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Deadline looms for CBILS

The clock is ticking for businesses that wish to apply for support via the Coronavirus Business Interruption Loan Scheme. Applications need to be submitted by midnight on September 30th . Any business who meets the criteria has until then to complete the application process.

We should add that this deadline also applies to the “little brother scheme” known as the bounce-back loan scheme. Under this scheme the maximum available to borrow is the lower of £50k or 25% of your annual turnover.

The scheme helps small and medium-sized businesses to access loans and other kinds of finance up to £5 million.

A panel of approved lenders (which includes all the mainstream commercial banks) can provide up to £5 million in the form of loans, overdrafts, invoice finance and asset finance.

The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months.

Our administration of all the Government support schemes applications on behalf of our clients has been 100% successful.

We have secured funds rapidly for them to inject into their business at the extremely attractive terms offered under the CBILS packages (and the bounce back loan scheme).

If you need support in completing your application for this scheme before the deadline on September 30th – please email Murray Patt as soon as possible.

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Accountants in Hale – the benefits for our clients

Accountants Hale

Since lockdown began, we’ve noticed a significant upturn in the number of business owners who live just a ‘stone’s throw’ from our office in Hale expressing how much they love having their accountants based near where they live.

A large number of business owners (and their advisers) choose to live in Hale, Hale Barns, Bowdon or Altrincham –  even if they run successful businesses in other parts of Greater Manchester.

Many business owners have already confirmed that that they have no intention of their staff returning to work as normal in their city centre office – and neither do they.

In fact, like us, they swiftly adapted to the new normal and have been able to continue their business operations with the vast majority of staff working at home thanks to technology and an entrepreneurial attitude.

Why choose accountants in Hale?

Being located in Hale means we are perfectly placed to deliver our professional services to business owners who, in no uncertain terms, want to avoid Manchester city centre!

That’s why we’re seeing so many business owners switch their accountants from city-centre based firms to ours in Hale.

By appointing us as your accountants you’ll avoid all the headaches that come with trips to the city centre including: the commute into town, parking problems and the sheer waste of time and unproductiveness of meeting accountants in the city centre.

We have:

  • Grade A offices in the heart of Hale on Hale Road. ✅

  • Plenty of free parking

  • A client base of successful entrepreneurs who live locally just like you ✅

  • Talented and experienced staff

  • More competitive rates than ‘rival’ city centre-based practices ✅

  • An entrepreneurial attitude to help your business thrive in 2020 and beyond ✅

Of course, we’re always ready to meet via Zoom – but we firmly believe that most people in business still prefer a face-to-face meeting – and there’s nowhere handier for locally-living entrepreneurs than our office in Hale.

Why don’t you speak to us about becoming your new accountants in the new post-Covid  era?

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Apprentice secures full AAT membership

We are proud to report that our colleague Jack Crowther, who joined us as an apprentice, has now attained AAT full membership (MAAT) – the internationally recognised professional status in accounting and finance.

We are committed to supporting the careers of the next generation of accountants and we are delighted with the progress and dedication that Jack has shown.

Alexander Knight & Co is an attractive career choice for both experienced accountants and people who are just starting off in their career.

Our supportive, flexible and entrepreneurial approach attracts just the right kind of professionals who our wide client base of business owners trust.

If you want to join a growing firm that invests in your accountancy career – especially one that offers a hybrid office/homeworking environment in the current climate – then speak to us now.

We are recruiting – so please send your CV to Alison Spier now. 

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3 things you need to know about #Budget2020

budget 2020 for entrepreneurs

We were looking for a budget to support businesses – jobs – and help entrepreneurs during unprecedented times.

Today’s statement by the Chancellor  goes some way towards that goal – but we will be analysing the details over the next few days and weeks to see how it impacts our clients who are running businesses in the real world where existing conditions remain challenging.

Key highlights:

£1,000 Job Retention Bonus

If you have furloughed staff – and you bring them back into the workforce through to January, you’ll be entitled to £1,000 per employee. This is badged as an ‘incentive’ for employers to re-introduce furloughed workers to their business. You should only re-introduce employees to your business when it makes commercial sense to do so.

It was confirmed today that the furlough scheme will not be extended after October.

VAT rate cut

The VAT rate cut launches next Wednesday (15 July). This rate cut from 20% to 5% on food, hospitality and tourism is welcome. The key to its success for these sectors (apart from making bills slightly cheaper) is a positive reaction from consumers. If you need guidance on the VAT rate cut please contact our tax team now.

Trainees 

In a further initiative to boost employment, the Chancellor announced a new trainee scheme for people aged 16-24 which may be of interest to some businesses. The new traineeships will provide classroom-based lessons in maths, English and CV writing, as well as up to 90 hours of unpaid work experience. Employers will be given £1,000 for each new work experience place they offer.

And finally…

There will be a new ‘Eat Out to Help Out’ scheme launched – which offers diners, through the scheme, 50% off their meals out (up to £10 per person) during August. Those hospitality businesses which offer this scheme can claim the lost revenue from the Government.

If you need advice about how today’s announcements affect your business – talk to us now.

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Furlough scheme: new changes for employers

Changes to the furlough scheme for employers

The Coronavirus Job Retention Scheme will finish at the end of October and there are some important things you need to know as an employer.

From August, employers must pay National Insurance and pension contributions, then 10% of pay from September, rising to 20% in October.

Furlough scheme changes for employers

Also, employees can return to work part-time from July, but with companies paying 100% of wages.

The scheme was originally intended to last until the end of July and the confirmation that it is running until the end of October is largely good news for employers, employees and the wider economy.

Some businesses, however, may need to consider their staffing levels when the cost of pension contributions and and National Insurance is factored in – as well as the tapering off of the support in September and October.

Support making new furlough claims

It is important that if you are making furlough claims you calculate the amount you can claim accurately. We have already seen multiple instances of clients missing out on money they are entitled to because they have ‘under-claimed‘. Any more additional procedures added to the extended scheme could see more errors being made.

If you need support to make your claim – speak to us. 

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How to get a ‘bounce back’ loan

If you are looking for a small business loan (up to a maximum of £50,000) you may wish to consider the  ‘bounce-back’ loan scheme launched by the Government.

The scheme is specifically designed to help smaller businesses and may be more appropriate than some of the other ‘loan’ initiatives launched by the Government recently.

What we know so far: 

  • Businesses will be able to apply for these new ‘bounce-back’ loans for 25% of their turnover up to a maximum of £50,000.
  • You can apply for between £2,000 and £50,000.
  • The Government will pay the interest for the first 12 months.
  • These loans will be available from 9am next Monday (4th May 2020).
  • No forward looking tests of business viability’ of the kind that has prevented some businesses from accessing other loan schemes will occur.
  • It is promised to be simpler and faster than previous loan schemes.

This may be suitable for your business if you require funding up to £50,000.

You can read more about the scheme here.

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How to ‘furlough’ employees and company directors

How to furlough staff and company directors

We are guiding many clients through the process of ‘furloughing‘ employees. In addition, as we have previously indicated, company directors are also eligible to be furloughed – and we are guiding our clients through this process too.

An update has been made by the Government to the Job Retention Scheme (or ‘80% scheme’) which you can see here and officially confirms:

  • company directors are eligible to be furloughed.
  • the minimum period for each employee to be furloughed is 3 continuous weeks (the word continuous is part of the updated legislation).
  • employees can be furloughed multiple times, but each claim is for a minimum of 3 continuous weeks.

The information required by an employer in making a claim on the HMRC portal is:

  • your ePAYE reference number
  • the number of employees being furloughed
  • the claim period (start and end date)
  • amount claimed (per the minimum length of furloughing of 3 consecutive weeks)
  • your company bank account number and sort code
  • your contact name
  • your phone number

There are still some questions that the update doesn’t answer. Specifically, these are:

  • when the online portal for making a claim will be ‘live’  – HMRC guidance still refers to ‘the end of April’, but is not specific.
  • whether the 3 continuous weeks (requirement) can span a month, so that employees can return to work for short periods of time, but employers can continue to claim furlough.
  • how quickly payments for furlough will be made.

Do you need more help in furloughing staff?

We are looking at launching a new specific service to help clients make their furlough claims in the correct way. If this is of interest please email Murray Patt now so that we can assess the level of demand – and then provide the necessary resource in-house to support you.

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How to claim your VAT deferral

How to defer VAT payments coronavirus

VAT payments due before the end of June 2020 can be deferred until March 2021.

This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period

Please remember that the deferred VAT payment will eventually need be paid on or before 31 March 2021 – and VAT returns should be processed as normal.

VAT refunds and reclaims will be paid by the Government as normal.

Cancel your direct debit

However: whilst HMRC does not require you to make a VAT payment – if you pay by direct debit (and  many businesses do) YOU SHOULD CANCEL YOUR DIRECT DEBIT TO ENSURE THAT HMRC DOESN’T AUTOMATICALLY TAKE PAYMENT. 

Murray Patt says:

Many of our clients plan to make use of this VAT deferral in order to conserve cash in their business.  We are keen to remind everyone who is doing so to cancel their direct debit to avoid payment being taken.

If you have any further queries about the coronavirus VAT deferral scheme speak to Murray Patt on 0161 980 8788.

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More clarity about how the ‘80%’ scheme works

We’ve been closely monitoring the support being made available by the Government. In particular, we’ve been keen to get more details about the Job Retention Scheme (often referred to as the ‘80%’ scheme).

Further details on this particular scheme are now available directly here.

Key issues

The main aspects of the scheme which are most relevant to you (based upon our review of the rules and feedback we’ve received from the clients we have been discussing this with in detail) are as follows:

  • There doesn’t appear to be any restriction for directors/family member, which was one of our initial concerns – so everyone may apply.
  • Companies will receive a grant from HMRC to cover the lower of 80% of an employee’s regular wage or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage.
  • Furloughed employees must have been on your company payroll on or before 28 February 2020
  • If the employee has been employed (or engaged by an employment business) for a full twelve months prior to the claim, you can claim for the higher of either:
    • the same month’s earning from the previous year
    • average monthly earnings from the 2019-20 tax year

If the employee has been employed for less than a year, you can claim for an average of their monthly earnings since they started work.

  • You can choose to provide a top-up salary in addition to the grant. Employer National Insurance Contributions and automatic enrolment contribution on any additional top-up salary will not be funded through this scheme
  • Grants will be paid by BACS, after providing your bank account details, although there is no timescale for home quickly companies will be reimbursed.

This is a very rapid piece of legislation and is consistent with the Governments initial announcement. The main issue still not resolved is the timescale from submission of a claim to payment. Be assured that we will keep monitoring the situation and share key details and updates as they emerge.

If you require specific advice and support to implement this scheme in your business please speak directly to Murray Patt.

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How to implement the ‘80% of salary’ ‘Job Retention Scheme’

How to implement the '80% of salary' Job Retention Scheme

In these challenging times and with many businesses looking for answers to questions about the Government backed support, the following information, which relates to payroll & staff costs, may be useful to you:

Support for Businesses through the Coronavirus Job Retention Scheme

  • The scheme will enable businesses to recover 80% of wage costs for employees on ‘furlough leave’ – which is an entirely new concept and is a new class of indefinite leave where the government will reimburse the employer for wage costs.
  • This has been introduced as an alternative for employers who might have otherwise implemented redundancies, lay-offs, unpaid leave or other measures for their employees.
  • All UK businesses are eligible to claim under the scheme. It seems that employees will be covered, but not other workers (such as casual staff or contractors) or the self-employed, although we expect support for these classes of worker to be announced shortly.
  • The government has announced that the scheme is available for at least three months from 1 March 2020 and will be extended if necessary.

 What costs can employers recover?

  • The coronavirus job retention scheme allows for 80% of wage costs to be recovered up to £2,500 per month per employee. There is no limit on the number of employees or the duration. Wage costs are expected to include wages, pension contributions and employer national insurance (NI) contributions, although this has not yet been confirmed.

What do employers need to do?

  • Employers and employees will need to agree the members of staff being designated as ‘furloughed workers’. This should be straightforward because this route will no doubt be more attractive to employees than redundancy, lay off, unpaid leave or a reduction in pay.
  • We recommend employers send a letter/email to each employee concerned and get them to agree to the change in status formally in writing.
  • Employers will then need to submit details to Her Majesty’s Revenue and Customs (HMRC) through a new online portal, which is being set up urgently.
  • The portal is expected to be in place by the end of April, so the 1st claim will cover the months of March & April 2020.
  • The timescale for payments to businesses is not yet known.

Does the employer have to top up the employee’s pay to 100%?

  • No, they do not. Some employers may wish to make up the shortfall, while others may not be able to. This just needs to be made clear to all employees concerned.

What about employees that have already been dismissed or taken unpaid leave?

  • The scheme is backdated to 1 March 2020 and employers are urged by the government to take back anyone they had already dismissed and convert them to this leave instead. Likewise, with anyone who is on unpaid leave.

What situations will this not help with?

  • Furlough leave is recommended for anyone that would have otherwise been laid off or made redundant due to the impact of coronavirus on the employer’s business.
  • It does not help with any situations where employees had agreed to reduce their hours, or to a pay cut but where they are still required to work. There is currently no option to do a mixture of reduced hours and furlough leave.

Support for Businesses who are paying sick pay to employees

All small and medium-sized businesses and employers will be able to reclaim Statutory Sick pay (SSP) paid for sickness absence due to COVID-19.

The eligibility criteria is as follows:

  • The 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 (if we look after your payroll this matter is already being dealt with for you), but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website
  • Eligible period for the scheme will commence the day after the regulations on the extension of SSP 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

Further information is being provided by the Government regularly and you should keep up to date with these fast moving developments.

If you have any questions please do not hesitate to contact Murray Patt, or a member of my team – we are all working remotely, fully operational and we are available to speak with you.