Coronavirus update 8 – 7 May 2020
SEISS claims and new initiatives
This newsletter is a further update on previously announced support schemes, and also to mention a couple of new initiatives which may benefit some of our clients. I also want to bring you up to date on our news.
Our office continues to be open from Monday to Friday, and we continue to guarantee that someone will be available from 9.00am to 3.00pm. All staff are now working on a full time basis, so deliveries or collections can be arranged in advance from 8.30am to 4.00pm if necessary. Whilst the front door remains locked, we continue to have a box outside during working hours to facilitate collections and deliveries.
Carolyn and Debbie are continuing to work from home most of the time, as they have school age children. Carolyn is able to work at the office on Wednesdays but Debbie is unable to work at the office now, so I shall be in the office on most days. Unfortunately we are still unable to arrange face to face meetings, but I have now had remote meetings using FaceTime or Zoom, and if you want to arrange a remote meeting, let us know.
As well as dealing with the various Coronavirus initiatives, we are busy preparing accounts and we will soon be working on the first tax returns. As much as possible we are now trying to work as normal, but do forgive slight delays that may occur, particularly with regard to payroll matters and claims under the Job Retention Scheme.
SUPPORT FOR THE SELF-EMPLOYED – ACTION NOW REQUIRED
HMRC have announced that the on-line claim service for the new Self Employed Income Support Scheme (SEISS) will be open from Wednesday 13 May. HMRC are now contacting potentially eligible claimants by email, text or letter, inviting them to make an application. If the contact is made by email or text, then it will not include any links to HMRC’s website – if you receive a message with a link, it is a scam – do not click onto any links. Do not apply until you are invited to do so, and do not try to contact HMRC in advance.
HMRC have created an online checker, and this is now available, and it will let taxpayers check their eligibility for themselves, as well as giving a date on which to apply. So, if you have received an email, text or letter, we would recommend that you follow this link: https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference. You can also access the eligibility checker, even if you have not received any contact from HMRC. You will need your unique taxpayer reference number (UTR – see more on this below) and your National Insurance number, and this will tell you when to apply. HMRC are staggering the application times, starting from next Wednesday through to Monday 18th, but this will not adversely affect the timing of payments (see below).
You will also need a Government Gateway account, and we have previously recommended that you should set one up. If you have not done so yet, then follow the links within the eligibility checker and create an account now. You will need some form of government issued ID, such as a current passport or photo-ID driving licence. If you have neither of these, then the website will ask for alternative information. When a government gateway ID is created as part of the SEISS service there is no requirement for an authentication code (PIN) to be sent in the post. Normally HMRC would do this, and that would obviously lead to delays, so using the eligibility checker is the best route to take at this late stage.
The claim has to be made by the taxpayer – regrettably we will not be able to make claims for you. However, we are more than happy to check whether you are eligible, and if so, how much you ought to receive. If HMRC do not think you are eligible when we think you are, then we are happy to assist with the request for a review (although we do not yet know what the review process entails). On the other hand, we already know of cases where HMRC are issuing invitations to apply, but the taxpayers concerned do not qualify. Naturally we are here to help our clients as much as we possibly can.
To make the claim itself, you will then need the following:
- Your UTR – this is a 10 digit number that you will find on any correspondence from HMRC concerning self-assessment.
- Your National Insurance Number.
- Your Government Gateway ID and password (see above)
- Your bank details (sort code and account number) into which the grant will be paid. You may also need the exact account name, and the address that the bank has for your account.
- You will also need to confirm that your business profits have been adversely affected by Coronavirus.
We recommend that you use your business bank account if you have one, as the grant is subject to income tax and national insurance as part of your self-employed profits. When you receive the grant, record it as “other income” in your accounting records. The grant is outside of the scope of VAT, so does not need to be included on your VAT return, if you are VAT registered.
For further guidance on the amount that you will receive (and whether you are entitled to make a claim), please refer to our previous newsletters 4 and 7: https://www.busbys.co.uk/Coronavirus/. Once the claim is made and approved, HMRC have said that payments will be made by 25 May, or six working days after the claim is made, if later.
We believe that all automatic grants for businesses with rateable values below £15,000 (grant of £10,000), and the grants paid to those in the retail, hospitality and leisure sectors (£10,000 or £25,000), have now been paid. If you think that you should have been entitled to an automatic grant, but have not received anything, then you should contact your local council.
Please note these are grants, not loans, but they will form part of your taxable profits. As will other grants awarded under the various Coronavirus initiatives, record it as “other income” in your accounting records. The grant is outside of the scope of VAT, so does not need to be included on your VAT return, if you are VAT registered.
Additionally, the government has announced that it is making further funds available to local authorities to support small businesses faced with ongoing fixed property-related costs during the coronavirus pandemic, when they may have been forced to close or restrict their activity. The intended beneficiaries of this top up are those businesses that pay rent or council tax rather than business rates, and so have missed out on the automatic grants.
The government is asking local authorities to prioritise certain businesses, including:
- Those who operate in shared spaces (rent a desk or “Regus type” facilities).
- Those who do not pay rates directly, because their landlords pay all of the business rates for an entire site.
- Regular market traders.
- Bed and breakfast owners.
However, local authorities are free to make payments to other businesses based on local economic need.
To qualify, businesses must be small (i.e. 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, with a maximum set at £25,000, and 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.
At the present time, we do not yet know how eligible businesses might apply for these grants, but they will need to apply directly to the local council. Check the coronavirus support pages of your local council.
BOUNCE BACK LOANS
Applications can now be made for loans up to £50,000 (or 25% of your business turnover, if lower), and these are 6 year loans which are interest and repayment free for the first year. Thereafter, the interest rate is capped at 2.5% per annum. The minimum loan application is for £2,000. The loans are unsecured, there are no arrangement fees, and they are backed by a 100% guarantee from the government.
There are restrictions which do mean that the business must be solvent, and you cannot apply for these loans if you have already obtained a loan under the Coronavirus Business Interruption Loan Scheme (CBILS). However, a CBILS loan of £50,000 or less can be converted to a Bounce Back Loan.
Applications have to be made directly to one of the approved lenders, which include the main high street banks. For further details, see https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/for-businesses-and-advisors/ and this includes a list of the approved banks.
SUPPORT FOR EMPLOYERS - CJRS
The scheme has now been live for a couple of weeks, and the application process is quite straightforward, although some of the calculations are not! We are finishing claims for all of our payroll clients this week, and once the claim is submitted, HMRC are paying the claims very promptly. They guarantee to pay claims within six working days, but some are being paid within three or four days.
Please note that the HMRC calculator (https://www.tax.service.gov.uk/job-retention-scheme-calculator/) is still rather limited, in that it cannot cope with situations where pay is topped up. But it can now deal with variable pay. HMRC are promising improvements in the future, but it is not clear when this might happen. If you use the HMRC calculator, print out the results; if you don’t (or can’t) then keep a record of how you calculated the claim. Remember that HMRC does retain the right to check claims at some (unspecified) point in the future.
If you have any questions, please do email your regular contact or at firstname.lastname@example.org.