COVID-19 Update

1st June 2020 – 1:00pm

There have been a number of significant updates from the Chancellor recently, full details of the changes, and all Government guidance and support can be found on their website by clicking here.

Self-Employment Income Support Scheme (SEISS)

Contrary to previous expectations The Government have announced a second grant will be available to all Self-Employed taxpayers from August.

It will be at a reduced rate of 70% of historical average profits (instead of 80%), which will limit the maximum claim to £6,570 (from £7,500). We believe the qualifying requirements will remain unchanged and therefore, if you didn’t qualify for the first claim it is unlikely that you will for the second.

Further announcements, providing more details, are expected from H.M. Revenue & Customs on 12 June.

Coronavirus Job Retention Scheme (Furloughing or CJRS)

There are considerable changes being introduced over the coming months to the existing scheme, and from 1 July it will only be possible to “agree working arrangements” with previously furloughed employees, which we understand will essentially close the scheme to employees who have not been furloughed before. Beyond this the changes fall broadly into two categories;

Reducing CJRS Grants – From 1 August the amount recoverable from The Government for furloughed staff will be slowly eroded.

  • In August the employers will no longer be able to reclaim for Employers National Insurance or Employers Pension Contributions for furloughed employees.
  • From 1 September the amount of furloughed wages claimable will decrease from 80% to 70%. The amount payable to the employee will remain at a minimum of 80%.
  • In October that figure will decrease further to 60%. Similarly, with the amount payable to the employee remaining at a minimum of 80%.
  • The Chancellor has announced that the CJRS scheme is expected to end on 31 October.

The decreasing percentages will be mirrored by decreasing cap on the maximum grant per employee.

Flexible Furlough – From 1 July businesses will be able to bring back furloughed employees on a part time basis. The employer will be responsible for the employee costs whilst they work, with the CJRS continuing to provide grants to cover the remainder.

We understand that for hours worked employees are to receive their normal (100%) wage, whilst for the hours do are not required they will be entitled to, a minimum of, their “80%” furlough rate (with the employer able to claim at the prevailing rate, be that 80%, 70%, or 60%).

Further announcements, providing more details, are expected from H.M. Revenue & Customs on 12 June.

We would remind you that some elements of this guidance are provided based on current understanding and reading of the published details, the release of further detail in the future may alter our understanding and expectations of both the support schemes and processes involved. Please do not rely solely on this information, or our interpretations, to make financial decisions.


5th May 2020 – 2:30pm

Yesterday the Government announced that the Self-Employed Income Support Scheme (SEISS) would be opening on the 13th May, considerably earlier than the “late June” date previously published.

Their latest guidance can be found by Clicking Here.

A quick H.M. Revenue and Customs eligibility checker can be found by Clicking Here.

Current guidance suggests that H.M. Revenue and Customs will confirm your eligibility and their wording also suggests that they will calculate the value of the grant, not you or us. This is not wholly unexpected as they hold all necessary information from your submitted Tax Returns.

It has been indicated that Moore Green, as your tax agents, may not be able to submit your claim. However, we still hope to be able to assist you where needed. This might also be something that H.M. Revenue and Customs reconsider prior to the full launch date.

It is therefore important that you have a personal Government Gateway account (and know the login details).

If you have not registered previously, you will need to do so.

It will also be necessary to know your Unique Tax Reference, which we can provide for you.

In brief summary;

  • M. Revenue and Customs have now begun contacting customers who may be eligible for the scheme.
  • Those who are eligible will be able to claim a taxable grant worth 80% of their average trading profits up to a maximum of £7,500 (equivalent to three months’ profits), paid in a single instalment.
  • To be eligible at least 50% of your total income (this includes most income sources including pensions and investment income) must be earned through self-employment.
  • The average trading profits over the last three submitted Tax Returns must be no more than £50,000.
  • You must have traded in the tax years ended 5 April 2019 and 5 April 2020 also intend to return to trading after the restrictions are lifted.

Although it is unclear what the exact process will be, it might be prudent to ask us to complete a brief review of H.M. Revenue and Customs’ calculation to ensure we agree it is correct…Whilst they have done an admiral job throughout this crisis H.M. Revenue and Customs’ new systems do not always work exactly as planned and it’s important you get the right amount of grant…and perhaps more important that you are not unknowingly overpaid leaving you exposed to an unwelcome claw-back claim in the future.


27 March 2020 - 12:30 pm

This is an update to the information previously published. Some of the originally promised support packages have now been expanded upon, although we all still have many questions. Such is the speed of change, and the Government’s determination to let people know that “the Cavalry is coming” that they don’t yet know themselves how they will achieve their promises (with the idea being to reassure so that undesired business decisions are avoided where possible).

We would continue to recommend that you regularly review The Government’s own guidance (Click Here) and that offered by the Institute of Chartered Accountants (Click Here). Both pages seem to be updated daily. This information can be coupled with detail from your professional bodies, forums and trade organisations to provide a good grounding of the known details. Of course, we would advise that you continue to monitor news sources and the daily announcements from Mr Johnson and his team.

We would remind everyone that this is unlike budget announcements etc, where the full details tend to be immediately available to our profession, but instead we are currently using the same sources as you to obtain our updates. However, we hope to be able to guide you through the changes and processes as things become clearer.

Self-Employed

  • The previous support offered was that Self-Employed people could access full Universal Credits (equivalent to Statutory Sick Pay).
  • The Chancellor has just announced a Self-Employed Income Support Scheme (SEISS), which has commenced immediately and will run for three months (although possible extended as necessary).
  • Taxable grants will be provided for the lower of 80% of profits [being average monthly profits from the past three years*] or £2,500 per month for self-employed individuals who earn the majority of their income from self-employment. (*or less if the self-employed has been trading for less than three years provided they completed a 2019 Tax Return)
  • In order to receive the SEISS grant, applications will be made through the GOV.UK login once the systems are ready (expected to be June 2020). HMRC will contact everyone individually if they are eligible (But please be careful and watch out for fake emails).
  • In the mean-time the self-employed will be able to access the Coronavirus Business Interruption Loan scheme and the Universal Credits system.
  • The scheme is available for those earning up to £50,000 per year through self-employment.
  • Unlike furloughing, it is not necessary to have stopped working, but is dependent on your profits being impacted by the Covid-19 crisis.
  • It is only available to individuals who completed a Self-Assessment Tax Return for the tax year ended 5 April 2019. Those who should have, but have not yet submitted their returns will be given until 23 April to complete the submission to ensure they are included in the scheme.
  • Those who have only recently commenced Self-employment, will not qualify due and have to rely on other support schemes.
  • The Chancellor highlighted that future consideration will be given to the inconsistency between the overall tax contribution made by the self-employed in comparison with employed individuals.

Director/Shareholders

  • The current information suggests that Directors will be considered employees and should use the furloughing scheme, The Institute of Chartered Accounts information page states “Many owner managed company director/shareholders pay small salaries and the balance of income as dividends. The scheme does not extend to dividends. Only the salary is relevant to the scheme. Such companies must have been paying a salary through a payroll to be eligible for a grant.”
  • It is currently unclear if this is the stance on those with these arrangements, or whether further support will become available to company Directors.

Job Retention Scheme – Furloughing workers

  • The Government have announced that they will cover 80% of employee’s wages up to a cap of £2,500. This “cap” now appears to be for the gross wages with employers’ national insurance and employers pension contributions being additionally refunded making a maximum grant of £2,804 depending on an individual’s circumstances. This information is taken from the ICAEW website, which now details some “rules” and provides some examples - Click Here
  • This will be paid as a grant and will be processed through a new portal (not through PAYE gateway) which will become active later in April 2020. At present little additional detail of the mechanics of this system have been released but we anticipate it will be important that you continue to follow employment law and correctly notify and consult with staff who are to be furloughed.
  • It has been announced that Coronavirus Business Interruption Loans will be made available to cover the cash-flow implications of paying staff now, and waiting until late April for reimbursement.
  • You must formally notify your staff that their employment status has changed and you are not required to actually pay the full (100%) wages to reclaim the 80%, but you are required to pass on the equivalent net pay recovered to the employee.
  • We understand (from information provided by Sage) that furloughed staff are not prevented from taking paid roles with other employers during their period of inactivity.
  • Your employee cannot work in any capacity for your business whilst they are furloughed.

Coronavirus Business Interruption Loan Scheme

  • The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website (Click Here). All the major banks will offer the Scheme which was launched on 23 March 2020.
  • Initial reports are that this is not as streamlined or accessible as many had hoped, banks are either not yet able to support the demand, or struggling to meet the requirements to evidence a businesses’ viability during these unusual times. Despite this, it remains a potentially helpful support option, but may require some work and time to access. Whilst we are determined to help our clients with the necessary accounts, forecasts and management information please consider that Moore Green are also impacted by the current guidelines and our team may not have its normal capacity to help as much, or as quickly, as we would like.

Income Tax and VAT

  • The July 2020 “2nd” income tax payment on account has been deferred until January 2021. This does not mean the tax isn’t payable, only that you get an extra six months to pay.
  • VAT payments have been deferred until the 30 June 2020. Again, this doesn’t mean the amount isn’t payable, you just get longer to help through this difficult initial period. We understand that you will still need to submit your VAT return as normal. If you pay your VAT by direct debit then it is our understanding that you will also have to cancel the direct debit to avoid HMRC automatically taking the funds from your bank account.

Retail, Hospitality and Leisure Sector – Cash Grants and Business Rates Holiday

  • The initially announced cash grants, will range from £10,000 to £25,000 depending on the rateable value of your premises (and will be for each premises), but only for businesses which are considered to the in the retail, hospitality and/or leisure sectors (shops, restaurants, cafes, drinking establishments, cinemas, live music venues, for assembly and leisure, hotels, guest and boarding premises and self-catering accommodation).
  • These grants should be paid by your local authority, who are expected to contact you in early April 2020.
  • Additionally businesses in this sector will have their rates liabilities cancelled for 2020-21, revised statements should arrive in due course.

Small Business Grant Scheme – Cash Grants

  • Businesses which benefit from Small Business Rates Relief (even if it totally extinguishes the rates payable) should be eligible for a one-off £10,000 grant.
  • These grants should be paid by your local authority, who are expected to contact you in early April 2020.

There is other information and schemes available which seem of less immediate interest but details are shown on the links provided.

We would also remind you that some elements of this guidance are provided based on current understanding and reading of the published details, the release of further detail in the future may alter our understanding and expectations of both the support schemes and processes involved. Please do not rely solely on this information, or our interpretations, to make financial decisions.


27/03/2020

Hopefully you all received our previous info-mail regarding the Government’s plans to support businesses through the Covid-19 pandemic, if not, the key points are reiterated within this email. Some of the originally promised support packages have now been expanded upon, although we all still have many questions. Such is the speed of change, and the Government’s determination to let people know that “the Cavalry is coming” that they don’t yet know themselves how they will achieve their promises (with the idea being to reassure so that undesired business decisions are avoided where possible).

We would continue to recommend that you regularly review The Government’s own guidance (Click Here) and that offered by the Institute of Chartered Accountants (Click Here). Both pages seem to be updated daily. This information can be coupled with detail from your professional bodies, forums and trade organisations to provide a good grounding of the known details. Of course, we would advise that you continue to monitor news sources and the daily announcements from Mr Johnson and his team.

We would remind everyone that this is unlike budget announcements etc, where the full details tend to be immediately available to our profession, but instead we are currently using the same sources as you to obtain our updates. However, we hope to be able to guide you through the changes and processes as things become clearer.

Self-Employed (Hot off the press…and still awaiting some details)

  • The previous support offered was that Self-Employed people could access full Universal Credits (equivalent to Statutory Sick Pay).
  • The Chancellor has just announced a Self-Employed Income Support Scheme, which has commenced immediately and will run for three months (although possible extended as necessary).
  • Grants will be provided for the lower of 80% of profits [being average monthly profits from the past three years*] or £2,500 per month for self-employed individuals who earn the majority of their income from self-employment. (*or less if the self-employed has been trading for less than three years provided they completed a 2019 Tax Return)
  • The scheme will be managed by H.M. Revenue and Customs and applications for grants are expected to be possible from early June 2020. In the mean-time the self-employed will be able to access the Coronavirus Business Interruption Loan scheme and the Universal Credits system.
  • The scheme is available for those earning up to £50,000 per year through self-employment.
  • The claiming of this grant does not seem to be dependent on the individual stopping work.
  • It is only available to individuals who completed a Self-Assessment Tax Return for the tax year ended 5 April 2019, those who should have, but have not yet submitted their returns will be given a further two weeks to complete the submission to enable them to access the scheme.
  • It remains unclear if director/shareholders will qualify as employed, or self-employed.
  • The Chancellor highlighted that future consideration will be given to the inconsistency between the overall tax contribution made by the self-employed in comparison with employed individuals.

Job Retention Scheme – Furloughing workers

  • The Government have announced that they will cover 80% of employee’s wages up to a cap of £2,500. This “cap” now appears to be for the total cost of employment, being gross wages, employers’ national insurance and employers pension contributions. You may therefore need to make some careful calculation to ensure that all employee costs are covered by the grant. This information is taken from the ICAEW website, which now details some “rules” and provides some examples - Click Here
  • This will be paid as a grant and will be processed through a new portal (not through PAYE gateway) which will become active later in April 2020. At present little additional detail of the mechanics of this system have been released but we anticipate it will be important that you continue to follow employment law and correctly notify and consult with staff who are to be furloughed.
  • It has been announced that Coronavirus Business Interruption Loans will be made available to cover the cash-flow implications of paying staff now, and waiting until late April for reimbursement.
  • You must formally notify your staff that their employment status has changed and you are not required to actually pay the full (100%) wages to reclaim the 80%, but you are required to pass on the equivalent net pay recovered to the employee.
  • We understand (from information provided by Sage) that furloughed staff are not prevented from taking paid roles with other employers during their period of inactivity.
  • Your employee cannot work in any capacity for your business whilst they are furloughed.

Coronavirus Business Interruption Loan Scheme

  • The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website (Click Here). All the major banks will offer the Scheme which was launched on 23 March 2020.
  • Initial reports are that this is not as streamlined or accessible as many had hoped, banks are either not yet able to support the demand, or struggling to meet the requirements to evidence a businesses’ viability during these unusual times. Despite this, it remains a potentially helpful support option, but may require some work and time to access. Whilst we are determined to help our clients with the necessary accounts, forecasts and management information please consider that Moore Green are also impacted by the current guidelines and our team may not have its normal capacity to help as much, or as quickly, as we would like.

Income Tax and VAT

  • The July 2020 “2nd” income tax payment on account has been deferred until January 2021. This does not mean the tax isn’t payable, only that you get an extra six months to pay.
  • VAT payments have been deferred until the 30 June 2020. Again, this doesn’t mean the amount isn’t payable, you just get longer to help through this difficult initial period. We understand that you will still need to submit your VAT return as normal. If you pay your VAT by direct debit then it is our understanding that you will also have to cancel the direct debit to avoid HMRC automatically taking the funds from your bank account.

Retail, Hospitality and Leisure Sector – Cash Grants and Business Rates Holiday

  • The initially announced cash grants, will range from £10,000 to £25,000 depending on the rateable value of your premises (and will be for each premises), but only for businesses which are considered to the in the retail, hospitality and/or leisure sectors (shops, restaurants, cafes, drinking establishments, cinemas, live music venues, for assembly and leisure, hotels, guest and boarding premises and self-catering accommodation).
  • These grants should be paid by your local authority, who are expected to contact you in early April 2020.
  • Additionally businesses in this sector will have their rates liabilities cancelled for 2020-21, revised statements should arrive in due course.

Small Business Grant Scheme – Cash Grants

  • Businesses which benefit from Small Business Rates Relief (even if it totally extinguishes the rates payable) should be eligible for a one-off £10,000 grant.
  • These grants should be paid by your local authority, who are expected to contact you in early April 2020.

There is other information and schemes available which seem of less immediate interest but details are shown on the links provided.

We would also remind you that some elements of this guidance are provided based on current understanding and reading of the published details, the release of further detail in the future may alter our understanding and expectations of both the support schemes and processes involved. Please do not rely solely on this information, or our interpretations, to make financial decisions.

Moore Green


23/03/2020

To all our clients, apologies for the generic advice, but in these fast-evolving times we are trying to keep clients as informed as possible.

As we are sure you have noticed, the headline announcements are arriving far quicker than the actual details and they are, we believe, being released in this way to provide reassurance to employers and business owners. It is likely that the keen researchers amongst you have already found out much of what we are about to mention, but hopefully what follows will be of some use, even it is confirming your understanding. Of course, if you would like to discuss things, please give us a call.

In terms of regularly updated information, we have found two of the best sources to be The Government’s own website (Click Here) and the Institute of Chartered Accountants (Click Here). Both pages are fairly general, and your professional bodies, forums or trade organisations may have more niche information. Both the Government website and ICAEW one are updated daily so do check back regularly for the latest data.

We will focus on the items that we think are most relevant to all;

Job Retention Scheme – Furloughing workers

  • The Government have announced that they will cover 80% of employees wages up to a cap of £2,500 (it is not clear if this refers to gross or net, we assume gross). This will be paid as a grant and will be processed through a new portal (not through PAYE gateway) which will become active later in April 2020. At present little additional detail of the mechanics of this system have been released but we anticipate it will be important that you continue to follow employment law and correctly notify and consult with staff who are to be furloughed.
  • The Government Guarantee is backdated to 1 March 2020 and is currently planned to be in operation for three months.
  • It has been announced that Coronavirus Business Interruption Loans will be made available to cover the cash-flow implications of paying staff now, and waiting until late April for reimbursement.
  • You must formally notify your staff that their employment status has changed and you are not required to pay the full wages to reclaim the 80%, but you are required to pay the minimum of 80%.
  • Your employee cannot work in any capacity for your business whilst they are furloughed.

Income Tax and VAT

  • The July 2020 “2nd” income tax payment on account has been deferred until January 2021. This does not mean the tax isn’t payable, only that you get an extra six months to pay.
  • VAT payments have been deferred until the 30 June 2020. There is no mention as to whether submissions are required, so we are assuming
  • For the time being they still are as normal. Again, this doesn’t mean the amount isn’t payable, you just get longer to help through the tough initial period.

Retail, Hospitality and Leisure Sector – Cash Grants and Business Rates Holiday

  • Some clarity has been provided regarding the initially announced cash grants. These range from £10,000 to £25,000 depending on the rateable value of your premises (and will be for each premises), but only for businesses which are considered to the in the retail, hospitality and/or leisure sectors (shops, restaurants, cafes, drinking establishments, cinemas, live music venues, for assembly and leisure, hotels, guest and boarding premises and self-catering accommodation)
  • These grants should be paid by your local authority, who are expected to contact you in early April 2020.
  • Additionally businesses in this sector will have their rates liabilities cancelled for 2020-21, revised statements should arrive in due course.

Small Business Grant Scheme – Cash Grants

  • Businesses which benefit from Small Business Rates Relief (even if it totally extinguishes the rates payable) should be eligible for a one-off £10,000 grant.
  • These grants should be paid by your local authority, who are expected to contact you in early April 2020.

Coronavirus Business Interruption Loan Scheme

  • The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website (Click Here). All the major banks will offer the Scheme once it has launched, which should be 23 March 2020.

Self-Employed

  • The current stance is that Self-Employed people can access full Universal Credits (equivalent to Statutory Sick Pay), but it is understood that a more suitable solution to this complex issue is being considered.

Mortgage & Rent Holidays

  • Mortgage Holidays are available to allow, currently, a three-month holiday from payments. Interest will still accrue on the loaned amount. This option is available on both residential and buy-to-let mortgages, with the latter being relevant because;
  • Tenants are also able to apply for a three-month payment holiday and evictions and repossessions are not possible for the next three months. It is our understanding that the rent remains payable and arrangements will need to be made to then clear this amount on top of normally payable amounts.

Additional measures have been announced, but it is considered that the above elements will be the most relevant to the widest range of our clients. If you have specific questions please feel free to contact us. We will be endeavouring to minimise disruption to our services although this may be impacted by government guidelines and future announcements.

Please be aware that as details emerge it might impact on our understanding of the new systems and processes.

With kind regards,

The Partners and Staff of Moore Green