Coronavirus Bounce Back Loan

Well at least the name is a bit more Boris esque. He must be back leading the troops.

This scheme will launch on Monday 4th May 2020. The aim of the scheme will be to help small and medium sized businesses to borrow between £2,000 and £50,000 with all the loan being 100% guaranteed by government. In addition, there will be no set up fees or interest payable in the first 12 months, and low rates of interest for the remaining 5 years after that. There will also be no repayments due for the first 12 months.

To be eligible, the business must be UK based, negatively affected by the virus, and was not in difficulty as at 31st December 2019. Certain types of industries cannot apply, such as banks, insurers, public sector bodies, grant funded further education, and state funded primary & secondary schools. Also, this loan cannot be claimed if a claim has already been made under the Coronavirus Business Interruption Loan Scheme, but a loan already received under that scheme can be transferred over to the Bounce Back Scheme.

More information on the scheme will follow shortly, and loans are expected to be approved within days of application.

All good news for the smaller businesses who need immediate cash flow.

What A Month That Was

WOW…………In over 35 years of working in a chartered accountancy practice, with 25 of those being at the helm of our own practice here, it will probably not be a surprise to any of you that the last month has been the strangest, and most turbulent, of all time.

We had a budget the second week in March which is now essentially redundant. We’ve had our prime minister in intensive care. The national debt will be the largest in any peace time history of our nation. The country’s output is expected to be at 12.9%, and 50% signifies recession. We are facing mass jumps in unemployment. We are facing large scale business failures. The government seems split between NHS Doves, and the economic Hawks. Investments and pensions have crashed. We are, to put it mildly, in the grips of an economic contaction on a scale not seen possibly since the South Sea Bubble Crash of 1720.

Now is the time to seek our advice, and to turn to your trusted advisors. This trusted advisor status of course doesn’t just end with your accountant, tax advisor, business advisor, but extends to your financial advisor, your legal advisor, and your banking advisor. Embrace, and use the knowledge and experience that these advisors have to offer.

Events are fast moving, and sometimes are changing by the day, or by the hour. After all, not one of us has ever encountered this before. So there is no contingency plan in place. There is no template to use as the model. It will all come down to proactivity, and taking aggressive action to beat or soften the inevitable downturn in the ecomomy.

The rules on making claims on furlough have been relaxed, and clarified, only this week. The self employed will need assistance with making their own grant claims come June. The ” unfair ” outcome of the furlough claims for directors in most small firms may be changed. Banks are looking to make loans. Businesses are looking to take out loans. Forecasts, management accounts, business plans, tax planning, cash flow planning, are all more important perhaps than ever before for the mainstream.

In the last week we are being asked to prepare more business plans. We are helping clients make grant claims. We have a record number of clients bringing their accounts into the office so that they can remain on top of their affairs ( and thank you for this by the way, as it is something that we want you to do, and would strongly recommend that you in fact do ), we are chasing up tax repayment claims, we are advising on VAT deferral,and we are doing so much more than what we would have been doing this time last year.

PLEASE, PLEASE, PLEASE remember that we are here to help you in whatever way we can during these difficult, strange, and turbulent times. Please contact your usual staff member for initial guidance.

CJRS Claim for Furloughed Employees

The portal to make the claim for the CJRS to HMRC is now open as of today.

The relevant information you will need to make the claim is all as per previous news updates on this website. In addition, we would recommend that you regularly visit GOV.UK to remain fully up to date.

Clients of ours have already submitted claims, and the process therefore is relatively straight forward, so long as you have all the information and access requirements in place.

We are not allowed to make claims on behalf of clients, as we are RTI filing only agents. You must therefore submit your own claims direct to HMRC.

We will, however, hold information that you may need, and our payroll department is here to help you. If you need any information, help, or guidance through this process then please contact Jackie on her email address.

I should however mention that as of midday today she had received over 60 emails from clients just on this one subject alone. She will work her way through all client emails, but please understand that there may be a slight delay in the current climate, especially the early part of this week.

Furlough Claim Update

I am referring to the furlough claim update as most people will recognise this term much easier than ” Coronavirus Job Retention Scheme “. They are for this purpose the same.

Our previous article advised clients to prepare the information in readiness to make the claim. There have also been recent changes made to the Scheme. The changes are :

1) You can claim for employees who were employed as of 19th March 2020, and were on your payroll on or before that date. Previously the date was 28th February.

2) Employees on the payroll as at 28th February, and who were made redundant or stopped working for you after that date but prior to 19th March, can be re employed and placed on furlough and qualify. We would however advise caution here, as the employee reinstated will continue to have all employment rights and you may decide to speak with your employment solicitor before taking this action.

For claims purposes, the online claim service will be launched on GOV.UK on 20th APRIL 2020. Do not attempt to access it before then as it will not exist.

The only way to make a claim is also ONLINE.

Claims should be paid within 6 working days. Do not telephone HMRC unless this is absolutely necessary, as they will be unable to cope with the demand if this was excessive.

You will need the following information before the 20th April/date of claim :

1) A government Gateway ID and password. If you do not have one, then apply NOW via ” HMRC services sign in or register “.

2) Ensure you are enrolled for PAYE online via HMRC ” PAYE online for employers “.

3) For each furloughed employee you will need the name, national insurance number, claim period, claim amount. This information will need to be input directly for each employee where you have fewer than 100 furloughed staff.

Our advice to you is to use any current business down time productively by taking these steps in readiness.

Cash Flow Management

As the old saying goes ” CASH IS KING “.

In these current economic and uncertain times, this phrase is probably truer than it has ever been before. Cash flow is more crucial to the survival and success of a business than profit itself in the short term.

As businesses we should all help each other as much as possible by ensuring that the cash continues to flow through the supply chain. So suppliers get paid if at all possible, and debtors pay if at all possible. There is a tendency sometimes to ringfence the cash and change your own payment terms for protectionist measures. This only impacts on other businesses further down the line who may need that cash for their very survival. In the longer term it is more damaging to the whole economy and ultimately our own business which we were trying to protect in the first place.

Good cash flow management is critical and good cash flow forecasting is critical. A business needs to know where it will be not just tomorrow, but next week, next month, and in 6 months time.

If any client needs our assistance in preparing these forecasts, then please come to us as soon as possible.

In addition to forecasting, a business may need loan assistance, or accessing loans. Again we can help and we are on hand for you.

Whilst you may not be able to control what is happening in the wider world, and on the health scene, you can always take control of your own actions and how to best position yourself through the current crisis.

Please speak with your usual contact in the office if you need our assistance.

Furloughed Staff Grant Claim

The portal for making a claim to HMRC for the grant in respect of furloughed employees is expected to be up and running within the next few weeks.

You need to be planning and organising NOW.

You will need the following information to make the claim, and you should be organising this in readiness :

1) The bank account sort code and account number that the claim should be paid into.

2) The name and telephone number of the person in your organisation who HMRC can call if they have any questions.

3) Your self assessment reference ( UTR ) if an individual/partnership, or the company UTR or company registration number if a corporate entity.

4) The name, employee number, and national insurance number for each of the furloughed employees.

5) The total amount being claimed for all employees, and the total furlough period.

If we process and file your payroll for RTI purposes, please note that we are NOT allowed to make this claim for you, but we will have some of the relevant information. If you need information, please contact us as soon as possible.

Off Payroll Working

The reforms to the off payroll working rules, IR35, are being postponed from April 2020 to April 2021 as a consequence of the Covid 19 outbreak.

The chief secretary to the Treasury confirmed that this was not a cancellation but merely a deferral. He confirmed that ” the government was committed to reintroducing this policy to ensure that people working like employees but through their own limited companies pay broadly the same tax as those employed directly “

Grant Funding Schemes

In response to Covid 19, two forms of grant funding schemes will be delivered by local authorities to eligible businesses. For more information please visit www.businesssupport.gov.uk

Under the small business grant fund eligible businesses in England who receive either small business rates relief or rural rates relief will be eligible for a grant of £10,000. Eligible businesses will receive one grant per property used for business purposes. The ratepayer as per the authority’s records on 11th March will receive the grant.

Under the retail, hospitality, and leisure grant fund eligible businesses in England in receipt of the expanded retail discount with a property that has a rateable value up to £15,000 will receive a grant of £10,000. If the property has a rateable value of £15,000 up to £51,000 then the grant is £25,000. Again the property must be used for business purposes, as at 11th March.

The government has confirmed that they will not accept deliberate manipulation and fraud, and any business caught falsifying their records to gain a grant will face prosecution and a claw back of the grant.

In cases where there are clear errors on the rating list as at 11th March, local authorities may at their discretion withhold any grant or award any grant based on their view as to which business was entitled to it.