Below I have summarised all the main tax related updates we have seen this week.
- Plan For Jobs: Chancellor Increases Financial Support for Businesses and Workers
- New Online Service to Check the Status of SEISS
- COVID-19 News Update and Business Planning
- 20 Point UK Brexit Planning Checklist
- Apply for a Kickstart Grant
I’m away on annual leave next week with the family for half-term, but please don’t hesitate to contact the team on 01934 444100 or email at team@hillmans.co.uk if you have any queries about this week’s content, or if you need any assistance.
I hope you have a great weekend!
Best wishes,
Steve
Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk/covid-19-updates
Plan For Jobs: Chancellor Increases Financial Support for Businesses and Workers
The government yesterday announced it will increase the amounts and reach of its winter support schemes.
In recognition of the challenging times ahead, the Chancellor said he would be increasing support through the existing Job Support and self-employed schemes and expanding business grants to support companies in high-alert level areas.
H M Treasury states that open businesses which are experiencing difficulty will be given extra help to keep staff on as the Government will increase contributions to wage costs under the Job Support Scheme, and business contributions drop to 5%.
Business grants are expanded to cover businesses in particularly affected sectors in high-alert level areas.
Grants for the self-employed doubled to 40% of previous earnings
Job Support Scheme (JSS)
When originally announced, the JSS – which starts on 1 November, saw employers paying a third of their employees’ wages for hours not worked and required employees to be working 33% of their normal hours.
Today’s announcement reduces the employer contribution to those unworked hours to 5%, and reduces the minimum hours requirements to 20%, so those working just one day a week will be eligible. That means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer £44.
Self-employed grant
Today’s announcement increases the amount of profits covered by the two forthcoming self-employed grants from 20 per cent to 40 per cent, meaning the maximum grant will increase from £1,875 to £3,750.
Business Grants
The Chancellor has also announced approved additional funding to support cash grants of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert level areas. These grants will be available retrospectively for areas who have already been subject to restrictions and come on top of higher levels of additional business support for Local Authorities moving into Tier 3.
These grants could benefit around 150,000 businesses in England, including hotels, restaurants, B&Bs and many more who are not legally required to close but have been adversely affected by local restrictions.
New Online Service to Check the Status of SEISS
The HMRC online service is now closed for the Self-Employment Income Support Scheme and you can no longer make a claim for the second grant.
However there is a new online service to check the status of SEISS payments.
You can use this new service if you think the grant amount is too low or HMRC have asked you to update your details for your claim.
See: https://www.gov.uk/guidance/return-to-your-claim-for-the-self-employment-income-support-scheme
COVID-19 News Update and Business Planning
This week has seen more discord between national and regional government in England as the new three tier system has been introduced. Wales goes into a national lockdown for a “short, sharp circuit-break” on Friday, in which people will be told to stay at home in most circumstances and the hospitality and leisure sector closing. There are new restrictions in parts of central Scotland and four weeks of tighter rules announced for Northern Ireland. We can expect more of the same over the coming months.
THE LATEST INDICATORS FOR THE UK ECONOMY AND SOCIETY
The Office for National Statistics has announced its latest experimental data on the economy which shows nearly half (48%) of currently trading businesses reported that their turnover had decreased below what is normally expected for this time of year. This is not a surprise given the Pandemic.
So, if you are running a business and turnover is down, what should you be doing to ensure resilience?
Clearly we are living in tough times and it makes sense to take advantage of Government supports both directly such as the job retention and new support schemes, deferring tax and using bounce back loans.
There are also grants available to help firms with Brexit changes for import and export administration.
BUSINESS PLANNING
Business planning for the unknown can be very difficult but there are some practical steps you can take to minimise potential disruption to your business:
1. Review your Budgets and set realistic and achievable targets for the remainder of 2020 and into the early part of 2021.
2. Get your employees involved in a discussion of likely trading conditions and get their input on reducing costs and maintaining revenues.
3. Use ‘bottom up’ budgeting where everyone in the business gives input on areas over which they have control – target a 10% cost saving.
4. Review and flow chart the main processes in your business (e.g. Sales processing, order fulfilment, shipping etc.) and challenge the need for each step.
5. Encourage team members to suggest ways to streamline and simplify processes (e.g. sit down and brainstorm about efficiencies and cost reduction).
6. Put extra effort into making sure your relationships with your customers are solid.
7. Review your list of products and services and eliminate those that are unprofitable or not core products/services.
8. Review efficiency of business processes and consider alternatives such as outsourcing certain activities locally or overseas.
9. Agree extended payment terms with all suppliers in advance.
10. Pull everyone together and explain the business strategy and get their buy-in.
Please talk to us about cash flow planning for the next six months, we can help with a template so you can do this yourself (see below) or work together to produce estimates for a variety of scenarios.
FREE CASH-FLOW TEMPLATE
In order to help with this we are making available a basic cash-flow forecast template to anyone who needs it. You can download the template free of charge from our website here: https://www.hillmans.co.uk/cash-flow-template
20 Point UK Brexit Planning Checklist
There is still some uncertainty as to whether the UK or EU will agree a tariff free trade agreement. Either way UK business will face additional documentation for importing and exporting goods to the EU from 1 January 2021.
Planning for the new requirements seems sensible right now. There are also other business matters to consider such as data protection, intellectual property and replacing existing agreements with EU suppliers and customers.
Use our 20-point checklist to review your Brexit preparedness and the Government information to prepare actions for 1 January 2021.
You can view our 20-point checklist on our blog here: https://blog.hillmans.co.uk/2020/10/20-point-uk-brexit-planning-checklist.html
Apply for a Kickstart Grant:
The Kickstart Scheme provides funding to employers to create job placements for 16 to 24-year olds on Universal Credit who are at risk of long-term unemployment.
We've put together a blog post on how to apply for a Kickstart scheme grant for 29 or less job placements here: https://blog.hillmans.co.uk/2020/10/apply-for-kickstart-grant.html
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