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Friday 3 April 2020, 12:55

HELP FOR THE SELF-EMPLOYED AND SMALL LIMITED COMPANIES

We have received many queries about what support is available for the self-employed and small owner managed companies. I summarise below the latest published guidance.

1. Self-employed income support scheme

2. Universal Credits

3. Small Business Grants

4. Business Interruption Loan Scheme

5. Tax Deferment

6. Further actions to take

AS MORE INFORMATION IS MADE AVAILBLE BY HMRC WE WILL SEND YOU UPDATES

FOR MORE INFORMATION PLEASE LOOK AT WWW.GOV.UK

Friday 27 March 2020, 11:13

Universal Credit

The self-employed will also gain full access to the equivalent of SSP (statutory sick pay) and can also benefit from tax payment deferrals. The chancellor recently announced that self-employed people can now access universal credit at the same rate as SSP for employed people. The current SSP rate is £94.25 per week for up to 28 weeks. The government announced last week that the benefits are going to be payable from day one rather than usual day four for affected individuals.

Universal Credit is a payment you can receive from the government if you are on low income or out of work. Both Employed and Self-employed people can apply for Universal Credit. The Chancellor also pledged to increase standard Universal Credit allowance by £1000 for next 12 months.

It is worth knowing that single owner managed Ltd companies are also treated as as self-employed / sole trader for the purpose of Universal Credit UC.

The main criticism Universal Credit has always received for self-employed claimant since its launch, is the application of minimum income floor rules. However in this unprecedented crisis Government has confirmed that during this outbreak they will suspend minimum income floor rules making it easier for all self-employment workers to access cash they need in this crisis moment. As minimum income floor has been temporarily removed, self-employed people will now be treated an equivalent as employed people within universal credit system.

What is the minimum income floor:

Previously, if someone had been working as self-employed for 12 months or more, DWP would apply minimum income floor to them, which is actually an income assumption about the income they earn, no matter whether or not they are actually earning it.

What if I’m self-employed or director and receiving Universal Credit already?

If you’re self-employed and receiving Universal Credit and you’ve got COVID-19 or are advised to self-isolate, rules around minimum income floor is going to be temporarily relaxed to make sure that self-employed UC claimants will receive full support.

What if I’m self-employed and NOT currently receiving Universal Credit?

If you have COVID-19 or advised to self-isolate, you can now make a fresh new application online and also claim and access Advance Payments upfront without having to attend a Jobcentre Plus. If you’re eligible for new style Employment and Support Allowance, this will also be payable from day 1 of sickness, instead of day 8.

Going forward, if you income from self-employment stays low during this unprecedented crisis then you will continue to receive support depending on your monthly household income and savings on your actual earnings with no earning assumptions.

AS MORE INFORMATION IS MADE AVAILBLE BY HMRC WE WILL SEND YOU UPDATES

FOR MORE INFORMATION PLEASE LOOK AT WWW.GOV.UK

Friday 27 March 2020, 10:08

We understand that our clients are concerned about what financial assistance is available for the self-employed and smaller owner managed businesses.

We’ve also had lots of queries about the “furlough” scheme.

Job Retention Scheme

The overall objective is to keep employees at home until they are needed in future to help businesses rebuild.

The rules are;

  • furloughed employees must not work for their employers
  • it is backdated 1 March 2020
  • available to all employees on the payroll as at 28 February 2020
  • ALL businesses are eligible
  • The grant is paid to the EMPLOYER who then pays the employee as normal through payroll using RTI
  • Relevant employees must be designated as furloughed
  • There will be a new HMRC portal
  • As the scheme may take time to roll out employers should continue paying furloughed employees as normal and then make a back dated claim from HMRC
  • Maximum grant is 80% of wages up to a maximum of £2,500
  • The scheme does not extend to dividends paid
  • The grant covers NI and pension contributions
  • Staff can study whilst furloughed but must not do actual work
  • The grant is taxed in the same way as salary
  • Bonuses, commissions etc are NOT included
  • It is based on average basic earnings over the last year

Latest HMRC guidance indicates that directors of small limited companies can access this scheme.

VAT

The deferral for VAT payments applies from 20 March 2020 until 30 June 2020.

All VAT registered traders are eligible. This will generally mean the deferral of one quarter’s VAT: the payment due on 7 April, 7 May or 7 June 2020 or the monthly payments due on each of these dates.

This is an automatic offer and no application is required. Businesses will not need to make a VAT payment during this period. HMRC has confirmed that businesses will need to cancel their direct debits. Businesses that have a direct debit mandate in place to pay their VAT and wish to defer payment will need to contact their bank to cancel that mandate. This needs to be done before the direct debit is due to be collected.

Taxpayers have until the end of the 2020/21 tax year i.e. until 31 March 2021, to pay any liabilities that accumulate during the deferral period. VAT refunds and reclaims will be paid by the government as normal. Businesses will also need to remember to reinstate their direct debit mandate once the deferral is over and to make arrangements to pay the accumulated VAT by the end of the 2020/21 tax year.

Businesses must continue to file their VAT returns by the due date.

Income Tax

The deferral for income tax self-assessment applies to the second payment on account for 2019/20 due on 31 July 2020 which is deferred until 31 January 2021.

Eligibility is limited to the self-employed ie, the deferral does not apply to those that are in self-assessment but are not self-employed. The current understanding is that the deferral applies to any taxpayer who was self-employed in the 2018/19 tax year on which the payment on account is based.

This is an automatic offer and no application is required.

Tax returns should still be filed by their due date and it may be advantageous to file the 2019/20 return as soon as possible after 5 April 2020. This might facilitate planning for the tax payment due in January 2021 and perhaps crystallise any refund due, including as a result of any loss relief available.

No penalties or interest for late payment will be charged in the deferral period.

Cash grants for businesses receiving small business rate relief

Key features of the scheme

  • Cash grants of £10,000 will be paid to businesses receiving Small Business Rate Relief (Small Business Bonus Scheme in Scotland) including taper relief or Rural Rate Relief.
  • Businesses have to occupy property to qualify.

Eligibility and additional features

  • Grants will be paid automatically by local authorities. Businesses will not need to apply for them (except in Scotland).
  • Each individual “hereditament” is eligible for the holiday and cash grant. Businesses with multiple premises will qualify for each of their hereditaments that meets the above criteria.
  • Decisions about granting reliefs will be taken by local authorities, following government guidance.
  • Eligibility is based on rateable values recorded on the rating list at 11 March 2020.
  • Premises which have closed temporarily due to the government’s advice on COVID-19 will be treated as occupied for the purposes of this relief.
  • Cash grants will be sent to the person named as the ratepayer in the local authority’s records on 11 March 2020

Unfortunately, this means that businesses working from home will not qualify.

Self-employed Income Support Scheme

Eligibility rules

  • Be self-employed or a member of a partnership
  • Have lost trading profits due to covid 19
  • Have filed a tax return for 2018-19 (although HMRC are giving an additional 4 weeks to those that are yet to file)
  • Have traded in 2019-20
  • Have trading profits of less than £50,000 on average

How will it work?

  • The grant is initially for 3 months and is a maximum of £2,500 per month or the monthly average over the 3 year from 2016-17 to 2018-19
  • It is taxable
  • It will be paid as a lump sum in June
  • HMRC will contact you if you are eligible and invite you to apply online
  • DO NOT CONTACT HMRC as this will delay the vital work they are doing to put the scheme in place

The latest HMRC guidance indicates that directors may access the job retention scheme BUT not the self-employed scheme

HMRC recommends that the self-employed access other sources of funding until the grant is paid. That includes Universal Credits and the Business Interruption Loan Scheme.

AS MORE INFORMATION IS MADE AVAILBLE BY HMRC WE WILL SEND YOU UPDATES

FOR MORE INFORMATION PLEASE LOOK AT WWW.GOV.UK

Monday 23 March 2020, 11:42

LATEST ANNOUNCEMENTS FROM HMRC FOR HELP FOR BUSINESS

“I promised to do whatever it takes to support our economy through this crisis – and that if the situation changed, I would not hesitate to take further action. That is what I want to begin doing today,” said Chancellor Rishi Sunak joined the Prime Minister at Tuesday’s Downing Street press briefing

He said further action would come as the situation evolved through new legal powers in the Covid Bill which enables the government to offer further financial support deemed necessary to businesses.

VAT

VAT for all businesses is being deferred until the end of June. In other words, if you were due to pay your VAT bill you now don’t have to until the end of June.

This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.

12 month business rate holiday

There is now a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.

Businesses that received the retail discount in the 2019 to 2020 tax year will be re-billed by their local authority as soon as possible.

Eligibility

You are eligible for the business rates holiday if:

  • your business is based in England
  • your business is in the retail, hospitality and/or leisure sector

Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:

  • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
  • for assembly and leisure
  • as hotels, guest & boarding premises and self-catering accommodation

How to access the scheme

There is no action for you. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible.

Support for businesses that pay little or no businesses rates

The government will provide additional Small Business Grant Scheme funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

Eligibility

You are eligible if:

  • your business is based in England
  • you are a small business and already receive SBBR and/or RRR
  • you are a business that occupies property

How to access the scheme

You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

Guidance for local authorities on the scheme will be provided shortly.

Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority.

Scotland Salons:

https://www.mygov.scot/non-domestic-rates-coronavirus/

‘Retail’ includes ‘hair and beauty’

Business Interruption Loan Scheme

The biggest single element in the Chancellor’s rescue package is a package of £330bn bank loan guarantees to help small and large businesses manage cashflows during the pandemic.

“That means any business who needs access to cash to pay their rent, the salaries, suppliers, or purchase stock, will be able to access a government-backed loan, on attractive terms, said Sunak.

For small and medium-sized firms, Sunak increased the new Business Interruption Loan Scheme announced at last week’s Budget from £1.2m to £5m of loans with no interest due for the first six months.

The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value.

Now be interest free for 12 months (increased from 6 months)

Salon and spa owners should contact their business bank account to apply.

Support for businesses paying tax

All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559

Insurance

Sunak confirmed that if your business is told to close (eg pubs) that this is sufficient for those businesses to claim insurance if they have appropriate business interruption cover for pandemics in place.

All salon and spa owners should check with their insurance provider if they are covered.

However, many businesses are unlikely to be covered as most business interruption insurance policies are dependent on damage to property, which will exclude pandemics.

Some businesses may have purchased a specific add on relating to notifiable diseases, but some of these will still specify damage to the building. Some businesses may have purchased supply chain or denial of access cover which may meet their needs in this case.

As many smaller salons don’t have such insurance, the government is making cash grants of £25,000 per business available. We await to see how you can claim.

Wednesday 18 March, 11:22

Please find an update from the measures brought by the Chancellor yesterday (17 March) on the package of temporary measures to support public services, people and businesses through disruption caused by COVID-19.

This includes a package of measures to support businesses including:

  • a statutory sick pay relief package for SMEs
  • a 12-month business rates holiday for all retail, hospitality and leisure businesses in England
  • small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
  • grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
  • the Coronavirus Business Interruption Loan Scheme to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance
  • the HMRC Time To Pay Scheme

Support for businesses who are paying sick pay to employees

The government will bring forward legislation to allow small- and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:

  • this refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19
  • employers with fewer than 250 employees will be eligible – the size of an employer will be determined by the number of people they employed as of 28 February 2020
  • employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
  • employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note
  • eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to those staying at home comes into force
  • the government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible

Support for businesses that pay business rates

The government will also introduce a business rates retail holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.

Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.

A £25,000 grant will be provided to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value between £15,000 and £51,000.

Any enquiries on eligibility for, or provision of, the reliefs should be directed to the relevant local authority.

Support for businesses that pay little or no business rates

The government will provide additional funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBBR). This will provide a one-off grant of £10,000 to businesses currently eligible for SBRR or rural rate relief, to help meet their ongoing business costs.

If your business is eligible for SBRR or rural rate relief, you will be contacted by your local authority – you do not need to apply.

Funding for the scheme will be provided to local authorities by government in early April.

    Support for businesses through the Coronavirus Business Interruption Loan Scheme

    A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch next week to support businesses to access bank lending and overdrafts. The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value. Businesses can access the first 6 months of that finance interest free, as government will cover the first 6 months of interest payments.

    Support for businesses paying tax

    All businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service. These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

    If you are concerned about being able to pay your tax due to COVID-19, call HMRC’s dedicated helpline on 0800 0159 559.

    Insurance

    Businesses that have cover for both pandemics and government-ordered closure should be covered, as the government and insurance industry confirmed on 17 March 2020 that advice to avoid pubs, theatres etc is sufficient to make a claim.

    Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.

    Wednesday 18 March, 08:43

    BREAKING NEWS  ON IR35

    It was announced late last night by HMRC that the proposed new IR35 rules which were going to be introduced from April 2020 have now been postponed until April 2021. This is as a result of the Coronavirus disruption.

    We have no more news at this stage, but I would recommend you Google HMRC IR35 for the latest updates.

    For some of you I know that this announcement will come too late, where you have already accepted contracts. Hopefully, for some of you still in the stages of negotiation this will come as a welcome relief.

    If you are able to continue contracting under the pre-April 2020 rules, please get in contact with us so that we can discuss payroll with you for the new tax year.

    Further information at 09:48
    HMRC have set up a dedicated telephone helpline to support businesses and self-employed people concerned about not being able to pay their tax due to coronavirus (COVID-19).

    The helpline allows any business or self-employed individual who is concerned about paying their tax due to coronavirus to get practical help and advice.

    Up to 2,000 experienced call handlers are available to support businesses and individuals when needed.

    If you run a business or are self-employed and are concerned about paying your tax due to coronavirus, you can call HMRC’s helpline for help and advice: 0800 0159 559.

    For those who are unable to pay due to coronavirus, HMRC will discuss your specific circumstances to explore:

    • agreeing an instalment payment
    • suspending debt collection proceedings
    • cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately

    The helpline number is 0800 0159 559 – and is an addition to other HMRC phone contact numbers.

    Opening hours are Monday to Friday 8am to 8pm, and Saturday 8am to 4pm. The helpline will not be available on Bank Holidays.

    Tuesday 17 March, 16:23

    Despite the rapid changes the world is currently encountering with the coronavirus, the Lamburn & Turner team would like to reassure our clients that we have measures in place to ensure service continuity.

    Our key objective is to protect the wellbeing of our people, our clients and our contacts whilst ensuring we continue to deliver a quality service. 

     Our offices are currently still open and fully staffed, and whilst we have always enjoyed a ‘just pop in’ open door policy, we would ask that you think seriously before doing so at the moment.

    We are aiming to move to more on-line and phone based meetings, and will be restricting meeting-related travel. If we have a meeting scheduled with you, we will be contacting you to see what arrangements best suit you.

    We will endeavour to meet deadlines for the filing of accounts and tax returns with Companies House & HMRC, and for the delivery of any other work in progress. However, to enable us to do this please provide any information we request as soon as possible. Should we encounter any unavoidable delays at this end we will inform you promptly.

    We are continuing to monitor the situation and are keeping an eye on the latest advice from the Government & Public Health England.

    Should our plans change at all either due to staff shortages or changing directives we will inform you accordingly.

    Please do not hesitate to contact us if you have any queries, or if you need to keep us informed of any change to your contact details or circumstances.

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    If you would like to know more about how we can help you, please email us and we will get back to you.