This page will be updated as we receive more information
Last updated : 5 June 2020
Get our latest updates on the COVID-19 situation
We are producing regular emails regarding the latest updates from HMRC & the government about the COVID-19 situation and how it affects your business.
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The Chancellor, Rishi Sunak, has delivered his summer economic plan to help the UK economy recover from the impact of the COVID-19 pandemic.
Keep alert! We are noticing an increase in scam emails purporting to be from HMRC. These emails are stating that clients CJRS applications are being rejected and are attaching documents which contain viruses .
Businesses are naturally concerned about cash flow, trade after lockdown and the debt associated with using the government-backed loan schemes.
R&D tax credits can help provide a quick, debt-free source of cash during these difficult times.
Any business investing in innovation, regardless of industry, can apply for tax credit relief. Our team has recently been able to assist a business in the construction industry receive a £400k claim.
If a business is attempting to create or develop an idea, product or service through its own research into something that is not simply to advance a method or product currently in place and used by them, then the business may be carrying out a qualifying activity thus eligible for R&D Tax Credits.
Some examples of activities which have been successful in R&D Tax Credit applications:
- A new flavour in the snack industry
- Changing the fermentation process in the brewing industry
- Modifying the internal production process in the health and beauty industry
To discuss this further visit: https://www.cottonsaccountants.co.uk/research-and-development/
In a government briefing on 29 May, Chancellor Rishi Sunak confirmed that the Job Retention Scheme is to slowly wind down to a final closure at the end of October.
We have summarised below the key points and dates:
HMRC have issued updated guidance for those that are self-employed or members of partnerships.
We have prepared a brief summary of the key points to note and actions to take in our article
This scheme will help small and medium-sized businesses affected by coronavirus (COVID-19) to apply for loans of up to £50,000.
You can apply for a loan if your business:
- is based in the UK
- has been negatively affected by coronavirus
- was not an ‘undertaking in difficulty’ on 31 December 2019
Additional Funding for Small Businesses
This relates to a pool of funding available for those not covered by existing local authority grants and business rates relief, primarily aimed at small businesses (less than 50 employees) with ongoing fixed property-related costs.
There will be three levels of grant payments. The maximum will be £25,000. There will also be grants of £10,000. Local authorities will have discretion to make payments of any amount under £10,000. It will be for councils to adapt this approach to local circumstances.
The grants are primarily and predominantly aimed at Small Businesses, with relatively high ongoing fixed property-related costs. Businesses will need to demonstrate that they have suffered a significant fall in income as a result of COVID-19.
- The Government has asked for the following businesses to be prioritised;
- Small businesses in shared offices or other flexibles workspaces.
- Regular market traders with fixed building costs, without their own business rates assessment.
- Bed & Breakfasts which pay Council Tax (rather than Business Rates)
- Charity properties in receipt of Charitable Business Rates Relief which would otherwise have been eligible for Small Business Rates Relief or Rural Rate Relief
HMRC have released a step by step guide explaining the information that employers need to provide to HMRC to make a claim through the Coronavirus Job Retention Scheme (CJRS).
Find out how to calculate 80% of your employee’s wages, National Insurance Contributions and pension contributions if you’ve furloughed staff due to coronavirus (COVID-19).
- a small business
- a retail or hospitality business
- a leisure business
Rugby Borough Council will be administering the Government’s Small Business Grants for eligible businesses that currently pay business rates in the Borough.
The Council aims to contact all eligible small businesses shortly with details on how to apply and are working to get the applicable grants paid as soon as possible.
Registered eligible businesses can complete an online confirmation statement confirming their eligibility by clicking the image below:
We have received news that some local councils are offering to delay payments for those most in need.
Please contact your local council to discuss further.
This page will be updated as we receive more information
In a further update to the Coronavirus Job Retention Scheme guidance, the government has announced that it will now cover the employer national insurance (NI) and employer auto enrolment costs for furloughed staff
The Government has confirmed that those who pay themselves a salary and dividends through their own company are not covered by the Self-employment scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating a PAYE scheme.
The Coronavirus Job Retention Scheme requires that an employee is ‘furloughed’; effectively stood down. There has been some debate as to whether Directors could be furloughed as they could not meet the criteria of ‘not working’ (providing services or generating revenue). Although not officially confirmed it is understood that a Director will be allowed to fulfil their statutory obligations as directors (e.g. official legal filings to companies house etc.) whilst furloughed. On this basis in appropriate circumstances Directors may be furloughed and claim under the Coronavirus Job Retention Scheme.
Points to note:
- To be furloughed there is a minimum of 3 weeks you can’t work for your company but you can continue to fulfil any statutory responsibilities as a Director e.g. official legal filings to Companies House etc.
- Your actual salary before tax, as of 28 February 2020 will be used to calculate the 80% funding This will vary depending on your salary arrangements.
In the typical Directors case a salary of £719 per month (£8,628 pa) would give rise to 80% funding of £575. On a salary of £1,042 per month (£12,500 pa) funding would be £833.
- If a higher salary was being declared then the funding will be based on this higher figure subject to a cap of £2,500 per month
- For those we prepare the payroll for – tell us if you are furloughing yourself and any employees – we’ll need the date effective from and how much is being paid.
- To be eligible for the subsidy employers should write to their employee confirming that they have been furloughed and keep a record of this communication – Directors should also keep some written evidence of the decision to furlough and the date it applies from. Keep this written evidence or email to us for our records.
HMRC have now issued guidance on what can be claimed through the Job Retention.
Our team have been in touch with HMRC this morning (via their web chat).
The advisors have recommended that where our clients have a Direct Debit set up and wish to take advantage of the VAT deferral, they should instruct their bank to cancel the Direct Debit rather than expect HMRC to not collect the payments during the deferral period.
The deferral applies to payments due between 20 March and 30 June (this covers VAT quarters Feb 20 to April 20 only).
May VAT returns will need to be paid by 7 July.
You must apply to Companies House for the extension. If you do not apply for an extension and your accounts are filed late, an automatic penalty will be imposed.
The Latest Updates from the Government
The Chancellor has set out a package of temporary, timely and targeted measures to support public services, people and businesses through this period of disruption caused by COVID-19.
The following links provide information on financial support packages for businessess, advice on how to operate your business, support for your employees, for example workers’ wage costs and information on changes to planning and regulations.