Articles & seminars

Coronavirus / COVID-19 Updates

A brief summary of advice and financial assistance that may be available to our clients during the Coronavirus / COVID-19 pandemic.

Further updates will be published and made available for download periodically on this page.

 

May 2020

Covid 19 Financial Review as at 31 May 2020

This is my seventh Covid 19 Financial Review and it should be read in conjunction with the previous six Financial Reviews. All of these reviews have been posted on our website. Today’s content is as of 31 May and incorporates the Chancellor’s announcement on Friday regarding a further extension to the Furlough Scheme...

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COVID 19 FINANCIAL REVIEW AS AT 31 MAY 2020

This is my seventh Covid 19 Financial Review and it should be read in conjunction with the previous six Financial Reviews. All of these reviews have been posted on our website. Today’s content is as of 31 May and incorporates the Chancellor’s announcement on Friday regarding a further extension to the Furlough Scheme.

Please remember

TURNOVER is vanity
PROFIT is sanity

But CASH IS KING

Preserve cash at all costs as we don’t know how long this will go on for.

Remember an accountant is not there just for the good times. We are still coming in to the office every day and will do as long as we are allowed.

We WILL NOT charge you for any Covid 19 telephone advice.

1. EXTENDED FURLOUGH SCHEME

The Chancellor announced on Friday that the Coronavirus Job Retention Scheme will be extended as follows: -

a) From 1 July employers will be given the flexibility to bring furloughed employees back part time. Employers will be able to decide the hours and shift patterns that the employees work, but they (not the Government) will be responsible to pay their employees for that work.

b) From 1 August the level of Government support under this scheme will reduce, as follows:

August

The Government will continue to pay the wages of the employees, up to a maximum of £2,500 per month. The employers will be responsible for paying the employer’s national insurance and the pension contributions.

September

The Government will pay 70% of the wages of the employees, up to a maximum of £2,187.50 per month. The employers will be responsible for paying 10% of the employees’ wages, up to the cap of £2,500 per month, the employer’s national insurance and the pension contributions.

October

The Government will pay 60% of the wages of the employees, up to a maximum of £1,875 per month. The employers will be responsible for paying 20% of the employees’ wages, up to a cap of £2,500 a month, the employer’s national insurance and the pension contributions.

2. EXTENDED SELF-EMPLOYMENT INCOME SUPPORT SCHEME

a) The Government has announced that a second and final grant will be payable to eligible self-employed people. The rules are exactly the same as the first grant.

b) This second grant will cover the three month period of June, July and August.

c) Self-employed people or partnerships will receive a grant of up to a maximum of 70% of their profits or £6,570 for this three month period.

d) Applications for this second grant will open in August.

e) Applicants for the second grant need not have applied for the first grant i.e. they may have been adversely affected by Covid 19 only in this second grant period.

f) Eligible tax payers must apply for the first grant by no later than 13 July.

3. TRADE CREDIT INSURANCE GUARANTEE

The Government will provide guarantees for all currently available trade credit insurance.

4. MORTGAGE HOLIDAY SCHEME

This scheme has been extended by a further three months to six months in total and ends on 31 October 2020.

5. “A BILLION HERE, A BILLION THERE AND PRETTY SOON YOU’RE TALKING REAL MONEY.”

a) Public Sector borrowing rose from £11 billion to £62.1 billion last month. This one month increase is as much as the Government borrowed for the whole of the previous twelve months. The Government has not borrowed this much money since records began.

b) National Debt is now at 97.7% of GDP and rising.

c) Tax receipts fell by 26.5% in April, largely due to a fall in VAT receipts of 43.6%.

d) One piece of good news is the £3.75 billion of bonds that the Government issued to partly fund this bears interest at the rate of -0.003%.

This Aide-Memoire is intended as guidance only. This Financial Review is based on information as at 31 May 2020. The situation is continually changing therefore if you need help regarding any of the above, please contact us immediately. You should not rely on the above as advice.

If you would like us to help you please contact Chris Wilkins FCCA, Wilkins Southworth.

You can contact us at:

Wilkins Southworth
Chartered Certified Accountants
Registered Auditors
10-12 Barnes High Street
Barnes
London SW13 9LW

Phone: 020 8878 3949

Email: cw@wilkinssouthworth.co.uk

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Covid 19 Financial Review as at 12 May 2020

This is my sixth Covid 19 Financial Review and it should be read in conjunction with the previous five Financial Reviews. Today’s content is as of 12 May and incorporates the Chancellor’s announcement today on the extension of the Furlough Scheme....

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COVID 19 FINANCIAL REVIEW AS AT 12 MAY 2020

This is my sixth Covid 19 Financial Review and it should be read in conjunction with the previous five Financial Reviews. All of these reviews have been posted on our website. Today’s content is as of 12 May and incorporates the Chancellor’s announcement today on the extension of the Furlough Scheme.

Please remember

TURNOVER is vanity
PROFIT is sanity
But CASH IS KING

Preserve cash at all costs as we don’t know how long this will go on for.

Remember an accountant is not there just for the good times. We are still coming in to the office every day and will do as long as we are allowed.

We WILL NOT charge you for any Covid 19 telephone advice.

1. EXTENDED FURLOUGH SCHEME

The Chancellor announced today that the Coronavirus Job Retention Scheme will be extended as follows: -

a) The scheme that currently expires on 30 June is being extended until 31 October 2020.

b) Furloughed employees will continue to receive the lower of 80% of the cost to the employer of employing that member of staff or £2,500 per month.

c) From 1st August furloughed employees will be able to return to work part time with employers being asked to pay a percentage of the salaries of their furloughed staff.

d) The employer and Government payments will ensure that the employee will continue to receive the lower of 80% of their salary or £2,500 per month.

e) More details about this arrangement will be released at the end of the month.

As of this morning 935,000 employers had furloughed 7.5 million jobs at a total cost of £10.1 billion.

2. SELF-EMPLOYMENT INCOME SUPPORT SCHEME

There have been some teething problems with this scheme as follows: -

a) Some people who are eligible to apply for the Self-Employment Income Support Scheme (SEISS) grant have not received any correspondence from HM Revenue & Customs.

This may be because HM Revenue & Customs do not have their up to date contact details.

b) There have been some false results on HM Revenue & Customs’ Self-Employment Income Support Scheme (SEISS) online checker.

This may be because HM Revenue & Customs’ systems have missing information on you.

In all instances we would encourage everyone to set up their Government Gateway (see my Covid 19 Financial Review As At 4 May 2020) at http://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme as soon as possible.

This must be done by the taxpayer not by us.

However, if you would like us to check the calculations please let us know.

3. IS THIS A FREE LUNCH?

As the saying goes there is no such thing as a free lunch. The figures are alarming:

a) The furlough scheme has already cost over £10 billion.

b) This scheme alone is estimated to have a total cost of £100 billion.

c) In excess of £8.37 billion has been lent under the Bounce Back Loan Scheme.

d) In excess of £6 billion has been lent under the Coronavirus Business Interruption Loans scheme.

e) The financial deficit was predicted to be £55 billion in the Government’s March Budget. This is now expected to rise by at least £282 billion to £337 billion.

Apart from tinkering at the edges the only way to pay for this is TAX RISES. The likely ones are income tax, national insurance, VAT and to a lesser extent Corporation Tax.

Don’t say you weren’t warned.

This Aide-Memoire is intended as guidance only. This Financial Review is based on information as at 12 May 2020. The situation is continually changing therefore if you need help regarding any of the above, please contact us immediately. You should not rely on the above as advice.

If you would like us to help you please contact Chris Wilkins FCCA, Wilkins Southworth.

You can contact us at:

Wilkins Southworth
Chartered Certified Accountants
Registered Auditors
10-12 Barnes High Street
Barnes
London SW13 9LW

Phone: 020 8878 3949

Email: cw@wilkinssouthworth.co.uk

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Covid 19 Financial Review as at 4 May 2020

This is my fifth Covid 19 Financial Review and it should be read after reading the previous Financial Reviews which were as at 21 March, 26 March,19 April and 27 April 2020. Today’s content is as of 4 May and incorporates the updated guidance on Bounce Back Loans which was first explained in the update on 27 April...

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COVID 19 FINANCIAL REVIEW AS AT 4 MAY 2020

This is my fifth Covid 19 Financial Review and it should be read after reading the previous Financial Reviews which were as at 21 March, 26 March,19 April and 27 April 2020. All of these reviews have been posted on our website. Today’s content is as of 4 May and incorporates the updated guidance on Bounce Back Loans which was first explained in my email of 27 April.

Please remember

TURNOVER is vanity
PROFIT is sanity
But CASH IS KING

Preserve cash at all costs as we don’t know how long this will go on for.

Remember an accountant is not there just for the good times. We are still coming in to the office every day and will do as long as we are allowed.

We WILL NOT charge you for any Covid 19 telephone advice.

1. BOUNCE BACK LOANS

This scheme was launched this morning. My Covid 19 Financial Review as at 27 April provided you with the main terms of the scheme but the following are also important:-

a) Loans will be the lower of £50,000 or 25% of a business’ turnover.

b) The business must not have been in financial difficulty at 31 December 2019.

c) The business must have been adversely affected by Covid 19.

d) The business must have been established by 1 March 2020.

e) The business must be engaged in trading or a commercial activity in the UK.

f) The business cannot be using the Coronavirus Business Interruption Loan Scheme (CBILS) or other similar scheme unless this loan is refinancing them.

g) The business is not in bankruptcy, liquidation or is undergoing debt restructuring.

h) It derives more than 50% of its income from trading activities.

i) Interest will be fixed at 2.5% with no interest chargeable in the first twelve months.

j) The loan can be up to six years, early repayment is allowed with no early repayment fees.

k) No personal guarantees are allowed and no recovery action can be taken over a principal private residence or private vehicle.


2. SELF-EMPLOYMENT INCOME SUPPORT SCHEME

This too was updated today. The salient points are:-

a) YOU must make the claim. Your tax advisor can’t do this for you.

b) When YOU make the claim, YOU will need the following information:

  • Self Assessment UTR (Unique Tax Reference number). This is shown at the top of your tax return.
  • National Insurance number.
  • Bank account number and sort code.
  • Government Gateway user ID and password.
  • It is very likely that a lot of taxpayers will not have set up their Government Gateway user ID and password. Therefore it is very important that this is done as soon as possible to avoid any delays in receiving these monies.

c) Once you have submitted your claim, you will be told straight away if your grant is approved. You should receive your money within 6 working days.

3. GRANTS FOR SMALL BUSINESSES IN SHARED SPACES

The government has pledged a further £617 million in grants to small businesses that pay Council Tax rather than Business Rates. This will cover businesses in shared spaces, market traders, small charity properties etc. This is because many small businesses do not pay Business Rates as they hadn’t been assigned a rateable value.

4. VAT ON PERSONAL PROTECTIVE EQUIPMENT (PPE)

With effect from 1 May, Zero rate VAT will be levied on PPE purchased by Businesses, Individuals, Charities and Care Homes to protect against Covid 19. This measure will continue for three months.

The objective is to relieve the burden of VAT for all non VAT registered entities. This covers disposable gloves, disposable plastic aprons, surgical masks, eye and face protection.

This Aide-Memoire is intended as guidance only. This information is based on information as at 4 May 2020. The situation is continually changing therefore if you need help regarding any of the above, please contact us immediately. You should not rely on the above as advice.

If you would like us to help you please contact Chris Wilkins FCCA, Wilkins Southworth.

You can contact us at:

Wilkins Southworth
Chartered Certified Accountants
Registered Auditors
10-12 Barnes High Street
Barnes
London SW13 9LW

Phone: 020 8878 3949

Email: cw@wilkinssouthworth.co.uk

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April 2020

Covid 19 Financial Review as at 27 April 2020

This is the fourth Covid 19 Financial Review which should be read in conjunction with our previous Financial Reviews as at 21 March, 26 March and 19 April 2020.  This content incorporates the guidance on Bounce Back Loans...

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COVID 19 FINANCIAL REVIEW AS AT 27 APRIL 2020

This is my fourth Covid 19 Financial Review and it should be read after reading the previous Financial Reviews which were as at 21 March, 26 March and 19 April 2020. All these reviews have been posted on our website. Today’s content is as of 27 April and incorporates the guidance on Bounce Back Loans which was released today.

Please remember

TURNOVER is vanity
PROFIT is sanity
But CASH IS KING

Preserve cash at all costs as we don’t know how long this will go on for.

Remember an accountant is not there just for the good times. We are still coming in to the office every day and will do as long as we are allowed.

We WILL NOT charge you for any Covid 19 telephone advice.

1. BOUNCE BACK LOANS

a) This measure is targeted at small businesses and it will provide loans between £2,000 and £50,000.

b) The online application form is two pages long and there are no forward looking business tests or eligibility criteria.

c) The money should be released within two days of the loan being approved.

d) The loans will be 100% government backed.

e) The loans will be interest free for the first twelve months.

f) The scheme will launch on Monday 4 May.

2. SELF-EMPLOYMENT INCOME SUPPORT SCHEME

This scheme has been updated. In addition to the stipulations listed in my Covid 19 Financial Review as at 26 March you must comply with the following: -

a) You must have lost trading profits due to Coronavirus.

b) You will need to confirm to HMRC that your business has been adversely affected by Coronavirus.

c) HM Revenue & Customs aim to contact you by the middle of May if they think you are eligible for the scheme.

d) You must then make a claim using the GOV.UK online service.

Following on from my concerns with the prevalence of scams HM Revenue & Customs have confirmed that only applications using the GOV.UK online service are acceptable. Therefore please do not respond to anyone who asks you to reply to emails, texts, phone calls etc.

e) HM Revenue & Customs will use a risk based approach to compliance.

3. NEW MEASURES TO PROTECT UK HIGH STREET FROM AGGRESSIVE RENT COLLECTION AND CLOSURE

a) The Government will temporarily ban the use of statutory demands made between 1 March and 30 June 2020, where a company cannot pay its bills due to the Coronavirus.

b) The Government will temporarily ban the use of winding up petitions presented from Monday 27 April to 30 June 2020, where a company cannot pay its bills due to the Coronavirus.

c) The Government will introduce secondary legislation to prevent landlords using Commercial Rent Arrears Recovery (CRAR) unless they are owed 90 days of unpaid rent.

The Government may extend this legislation.

4. CORONAVIRUS JOB RETENTION SCHEME (CJRS)

As with other European Countries we have noticed that some additional restrictions are being imposed on Government assistance before claims can be made. We have particularly noticed this in regard to Children’s Nursery Schools and Pharmacies.

Please ensure you are fully appraised of these restrictions before any claims are made.

This Aide-Memoire is intended as guidance only. This information is based on information as at 27 April 2020. The situation is continually changing therefore if you need help regarding any of the above, please contact us immediately. You should not rely on the above as advice.

If you would like us to help you please contact Chris Wilkins FCCA, Wilkins Southworth.

You can contact us at:

Wilkins Southworth
Chartered Certified Accountants
Registered Auditors
10-12 Barnes High Street
Barnes
London SW13 9LW

Phone: 020 8878 3949

Email: cw@wilkinssouthworth.co.uk

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Covid 19 Financial Review as at 19 April 2020.

This is the third Covid 19 Financial Review which should be read after the first and second Financial reviews published as at 21 March and 26 March 2020, respectively...

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COVID 19 FINANCIAL REVIEW AS AT 19 APRIL 2020

This is my third Covid 19 Financial Review and it should be read after reading my first and second Financial Reviews which were as at 21 March and 26 March 2020. Today’s content is as of 19 April and incorporates HM Revenue & Customs’ fifth version of the Coronavirus Job Retention Scheme which was released on the evening of Friday 17 April. This release is just 48 hours after the release of version 4. HM Revenue & Customs’ calculate that there will be approximately 9 million furloughed employees.

Please remember

TURNOVER is vanity
PROFIT is sanity

But CASH IS KING

Preserve cash at all costs as we don’t know how long this will go on for.

Remember an accountant is not there just for the good times. We are still coming in to the office every day and will do as long as we are allowed.

We WILL NOT charge you for any Covid 19 telephone advice.

1. Coronavirus Job Retention Scheme (CJRS)

a) It is worth repeating part of my Covid 19 Financial Review as at 26 March 2020 as follows: -

  • The Government will pay the lower of 80% of the cost to the employer of employing that member of staff or £2,500 per month.
  • The cost of employing that staff member includes employer’s national insurance and the minimum payment due under Auto Enrolment. The monthly recoverable sum is:

      £
    Gross monthly salary x 80% A
    Employer’s national insurance on A B
    Minimum Auto Enrolment on A C
      D


    Where A cannot be more than £2,500 per employee per month.

b) Contracted elements can be included in Gross Monthly Salary but non contracted elements can’t eg if the employment contract states that the employee is contracted to work 8 hours overtime a month then that is included in the Gross Monthly Salary.

c) As April is the first month of the new tax year then those employer’s that are eligible can claim a £4,000 Employment Allowance. However, the employer must fully utilise this claim first before it can claim a Grant of the Employer’s National Insurance (figure B above).

d) Payroll is calculated in the normal way and submitted the normal way. The CJRS claim is completely separate and is calculated as above.

e) The scheme will now run for four months from 1 March 2020 to 30 June 2020.

f) To claim the relief the employee must have been included in an RTI payroll submission to HMRC by 19 March 2020. Therefore practically speaking as an employer only makes an RTI submission when the employee is paid then in effect a monthly paid employee who is paid at the end of each month must have been employed as at 28 February 2020 (despite this year being a leap year).

It would however, benefit employees who are paid weekly who joined an employer and were paid between 28 February and 19 March.

g) Company directors can claim under this scheme, as long as they meet the rules.

h) The portal opens today and HMRC say they can accommodate 450,000 claims an hour.

i) The payments should be made within six days.

j) The employer must calculate its own CJRS claim.

k) The employer needs to manually input the following data for each employee: -

  • Employer PAYE scheme reference number
  • The number of employees being furloughed
  • Full name and NI number for each employer
  • The claim period start and end date
  • Amount claimed
  • Bank and contact details
  • Self-Assessment UTR, Corporation Tax UTR, Company Registration Number or Employer Name (as appropriate).

l) HMRC have explained that they will audit these claims and they will prosecute any fraudulent claims.

2. Self-Employment Income Support Scheme

a) As yet this has not been extended so it currently expires on 31 May. However, on the basis that it mirrored CJRS then I wouldn’t be surprised to see this being extended by one month to 30 June.

b) I explained in my emails as at 21 March and 26 March that as HM Revenue & Customs have stated that they will contact the taxpayer then this means that more scams will appear. HMRC have stated they they will commence contacting the taxpayer around the middle of May therefore its very important that you are wary of being contacted by scammers. Please contact us if you are at all worried about correspondence received on this point.

c) In my Covid 19 Financial Review as at 26 March I explained that this is based on your ‘Profits’. HMRC have now confirmed that ‘Profits’ are defined as follows: -

  • Profits are the taxable profits as per your tax return ie after claiming capital allowances.
  • Losses brought forward as at 5 April 2016 won’t be deducted from subsequent year’s profit for these purposes.
  • In year losses eg 2016/17, 2017/18 and 2018/19 will be deducted from other year’s profits when working out the average profits.

3. Time To Pay (TTP)

HMRC have changed the COVID 19 dedicated helpline telephone number to : -

0800 024 1222

Please note that the above Aide-Memoire is intended as guidance only. This information is based on information as at 19 April 2020. The situation is continually changing therefore if you need help regarding any of the above, please contact us immediately. You should not rely on the above as advice.

If you would like us to help you please contact Chris Wilkins FCCA, Wilkins Southworth.

You can contact us at:

Wilkins Southworth
Chartered Certified Accountants
Registered Auditors
10-12 Barnes High Street
Barnes
London SW13 9LW

Phone: 020 8878 3949
Email: cw@wilkinssouthworth.co.uk

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Changes to Covid 19 Financial Assistance

This is an update on some changes to the Covid 19 Financial Assistance which the government has introduced...

Read more... Download cash flow diagram

Changes to Covid 19 Financial Assistance

This is an update on some changes to the Covid 19 Financial Assistance which the government has introduced:

Coronavirus Job Retention Scheme

  1. The scheme has been extended whereas before you were only eligible if an employee was employed on 28 February 2020. The new rule is that the employee must have been employed on 19 March 2020. 

    This assists employees who joined a firm between 29 February and 19 March, who otherwise wouldn’t have been eligible to be furloughed by their employer.
     
  2. The Grant portal is due to go live on 20 April.

Cash Flow Help

I attach a diagram which may be of assistance.

Download cash flow diagram (PDF)

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March 2020

COVID 19 Financial Review as at 26 March 2020

This is my second Covid 19 Financial Review and it should be read after reading my first Financial Review which was as at 21 March 2020 (below). Today’s content is as of Thursday 26 March and incorporates the Chancellor’s speech regarding the self employed last night. As all of this is very new, we haven’t got all the details, but this is a starting point...

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COVID 19 FINANCIAL REVIEW AS AT 26 MARCH 2020

This is my second Covid 19 Financial Review and it should be read after reading my first Financial Review which was as at 21 March 2020. Today’s content is as of Thursday 26 March and incorporates the Chancellor’s speech regarding the self employed last night. As all of this is very new, we haven’t got all the details, but this is a starting point.

Please remember

TURNOVER is vanity
PROFIT is sanity
But CASH IS KING

Preserve cash at all costs as we don’t know how long this will go on for.

Remember an accountant is not there just for the good times. We are still coming in to the office every day and will do as long as we are allowed.

We WILL NOT charge you for any Covid 19 telephone advice.

The measures are: -

1. SELF-EMPLOYMENT INCOME SUPPORT SCHEME

a) Please remember that a self employed person is one that fills in a Self Assessment Tax Return and ticks box 2 (self-employment) or box 3 (Partnership) on page TR2 of their Self Assessment Tax Return. Therefore, the following are examples of people who ARE NOT self employed (if this is their sole source of income).

  • Directors of their own limited companies.
  • Shareholders of their own limited companies.
  • People solely in receipt of rental income ie passive income.

b) Self-employed people or partnerships will receive a grant up to a maximum of 80% of their profits or £2,500 per month, whichever is the lower.

c) This grant is taxable.

d) HMRC will calculate the average profits from your last three years tax returns eg 2016/17, 2017/18 and 2018/19 (unless fewer years are available).

e) This is only available where the majority of your income derives from self employment.

f) This is not available if your annual profits are more than £50,000.

g) The scheme runs from 1 March until 31 May 2020, unless extended.

h) You don’t have to do anything. No claim is necessary. HM Revenue & Customs will contact you.

i) You will not receive any money until June 2020.

j) You must have filed your 2018/19 tax return (there is a four week extended window to do this).

k) You must be trading (or would be except for Covid 19) in 2019/20.

l) You must intend to trade in 2020/21.

2. JOB RETENTION SCHEME

a) The Government will pay the lower of 80% of the cost to the employer of employing that member of staff or £2,500 per month.

b) The cost of employing that staff member includes employer’s national insurance and the minimum payment due under Auto Enrolment. The monthly recoverable sum is: -

  £
Gross monthly salary x 80% A
Employer’s national insurance B
Minimum Auto Enrolment C
  D

Where A cannot be more than £2,500 per employee per month.

Bonuses, commissions and fees are not included in the gross salary calculation.

c) The minimum period that you can furlough an employee is three weeks. The maximum period that you can furlough an employee is three months. Although the Chancellor has said that he is willing to extend this if necessary.

d) A furloughed employee cannot do any work for the company whatsoever.

e) To claim the relief the employee must be employed on 28 February 2020 ie you cannot claim it for employees who start work after this date.

f) The amount that can be claimed is the higher of the salary paid to the employee in the same month last year or an average of the last year’s salary.

g) This doesn’t stop the furloughed employee working for another employer during this period.

h) You cannot claim under the Job Retention Scheme if the employee is off work under the Statutory Sick Pay Scheme.

i) Any monies claimed under the Job Retention Scheme is treated as taxable income in the hands of the employer.

3. VAT

Please remember to stop any direct debits you have set up to pay your VAT for any VAT due between 20 March and 30 June 2020. You then need to restart your direct debit.

4. INCOME TAX

The Chancellor has now confirmed that not only can the self employed defer their income tax liability which is ordinarily due on 31 July 2020 until 31 January 2021 but now anyone in the Self Assessment system who has a tax liability falling due on 31 July 2020 can defer this until 31 January 2021.

5. LANDLORDS

a) Residential tenants have already been given the protection that landlords will not be able to start proceedings to evict them for at least a three month period. This also applies to private and social renters.

b) The Government has now confirmed that all commercial property tenants may also defer rent payments for a quarter without the risk of eviction.

6. BUSINESS RATES

The Government are extending this relief on a regular basis to encompass more businesses please do check your eligibility at Gov.uk.

7. CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME

We have heard of banks requiring property to be supplied as security against the loan or personal guarantees being requested. The reason being that if the loan is defaulted the banks are required to exhaust all methods of being paid before they can call on the Government guarantee. However, most of the high street banks are now moving to not requesting personal guarantees.

I mentioned in my last email that there are a lot of scams around and we have already seen some of these surfacing. My concern is that as HM Revenue & Customs have already stated that they will contact you to advise if you are eligible for a Grant under the Self Employment Income Support Scheme then this means that yet more scams will appear. If you are at all unsure about any correspondence received from HM Revenue & Customs, please contact us.

Please note that the above Aide-Memoire is intended as guidance only. This information is based on information as at Thursday 26 March 2020. The situation is continually changing therefore if you need help regarding any of the above, please contact us immediately. You should not rely on the above as advice.

If you would like us to help you please contact Chris Wilkins FCCA, Wilkins Southworth.

You can contact us at:

Wilkins Southworth
Chartered Certified Accountants
Registered Auditors
10-12 Barnes High Street
Barnes
London SW13 9LW

Phone: 020 8878 3949
Email: cw@wilkinssouthworth.co.uk

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COVID 19 Financial Review as at 21 March 2020

I have prepared a brief summary of the financial assistance available to our clients. It is not comprehensive but hopefully it will give you a starting point to keep you going. The content is as of Saturday 21 March. As all of this is very new, we haven’t got all the details, but this is a starting point...

Read more... Download the PDF

COVID 19 FINANCIAL REVIEW AS AT 21 MARCH 2020

I have prepared a brief summary of the financial assistance available to our clients. It is not comprehensive but hopefully it will give you a starting point to keep you going. The content is as of Saturday 21 March. As all of this is very new, we haven’t got all the details, but this is a starting point.

Please remember

TURNOVER is vanity
PROFIT is sanity
But CASH IS KING

Preserve cash at all costs as we don’t know how long this will go on for.

Remember an accountant is not there just for the good times. We are still coming in to the office every day and will do as long as we are allowed.

We WILL NOT charge you for any Covid 19 telephone advice.

The measures are: -

1. JOB RETENTION SCHEME

80% of an employee’s salary will be paid for three months from 1 March 2020. The Chancellor has already stated that this may be extended beyond three months. The employer needs to decide which employees will be ‘Furloughed’. You need to notify the employee in writing. Their salary will probably be based on their February payroll. The salary will be up to £2,500 per month.

2. VAT

a) You don’t have to pay any VAT liability that falls due to be paid between 20 March and 30 June 2020.

b) The VAT liability must be paid by 31 March 2021 at the latest.

c) You must still file the VAT return by the due date.

3. TIME TO PAY (TTP)

TTP can enable businesses adversely affected by COVID-19 to defer payments of VAT, income tax and PAYE liabilities, over several months.

HMRC will discuss the length of time required to pay on a case by case basis, but we understand that this is usually between 3-12 months.

Typically, HMRC will allow one month’s PAYE bill to be deferred, but those most severely affected businesses may be able to defer payments in full to a later point in the year.

It is important that businesses proactively approach HMRC with any concerns as early as possible.

Businesses should be prepared to explain:

• The reasons payments cannot be made (e.g. to pay salary costs)

• How the business is managing this process and attempting to raise funds for outstanding payments (e.g. chasing debtors, seeking loans, negotiating with creditors)

• How much of the liability (if any) can be paid immediately, plus an anticipated payment plan

If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 0159 559.

4. STATUTORY SICK PAY

HMRC will refund SSP for two weeks even if you are Self-Isolation. You do not need to have contracted the virus. This applies to all firms up to 249 employees. The employer can claim £94.25 p.w for each employee. Available from 13 March and claimable from day 1. Directors can also claim this (if they earn more than £118 p.w).

5. SELF-EMPLOYED

If you are self-employed and receiving Universal Credit (UC) and you have COVID-19 or are advised to self-isolate, the requirements of the Minimum Income Floor will be temporarily relaxed. This change took effect on 13 March and will last for the duration of the outbreak, to ensure that self-employed UC claimants will receive support.

If you need to claim Universal Credit but have COVID-19 or are self-isolating, you will now be able to claim and to access advance payments upfront without needing to attend a Jobcentre Plus. Please visit www.gov.uk/universal-credit for more information.

If you are eligible for new style Employment and Support Allowance, it will now be payable from day 1 of sickness, rather than day 8, if you have COVID-19 or are advised to self-isolate.

If you think you may need financial support from your Local Authority in England, you may be entitled to support from the £500 million Hardship Fund:

• most of this funding will be used to provide more Council Tax relief, either through existing Local Council Tax Support schemes, or through similar measures.

• the Ministry for Housing, Communities and Local Government (MHCLG) will set out more detail on this funding, including allocations, shortly

• if you have any questions, please contact your Local Authority

6. INCOME TAX

Self-employed people don’t have to pay their income tax liability which is ordinarily due on 31 July 2020 until 31 January 2021.

7. LANDLORDS

If you are experiencing financial difficulties meeting your mortgage repayments because of COVID-19, you may be entitled to a mortgage or rental holiday for 3 months. This includes if you are a landlord whose tenants are experiencing financial difficulties because of COVID-19. If you are a tenant experiencing financial difficulties because of COVID-19, the government will ensure you do not face the threat of eviction for at least 3 months:

• the government has agreed with mortgage lenders that they will offer repayment holidays of 3 months to households in financial difficulty due to COVID-19

• this will also apply to landlords whose tenants are experiencing financial difficulties because of COVID-19

• the offer of a payment holiday can be made available to customers who are up to date with payments and not already in arrears

• customers who are concerned about their current financial situation should contact their lender at the earliest possible opportunity to discuss if this is a suitable option for them

• emergency legislation will be taken forward so that landlords will not be able to start proceedings to evict tenants for at least a 3 month period. This applies to private and social renters

• at the end of this period, landlords and tenants will be expected to work together to establish an affordable repayment plan, taking into account tenants’ individual circumstances

8. FINANCIAL DIFFICULTIES

If you are experiencing difficulties paying back personal loans or credit card bills as a result of COVID-19, you should read the following information:

• the Financial Conduct Authority (FCA) called on lenders to use flexibility built into their rules to support consumers, taking into account customers’ individual circumstances. Many major lenders have already made statements to this effect

• if you are experiencing difficulties paying back loans or credit card bills because of COVID-19, you should talk to your lender

• if you agree a payment holiday with your lender, they should record these in such a way that will not impact on your credit score

www.gov.uk/government/publications/support-for-those-affected-by-covid-19/support-for-those-affected-by-covid-19

9. BUSINESS RATES

a) Twelve month holiday for 2020/21 for retail, hospitality and leisure.

b) Also covers Guest and boarding premises and self-catering accommodation, hotels.

See Ministry of Housing, Communities and Local Government Business rates.

The advice to Local authorities is that “they should determine for themselves whether particular properties not listed are broadly similar in nature to those above and, if so, to consider them eligible for the relief.”

10. RETAIL, HOSPITALITY GRANT SCHEME

Cash grant up to £25,000 for buildings i.e per property and includes Guest and boarding premises and self-catering accommodation.

11. DIRECT BUSINESS GRANTS FOR SMALL BUSINESSES

To support the many small businesses that pay little or no business rates because of Small Business Rate relief (SBRR), the government will provide funding for local authorities in England, who will provide the business grants. This will provide up to £10,000 each to around 700,000 business currently eligible for SBRR or Rural Rate.

Businesses that use premises with a rateable value of up to £51,000 and will therefore pay no business rates for the current year, will receive grants of up to £25,000 from their Local Authority. Businesses should contact their local authority for further details of eligibility and payment arrangements.

12. CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME

A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch this week to support primarily small and medium-sized businesses to access bank lending and overdrafts.

The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value.

Businesses can access the first months of that finance interest free, as government will cover the first months of interest payments.

Eligibility

You are eligible for the scheme if:

1. Your business is UK based, with turnover of no more than £41 million per annum.

2. Your business meets the other British Business Bank eligibility criteria.

How to access the scheme

The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website. All the major banks will offer the Scheme once it has launched. You should talk to your bank or finance provider (not the British Business Bank) as soon as possible and discuss your business plan with them. This will help your finance provider to act quickly once the Scheme has launched. If you have an existing loan with monthly repayments you may wish to ask for a repayment holiday to help with cash flow.

The scheme will be available from week commencing 23 March.

13. INTRODUCTION OF IR35 OFF PAYROLL RULES DEFFERED

The taxation of consultants engaged by Medium and Large sized private enterprises was set to undergo a fundamental change from 5 April 2020 with the introduction of the IR35 Off Payroll Rules, similar to those introduced for public sector in 2017. These changes have now been deferred for a year and will come into effect from 5 April 2021.

There are a lot of scams around in these worrying times. Please remember that HM Revenue & Customs will never e-mail you and any e-mails that you receive purporting to be from HM Revenue & Customs should immediately be deleted.

Please note that the above Aide-Memoire is intended as guidance only. This information is based on information as at Saturday 21 March 2020. The situation is continually changing therefore if you need help regarding any of the above, please contact us immediately. You should not rely on the above as advice.

If you would like us to help you please contact Chris Wilkins FCCA, Wilkins Southworth.

You can contact us at:

Wilkins Southworth
Chartered Certified Accountants
Registered Auditors
10-12 Barnes High Street
Barnes
London SW13 9LW

Phone: 020 8878 3949
Email: cw@wilkinssouthworth.co.uk

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