do not receive them by Thursday, please get in touch and we can chase it on your behalf. Please remember to do the following:
- Update us of any changes to you or your employees, so that we do not make an erroneous claim on your behalf.
- If you are un-furloughing staff, please let us know the name of the staff member and the last day of their furlough
- If there are no changes then there is NO NEED to contact us and we will continue to make the claim on your behalf.
- From 1st July new rules come into force to enable employees to get back to work part time, even if they have been furloughed. Therefore, you will need to advise us of any changes in plenty of time or you claim may be delayed
COMMUNICATION IS KEY THROUGHOUT THE FURLOUGH PROCESS SO PLEASE LET US KNOW OF ANY CHANGES IMMEDIATELY
More specific details will be available towards the end of this month so keep your eyes open to our newsletters where we will update you.
WE REMAIN COMMITTED TO SUBMITTING YOUR FURLOUGH CLAIMS FREE OF CHARGE FOR AS LONG AS POSSIBLE
Self Employed Income Support Scheme (SEISS)
Until now, self-employed workers who qualify have been in line for a grant of 80% of their average profits, up to £2,500 a month for three months.
If you haven’t claimed already then you have until the 13th July to do so.
On Friday Rishi announced applications for a second taxable grant to the Self-Employed which is great news. The main points of this are:
- The second applications will be made in August
- They will cover the periods of June, July & August
- The second grant will be capped at £2.190 (70% instead of 80% of your average monthly trading profits)
- You will need to confirm your work has been affected by the virus
- They would not need to have taken the first grant to be eligible for the second, although the same eligibility criteria is in place as before (See Below) This means if you didn’t take the first grant because you business was unaffected and then subsequently your business was affected from June then you can claim the second grant.
- Self-Employed can continue to work
Further guidance on the scheme can be found here
Please click on the link and see if you our eligible. You will need your Unique Tax Reference number (UTR) and your National Insurance number
You will be able to set up an online government gateway account which is required to make your claim if you have not already done so.
Please let us know if you have been successful with your claim or if you are having any difficulty.
5. Self Employed and Universal Credits
You can make a claim for Universal Credit while you wait for the grant, but any grant received will be treated as part of your self-employment income and may affect the amount of UC you get. Any UC claims for earlier periods will not be affected.
For the self-employed awaiting the SEISS grant, any UC claim now won’t affect future SEISS payments. The SEISS grant is based on average figures over the last three tax years and takes no account of whether someone is claiming benefits now.
On the flip side, the SEISS grant may affect UC payments going forward as it’s treated as income. This may result in a repayment of UC being due, but not in all cases and individual circumstances will dictate the outcome
For more information click on the attached link
6. Statutory Sick Pay Rebate Scheme
This is another scheme HMRC have introduced to enable employers to claim back the statutory sick pay they have paid to their employees from 13 March 2020. They will repay up to 2 weeks of sickness
The criteria are:
- The employee had or has Coronavirus
- The employee cannot work due to self-isolating at home
- The employee is shielding in line with public health guidance
The scheme went the 26th May 2020, therefore if you want to let us know if any of your employees fall into the category above, we will be able to make the claim on your behalf.
The information needed to make the claims are as follows:
- PAYE reference number
- Contact name, number if HMRC has any queries
- Bank details
- Total amount of Coronavirus SSP paid to employees
- Number of employees being claimed for
- Start and End Date of the claim
Based on the above we would need your bank details if we haven’t already made a furlough claim on your behalf and also details of the employees you are wishing to make a claim for with the dates you want us to claim
7. Bounce Back Loans
The bounce back loan scheme has been a resounding success so far and many clients have used this facility with their banks. The Scheme will remain in place until the 4th November 2020.
Whilst we don’t actively encourage a loan for a loan’s sake, the terms and conditions and the application process for a bounce back loan are so good that if you haven’t considered it yet then please do so, whether you are self-employed, a partnership or a Limited Company.
You could use a Bounce Back Loan to repay more expensive debt even!
If you would like to talk to one of us before applying for a bounce back loan or if you are just not sure, then please get in touch to discuss.
Yes, we have all been knocked down, but it is time to get back up again.
I know for some you may not feel like it, but now is the time to focus on the next steps to take to come out of lockdown and think about making your businesses sustainable in the short term and stronger and more profitable in the long term.
The governments plan for coming out of lockdown can be found here:
While the government has a plan, do you as a business owner have a plan? If not now is the time to start making them if you haven’t done so already.
Some things to consider
- How will your business be affected by social distancing rules?
- Can you adapt to these new requirements?
- Can you change your business model? – Some businesses in the RLH sector have being doing takeaways and deliveries etc, it may be worth considering expansion of these activities in the short term. PT’s and Professional Service Providers have taken to outside training and remote training by Zoom or Microsoft Teams, the health and beauty industry have taken to How to Videos and selling products online. So, we are finding ways to adapt – find yours!
- Working from home has this worked? If so, do you need premises going forward, can you reduce office costs. Working from home has also allowed for more flexible working arrangements and allowed people to work around their new lifestyles instead of the other way round. The way forward could be a combination of home and office-based working or shared office spaces (subject to social distancing rules)
- Is it time to invest in better technology to help with home/remote working? Office 365 with Microsoft Teams and SharePoint has enabled us to carry on seamlessly.
- Is it time to re-train or upskill you and your workforce? Digital marketing is becoming ever more important as a way of reaching your clients. Re-train or better still get in touch with a professional to help with a marketing strategy.
- Look at ways of streamlining your business
- Have you re-visited your cashflow forecasts and budgets for the year? Do you need a bounce back loan if you don’t have one already?
- Change your views on Accountants – they are an investment not a cost! We help you stay compliant and thereby avoiding fines and penalties, we help you save tax, we help you with advice and guidance on running your business and above all we are here to help you as individuals, I’m not aware of any other costs that do this for you – so consider it a wise investment and one of the best you will make!
Adaptation, re-skilling, upskilling, innovative thinking and looking at your business strengths and weaknesses are key to survival and then growth and prosperity. As a minimum think about these 3 key areas for your business over the next few weeks.
- Marketing Plan – How am I going to Market my business going forward
- Operational Plan – How am I going to operate under new Health & Safety rules and regs.
- Financial Plan – Budgets and Cashflow will help you keep your business under financial control.
9. Cloud Accounting
If you aren’t already using cloud accounting software, then now if the time to definitely consider it.
The Government have put back their plans on Making Tax Digital during the Covid-19 Crisis, however those plans will re-surface in the not too distant future.
The Gov website states that:
“Making Tax Digital is a key part of the government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs.
HMRC’s ambition is to become one of the most digitally advanced tax administrations in the world. Making Tax Digital is making fundamental changes to the way the tax system works – transforming tax administration so that it is:
- more effective
- more efficient
- easier for taxpayers to get their tax right
Yeah right, I would interpret that as a way to collect the taxes in quicker and more efficiently!
VAT is already under the MTD system and whilst no further mandates to make any other taxes MTD in 2020 are in place, at some point it will start to happen. So why not start planning for it now!
I have personally reviewed many online accounting systems, Xero, Quickbooks, Freeagent, Zoho, Clearbooks, Sage and Kashflow. However, it doesn’t matter to us as Accountants what system you use because we can always get the information, we need to do your accounts.
What is important though is that you the end user can use it, and this is where many of these systems fall down. All too often we see clients with various systems but with an inability to use them effectively in their business.
The system I have reviewed and personally recommend is Quickfile. No, we are not on commission for it and have no affiliation to it, the reason I recommend it is:
- It is easy for the end user to use
- It is very cheap (£45+Vat per year for over 1,000 transactions – below that and it’s free!)
- It links to your bank account
- Has its own app for scanning in your purchase
- Gives you the ability to go paperless
- Put you in financial control of your business on a daily basis
I could go on and on about the list of benefits to this system, however, just take a look for yourself here
So, whether you are a Sole Trader, Partnership, Limited Company, Charity, Landlord, Contractor, Big or Small business then now could be the time to get online and future proof your business.
Not only that, we don’t just recommend the software then leave you flailing in the dark with like most Accountants do, we offer you full training on it FREE OF CHARGE
If you are interested in gaining more financial control over your business, better planning your taxes and cashflow, immediately seeing your profits (hopefully not losses) then please contact Katy for a free demo or training on 0151 556 7249 or firstname.lastname@example.org
10. Fee Protection Service
For those that have this service we will shortly be sending out a copy of your policy. For those that don’t it may well be worth considering it. Due to the amount of government support made available during this crisis then at some point they will start to audit the claims and make enquiries.
Unfortunately, this is something we do have to charge clients for as it’s an expensive and time-consuming process when HMRC come calling.
The fees for dealing with HMRC investigations range from £75/hour to £150/hour depending on which member of staff is dealing with the investigation. Investigations can in some cases be ongoing for 18 months and longer depending upon the nature of them.
Therefore, when this crisis is over no doubt they will be looking at who claimed what and why and making sure it was justifiable.
HMRC has also increased the levels of its compliance checks for self-assessment returns opening more than 300,000 tax return investigations for 2016/17 and netting over £1bn in extra tax in 2017/18.
HMRC’s methods of data collection are more invasive than in some other countries.
For example, HMRC can scan social media accounts to see if someone is clearly living beyond their reported means. So be careful what you post!
Even a straightforward compliance check can sometimes take several months to complete. Apart from it being very stressful and taking up a lot of time, there is also the possibility of incurring penalties. A careless mistake could incur a maximum penalty of 30% of the amount of tax in question, a deliberate inaccuracy 70% and a deliberate and concealed miscalculation could lead to a penalty as high as 100%
Penalties can be reduced to the minimum values depending on the amount of help the taxpayer gives to HMRC. Unprompted disclosure of a mistake will see the
penalty for a careless error reduced to nil.
During the last 12 months thousands of landlords have been caught out and in some cases incurred several thousand pounds in Accountancy Fees, along with Tens of thousands in taxes owed and penalties incurred.
My suggestion is to also take out the fee protection services as it protects you from the cost of incurring Accountancy fees in HMRC investigations and at least alleviates some of the worry.
Our service costs the following
- Sole Traders £36-£80 dependent upon the size and nature of the business
- Limited Companies (Includes the Directors) – £180
The service will provide cover for up to £100,000 with no excess for:
- Any compliance check, visit (regardless of whether a dispute has yet arisen) or investigation started by HMRC regarding compliance with:
- Corporation Tax
- Income Tax Self-Assessment
- National Insurance
- Construction Industry Scheme
- VAT & VAT Visits
- Employer Compliance visits
- Check of employer records
- Requests for information
- Capital Gains Tax
The Fee Protection Cover represent great value for money and should be seriously considered. Please let me know if you would like to take it out,or require further information.
Finally, we will as always try to keep you up to date with all the latest help and support for you and your business. If you need us for anything, please do not hesitate to contact us
“Our greatest glory is not in never falling, but in rising every time we fall.”