On 5th January 2021, the Chancellor Rishi Sunak announced a further £4.6 billion in business support grants for businesses forced to close due to the latest lockdown.
This follows the Prime Minister’s recent announcement of a third national lockdown, that these business will be closed until at least February half-term in order to help control the virus, and, together with the wide range of existing support, provides them with certainty through the Spring period.
The cash is provided on a per-property basis to support businesses through the latest restrictions, and is expected to benefit over 600,000 business properties, worth £4 billion in total across all nations of the UK.
The one-off grants are available as follows:
The grants are available for businesses legally required to close.
The business support grants will be administered through local authorities, which (for our client base) is predominantly DMBC. Further information, when available, will be available from here.
6th January 2021
The Chancellor announced the latest support for small businesses on Thursday 26th March 2020, in the form of the Self Employment Income Support Scheme. This is aimed at people who are self employed, and importantly were self employed before the beginning of the current tax year.
It is aimed at levelling the position of the self employed with that of employees, who would potentially benefit from the Coronavirus Job Retention Scheme.
IMPORTANT – The scheme is only available for sole traders and members of partnerships. It is not available if you operate your business through a limited company.
This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed.
You can apply if you’re a self-employed individual or a member of a partnership and you:
Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment. This is determined by at least one of the following conditions being true:
If you started trading between 2016-19, HM Revenue and Customs (HMRC) will only use those years for which you filed a Self-Assessment tax return.
If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020.
HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way.
You’ll get a taxable grant which will be 80% of the average profits from the tax years (where applicable):
To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.
It will be up to a maximum of £2,500 per month for 3 months. HMRC will pay the grant directly into your bank account, in one instalment.
You cannot apply for this scheme yet.
HMRC will contact you if you are eligible for the scheme and invite you to apply online. Individuals do not need to contact HMRC.
You will access this scheme only through GOV.UK. If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.
Once HMRC has received your claim and you are eligible for the grant, they will contact you to tell you how much you will get and the payment details.
If you claim tax credits you’ll need to include the grant in your claim as income.
This latest scheme is in addition to support previously announced for small business, which can be found here. Please also see our previous blog article on the support.
Further to our recent blog about how we are responding to the Coronavirus (Covid-19) pandemic, and in view of the lock down announced yesterday (23rd March 2020), we have the following update:
We are working hard to try and minimise the disruption which we are all experiencing. However, given the large number of changes which are being introduced in a short space of time, coupled with the different working environment, we would ask for patience. If you have any issues which need dealing with, particularly in respect of wages, please contact us sooner rather than later. As always, we will try and do our best for you.
Thank you
Nick, Tracy, Tracey, Linda & Alana
The Coronavirus (Covid-19) pandemic is having a profound and unprecedented effect on all aspects of our lives. The situation seems to be changing on a daily basis. In respect of how this affects small businesses, since the Budget on 11th March, there have been further announcements in respect of assistance. There were a raft of announcements on 17th March (which included increasing an initial grant of £3,000 to £10,000), and also on 20th March (where employees’ wages were underwritten to 80%).
The latest announcement was lock down announced yesterday (23rd March).
We have had a huge number of enquiries from clients in respect of help available from the Government. The following is a summary of the measures announced so far:
The full document is here. It is correct as at time of writing (Tuesday afternoon, 24th March 2020).
It is expected that further announcements will be made, particularly in respect of anyone who's self employed. We will communicate this information when it is available. In the meantime, if you have any questions,please feel free to contact us.
The rate of development of the Coronavirus (Covid-19) has created an unprecedented atmosphere of uncertainty, which has led to self-isolation, partial travel bans, bans on mass gatherings and panic buying. It will also have a significant effect on small businesses like ours, and the clients we provide services to. In the current climate (as from 18.3.20), we have formulated the following plan as to how business can continue.
It is our intention that our office will remain open for the foreseeable future. We obviously cannot guarantee that this will continue, but we also cannot simply close our doors. Therefore, it is our aim to be open Monday to Friday, 9.00 am to 5.00 pm, with at least one member of staff. NB this may change due to further Government initiatives.
We are also offering staff the option to work from home where practical.
If the office is open, then you should be able to drop books off. Many clients do this as and when convenient, but for the foreseeable future, you may wish to check in advance to make sure that it’s not a problem. As always, if your books and records are small enough to fit through a standard size letterbox (outside of normal working hours), then that option is always available.
If, however, you are restricting your travel and wish instead to post your records, that is fine too. Also, technology is increasingly playing a part, and we often receive electronic records via email or through the Openspace file sharing website.
Given the potential disruption we could all face over the next 3-6 months due to Coronavirus, the importance of dealing with your accounts and tax affairs remains high, and the extra time this could involve means that we would be grateful if you could please let us have your books and records ASAP.
The majority of meetings are to review accounts and get sign off, to enable submissions to HM Revenue and Customs (HMRC) and/or Companies House. We also achieve this quite often remotely, using a combination of email and Openspace. This would be the preferred option, as it would reduce travel and follow the social isolation principle.
Also, please bear in mind that the other usual methods of communication should still be open (email, telephone, text, Whatsapp). We should also be able to accommodate video conferencing if required, using either FaceTime or Whatsapp. It may not be quite as straight forward if staff are working from home, but it should not be insurmountable.
Although the Government are making lots of noises in respect of supporting small businesses, we have not seen much evidence that this approach is being replicated by either HMRC or Companies House. Therefore, we would urge clients to assume that normal filing deadlines still exist. That is the default scenario which we will assume, and as always, we will look to deal with the filing deadlines sooner rather than later.
However, HMRC are providing assistance to businesses who cannot pay their tax due to Coronavirus. This is the Time to Pay initiative, details can be found here as to spreading payments out.
Best Wishes,
Nick, Tracy, Tracey, Linda and Alana
18th March 2020
The Chancellor Rishi Sunak delivered his first Budget on 11th March 2020. It was against the backdrop of the development of the Coronavirus, which has turned into a pandemic and is potentially going to have a huge impact on the fabric of society over the coming months. For this reason, there were some business friendly announcements (and the Budget followed a cut in the Bank of England base rate, from 0.75% to 0.25%). The following are the main points which affect small businesses.
Employment Allowance
The Employment Allowance is currently £3,000 that reduces an employer’s National Insurance Contributions. This will increase to £4,000 from 1 April 2020.
Statutory Sick Pay
A number of measures have been introduced to Statutory Sick Pay (SSP) which are effective from 6 April 2020. The measures include:
The current rate of SSP is £94.25 per week, rising to £95.85 from 6 April 2020.
SSP is currently payable to employees with earnings over £6,136 (£6,420 per annum from 6 April 2020). For employees below this threshold, as well as the self-employed, the Government has announced additional measures that include:
Business Rates Relief
To help businesses cope with the commercial impact of Coronavirus, business rates reliefs for businesses in England have been confirmed and extended. As a result, some businesses will have a reduced business rates liability or no liability at all, for the year to 31 March 2021.
It had previously been announced that there would be an increase in rates relief to 50% for the year to 31 March 2021 for those retailers in England with a rateable value below £51,000. This was expected to apply to up to 90% of independent shops, pubs and restaurants. The relief has now been increased to 100% and the scope of the relief has been expanded to include cinemas, music venues and leisure and hospitality businesses. This means that qualifying businesses will have no liability to business rates for the year to 31 March 2021.
Pubs in England with a rateable value below £100,000 will receive a rates discount of £5,000, (increased from £1,000), for the year to 31 March 2021.
One-Off Grant for Small Businesses
If a business currently qualifies for the Small Business Rates Relief, the Government is to provide a £3,000 grant. Businesses that think they may be eligible should contact their local authority.
Income Tax
The personal allowance and the income tax bands have been maintained at the same level for the 2020-21 tax year as for the previous year, 2019-20:
Personal allowance £12,500
Basic rate band £37,500
Higher rate band £37,501 to £150,000
Additional rate Income over £150,000
National Insurance
The tax threshold for National Insurance Contributions will rise, from ££8,632 to £9,500.
Capital Gains Tax
In respect of your home, there is usually no Capital Gains Tax (CGT) to pay on disposal. If you let out your home (as well as live there yourself), then you may be subject to CGT. Effective from April 2020, there are 2 changes to the current rules in respect of this:
Also, before the Budget, there was a lot of speculation in respect of whether Entrepreneur’s Relief (a relief available to business owners which limits CGT payable on disposal of the business) may be scrapped. The announcement was that it was being retained, but the lifetime allowance for the relief would reduce from £10m to £1m.
