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APH Accountants Covid-19 Business Support Update 23.11.20

Hi Everyone,

Please take the time to read our newsletter as it contains a lot of important information relevant to you and your business and will take no more than 15 minutes to read. Go grab that cup of tea, coffee or the glass of wine and have a read!

Two weeks and half weeks into the second lockdown and this time round it seems so much tougher with the weather being terrible and the night’s drawing in! Fingers crossed that we go back to some semblance of normality after the 2nd December!

For the time being though we need to review, advise and update you on what financial support is available for you and your business. Recent weeks brought so many changes from Rishi we thought we would better wait a few days before sending out a newsletter that will give you some clarity on all the financial announcements made.

Please take the time to read and digest the information in this newsletter as it saves many calls, emails and uncertainty and gives you information on what you should do and what we need from you in order to assist you obtaining as much financial support as possible.

It’s vital that you provide any information we request from you in a timely and accurate manner. In supporting our clients through the furlough process alone this has cost us over £40,000 in resources so far, so please help us work as efficiently as possible by minimising email, text and calls for information that is contained within this newsletter. That way we can help more people and carry on supporting clients for furlough claims free of charge.


Contact APH Accountants Wirral Merseyside chartered accountants for self employed limited companies and start ups

Office Number: 0151 630 4542    
Email: accounts@aphaccountants.co.uk

Paul White: 0151 556 7247           
Email: paulwhite@aphaccountants.co.uk

Helen White: 0151 556 7241        
Email: helenwhite@aphaccountants.co.uk

Matt Newman: 0151 556 7246     
Email: mattnewman@aphaccountants.co.uk

Carla Ashley: 0151 556 7244       
Email: carlaashley@aphaccountants.co.uk

Kerry Roe: 0151 556 7240            
Email: kerryroe@aphaccountants.co.uk

Dave Parry: 0151 556 7245          
Email: daveparry@aphaccountants.co.uk

Danielle Levy: 0151 556 7243     
Email: daniellelevy@aphaccountants.co.uk

Katy Holmes: 0151 556 7249       
Email: katyholmes@aphaccountants.co.uk

Lauri Murphy: 0151 556 7248       
Email: laurimurphy@aphaccountants.co.uk


Contents

  1. Christmas Opening Hours
  2. Coronavirus Job Retention Scheme Extension (Furlough Scheme)
  3. The Job Retention Bonus
  4. Local Restrictions Support Grant
  5. Additional Restrictions Support Grant
  6. Self-Employment Income Support Scheme – Grant Extension
  7. Other Grants
  8. Bounce Back Loans
  9. Time to Pay
  10. HMRC goes undercover
  11. VAT Deferral
  12. VAT Extension
  13. Self-Assessment
  14. Annual Investment Allowance
  15. Kickstart Scheme

1. Christmas Opening Hours

Please note we will be closing after Friday 18th December and will return to work Monday 4th January 2021. If you have year end accounts due with a deadline of 31st Dec 2020 then you will need to provide all your information at least 1 week prior to the 18th December. If you are in the self-assessment system and have not yet submitted your information for completing your self-assessment returns, then you should do so immediately.

We will have limited working for payroll during the Christmas break, however you should provide all your payroll requirements on or before the 18th December where possible.

2. Coronavirus Job Retention Scheme Extension (Furlough Scheme)

Coronavirus-Job-Retention-Scheme

As you will have seen in all the news the furlough scheme which was due to end on the 31st Oct 20 has now been extended to 31st Mar 21. This extension now replaces the previously announced Job Support Scheme and the Job Support Scheme extension.

So, we are back to the original furlough with some slight changes. As ever when something is changed, some win and some lose unfortunately, so don’t go shooting the messenger.

Eligibility for the Furlough Scheme Extension

  • Employers need not have used the scheme before
  • Employers across the UK can claim whether your business is open or closed
  • The Scheme has been extended until 31st March 2020

Criteria

  • Employers can claim for employees who were employed and on their PAYE payroll on 30 October 2020
  • The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
  • Employers will have flexibility to use the scheme for employees for any amount of time or shift pattern, furloughing employees on either a full-time or part-time basis, and will be able to vary the hours worked in agreement with the employee.
  • As under the previous furlough rules, employees can be on any type of employment contract
  • You can claim 80% furlough for Employees up to a cap of £2,500

Practical Implications

If you are an Employer who has claimed furlough for employees previously (Pre 31st Oct 2020) and wish to continue to make claims from November onwards then the following conditions apply:

  • The same reference salary period and amount will be used for calculating furlough.
  • This means the reference pay period will be 28th Feb for monthly paid staff of 19th March for weekly paid staff
  • Flexible furlough still applies

So, in a nutshell this will mean even if you have changed the contractual hours of staff since February or given them pay rises, these elements will be ignored as the furlough claim will be based on the original reference pay periods noted above.

If you are an Employer (or new Employer) who has taken on additional staff since 19th March and are still on your payroll as at the 30th October, then the furlough criteria is slightly different.

  • The reference salary period becomes 30th October 2020 (or earlier)
  • So, for calculating furlough claims this will be based on earnings (fixed or variable, based on an average) up to that point in time regardless of when they were employed (anytime between 19th March and the 30th October)

Summary

For employees on a fixed salary who were eligible for furlough before, pay is based on 80% of salary as at 19th March 2020.

For employees on a fixed salary who were not eligible for furlough before, pay is based on 80% of October salary.

For variably paid employees who were eligible for furlough before, pay is based on 80% of the higher of (i) the same period’s earnings from 2019; or (ii) average earnings from the 2019-20 tax year.

For variably paid employees who were not eligible for furlough before, pay is based on 80% of average wages payable between 6 April 2020 (or from their start date if later) and the day before they were furloughed.

As previously noted there are some winners and losers under this scenario, the winners are in essence new employees who will be furloughed at current rates of pay, the losers will be employees previously furloughed who will have to revert back to the Feb reference salary period for calculating the furlough pay. Remember, don’t shoot the messenger!

Other points to note

  • You can only claim 80% of the reference pay, you cannot claim any Employers NI or Pension contributions you may have to make on behalf of employees
  • If you have made any staff redundant since the 23rd Sep to 30th Oct, you may re-employ them and claim furlough for them
  • Employees can undertake training/volunteer work whilst on furlough
  • Flexible furlough remains in place
  • Employees who are unable to work because they are clinically extremely vulnerable, or at the highest risk of severe illness from coronavirus and following public health guidance can be furloughed
  • Employees who are unable to work because they have caring responsibilities resulting from coronavirus (COVID-19), including employees that need to look after children they can be furloughed
  • Apprentices can continue with their training, providing you are paying them national minimum wages for the time they spend training
  • TUPE or PAYE business succession rules apply to the change in ownership and are eligible for furlough
  • If your employee is on sick leave or self-isolating as a result of coronavirus, they may be able to get Statutory Sick Pay (SSP), The Coronavirus Job Retention Scheme is not intended for short-term absences from work due to sickness. If, however, employers want to furlough employees for business reasons and they are currently off sick, they are eligible to do so, as with other employees.
  • Employers can claim furlough for employees who are on holidays but must top up the furlough amount to the full pay for the holiday days taken
  • You can no longer claim furlough for employees working notice periods after the 1st December 2020.
  • Employees will continue to accrue holidays if they are on furlough
  • There are now monthly deadlines for making claims of 14 calendar days after the end of the claim period
  • HMRC will publish in the public domain a list of all Employers who have claimed furlough along with an indication of the value of the claim.

Agreeing to furlough employees

  • Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.
  • To be eligible for the grant, employers must have confirmed to their employee (or reached collective agreement with a trade union) in writing that they have been furloughed.
  • You must make sure that the agreement is consistent with employment, equality and discrimination laws, keep a written record of the agreement for five years, keep records of how many hours your employees work and the number of hours they are furloughed (i.e. not working)

Please remember we are Chartered Accountants and not Employment Law experts. Therefore, if you are unsure of any aspect of how to deal with employees over furlough you should speak with your HR consultant first.

Anyone looking for a HR consultant should speak with Laura from Concentric HR Ltd by calling 0151 342 697. Laura is first rate and has been extremely helpful and knowledgeable not only to us but to many businesses throughout this crisis.

What we need from you

  • If we have previously claimed furlough on your behalf, we will already have most of your details on file. Therefore, you just need to notify us of:
  • Employees to be furloughed – new or old
    • The start date of the furlough claim and end date
    • Any hours that employee has worked during the furlough claim period
    • If you wish to top up their salaries to the full 100%
  • If we have not previously claimed furlough on your behalf, we will need the following information from you
  • Employees to be furloughed – new or old
    • The start date of the furlough claim and end date
    • Any hours that employee has worked during the furlough claim period
    • If you wish to top up their salaries to the full 100%
    • Your Bank Account Number
    • Your Bank Sort Code
    • The Name on your Bank Account
    • The address you have registered with your bank.

This information should be sent to as soon as possible. We can then start to process your claims so that you have the money in your bank within 7 days of making the claim.

WE WILL NOT MAKE ANY CLAIMS BASED ON INCOMPLETE INFORMATION OR WITHOUT YOUR EXPRESS AUTHORITY AND AGREEMENT AS TO WHAT YOU ARE CLAIMING FOR. YOU MUST ACCEPT ALL RESPONSIBILTY FOR WHAT WE ARE CLAIMING ON YOUR BEHALF SO MAKE SURE YOUR PROVIDE THE CORRECT AND RELEVANT INFORMATION AND CHECK WHAT IS BEING CLAIMED FOR.

2. The Job Retention Bonus

The Job Retention Bonus will no longer be paid in February‌ ‌2021 and an alternative retention incentive will be put in place at the appropriate time.

3. Local Restrictions Support Grant

The Government have had in place since September a Local Restriction Support Grant (LRSG) to support businesses who have been forced to close due to local restrictions.

A few clients have made claims for this and the money is now starting to filter through. This grant has been available to eligible business since the start of Tier 3 restrictions.

The direct aim of this grant is to support businesses who provide in person services at their business premises who have been forced to close under the new restrictions. The criteria are:

  • Business must occupy a property on which it pays business rates.
  • Has been forced to close due to lockdown restrictions for at least 3 weeks.
  • Therefore, cannot provide its usual in person service from its business premises.

Note: businesses can still provide a takeaway service and claim the grant.

The grant you can claim depends on the rateable value of your business premises as follows:

  • Rateable values of up to £15,000 – £667 every 2 weeks of business closure
  • Rateable values between £15,000 and £51,000 – £1,000 every 2 weeks of closure
  • Rateable values of over £51,000 – £1,500 every 2 weeks of closure

The grant is also available on a discretionary basis to some other businesses who do not meet all of the above criteria, such as businesses who don’t pay business rates but have been forced to close, and also some businesses that have not been required to close but have been severely impacted (for example by the closure of customer businesses).

The claims will be made through your local council’s website, links below for the Wirral and Liverpool areas

https://my.wirral.gov.uk/en/service/covid_19_local_restrictions_support_grant

https://forms.liverpool.gov.uk/contour-forms/apply-for-local-restrictions-support-grant/

4. Additional Restrictions Support Grant

Local councils have the freedom to determine the eligibility criteria for these grants. However, we expect the funding to help those businesses which – while not legally forced to close – are nonetheless severely impacted by the restrictions.

This could include:

  • businesses which supply the retail, hospitality, and leisure sectors
  • businesses in the events sector
  • business required to close but which do not pay business rates

We are still waiting for further information to be released on this, however, keep an eye out by visiting this link

https://liverpool.gov.uk/communities-and-safety/emergency-planning/coronavirus/help-for-businesses/additional-restrictions-support-grant/

5. Self Employed Income Support Scheme (SEISS) Grant Extension

Eligibility

To be eligible for the grant extension self-employed individuals, including members of partnerships, must:

  • Have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
  • Declare that they intend to continue to trade and either:
  • Are currently actively trading but are impacted by reduced demand due to coronavirus
  • Were previously trading but are temporarily unable to do so due to coronavirus

What the grant extension covers

The extension will last for 6 months, from November 2020 to April 2021. Grants will be paid in 2 lump sum instalments each covering a 3- month period. The basis of the amount you can claim is the same as previously i.e. the 3 previous years self-assessment trading profits.

The third grant which opens for claims on the 30th November will cover a 3-month period from 1 November 2020 until 31 January 2021.

The Government will provide a taxable grant calculated at 80% of 3 months average monthly trading profits, paid out in a single instalment and capped at £7,500 in total.

The Government are providing the same level of support for the self-employed as is being provided for employees through the Coronavirus Job Retention Scheme which has also been extended until March 2021.

The Government has already announced that there will be a fourth grant covering February 2021 to April 2021. The Government will set out further details, including the level, of the fourth grant in due course.

The grants are taxable income and subject to National Insurance contributions.

How to claim

The claims portal is not yet open, we will advise you when it doeshttps://www.gov.uk/government/publications/self-employment-income-support-scheme-grant-extension/self-employment-income-support-scheme-grant-extension

6. Other Grants

Seeking Grants for an Association, a Small Business or for Research

The Growth Platform has details of other grants that may be available to your business such as

  • The Future Innovation Fund
  • Business Recovery Grant
  • Mentoring for Growth

More details of these grants can be found by following the attached link

https://growthplatform.org/business-covid-19-advice/

7. Bounce Back Loan Scheme – Pay as you Grow

From the 10th November, participating lenders in the Bounce Back Loan Scheme (BBLS) are able to offer smaller businesses across the UK a ‘top-up’ to their existing Bounce Back Loan if they originally borrowed less than the maximum amount available to them.

The top-ups are only available from a borrower’s existing BBLS lender. A borrower can apply for a top-up that is for the lesser of £50k or 25% of the annual turnover the borrower certified in their original successful BBLS application form, minus the value of their original loan.

How long the loan is for

  • The length of the loan is 6 years, but you can repay early without paying a fee. No repayments will be due during the first 12 months.
  • Before your first repayment is due, your lender will contact you about further options to:
    • Extend the term of your loan to 10 years
    • Move to interest-only repayments for a period of 6 months (you can use this option up to 3 times)
    • Pause your repayments for a period of 6 months if you have already made at least 6 repayments (you can use this option once)

Where possible you should take full advantage of these flexible terms and make repayments over a long a term as possible, take advantage of repayment holidays and interest only payments, the interest rates are extremely low, The aim for the next 6 – 12 months for most businesses will be survival and preserving cashflow and therefore you should take advantage of this.

For anyone who still hasn’t applied for a bounce back loan, then this is the easiest loan you will ever apply for, so take advantage of it if your business needs it. Applications for BBLS will remain open until 31st January 2021.

8. Time to Pay

If you owe any Taxes whatsoever then please don’t ignore requests from HMRC demanding payments. Ignoring requests for payments only leads to penalties being adding to what you owe and in some cases these penalties can be draconian.

At the moment HMRC are being extremely flexible in helping with time to pay arrangements. Therefore, our advice is to call them on the number below to arrange time to pay on mutually agreeable terms. Doing it this way will stop any penalties arising, help you plan your cashflow and stop any debt collectors contacting you on behalf of HMRC.

If you are not sure, then call us rather than ignore any HMRC demands!

Self Assessment Payment Helpline
Telephone: 0300 200 3822
Monday to Friday, 8am to 4pm

Payment Support Service
Telephone: 0300 200 3835
Monday to Friday, 8am to 4pm

PLEASE DO NOT IGNORE ANY HMRC PAYMENT DEMANDS – SORT IT OUT AND STOP ANY PENALTIES

9. HMRC going undercover

There’s been widespread fraud involving claims for government aid linked to local and national lockdowns. HMRC is now employing covert tactics to identify businesses not following the rules. What’s the full story?

Phone calls. We’ve received information that HMRC is making calls to businesses which have claimed financial support and should not be operating during lockdown. The caller might, for example, pose as a new customer wanting to purchase your services, where it would involve you or one of your employee’s attendance in breach of the rules. If you respond by saying that you can’t help them until after the lockdown, you’ll receive a follow-up call explaining that the earlier one was just part of an HMRC check.

Further action? HMRC’s approach depends on the nature of your business. Your response could trigger further HMRC investigations, so when handling phone enquiries your answers need to be clear. Naturally, only businesses breaking the rules should be concerned. Receiving an undercover call may be inconvenient but at least you can be encouraged that HMRC is taking steps to identify those involved in dodgy claims or breaking the lockdown rules.

10. VAT Deferral

On 24 September 2020, the Chancellor 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.

a. 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

b. 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.

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

d. If you are still unable to pay the VAT due and need more time, see the guidance about what to do if you cannot pay your tax bill on time you can also contact HMRC by phoning: 0300 200 3835.

Again, in terms of cashflow planning for your business then you should if possible, take advantage of these payment arrangements.

If you would like any help with regards to the above, please contact us.

11. VAT Extension

The chancellor has announced the extension of a VAT cut for the hospitality and tourism sectors – some of the worst-hit by the pandemic.

The temporary reduction of VAT rates from 20% to 5% would remain in place until 31 March 2021, rather than 13 January.

12. Self Assessment Season

The deadline for filing your self-assessment is 31st January 2021 to submit and pay any taxes owed by, please don’t leave it until the last minute as we become overloaded with work in January and we are therefore requesting everyone has submitted all the required information to us by the end of December latest to ensure no deadlines are missed.

Please supply your information in electronic format by scanning in or taking photographs and emailing or whatsapping us the information – you can whatsapp to my mobile 07595 272980 if need be.

13. Annual Investment Allowance

Due to the economic downturn caused by the pandemic, the government has been urged to extend the temporary tax break for businesses investing in equipment – the annual investment allowance (AIA).

New tax policy. In a news statement dated 12 November, the government announced that the AIA limit, which was due to revert to £200,000 with effect from 1 January 2021, will remain at £1 million for another year.

Plant and equipment. The change of policy means that businesses can continue (until 1 January 2022) to claim a tax deduction for the accounting period in which they purchase qualifying plant and machinery, up to the £1 million cap. No other changes to the AIA rules are indicated in the government’s statement.

14. Kickstart Scheme

The Kickstart Scheme was announced in July as part of the Chancellor’s Plan for Jobs. The scheme aims to create thousands of high-quality six-month work placements for young people aged 16 to 24 who are claiming Universal Credit and are at risk of long term unemployment.

Under the scheme, the Government will cover 100 per cent of employment costs for 25 hours a week. This includes the employee’s salary at the appropriate minimum wage for their age, as well as National Insurance and pension contributions.

If you are interested in this scheme and intend to recruit less 30 people you will need to go through Wirral Chamber (or other organiser)

The link for Wirral Chamber is here

http://www.wirralchamber.co.uk/Services/kickstart/

That’s all again for now folks. Please recommend us or refer us to anyone you know who needs an Accountant or could benefit from our services. At the very least leave us a google or facebook review if we have helped you in any way.

Please feel free to call, email or whatsapp us anytime for help and assistance.

Kia Kaha

Paul and all the Team at APH

www.aphaccountants.co.uk

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