COVID-19 LATEST CHANGES

July 2020

Responding to COVID-19

JOB RETENTION SCHEME
The Job Retention (furlough) Scheme will close, as scheduled, at the end October. There are the following stages:

– August
The main change is that from 1 August, employers will have to pay employee’s National Insurance Contributions and pension contributions, and can no longer claim a grant for these. Until August 31 the government will pay 80% of furloughed employees wages up to a cap of £2,500 for hours not worked.

– September
The government will pay 70% of furloughed employees wages up to a cap of £2,187.50 for hours not worked. Employers will pay 10% of wages to make up 80% total up to a cap of £2,500 plus employers’ total NICs and pension contributions.

– October
From 1 October until the end of the scheme on 31 October the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work. Employers will pay 20% of wages to make up the 80% total up to a cap of £2,500 plus employers’ total NICs and pension contributions.

JOB RETENTION BONUS
A new Job Retention Bonus has been introduced to encourage firms to keep on furloughed workers and they bring back to work from furlough.

The Bonus is one-off payment for employers of £1000 for every employee brought back from furlough and still employed untill January 2021.

KICKSTART SCHEME
A ‘kickstart’ scheme to encourage employers to create new jobs for 18-24 year olds: employers will be paid up to £6,500 to cover salary costs and overheads for six months. Employees will work 25 hours per week and will be paid the National Minimum Wage.

STAMP DUTY TAX TEMPORARY CUT
An increase in the Stamp Duty Land Tax (SDLT) threshold for property purchases to £500k, until 31 March 2021. This takes effect immediately.

VAT REDUCTION
A reduction in the VAT has been applied for the hospitality and tourism sectors from 20% to 5%, from Wednesday 15 July until 12 January.

The reduction will last 6 months on supplies of food and nonalcoholic drinks from restaurants, pubs, bars and cafés, as well as to supplies of accommodation and admission to tourist attractions.

It will take effect on 15 July 2020 and will be in place until 12 January 2021 to support businesses and jobs in the hospitality sector across the UK.

EAT OUT TO HELP VOUCHER
‘Eat out to Help Out’ vouchers for all – 50% discount (up to £10 each) on meals purchased Monday to Wednesday in August 2020 at participating restaurants, pubs and cafes. Providers can apply to participate from next week: cash will be returned to them within eight days

COVID-19 LATEST CHANGES

July 2020

TAX & ADVISE team advises to support impacted businesses

COVID-19 is an unfolding event bringing uncertainty to every business.

To help you navigate through these unprecedented times and if you wish to discuss any of the COVID-19 related initiatives or changes please contact us by our contact link https://www.taxandadvise.com/contact-us/ or call us on +44 (0) 207 283 7489

A business continuity plan is a basic requirement. There is a range of system in place to support Businesses and individual to ensure the impact of COVID-19 is minimised

Practical Action to respond to COVID-19

We’ve developed some practical measures to help companies think about their priorities and navigate these troubled times.

Putting people first
Ensuring the safety and wellbeing of employees and customers is clearly the number one priority for all businesses

Communicate transparently with your customers
Communicating regularly with your employees and customers will ensure that everyone is on the same page. It’ll also stop the spread of fear and misinformation.

Shift your sales strategy to online
Focus on serving your customers through digital channels, by selling on social media, putting your email list to good use or using a video tool to reach new leads.

Prioritize critical operations
You should be prepared to make adjustments, like using alternative suppliers or putting certain operations on hold.
And have a plan for how you’ll continue to prioritize your customers throughout all of this.

Review costs
We would encourage all business owners to be actively reviewing their short, medium and long-term cashflow forecasts and seek early advice and support to proactively manage your business risk. Review your financial model on a regular basis by reducing cost, by collecting as much from debtors as you can, considering negotiating payment terms with suppliers. Evaluate if you can do more with less; or considering whether certain contractors are needed. Now is the time to evaluate if capital spending plans are still relevant in light of changing circumstances.

TAX & ADVISE team advises to support impacted businesses

COVID-19 is an unfolding event bringing uncertainty to every business.

To help you navigate through these unprecedented times and if you wish to discuss any of the COVID-19 related initiatives or changes please contact us by our contact link https://www.taxandadvise.com/contact-us/ or call us on +44 (0) 207 283 7489

A business continuity plan is a basic requirement. There is a range of system in place to support Businesses and individual to ensure the impact of COVID-19 is minimised

UK Government guidance:
measures to support impacted businesses

STRENGTHENING BUSINESS CONTINUITY

Protect you Business continuity: Summary of financial, tax and accounting measures:

Business Rates Relief
The Government has announced a number of business rate measures to assist businesses experiencing disruption to their cashflow as a result of the COVID-19 outbreak. The main focus of these is on small and medium enterprises (SMEs) in the retail, leisure and hospitality sectors occupying smaller property.
The business rates retail discount for properties with a rateable value below £51000.A 12-month business rates holiday for all retail, hospitality and leisure businesses in England (including shops, pubs, restaurants)

Cash grants
The cash grants that will become available include:
– up £10,000 to the smallest businesses
– up to £25,000 for retail, hospitality and leisure businesses with a rateable value less than £51,000

Deferring payment of taxes
HMRC is willing to allow businesses to defer tax payments. What is key is communicating with HMRC prior to the tax due date. Early action on this is highly recommended.

Practicalities for Companies House accounts filing
Companies House has confirmed that Businesses may apply for a three-month extension period to file their accounts. This extension will not be granted automatically and companies seeking more time are expected to complete an online application before the filing deadline.

VAT
The Government announced that no VAT liabilities need be paid between 20 March and 30 June 2020. This is automatic, and no applications need to be made to HMRC. Organisations will have until the end of the 2021 “tax year” to pay off any accumulated liabilities.
HMRC guidance now states that where organisations are set up with direct debits to pay their VAT, they should cancel them, as otherwise the banking system will continue to take the direct debits automatically.

Job Retention Scheme
The Government has announced support of all UK businesses to help protect jobs during the COVID-19 crisis.
Under the Corona virus Job Retention Scheme, all UK employers will be able to access support to help pay part of the employees’ salary for those employees who would otherwise be laid off during the crisis period. The support package is intended to help protect jobs of employees who would otherwise have been laid off or made
redundant.
HMRC will reimburse 80% of furloughed workers’ wage costs to employers, up to a maximum of £2,500 per month. Employers will be able to make a claim for the money once HMRC’s new system is available.
It’s up to employers whether they pay the remaining 20% of wages. They do not have to pay it.

Assistance for the Self Employed
The Government has announced an unprecedented package of assistance for business, employees and the economy.
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.
Various criteria apply and not all self-employed will qualify.

Business Interruption Loan Scheme (CBILS)
The British Business Bank together with 40+ lending providers are providing a range of financial options enabling an SME (turnover of less than £41m) to borrow up to £5m, with the first six months being interest-free under the Corona virus Business Interruption Loan Scheme (CBILS). Not all SMEs will be eligible. The scheme will be available from early week commencing 23 March 2020. Further details are here.

Temporary changes to Statutory Sick Pay (SSP)
SSP will temporarily be paid from the first day of sickness absence rather than the fourth day for people who have COVID-19 or have UK Government guidance: measures to support impacted businesses link to selfisolate.
SSP will be payable at a rate of £95.85 per week from 6 April 2020.
Those who are not eligible for SSP, for example, the self-employed or people earning below the lower earnings limit will be able to make a claim for Universal Tax Credit or Contributory Employment and Support Allowance.
Additional financial support for business owners and the self employed has come in the form of a three-month mortgage holiday for homeowners struggling to make repayments due to the effects of COVID-19.

Employment taxes
The Government has confirmed that, having recently concluded a review of the planned reform to the offpayroll working rules and having made a number of changes to support its smooth implementation, it intends to push ahead with the changes coming into effect on 6 April 2020.

UK Government guidance:
measures to support impacted businesses

Our thoughts go out to all who have been impacted or infected.

We hope you and your families are safe, well, and taking all the necessary precautions.