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 1^st 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.

We’ve all heard of IR35, but do you know the rule changes that are being introduced? IR35 also known as the ‘off-payroll’ working rules and will kick in if a worker provides their services through an intermediary.  It’s been in the news for some time now affecting a lot of News and TV presenters and has been making big headlines.   From April 2020 this will now be affecting the private sector from any industry where they are working either through a limited company or as a sole trader but the relationship between themselves and the client could constitute an employer/employee relationship.

An intermediary will usually be the worker’s own personal service company, such as a limited company. They could also be a partnership, a managed service company, or an individual who is on self-assessment.

The rules make sure that workers, who would have been an employee if they were providing their services directly to the client, pay broadly the same tax and National Insurance contributions as employees.

The rules apply if a worker provides their services to a client through an intermediary but would be classed as an employee if they were contracted directly.

So, who decides?

If you’re a worker and your client is in the public sector like a school or library, it’s their responsibility to decide your employment status. You should be told of their decision; we’ve seen a large number of the larger companies starting to make changes to their arrangements with their subcontractors in preparation for this event.     This will affect everyone, including people who employ a Cleaner, a subcontractor in the building industry.   IR35 supersedes the CIS scheme i.e. its take priority over the CIS scheme above everything.

If you are a worker and your client is in the private sector, it’s your intermediary’s responsibility to decide your own employment status for each contract. The private sector includes third sector organisations, such as some charities.

HMRC do have a calculator on their website to help you see for yourself whether you would have to comply with the rules.

There are tests that are run to decide this for you.

https://www.gov.uk/guidance/check-employment-status-for-tax

Some of the tests are as follows

Who has the control, can you say no to projects or specific pieces of work, or are you required to take whatever work is given to you.

Do you use your own tools at work?

Do you have public liability insurance and employers liability insurance?

Can you send in a substitute for yourself?   Not a main point but it does get weighted on any HMRC decision.

The difference on what this will mean for you, is that you will no longer be able to claim the travel expenses you would have been able to claim before regardless of the distance you are travelling to work, plus you will pay the higher national insurance which currently is 12% for employees and 13.8% for  employers.   You effectively could pay out both rates, not just the one.

HMRC do not care if you have given up your employment rights, i.e. holiday pay and sick pay.    We are expecting them to spot check individuals at any point during 2020.

The costs to the private sector will be very high, we haven’t seen the updated budget expected to be out in March 2020.  But are expecting with all the news coverage and the actions the larger companies are planning, everyone could be affected imminently.

If you are facing this problem with your own subcontractors, please get in touch with us, we have a risk assessment template for our clients that they can use.   If you are a subcontractor yourself, it is worth getting in touch with your contractor to find out their plans for the system.   

A lot of these companies are planning on putting everyone on PAYE whether you receive the employment rights that go with that change, we are still waiting to see.

2019 has not been the easiest of years for many of our clients, the lengthy political and economic uncertainty is making the general public think a lot more about spending their hard-earned money.  Small businesses are having to renegotiate with their suppliers and look at all their costs to ride the storm we find ourselves in at the moment.

Not ones to sit down and wait for things to happen, this blog is about refinancing. 2019 may not have been the best year, but let’s not sit and see if 2020 will be better. Now is the time to review your finances. Autumn is a great time of year to look at this, you’re halfway through the financial year, summer is over, and Christmas is around the corner, the end of the year will be here before you know it.

So, what is refinancing?

Refinancing is the process of replacing an existing loan with a new loan. Typically, people refinance so they can get a better deal on their current loan. For example, you may be able to get a better interest rate than what you are on currently, saving you money. Refinancing also depends on your credit score, current deal and many other factors.

You may also have some assets in your business currently tying up cash and want to get a loan to put more liquid cash into the business, to allow you to put some plans for 2020 into practise right now.

Why refinance?

If you have a loan or a mortgage, it is worth speaking to the provider for refinancing. Some potential advantage of refinancing includes:

• Lowering your monthly payments. You can then put to use your extra saving to pay off other debts or towards your saving goals.
• You can combine your debts into one with some refinancing options. This is good so you know exactly when payments need to be made.
• Usually able to negotiate lower interest rates.
• Cashflow is tight but you have some assets that can assist you gain some cash to put back into the business.

Studies have shown that trying to negotiate a better refinancing deal tends to save people money and a lot of stress. Some questions to ask yourself is if you are paying too much monthly on any equipment that you could possibly lower or if you are too dependent on your bank overdraft as it is one of the most expensive bowing methods. Knowing where all your finances lay can help you budget and with the extra cash you can invest in yourself or your business.

Our busiest season has passed with the self-assessment deadline and now it’s the season of love. With love in the air, its time to make your business your valentine. Take the time to make a plan of action for your business. What do you want to achieve in the next 12-18 months?

Are you looking to expand your business and grow a larger list of customers? or are you trying to cut back on the amount of expenses your business pays out ? These are all goals that should be in the clear to you. Write down your plan of action, top tip, something that is written down will be more likely to be achieved than something that you have stored in your mind.

Having it written down and somewhere in sight will give you the reminder and motivation to try and achieve this. Think of the strengths and weaknesses of your business. Refresh and re-train on yourself in terms of, what are your strengths, work on weaknesses to learn and help achieve your goals.

Loving your business will give you opportunities to take it to the next level. However, with opportunities you also must weigh up the risks. This is where you need a forecast for your business, a cashflow can help make the deciding factor whether its time to hold back and watch the spending, or if there is spare cash around to invest back in the business.

We are at the start of 2018.   Make it a good one.