Below I have summarised all the main tax related updates we have seen this week.
·
Chancellors
Winter Economy Plan
·
Business
Evictions - New Guidance
·
Statutory
Sick Pay SSP Paid to Employees Due to Coronavirus
·
Businesses
Urged to Prepare for NHS COVID-19 App
·
Hillmans
Business News Update
If you have any queries about this
week’s content, please do not hesitate to contact me.
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
Chancellors Winter Economy Plan
Here is our summary of the headlines
from the Chancellors statement in Parliament yesterday where a series of
measures to help jobs and businesses were announced.
NEW JOB SUPPORT SCHEME ANNOUNCED
Today Chancellor Rishi Sunak announced
a new job scheme starting 1 November 2020 to replace the current Job retention
(“furlough”) scheme which ends 31 October 2020.
All small and medium-sized businesses
are eligible, larger businesses must show their turnover has fallen during the
pandemic. Employers can use the new scheme even if they have not previously
used the furlough scheme.
The new Government scheme will last for
six months to 30 April 2021 and to be eligible employees will need to be
working a minimum of 33% of their hours. For the remaining hours not worked the
Government and employer will pay one third. of wages each. This means:
Employers will continue to pay the
wages of staff for the hours they work - but for the hours not worked, the
government and the employer will each pay one third of their equivalent salary.
Employees who can only go back to work
on shorter time will still be paid two thirds of the hours for those hours they
can’t work.
The level of grant will be calculated
based on employee’s usual salary, capped at £697.92 per month.
By way of an example an employee
working 33% of their hours will receive at least 77% of their pay, 22% paid by
the Government and 55% paid by their employer (the “worked” 33% plus 22%).
SELF-EMPLOYED INCOME SUPPORT SCHEME
The existing self-employed grant
(SEISS) will also be extended on the same basis as the job support scheme.
An initial taxable grant will be
provided to those who are currently eligible for SEISS and are continuing to
actively trade but face reduced demand due to coronavirus. The initial lump sum
will cover three months’ worth of profits for the period from November to the
end of January next year. This is worth 20% of average monthly profits, up to a
total of £1,875.
An additional second grant, which may
be adjusted to respond to changing circumstances, will be available for
self-employed individuals to cover the period from February 2021 to the end of
April.
VAT CUT FOR HOSPITALITY SECTOR
CONTINUES
The reduction in VAT to 5% for the
hospitality and tourism sector will be extended until 31 March 2021.
DEFERRAL OF VAT BILLS
Up to half a million businesses who
deferred their VAT bills will be given more breathing space through the New
Payment Scheme, which gives them the option to pay back in smaller instalments.
Rather than paying a lump sum in full at the end March next year, they will be
able to make 11 smaller interest-free payments during the 2021-22 financial
year.
SELF-ASSESSMENT TAXPAYERS – TIME TO PAY
EXTENSION
Approximately 11 million
self-assessment taxpayers will be able to benefit from a separate additional
12-month extension from HMRC on the “Time to Pay” self-service facility,
meaning payments deferred from July 2020, and those due in January 2021, will
now not need to be paid until January 2022.
BOUNCE BACK LOANS - FLEXIBILITY GIVEN
TO PAY BACK AMOUNTS BORROWED
More than a million businesses who took
out a Bounce Back Loan will get more repayment time through a new Pay as You
Grow flexible repayment system.
This includes extending the length of
the loan from six years to ten, which will cut monthly repayments by nearly
half. Interest-only periods of up to six months and payment holidays will also
be available to businesses.
The Government also intends to give
Coronavirus Business Interruption Loan Scheme lenders the ability to extend the
length of loans from a maximum of six years to ten years if it will help
businesses to repay the loan.
The chancellor also announced an
extension in applications for the government’s coronavirus loan schemes until
the end of November.
Further guidance will be issued in due
course.
See: https://www.gov.uk/government/news/chancellor-outlines-winter-economy-plan
Business Evictions - New Guidance
Commercial tenants will be protected
from the risk of eviction until the end of 2020.
This move will help those businesses
most in need of additional support to remain in their premises without the
threat of eviction for the rest of this year, giving them the chance to focus
on rebuilding their business over the autumn and Christmas period.
See:
https://www.gov.uk/government/news/government-extends-support-to-stop-business-evictions-this-year
Statutory Sick Pay SSP Paid to
Employees Due to Coronavirus
From the 26th August 2020 employers can
claim for employees who have been notified by the NHS to self-isolate before
surgery.
This scheme is for employers. You can
claim back up to 2 weeks of SSP if:
• you
have already paid your employee’s sick pay
• you
are claiming for an employee who’s eligible for sick pay due to coronavirus
• you
have a PAYE payroll scheme that was created and started on or before 28th
February 2020
• you
had fewer than 250 employees on 28th February 2020 across all your PAYE payroll
schemes
Employees do not have to give you a
doctor’s fit note for you to make a claim. But you can ask them to give you
either:
• an
isolation note from NHS 111 – if they are self-isolating and cannot work
because of coronavirus (COVID-19)
• the
NHS or GP letter telling them to stay at home for at least 12 weeks because
they are at high risk of severe illness from coronavirus
The scheme covers all types of
employment contracts, including:
• full-time
employees
• part-time
employees
• employees
on agency contracts
• employees
on flexible or zero-hour contracts
• fixed
term contracts (until the date their contract ends)
Businesses Urged to Prepare for NHS
COVID-19 App
Pubs, restaurants, hairdressers,
cinemas and other venues across England and Wales are being urged to download
QR codes to prepare for public rollout of new app.
The NHS COVID-19 app is currently being
trialled and will launch on Thursday 24 September in England and Wales,
including QR check-in at venues.
QR codes will be an important way for
NHS Test and Trace in England and NHS Test, Trace, Protect in Wales to contact
multiple people if coronavirus outbreaks are identified in venues.
Businesses across England and Wales
like pubs, restaurants, hairdressers and cinemas are being urged to ensure they
have NHS QR code posters visible on entry so customers who have downloaded the
new NHS COVID-19 app can use their smartphones to easily check-in.
See: https://www.gov.uk/government/news/businesses-urged-to-prepare-for-nhs-covid-19-app
Hillmans Business News Update
The main economic news at the start of
this week is that the UK inflation rate fell to 0.2% as the Eat Out to Help Out
scheme reduced restaurant prices. There is also speculation that the Government
is looking at a new jobs scheme to replace the coronavirus job retention scheme
(CJRS). If there are any announcements we will keep you informed.
With Brexit looming the Government has
stated that the new freight management system will be ready the 1st January
2021. The “Smart Freight system” ensures
that trucks are carrying the correct documentation before they travel to ports.
The new system is designed to reduce delays and to better manage traffic into
Dover and prevent queues of lorries building up along the M2 and M20 motorways.
There are a number of changes to the
CJRS including a new calculation from 14 September.
From 26 August 2020 you can claim
Statutory Sick Pay (SSP) for employees who have been notified by the NHS to
self-isolate before surgery. Further HMRC guidance on paying back CJRS grants
made in error are given. Pubs, restaurants, hairdressers, cinemas and other
venues across England and Wales are being urged to download QR codes to prepare
for public rollout of new app.
It looks like we are in for a lot of
changes to how we do things between now and the end of the year and our role is
to support you through these and ensure your business takes actions to manage
the changes.
Please talk to us about how we can help
you plan forward. We are with you all the way!
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