There have been a few updates to advice we have given out due to HMRC changes and some new schemes that have launched that will be of interest to those businesses worried about cash flow.
Contents of this update:
1) Extension of July Income Tax postponement
We have written to all clients before and I have reiterated to some clients individually how the July payment on account deferral was for the self-employed only.
As per usual HMRC are embarrassing me and making a U turn on this announcement. But to everybody’s benefit.
If you have a July payment on account (director or self-employed), you can defer this payment to January 21. I personally would recommend paying this amount where your cash flow has not been affected by Covid-19.
We as a practice are going to remind everyone of what their July payment should be, and we will give you payment details.
If you want to defer this payment you do not need to do anything just don’t pay the amount. We will adjust our reminders in December if you do not pay in July.
2) Bounce Back Loan Scheme (BBLS)
In my opinion this is the scheme we need for small business; we have not been recommending the previous CBILS scheme to any clients because they were so difficult to obtain. We do not know if there are any difficulties with the bounce back scheme yet, but we are hopeful it is straight forward.
- Small businesses will be able to apply for quick and easy-to-access loans from today
- Businesses will be able to borrow between £2,000 and £50,000 with the cash arriving within days
- Loans will be 100% government backed for lenders, and businesses can apply online through a short and simple form
- Maximum Loan 50K or 25% of turnover
- No payments for the first 12 months
- 2.5% interest rate
Please go here to apply:
BOUNCE BACK LOAN SCHEME
3) Top-up to local business grant funds scheme
The Business Secretary Alok Sharma and Minister for Regional Growth and Local Government, Simon Clarke spoke to local authorities in England yesterday to set out that up to £617 million would be made available.
This is an additional 5% uplift to the £12.33 billion funding previously announced for the Small Business Grants Fund (SBGF) and the Retail, Hospitality and Leisure Grants Fund (RHLGF), so up to £617 million. We will confirm the exact amount for each local authority next week.
This additional fund is aimed at small businesses with ongoing fixed property-related costs. We are asking local authorities to prioritise businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for Small Business Rates Relief, and bed and breakfasts that pay council tax rather than business rates. But local authorities may choose to make payments to other businesses based on local economic need. The allocation of funding will be at the discretion of local authorities.
Businesses must be small, under 50 employees, and they must also be able to demonstrate that they have seen a significant drop of income due to Coronavirus restriction measures.
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.
Further guidance for local authorities will be set out shortly.
4) Self Employed Income Support Scheme (SEISS)
So, this is important for any self-employed clients.
We as your agents are not going to be able to make a claim for the self-employed income support scheme
But as it turns out HMRC are going to do all the calculations for you and write to everyone that is eligible for the scheme. You will be receiving a letter around Mid-May once you receive this letter you will be able to make a claim with HMRC.
How to claim
The online service you will use to claim is not available yet. HMRC will aim to contact you by mid May 2020 if you are eligible, to invite you to claim using the GOV.UK online service. Payment will be made by early June 2020 if your claim is approved.
If you are unable to claim online an alternative way to claim will be available. HMRC will update the overview with more information soon. We will update you as soon as we know more but keep your eye on:INCOME SUPPORT SCHEME
What you need to claim
- Self Assessment UTR – if you do not have this find out how to get your lost UTR
- National Insurance number – if you do not have this find out how to get your lost National Insurance number
- Government Gateway user ID and password – if you do not have a user ID, you can create one when you check your eligibility online
- Bank account number and sort code you want us to pay the grant into (only provide bank account details where a Bacs payment can be accepted)
You’ll have to confirm to HMRC that your business has been adversely affected by coronavirus. If you claim the grant HMRC will treat this as confirmation you’re below the state aid limits. HMRC will check claims and take appropriate action to withhold or recover payments found to be dishonest or inaccurate.
How much you will get
You will get a taxable grant based on your average trading profit over the 3 tax years: 2016–2017, 2017–2018 and 2018–2019.
HMRC will work out your average trading profit by adding together your total trading profits or losses for the 3 tax years, then we will divide by 3.
The grant will be 80% of your average trading profit, divided by 12 to give a monthly amount. HMRC will then multiply this by 3. We will pay this amount up to a maximum of 7,500.
The grant amount they work out for you will be paid directly into your bank account, in one instalment.
Finally, If anything in this newsletter is of concern or you want to discuss a point in detail please contact me here at the office: email@example.com
Share this Story