The Chancellor has announced three changes to the job retention scheme:

1. From 1‌‌ July 2020, the scheme will be made more flexible to enable employers to bring previously furloughed employees back part time and still receive a grant for the time when they are not working.

2. From 1‌‌ August 2020, employers will have to start contributing to the wage costs of paying their furloughed staff and this employer contribution will gradually increase in September and October.

3. The scheme will close to new entrants from 30‌‌ June. This gives employers until 10 June to add any new employees to the scheme

Further information regarding each of these changes is detailed below.

1. Part time furloughing

From 1‌‌ July 2020, businesses using the scheme will have the flexibility to bring previously furloughed employees back to work part time, a month earlier than previously announced.

Employers will decide the hours and shift patterns their employees will work on their return and will be responsible for paying their wages in full while working. This means that employees can work as much or as little as the business needs, with no minimum time that they can furlough staff for.

Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing.

2. Employer contributions

From August, the government grant provided through the job retention scheme will be slowly tapered.

3. Important dates

The scheme will close to new entrants from 30‌‌ June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30‌‌ June.

This means that the final date by which an employer can furlough an employee for the first time will be 10‌‌
June for the current three-week furlough period to be completed by 30‌‌ June. Employers will have until 31‌‌
July to make any claims in respect of the period to 30‌‌ June.

As always, GBAC – accountants in Barnsley – are here to support. Please do not hesitate to give us a call on 01226 298 298 if you have any questions. 

Our accountants in Leeds and accountants in Sheffield are happy to help too.

Since the Government announced that the UK would be placed under lockdown on 23rd March 2020, the financial impact that this would have on thousands of businesses and individuals was, understandably, a cause of concern for everyone up and down the country.

However, since this announcement the Government have pledged to support businesses and have implemented new measures to help them cope and remain operational throughout the Coronavirus outbreak.

Here we provide you with a round-up of the support, which is available to SME’s, self-employed and most recently, start-up businesses:

Employee Costs

Statutory Sick Pay Relief Package

SMEs will be able to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19.

The eligibility period for the scheme began on 13th March and the refund will cover up to two-weeks’ SSP per eligible employee who are either ill or have been told to self-isolate because of Coronavirus.

Coronavirus Job Retention Scheme

If you are struggling to maintain your current level of workforce due to the negative effect the impact of Coronavirus has had on your business, then you can decide to “furlough” employees and apply for a Government grant which covers 80% of their usual monthly wage costs, up to a total of £2,500 a month.

This scheme was initially hoped to be a temporary measure, but it has since been announced by the Chancellor, Rishi Sunak, that this will be extended until the end of October. From August, employers currently using the scheme will have more flexibility to bring their furloughed employees back part-time.

Follow the link for further details on the scheme: https://www.gov.uk/guidance/cl…

Rates support and grants

Small Support Grant Funds

The Government is providing additional funding for local authorities to support businesses that pay either little or no business rates because of Small Business Rate Relief (SBRR), Rural Rate Relief (RRR) and Tapered Relief.

This will be a one-off grant to eligible businesses to help meet ongoing costs during Coronavirus. No application is necessary, the local authority will contact you if you are eligible.

Under the Small Business Grant Fund (SBGF) all eligible businesses in England in receipt of either Small Business Rates Relief (SBRR) or Rural Rates Relief (RRR) in the business rates system will be eligible for a payment of £10,000.

Under the Retail, Hospitality and Leisure Grant (RHLG) eligible businesses in England in receipt of the Expanded Retail Discount (which covers retail, hospitality and leisure) with a rateable value of less than £51,000 will be eligible for a cash grants of £10,000 or £25,000 per property.

Eligible businesses in these sectors with a property that has a rateable value of up to and including £15,000 will receive a grant of £10,000.

Eligible businesses in these sectors with a property that has a rateable value of over £15,000 and less than £51,000 will receive a grant of £25,000.

Businesses with a rateable value of £51,000 or over are not eligible for this scheme Businesses which are not ratepayers in the business rates system are not included in this scheme

Business Rates relief

Businesses in the retail, hospitality and leisure sectors in England will not have to pay business rates for the 2020 to 2021 tax year.

You are eligible if your property is a:

• shop

• restaurant, café, bar, or pub

• cinema or live music venue

• assembly or leisure property – for example, a sports club, a gym, or a spa

• hospitality property – for example, a hotel, a guest house, or self-catering accommodation

You do not need to take any action. Your local council will apply the discount automatically.

Bank and third-party finance

Small Business Bounce Back Loan

The Bounce Back loan scheme was launched on Monday 4th May and is aimed to help small and medium sized businesses borrow between £2,000 and £50,000.

The Government have announced that they will guarantee 100% of the loan with no fees, interest, or repayments during the first 12 months and is been provided through a network of accredited lenders.

Follow the link below for further details on how you can apply for the loan:

https://www.gov.uk/guidance/ap…

Coronavirus Business Interruption Loan Scheme (CBILS)

A temporary scheme which provides a wide range of business finance products such as term loans, overdrafts, invoice finance and asset finance facilities via the British Business Bank up to a value of £5m.

The Government have announced that they will cover the first 12 months of interest payments so smaller businesses will benefit from no upfront costs and lower initial repayments.

You should talk to your bank or finance provider (not the British Business Bank) as soon as possible and discuss your business plan with them. This will help your finance provider to act quickly and provide the finance needed in a timely manner.

Coronavirus Future Fund

The Future Fund will provide government loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors.

These convertible loans may be a suitable option for businesses that rely on equity investment and are unable to access the Coronavirus Business Interruption Loan Scheme.

The scheme will be delivered in partnership with the British Business Bank.

You are eligible if your business:

• is based in the UK

• can attract the equivalent match funding from third-party private investors and institutions

• has previously raised at least £250,000 in equity investment from third-party investors in the last 5 years

Coronavirus Large Business Interruption Loan Scheme

The Coronavirus Large Business Interruption Loan Scheme (CLBILS) supports large businesses, with an annual turnover of over £45 million.

All viable businesses with turnover of more than £45 million per year can apply for up to £25 million of finance.

The scheme is available through a series of accredited lenders, which are listed on the British Business Bank website. The government provides lenders with an 80% guarantee on individual loans. This gives banks the confidence to lend to many more businesses which are impacted by coronavirus. Facilities backed by a guarantee under CLBILS are offered at commercial rates of interest.

This scheme allows lenders to support businesses that were viable before the coronavirus outbreak but now face significant cash flow difficulties that would otherwise make their business unviable in the short term.

Payment holidays for loans and mortgages

Businesses with existing loans and mortgages should contact their lender(s) to explore the possibility of a payment / mortgage holiday.

Support with your tax liabilities

HMRC: Time to Pay

Any business which may find themselves in financial upset with outstanding tax liabilities may be eligible to arrange a “Time to Pay” agreement with HMRC. This would allow businesses and individuals to pay off their debt in instalments over an agreed period; each decision is made on a case by case basis.

A dedicated helpline has been set up for this on 0800 0159 559.

HMRC: VAT Payments Deferral

The VAT payment deferral scheme has been made available for all businesses regardless of nature or size. The scheme runs from 20th March 2020 to 30th June 2020 and enables the business to defer any VAT liabilities which fall due within this period to be deferred until the end of the 2020/21 tax year.

This is an automatic offer and no application is necessary, however, companies that usually pay their VAT liabilities are been advised to contact their bank to cancel the direct debit if they are unable to pay. This needs to be done in enough time so that HMRC do not attempt to automatically collect payment on receipt of your VAT return.

All VAT returns should be submitted by their due date, as normal protocol.

Support for the Self Employed

Self Employed Income Support Scheme

Like the Job Retention Scheme, self-employed people who are eligible can apply directly to HMRC for a grant worth 80% of their average monthly trading profits over the past three years. The grant is to be capped at £7,500 and is thought to be one of the most generous support schemes announced by the Government in response to Coronavirus.

Individuals are eligible if their business has been adversely affected by coronavirus, they traded in the tax year 2019 to 2020, intend to continue trading, and they:

• earn at least half of their income through self-employment

• have trading profits of no more than £50,000 per year

• traded in the tax year 2018 to 2019 and submitted their self-assessment tax return on or before 23 April 2020 for that year

HMRC calculate the amount to be paid to each eligible claimant based on an average of the tax returns for 2016/17, 2017/18 and 2018/19.

Follow the link below to check if you are eligible for the scheme and complete your application:

https://www.gov.uk/guidance/cl…

Universal Credit

Universal Credit is a monthly payment to help with your living costs. You may be able to get it if you are on a low income, out of work or you cannot work.

HMRC time to pay

If you owe less than £10,000 you might be able to arrange to pay in instalments online.

Because of coronavirus (COVID-19), you can delay making your second payment on account due in July 2020. If you choose to delay, you will have until 31 January 2021 to pay it.

Call the Self-Assessment helpline if you have missed your payment date or you cannot use the online service (0300 200 3835). You do not need to contact HMRC if you have set up a payment plan online.

Staying COVID-19 Secure

Below are links to guidance which you may find useful to ensure that, when the time is right, you can safely reopen your office environment in accordance with Government guidelines and manage the risks of COVID-19.

Working safely during COVID-19 in offices and contact centres:

https://assets.publishing.serv…

Staying COVID-19 secure in 2020:

https://assets.publishing.serv…

The Bounce Back loan scheme which is set to launch on Monday 4th May 2020 is aimed to help small and medium-sized businesses to borrow between £2,000 and £50,000.

It has been announced that the Government will guarantee 100% of the loan with no fees, interest or repayments due during the first 12 months. Terms of up to 6 years can be agreed and the Government will work with lenders to agree a lower rate of interest for the remaining period of the loan. The scheme will be provided through a network of accredited lenders and in order to be eligible to apply for a loan, your business must meet the following criteria:

However, there are limits to the availability of the loan as businesses within the following sectors are not eligible to apply:

Note. You cannot apply for the Bounce Back Loan scheme if you are already claiming under the CBILS (Coronavirus Business Interruption Loan Scheme), however, if you have already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender until 4th November 2020.

More information is expected to be released about the scheme shortly which we will publish in due course. However, if you have any concerns or questions regarding the support available for your business during these uncertain times, please don’t hesitate to get in touch with our team on 01226 298 298.

HMRC have confirmed that the online service for claiming funding for furloughed employees under the Coronavirus Job Retention Scheme is due to be launched on 20 April 2020

Making a claim

Applicants will be able access the system using their current government gateway login.

The following information will be required to make a claim:

Payment

We understand that the first claims will be paid 10 days after the portal opens with future claims paid within four to six days.

Further information

HMRC have indicated that they may retrospectively audit all aspects of the claim made.

Practical guidance on how to make claims via the portal is expected to be published this week to give employers the information required to enable claims to be made online without the need to contact HMRC.

If you have any queries or wish to speak to a member of our team to assist you with your claim, please call our office on 01226 298 298.

VAT

Income Tax

As always, if you have any queries about the above or wish to discuss anything with our team, please don’t hesitate to contact us on 01226 298 298. 

On the evening of March 26th 2020, the Government released further information on how a claim for wages costs through the scheme can be made. 

Full details of the guidance which has been published can be found on the GOV.uk website, link below.

https://www.gov.uk/guidance/cl…

As always, please do not hesitate to get in touch with a member of our gbac team on 01226 298 298 and we will be happy to discuss the guidance with you and any other concerns you may have during this unprecedented time.

“Coronavirus Job Retention Scheme”

Improvements to “Business Interruption Loan Scheme”

Support through the tax system

Self-employed

We will continue to update you as more details are released.

During the 2020 Budget which was held last week, the Chancellor announced that a ‘Coronavirus Business Interruption Loan Scheme’ would be available ‘over the coming weeks’. However, due to the rapidly changing circumstances surrounding Covid-19 it has now been announced that this will be brought forward and we can expect the new scheme to become available to SME’s in the week commencing 23rd March 2020.

The loan is to be provided by the British Business Bank through participating providers, and will offer more attractive terms for both businesses applying for new facilities and lenders, with the aim of supporting the continued provision of finance to UK businesses during the Covid-19 outbreak.

The scheme provides the lender with a government-backed guarantee against the outstanding facility balance, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’. NB – the borrower always remains 100% liable for the debt.

The maximum value of a loan provided under the scheme will be £5m (the original announcement suggested a maximum loan size of £1.2m).

The Government will also cover the first 6 months of interest payments, so businesses will benefit from lower initial repayments. The business remains liable for repayments of the capital.

As well as loans, there are many other types of finance supported by the programme, depending on the provider. You can find out what type of finance the British Business Banks partner page.

This measure is targeted towards SMEs. It is open to businesses with a turnover of less than £41m (as long as the business is long-term viable and is UK based) which meet the scheme’s eligibility criteria. Full details on the eligibility criteria will be announced shortly.

The British Business Bank Coronavirus Business Interruption Loan Scheme webpage has the latest source of information.

As always, we are here to support in any way possible. Please don’t hesitate to give a member of our team a call and we will be able to provide you with as much information as possible.

A report out in January shows that around 20% of those on apprenticeship schemes are not being paid the National Minimum Wage (NMW), while apprenticeships themselves have fallen in number.

The figures in the Apprenticeship Pay Survey from the Department for Business, Enterprise and Industrial Strategy (BEIS) show the strange anomaly that correct levels of the NMW are largely paid in the first year of an apprenticeship, but often fall below it during the second and third years.

The highest levels of compliance were in management apprenticeship schemes, and the lowest in hairdressing (at 47% non-compliance) and child care (at 34%). Those on formal training for at least a day a week reported that they were less likely to receive compliant pay than those in more informal training.

The Apprenticeship Levy, introduced in 2017, was designed to increase people in apprenticeships by making companies offer formal apprenticeship training. Companies paying over £3 million in wages a year must pay the levy but can claim it back to cover apprenticeship training costs. Firms paying below that level in wages can apply for funding. But since the scheme came in, the number of apprenticeships has declined by 200,000 places between 2016 and 2018.

One issue has been the rise of companies offering apprenticeship training in the more office-based, soft skills and management sector, rather than the technical skills needed, for example, in construction and engineering. This focus has skewed the market towards sectors taking advantage of recuperating the levy funds, to the disadvantage of key sectors. With some traditionally employer-offered training courses rebranded as ‘apprenticeship schemes’, the concept has become watered down as the funding available is swallowed up.

At the end of 2019, the government announced that, the NMW will rise in April by 6.2% to £8.72 an hour. A report from the Resolution Foundation has found that while levels of non-compliance with the NMW fell from the turn of the century, they have risen since the introduction of the National Living Wage (NLW) in 2016. For companies failing to comply with their minimum wage obligations overall, there doesn’t appear to be much incentive to change their ways, with only a one in eight chance of being caught and penalised.

Paying your staff fairly and transparently, and engaging in genuine apprenticeship, training and development practices, is a key element in maintaining staff loyalty, productive recruitment and brand reputation.