The Chancellor of the Exchequer has, after shelving the proposed Autumn Budget, announced a package of new measures to help the British Economy through the next few months. A summary of the new schemes and rules is noted below.

Please be aware that this note is based on the information published as at 24 September 2020 and is intended to provide guidance on how Foremans LLP believe at this juncture the schemes operate. The below is based on Foremans LLP’s interpretation of the available information and HMRC guidance.

Foremans will continue to update our clients as and when information is received from the regional governments. 

Coronavirus Job Retention Scheme (CJRS)

The Coronavirus Job Retention Scheme is currently active but is due to cease at the end of October. Details of how the scheme is applied was included in our Practical Guidance Note issued in July 2020. Please let us know if you would like a copy or have any queries.

Job Support Scheme (JSS)

The CJRS will be replaced with the Job Support Scheme. The Job Support Scheme is intended to help small and medium sized businesses retain staff whilst they are working fewer hours as a result of a lower demand for goods and services. The minutiae of how this will be implemented have yet to be released. However, in summary:

·         Workers must work at least 1/3 of their normal hours;

·         Employers will pay staff for the hours they work

·         Employers will pay a third of the hours that the employee cannot work

·         The Government will also pay a third of the hours that the employee cannot work

·         The grant per employee will be capped at £697.92 per month

·         Anyone employed as of 24 September 2020 will be eligible

·         Employers can claim both the JSS and the JRB (see below)

In essence this means that an employee working a third of their normal hours should receive 77% of their pay provided that the cap is not reached.

All small and medium sized businesses will be eligible for the JSS but large companies will only be eligible if their turnover has decreased during the pandemic.

All employers across the UK can use the scheme even if they have not previously used the CJRS.

The JSS is intended to run from November 2020 for six months.

Job Retention Bonus (JRB)

On 08 July 2020 the Government announced plans for a Job Retention Bonus as part of its “Plan for Jobs”.

UK employers will receive a one-off bonus for each furloughed employee who is still employed as of 31 January 2021.

Our current understanding is that the JRB will be payable to the employer for every employee furloughed before 30 June 2020. The employee will need to receive an average salary from their employer of at least £520 from November 2020 through to 31 January 2020. The bonus is not automatically paid to the employee but is a bonus to the employer. The intention is to encourage employers to retain employees. You should be aware that the conditions may change as these schemes are being developed and announced by the Government.

Foremans will be monitoring clients’ payroll, where appropriate, and will be able to make claims on their behalf when possible.

VAT

Deferred VAT Payment

All VAT registered UK businesses were eligible to defer any VAT payments due between 20 March 2020 and 30 June 2020.  Businesses could still pay any VAT due as normal.

The VAT payments deferral scheme ended on 30 June 2020. Any VAT deferred originally was expected to be paid by 31 March 2021. The payment date has now been extended to allow businesses who deferred their VAT payment to pay the tax in 11 smaller instalments from March 2021.

Temporary Reduced Rate of VAT

Organisations that make supplies in hospitality and tourism had a VAT rate cut to 5% in July 2020. The reduced rate was originally expected to cease on 12 January 2021. The 5% emergency VAT period has now been extended to 31 March 2021.

Grants

Professional Services Grant

Small businesses in England may be able to apply for a new Professional Services Grant. The idea behind the scheme is that the grant will help the small business recover from the impact of coronavirus through professional advice including guidance from accountants.

The grants will range between £1,000 and £5,000 with an overall fund of £20 million available. The grants are intended to help the business access professional services from accountants, HR experts and lawyers together with purchasing new technology and equipment.

The funding can be accessed through the Local Enterprise Partnership (LEP) in the businesses area. Grants must be awarded by 28 February 2021 and all related activity fully completed by 31 March 2021.

Kickstart Scheme

A £2 billion pound scheme is to be launched to create new jobs for young people. Anyone aged 16 to 24 years, claiming Universal Credit and at risk of long term unemployment will be eligible. The funding is intended to cover 25 hours per week at National Minimum Wage for 6 months. Employers will be able to top the wage up.

Business Loans

The availability of business loans has been extended to November 2020. The loan period for both the Coronavirus Business Interruption Loan Scheme and the Bounce Back Loans has also been extended from 6 years to 10 years meaning that businesses will have smaller monthly repayment amounts.

Businesses will have the option to make interest only payments for a period of 6 months. Those businesses “in real trouble” will also have the option to apply to suspend repayments for a period of 6 months.

Any business taking advantage of the 6 months change to payments should not see an adverse effect on their credit rating.

Property

Stamp Duty Land Tax (SDLT)

You must pay Stamp Duty Land Tax if you buy a property or land over a certain price in England and Northern Ireland. The SDLT threshold up to 07 July 2020 was £125,000 for residential properties and £150,000 for non residential land and properties.

As of 08 July 2020 a Stamp Duty Land Tax holiday has been announced. If you purchase a property between 08 July 2020 and the 31 March 2021 the SDLT is only charged on the purchase price above £500,000.

Those purchasing an additional property will still need to pay the 3% higher rate of SDLT.

Please be aware these changes do not affect the equivalent taxes in Scotland and Wales. In Scotland the Land and Buildings Transaction Tax has not altered. In Wales the Land Transaction Tax also remains the same.

Companies House Accounts Filing

The Government has extended the Companies House filing deadlines. The measures are intended to relieve the burden on businesses during the COVID-19 outbreak.

Affected filings include accounts, Confirmation Statements, event-driven filings and mortgage charges.

The accounts filing deadlines have been extended by 3 months if the deadline falls between 27 June 2020 and 05 April 2021 inclusive. Please note that this is a temporary measure and filing deadlines that fall on 06 April 2021 or later will remain unchanged.

The normal 14 day deadline for Confirmation Statements has been extended to 42 days.

Please note that companies that have already extended their filing deadline or shortened their accounting reference period may not be eligible for an extension.

All companies should take appropriate measures to ensure accounts are filed on time as the law imposes an automatic penalty.

Late filing penalties will still apply where a deadline is missed but appeals will be treated “sympathetically”.

Companies House had also temporarily suspended the strike-off process to prevent companies being dissolved before Directors or potential creditors have the opportunity to submit the appropriate paperwork to prevent the strike-off. Voluntary dissolution requests are now being actioned by Companies House and compulsory strike off action will be reintroduced in October 2020.

Extension of Insolvency Measures

The government has also announced the extension of measures to protect businesses from insolvency. The new measures were due to expire on 30 September 2020 but it has now been confirmed that:

·         Companies will be able to hold virtual AGM’s up until at least the end of December 2020

·         Statutory demands and winding-up petitions will continue to be restricted until 31 December 2020

·         Small suppliers will remain exempted from the obligation to supply to companies going through a rescue process until March 2021

Time to Pay

HMRC have also upgraded their time to pay service for businesses. If you have missed or are worried about missing a tax payment due to Coronavirus you should contact HMRC to discuss being allowed additional time to make payments. The HMRC helpline number is 0800 0241 222. The helpline is available Monday to Friday 8am to 4pm.

Exemption for COVID-19 Related Reimbursed Home Office Expenses

The Financial Secretary to the Treasury announced on 13 May 2020 that the reimbursement of expenses for home office expenses are temporarily exempt from income tax and National Insurance.

To be eligible for the exemption the expenditure must meet the following two conditions:

·         Equipment is obtained for the sole purpose of enabling the employee to work from home as a result of the coronavirus outbreak

And

·         The provision of the equipment would have been exempt from income tax if it had been provided directly to the employee by or on behalf of the employer.

Self Assessment Tax

Income taxpayers who need it will be given more time to pay their tax due on 31 January 2021 for the 2019/20 tax year. Taxpayers with up to £30,000 of self assessment tax liabilities due will be able to use HMRC’s Time to Pay service to arrange a plan to pay their tax over an additional 12 months.

Self Employment Income Support Scheme (SEISS)

Two payments could have been claimed so far under the Self Employment Income Support Scheme.

First Grant

The First Grant payment was the lower of 80% of trading profits and £2,500 per month. Initially the payments were for the first 3 months in one lump sum. The First Grant closed for applications on 13 July 2020.

Second Grant

The Second Grant payment was the lower of 70% of trading profits and a maximum of £6,570 total. The Second Grant is open from 17 August 2020 and closes on 19 October 2020. You can claim the Second Grant if your business has been adversely affected by coronavirus on or after 14 July 2020.

You do not have to have claimed the first grant in order to make a claim for the Second Grant.

Taxpayers may wish to request a review of their entitlement to a SEISS grant where they have been told they are not eligible by HMRC or they wish to dispute the amount awarded. A review can be requested via the HMRC eligibility checker where there is an option to complete an online form requesting a review. Although only the taxpayer can apply for SEISS the review can be requested by either the taxpayer or their agent.

If you believe you are eligible for SEISS and have been rejected or that the amount you have been awarded is incorrect please contact Foremans for help with your review application.

Self Employment Income Support Scheme (SEISS) Grant Extension

The recent statement has stated that the SEISS will be extended and support given which is similar to the Job Support Scheme. The new SEISS grant extension will cover 6 months of profit for the period November 2020 to April 2021. The extension will provide two grants. The first grant will cover 3 months of profit from November 2020 to January 2021 and will be worth 20% of average monthly profits up to a total of £1,875.

The Government will review the level of the second grant, for February 2021 to April 2021, dependent on the economic circumstances at the time.

To be eligible for the scheme you must meet the following criteria:

·         Currently be eligible for SEISS

·         Declare that you are actively trading and intend to continue to trade

·         Declare that you are impacted by reduced demand due to COVID-19 in the qualifying period. For the first grant the qualifying period is between 01 November 2020 and the date of the claim.

Scam Calls

We are aware of a significant number of scam calls and emails saying that you are eligible for financial help or owed a tax refund. HMRC will NOT ask you to click on a link or give any personal information either over the phone or by email. Please do not respond to any such contact.

Please be aware that the advice and proposals regarding coronavirus are constantly changing and before acting on any of the above you should check the current situation with:

www.gov.uk

If you would like to discuss any of the issues noted above please contact us on:

01244 625 500 or 01978 364 000

contactus@foremansllp.com

Whilst all due care and attention has been taken in the preparation of these notes no liability can be accepted for any omission or item contained therein.

Foremans LLP

25 September 2020