As summer has ended and the colder nights approach, it can be a bit tough to take with the local lockdowns in place. We need to try and stay spirited and make the most of our situation. If you are having to close or reduce hours, make sure to keep promoting your business on social media, so once you are back, you are still in front of people’s mind. There is some support still out there, carry on reading to see what you can apply for before the deadlines approach.

           

Coronavirus Loans

The Chancellor, Rishi Sunak has announced that businesses that have borrowed money through the government's loan scheme, such as the “bounce back” loan and the “Coronavirus Business Interruption Loan Scheme” would be given more time to repay the money.

 

A new Pay as You Grow flexible repayment system has been introduced by the chancellor for small businesses who took out the "Bounce Back". It means borrowings can be repaid over ten years instead of the original six-year term.

The longer repayment time also applied to small and medium-sized firms who borrowed under the “Coronavirus Business Interruption Loan Scheme”.

Businesses will also have more time to apply for these loans, application dates for the schemes had been due to end in October.

 

Job Support Scheme

As furlough comes towards the end, the chancellor announced a new replacement scheme for the Job Retention Scheme (furlough). From 01 November, the new scheme known as Job Support Scheme will see that the government will contribute towards the wages of employees who are working fewer than normal hours.

 

Any hours worked by the employees the employer will continue to pay their usual wages of the hours worked. For hours not worked, the government and the employer will each pay one third of the equivalent salary. The government’s contribution will be capped at £697.92 a month.

 

Kickstart Scheme

With Coronavirus effecting everyone, some of the hardest hit were the young people. The Kickstart Scheme provides funding to employers to create new 6-month job placements for young people aged between 16 – 24 who are currently claiming Universal Credit and at risk of long-term unemployment.

 

This is the government’s plan for jobs and to create hundreds and thousands of new, fully funded jobs across England, Scotland and Wales. More details are yet to come out and the first placements are likely to be available from November.

 

The Kickstart Scheme will cover 100% of the National Minimum Wage for 25 hours a week as well as the employer National Insurance contributions and employer minimum automatic enrolment contributions.

 

There will also be extra funding to support young people after the 6-month period to help build their experience and help them move into sustained employment after they have completed their Kickstart Scheme.

 

Self-Employment Income Support Scheme

The previous support for the self-employed has been decided by the government to be extended. The extension will provide two grants and will last for six months, from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a 3-month period.

 

You must currently be eligible for the original Self-Employed Income Support Scheme, though you do not need to have claimed it. It must be declared that you are actively trading and that you are impacted by the pandemic. HMRC will provide more details about claiming in due course.

 

VAT Reduced Rate

There was a series of new measures introduced to help hospitality, holiday accommodation and attractions sector. These included VAT being cut to 5%, effective from 15 July 2020. The VAT cut will remain in place and has been extended to run until 31 March 2021.

 

For restaurants and cafés that provide food services for both take away and dine in, the temporary reduction in the VAT rate only applies to;

 

·         Food for consumption on the premises on which they are supplied

·         Non-alcoholic beverages for consumption on the premises on which they are supplied

·         Hot takeaway food for consumption off the premises on which they are supplied

·         Hot takeaway non-alcoholic beverages for consumption off the premises on which they are supplied

 

We all need to continue supporting each other, shop local wherever possible, helping the small independent shops. Let’s follow government guidelines and rules, to stop a spike in cases and who knows, our sacrifices may be worth it when we may be able to celebrate come Christmas.

As we try and get back some normality in our lives, and places start to open back up for business. We still need to remember that the fight is not over and need to abide by the rules set in place. Well done to all pushing through and staying motivated. Throughout lockdown we have updated you with what the government have announced and plan to do. There have been a lot of information announced, you can find all the latest below.

 

How has the Furlough scheme changed?


One of the many questions we get asked is, how has the furlough scheme changed? The Coronavirus Job Retention Scheme, furlough as its more commonly called is designed to help people who could not do their jobs because of the virus and prevent mass redundancies.

 

The scheme is to close in October and has had some criticism with the decision to close, but it has been backed by the Bank of England boss, which says workers should be helped to ''move forward'' and not kept in unproductive jobs.

 

From 01 August 2020 the government will pay 80% of wages up to a cap of £2,500. Employers will now have to pay employers National Insurance Contributions (NIC) and pension contributions. You can bring back employees to work shifts and then put back on furlough if needed. Remember any hours worked, the employee is entitled to 100% of their wage and this needs to come directly from the employer.

 

From 01 September 2020 the government will contribute 70% of wages up to a cap of £2,187.50. Employers will again pay employer National Insurance Contributions (NIC) and pension contributions just like for August. However, now employers will have to pay 10% of wages to make up the 80% total up to a cap of £2,500. Part time furlough is still available, but any hours worked by staff, employers will have to pay 100% of wage.

 

From 01 October 2020, 60% of wages will be contributed by the government up to a cap of £1,875. Employers will pay employer NICs and pension contributions and top up 20% of wages to make up 80% total up to a cap of £2,500 until when the scheme ends at the end of the month.

 

The aim of the tapering is to allow employers to ease employees back in to work at the same time as businesses productivity hopefully resumes.

 

How does the part time furlough work?

 

The part time furlough is designed to give you the chance to call an employee back in to work if there is a lot of work or put them back on furlough if the workload drops off. So, how does it work?

 

If you have a member of staff who works 8 hours a day, 5 days a week and your business is closed, you can furlough the member of staff and the government will cover a percentage of the wage, depending on the situation as mentioned above. If you want to trial opening your business for a couple of days a week, and you need the member of staff for 3 days a week, you will be liable to pay 100% of the wage for the 3 days worked, and the government will pay the percentage equivalent for the remaining 2 days not worked and on furlough. The rules mentioned above applies, regarding the percentage amount and NIC’s being paid by yourself.

 

The government has allowed the part time furlough to relieve some of the financial strain of keeping staff and prevent mass redundancies. For each furloughed member of staff still employed as of 31 January 2021, the government will give the employer a one-off £1,000 bonus

 

Kickstart Scheme

 

The chancellor also announced a new Kickstart Scheme worth to be in the region of £2 billion. The plan is to be launched to create hundreds of thousands of new, fully subsidised jobs for young people. If you claim Universal Credit and are aged between 16-24 and at risk of long-term unemployment will be eligible. Funding will be available for each six-month job placement and will cover 100% of the National Minimum Wage for 25 hours a week. Employers will be able to top this wage up if they please.

 

How to apply for this, still has not been fully revealed by the government. As it gets closer to the scheme being live, more information will be revealed and as always, as soon as we know, we will pass the information to you.

 

Help Out Eat Out


A little more positive news from the hospitality sector is for the month of August you can get 50% off your bill in participating restaurants with the other half covered by the government. This is capped at £10 per diner and excludes alcohol and is only valid for Monday – Wednesdays in August and can be used as many times as you like. The offer is for dine in only as the government encourages people to go out. To check which restaurants are participating click here and enter your post code to see who around you are participating.

 

Remember to support your independently owned food venues during these tough times and remember to practice social distancing. Stay motivated and stay safe as together we can end 2020 on a positive bang!

We have all been paying closer attention to the news in recent times. It does look like better days are to come, with restaurants and bars been given the green light to open. While we all are excited and wanting to enjoy ourselves, please remember to social distance as this is still very vital to our fight against this virus.

 

The Chancellor, Rishi Sunak has pledged great support during these tough times and has again set the foundation for all of us to come out of this. It will be no easy job, but together we can do this. Supporting small businesses is vital.

 

The Chancellor mentioned a few things in his speech, while some of his policies apply to Wales, others do not as they are the responsibility of the Welsh Government. We digest the main points here.

 

Job Retention Bonus

 

The furlough scheme will be ending in Wales at the end of October. We are more reliant on the job retention scheme here in Wales than any other part of the UK. There are about 300,000 people on the furlough scheme. The Welsh Government has said that it does not have the "financial fire power" to be able to continue the scheme itself.

 

The Chancellor said he would be introducing a new scheme called the Jobs Retention Bonus. Under the new scheme, firms will be paid £1,000 for each employee they bring back from furlough and continuously employ through to January 2021 on an average of at least £520 a month.

 

            Eating Out Discount

 

The Chancellor has said there will be a 50% discount on food if people eat out in August on Mondays to Wednesdays. This is to try and get people using restaurants.

 

This will entitle every diner to a 50% discount of up to £10 per head on their meal, at any participating restaurant, café, pub, or other eligible food venue. There is not a limit to the amount of times the discount can be used and will be valid Monday to Wednesday on any eat-in meal (including on non-alcoholic drinks) for all of August. Participating establishments will be fully reimbursed for the 50% discount.

 

Temporary VAT Cut

 

If you supply food and non-alcoholic beverages for consumption on your premises, for example, a restaurant, café or pub, you’re currently required to charge VAT at the standard rate of 20%. However, when you make these supplies between 15 July 2020 and 12 January 2021 you will only need to charge 5%

It will apply to supplies of accommodation and admission to attractions as well. This will include takeaways, restaurants, cinemas and theme parks.

 

These are all in the pilot stages, and more information is to be released in the days to come. As soon as we know, we will also share the information with you. If there is something you want to know more about, you can call us on 02920 653995 to discuss. The introduction of these will mean we have a better chance to finish 2020 on a high.

Here is a reminder of the thresholds for the current tax year (6th April 2020 - 5th April 2021)

Personal Allowance

You do not have to pay any tax on income up to the amount of £12,500.

Band

Taxable income

Tax rate

Personal Allowance

Up to £12,500

0%

Basic rate

£12,501 to £50,000

20%

Higher rate

£50,001 to £150,000

40%

Additional rate

over £150,000

45%



National Minimum Wage

It is against the law to pay under the national minimum wage.

Year

25 and over

21 to 24

18 to 20

Under 18

Apprentice

April 2020 (current rate)

£8.72

£8.20

£6.45

£4.55

£4.15

April 2019 to March 2020

£8.21

£7.70

£6.15

£4.35

£3.90



Dividend Allowance

The dividend allowance for this current year is £2,000

Tax band

Tax rate on dividends over the allowance

Basic rate

7.5%

Higher rate

32.5%

Additional rate

38.1%


There are many more rates and threshold that will be of value when it comes to your tax affairs, we have highlighted the most frequent rates.

It has been several weeks now since the whole country has come to a standstill. We still have strict restrictions in place, however there is still a lot we can do to ensure our businesses does not just fade away. We have all put endless efforts into our business and now is not the time to just give up. You should still be on social media, promoting your business, so once all this is over, and it will all be over, your business is in the front of everyone’s minds.

 

Our previous Coronavirus Blog detailed how you could get support from the Government Retention Scheme to the grants that are available. To read our previous blog, please click here https://bit.ly/Covid19interruptionCrossAcc

 

Bounce Back Loan

 

There will be support in the form of a bounce back loan which will help you to borrow between £2,000 and up to 25% of their turnover. The maximum loan is capped at £50,000. The government has guaranteed 100% of the loan and there will not be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.

 

To be able to apply for the loan you will have to be based in the UK, have been in business before 1st March 2020 and your success or development have been impacted by the coronavirus.

 

You cannot apply if you are already claiming under Coronavirus Business Interruption Loan Scheme or COVID-19 Corporate Financing Facility. If you have already received a loan of up to £50,000 under one of these schemes you can transfer it into the Bounce Back Loan scheme. A deadline of 4 November 2020 has been set to arrange with your lender.

 

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 and any charges for the loan will be covered by the governments guarantee.

 

There are several lenders participating in the scheme including many of the main retail banks. You should approach a suitable lender yourself via the bank’s website. The lender will ask you to fill in a short online application form and self-declare that you are eligible. The lender will decide whether to offer you a loan or another type of finance and you will be responsible for repaying 100% of the amount borrowed.

 

Self-Employment Income Support Scheme

 

In line with the Chancellors commitment to help businesses who have been affected by the coronavirus, HMRC have launched the self-employment scheme. You should receive a letter through the post stating that you may be eligible. You will have to go to the HMRC website and complete an eligibility checker to see if you are eligible. You will need your National Insurance number and Self-Assessment Unique Taxpayer Reference (UTR) number.

 

If HMRC confirm you are eligible, then you will need your Government gateway and user ID and password, if you have not created this yet, you will have to, to commence with the claim. You will have to enter your correct contact details as HMRC will contact you, using these details to tell you when the claim system is available for use.

 

HMRC will automatically calculate the income support you are entitled to, based on the information submitted from previous tax returns. After HMRC have received and checked your claim, they will pay the money directly in to your bank account in six working days.

 

You will need to make the claim yourself, although you can seek advice from an accountant. The grant is also not for limited companies or anyone operating a trade through a trust. HMRC will check claims and take action to withhold or recover payments found to be dishonest or inaccurate.

 

We are still available on the phone and by email, so if you do want to talk through what may be your best option, please feel free to contact us. We are always happy to help.