We provide our clients with regular updates on changes in taxation regulation, news from the world of accounting and, of course, information about the latest developments at Francis Davies & Partners.

Wednesday 29.04.2020 Coronavirus Update

Coronavirus Bounce Back Loan

• Available from Monday 4th May 2020
• Borrow between £2,000 and £50,000
• Government Guarantee of 100% of the loan
• No fees or interest for the first 12 months
• Loan terms up to 6 years
• Delivered through a network of accredited lenders

Eligibility

• Based in the UK
• Have been negatively affected by coronavirus
• was not an undertaking in difficulty on 31st December 2019

You cannot apply if you are already claiming under the Coronavirus Business Interruption Loans Scheme

The Chancellor has stated that “payments will be made within 24 hours of approval with no complex eligibility criteria”

The loans will be easy to apply for through a short, standardised online application.

It was mentioned in the commons that this will be capped to 25% of the company’s turnover but at present we have no further information on how this will be calculated (i.e. dates or current figures)

Job Retention Loan Scheme (80%)

This is now up and running and payments are being received by companies

Economic Resilience Fund

Grants for up to £10,000 for 1 to 9 employees

The fund has been paused on midday on Monday 27 April following the very large number of
applications.

Self Employed Income Support Scheme

Contact to the self employed is due to be made by the middle of May by HMRC, though we still do
not know if it will be by email or letter.

If you do require more detail on any of the funds / grants please give me a quick email on
tina@francisdavies.com and I will try my best to help.

Tuesday 31.03.20 Coronavirus Update

Welsh Government Funding

1) Development Bank of Wales Loan – loans between £5,000 and £250,000 at favourable interest rates.

The loan scheme will work alongside the UK wide Coronavirus Business Interruption Loan Scheme, other Welsh Government and UK Government support offers, providing more vital options for Welsh businesses. Loans of between £5,000 and £250,000 are available to businesses who have been trading longer than 2 years and can demonstrate that they were able to service that level of debt before the outbreak.

Fund Details:

• £100m fund

• loans between £5,000 to £250,000, maximum loan levels apply

• 12 month capital and interest repayment holiday

• no arrangement or monitoring fees

• 2% interest fixed for 6 years (includes the 12 month holiday)

https://developmentbank.wales/

2) Economic Resilience Fund

Grants of £10,000 for micro-businesses employing up to 9 people. This includes sole traders employing staff. Qualifying businesses will be able to apply by mid-April.

Grants of up to £100,000 for small and medium sized firms with between 10 and 249 employees. Qualifying businesses will be able to apply from next week.

Support for larger Welsh companies, which are of critical social or economic importance to Wales. This element will be open to qualifying businesses within the next 2 weeks.

3) Welsh Government Business Grants

Grant 1 : For retail, leisure and hospitality businesses in Wales, a grant of £25,000 will be offered for businesses in these sectors with a rateable value of between £12,001 and £51,000.

Grant 2 : For all other sectors the Welsh Government package also provides a £10,000 grant to all businesses eligible for Small Business Rates Relief with a rateable value of £12,000 or less.

These are available now and need to be claimed via your local authority

4) Coronavirus Job Retention Scheme

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per employee per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

5) Business Interruption Loan Scheme

This scheme will support loans of up to £5 million in value. Businesses can access the first 12 months of that finance interest free, as government will cover the first 12 months of interest payments.
Further details can be found at: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

6) Self-Employed Income Support Scheme

Those eligible will receive a cash grant worth 80% of their average monthly trading profit over the last three years.

The scheme will be open to those with a trading profit of less than £50,000 in 2018-19 or an average trading profit of less than £50,000 from 2016-17, 2017-18 and 2018-19.

The income support scheme, which is being designed by HMRC from scratch, will cover the three months to May. Grants will be paid in a single lump sum instalment covering all 3 months, and will start to be paid at the beginning of June.

Individuals should not contact HMRC now. HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational

Monday 30.03.20 Coronavirus Update

Landlords and Tenants

Rent, mortgage payments and notices seeking possession
Until 30th September 2020, most landlords will not be able to start possession proceedings unless they have given their tenants three-months’ notice. Landlords can choose to give more than this three months’ notice.

We have received a few queries regarding being a landlord or tenant, below are some of the responses the government have given.

• As a tenant, should I stop paying rent during the outbreak?

Tenants should continue to pay rent and abide by all other terms of their tenancy agreement to the best of their ability. The government has a strong package of financial support available to tenants, and where they can pay the rent as normal, they should do.
In many if not most cases, the COVID-19 outbreak will not affect tenants’ ability to pay rent. Rent levels agreed in the agreement remain legally due and they need a discussion with landlord if they are in difficulty.
Local authorities can provide support for tenants to stay in their homes. If they are experiencing financial hardship, they may be able to access new funding.

• What can I do about mortgage repayments?
Mortgage lenders have agreed to offer payment holidays of up to three months where this is needed due to Coronavirus-related hardship, including for buy-to-let mortgages. The sum owed remains and mortgages continue to accrue interest during this period.

• As a landlord, should I stop charging rent during the outbreak?
Landlords are not required to do this. Most tenants will be able to pay rent as normal and should continue to do so, as they will remain liable for the rent during this period.

• Someone in my House in Multiple Occupation has the virus, am I obliged to remove them or find my tenants another place to stay?
The Government has issued specific guidance on what to do if someone in your household has contracted the virus, including self-isolating the whole household for 14 days.

You can find that guidance here: https://www.gov.uk/government/publications/covid-19-stay-at-home-guidance/stayat-home-guidance-for-households-with-possible-coronavirus-covid-19-infection
Nobody can be removed from their home because of the virus.
Landlords are not obliged to provide alternative accommodation for tenants if others in the property contract the virus.

Job Retention Scheme Update

The Coronavirus Job Retention Scheme is a temporary scheme open to all UK employers for at least three months starting from 1 March 2020. The online service you’ll use to claim is not available yet. We expect it to be available by the end of April 2020,

Friday 27.03.20 Coronavirus Update

Self-employment Income Support Scheme Grant

This scheme is for self-employed or a member of a partnership who have lost income due to coronavirus.

It is a taxable grant worth 80% of trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended.

Who can apply

You can apply if you’re a self-employed individual or a member of a partnership and you:

• have submitted your Income Tax Self Assessment tax return for the tax year 2018-19
• traded in the tax year 2019-20
• are trading when you apply, or would be except for COVID-19
• intend to continue to trade in the tax year 2020-21
• have lost trading/partnership trading profits due to COVID-19
• Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment.

How much you will get

You’ll get a taxable grant which will be 80% of the average profits from the tax years (where applicable):

2016 to 2017
2017 to 2018
2018 to 2019

To work out the average HMRC will add together the total trading profit for the 3 tax years then divide by 3 and use this to calculate a monthly amount.

If you have under 3 years accounts, it will be averaged over this time.

It will be up to a maximum of £2,500 per month for 3 months.

It will be paid directly into your bank account in one instalment

How to apply

You cannot apply for this scheme yet.

HMRC will contact you if you are eligible for the scheme and invite you to apply online.

You will access this scheme only through GOV.UK. If someone texts, calls or emails
claiming to be from HMRC, saying that you can claim financial help or are owed a tax
refund, and asks you to click on a link or to give information such as your name, credit
card or bank details, it is a scam.

After you’ve applied

Once HMRC has received your claim and you are eligible for the grant, you will be contacted and told how much you will get and the payment details.

If you claim tax credits, you’ll need to include the grant in your claim as income.

Unfortunately, those who haven’t filed a tax return for the year to the 5th April 2019 will not
be eligible for this scheme.

Thursday 26.03.20 Coronavirus Update

Apply for Welsh Government business support

The support grant is now starting to become available throughout the country.

Each business that works out of a business premises and has a rateable value of under £12,000 will get a grant of £10,000.

Rateable value of over £12,000 and under £51,00 and in the leisure, retail or hospitality will get a grant of £25,000.

The following links are to the council’s online forms, you will need to know the Business Rates Account Reference which will be on your council demand notice.

Bridgend - https://eforms.bridgend.gov.uk/applicationforwelshgovernmentbusinesssupport

Caerphilly - https://www.caerphilly.gov.uk/Business/Business-rates/Covid-19-Grants-Linked-to-Business-Rates
Vale of Glamorgan - https://www.valeofglamorgan.gov.uk/en/working/Business-Support/Coronavirus-Advice-for-Business.aspx

Merthyr Tydfil - https://www.merthyr.gov.uk/business/business-rates/business-rates-relief-coronavirus-covid-19/

Cardiff – https://www.cardiff.gov.uk/ENG/Business/Business-Rates/Covid-grant/Pages/default.aspx

Neath Porth Talbot – not online as at 9am

Coronavirus Job Retention Scheme

We have teamed up with Peninsula UK who are giving our clients free advice on the Retention Scheme, how to deal with employee concerns and how to support employees while protecting the business.
They have a dedicated Coronavirus team set up within Peninsula, the contact is Barry Quinn on 07772 320508 or barry.quinn@peninsula-uk.com

Self Employed

We are hoping information to help will be either in tonight’s or tomorrow’s Boris Briefing

Tuesday 24.03.20 Coronavirus Update

Business that now need to close due to Coronavirus

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/874732/230320_-_Revised_guidance_note_-_finalVF.pdf

Self Employed

The below bill was going through parliament last night, at present there is nothing except Universal Credits for the self employed but we believe there will be an announcement in the next couple of days on this.

As soon as we have any further information we will update you.

https://publications.parliament.uk/pa/bills/cbill/58-01/0122/amend/coronavirus_daily_cwh_0320rev.14-18.html?fbclid=IwAR0bEpDyICU0KASgKJeipv7qHyTWJNmk_neQsuQXbsrG0vdqnYXcBsgxvnI

Coronavirus Job Retention Scheme
How do I access it?

You will need to:

1. Designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
2. Once the new online portal is live, submit information to HMRC about the employees that have been furloughed and their earnings (HMRC will set out further details on the information required)

When can I access it?

HMRC are working urgently to set up a system for reimbursement. They expect the first grants to be paid within weeks, and they aiming to get it done before the end of April. If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.

Business Loan Scheme

These can now be access directly through your current bank either by telephone or online

Saturday 21.03.20 Coronavirus Update

Job Protection – 80%

Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have to be laid off during this crisis. it has been announced the government will be paying up to 80% of a worker’s wages, up to a total of £2,500 per worker each month.

These will be backdated to 1st March and will be initially open for 3 months, to be extended if necessary. This will cover any employees as at the 28th February 2020.

The scheme will be run by HMRC who are expected to make the first grant within weeks. As soon as we have information on how to claim we will update you as soon as possible, as the existing systems are not set up to facilitate payments to employers.

Business Loan Scheme

The interest free period on the Coronavirus Business Loan Scheme will extend form 6 months to 12 months.

These loans should be available from Monday

Cashflow Support – VAT

VAT payments due between now (March) and the end of June will be deferred. No VAT registered business will have to make a VAT payment normally due with their VAT return to HMRC in that period.

The deferred period will be by the end of the financial year 31st March 2021.

All returns will still need to be filed on time.

Cashflow Support – Self Assessment

Payments on account due by the 31st July 2020 under the Self Assessment system will be deferred to January 2021.

Friday 20.03.20 Coronavirus Update

Employees and Payrolls

Chancellor Rishi Sunak is to announce an employment and wage subsidy package to try to protect millions of jobs.

One proposal under discussion is for the UK to follow the lead of countries such as Denmark, where the government has promised to cover 75% of salaries at private companies for three months, if they promise not to let staff go.

The technical difficulty is how to operate such a scheme. It could be through the tax system, or as a series of guarantees to businesses, or informally after a significant tax holiday.

Hopefully we will know more after the 5pm briefing today.

Interest Rates

The Bank of England has cut interest rates again in an emergency move as it tries to support the UK economy in the face of the coronavirus pandemic.

It is the second cut in interest rates in just over a week, bringing them down to 0.1% from 0.25%.

Though this will not benefit anyone with a fixed rate mortgage.

Self Employed – Universal Credits

For people who need to make a new claim for financial support

If you are required to stay at home or are infected by coronavirus you may need financial support, and quickly.

• those affected by coronavirus will be able to apply for Universal Credit and can receive up to a month’s advance up front without physically attending a jobcentre
• the 7 waiting days for ESA for new claimants will not apply if they are suffering from coronavirus or are required to stay at home – so it will be payable from day one

Employees and self-employed people

To make sure people in work can take the necessary time off to stay at home if they are suffering from coronavirus or to prevent its spread, changes have been made to Statutory Sick Pay and how Universal Credit supports self-employed claimants.
This includes:

• people who cannot work due to coronavirus and are eligible for Statutory Sick Pay will get it
from day one, rather than from the fourth day of their illness
• Statutory Sick Pay will be payable to people who are staying at home on government advice
• if employees need to provide evidence to their employer that they need to stay at home due
to coronavirus, they will be able to get it from the NHS 111 Online instead of having to get a
fit note from their doctor – this is currently under development and will be made available
soon
• self-employed claimants on Universal Credit who are required to stay at home or are ill as a
result of coronavirus will not have a Minimum Income Floor (an assumed level of income)
applied for a period of time while affected
• https://www.understandinguniversalcredit.gov.uk/coronavirus/

Businesses

Employers with fewer than 250 employees will be able to reclaim Statutory Sick Pay for employees
unable to work because of coronavirus. This refund will be for up to 2 weeks per employee.

Thursday 19.03.20 Coronavirus Update

Coronavirus Business Interruption Loan Scheme (CBILS)

Expected to become available in the week commencing 23rd March 2020

• Provided by the British Business Bank through participating providers
• The scheme provides the Lender with a government backed guarantee against the outstanding facility balance, potentially enable a no credit decision from a lender to become a yes
• NB the borrower always remains 100% liable for the debt
• The Government will also cover the first 6 months of interest payments, so the business will benefit from lower initial repayments.
To be eligible for support via CBILS the business must
• Be UK based with turnover of no more than £41 million per annum
• Operate within an eligible industrial section (see link https://www.british-business-bank.co.uk/wp-content/uploads/2020/03/Ineligible-and-Restricted-Eligibility-Sector-2017.pdf)
• Be able to confirm that they have not received de minimis State aid beyond €200,000 equivalent over the current and previous two fiscal years
• Have a sound borrowing proposal, but insufficient security to meet the lender’s requirements
• Full eligibility criteria will be published shortly

These details are being updated daily, below is the link to the British Business Bank
https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

Grants

The Welsh Government has announced a package of support worth £1.4bn for small businesses to help them during the coronavirus outbreak.

Shops, leisure and hospitality businesses with a rateable value of £51,000 or less will receive 100% business rates relief and pubs with a rateable value of between £51,000 and £100,000 will receive a £5,000 reduction on their bill. This will be administered through your local authority.

It also provides a £10,000 grant to all businesses eligible for Small Business Rates Relief with a rateable value of £12,000 or less.

Businesses that qualify for this support will not need to do anything to apply for this scheme. This will be administered through the Business Rates system, and local authorities will be in touch regarding this.

As of today, we have no further information on the grant scheme but are reviewing it regularly.

Tax payments

HMRC is offering time to pay applications and may even waive interest and penalties on late payments for those struggling to make tax payments.

To help with the surge in applications it anticipates, HMRC has established a dedicated helpline manned by more than 2,000 personnel to help businesses and self-employed individuals in financial distress, who may have outstanding tax liabilities.

Those who call the line will be offered advice, as well as other options including:

▪ instalment arrangements
▪ suspension of debt collection proceedings
▪ cancellation of penalties and interest where a business has administrative difficulties contacting or paying HMRC immediately.
The line will be open Monday to Friday from 8am to 8pm, and Saturday from 8am to 4pm.

If you run a business or you are self-employed and concerned about paying tax due to the impact of coronavirus, you can call HMRC’s helpline for advice on 0800 0159 559.

Tuesday 17.03.20 Coronavirus Update

Welsh Government Support

The Welsh Government today announced a package of support worth more than £200m for small businesses to help them during the coronavirus outbreak:

• Retail, leisure and hospitality businesses with a rateable value of £51,000 or less will receive 100% business rate relief and pubs with a rateable value of between £51,000 and £100,000 will receive a £5,000 reduction on their bill.
• A further £100m will be available for a new grant scheme for small businesses Further details on this new grant scheme will be confirmed as soon as possible.

For more details, please see https://gov.wales/emergency-support-businesses-hit-coronavirus 

UK Government Support

Covid-19: Immediate support for SMEs

Measures to support businesses experiencing increases in costs or financial disruptions

Employment costs

Legislation will be enacted to allow small-and medium-sized businesses and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The eligibility criteria for the scheme will be as follows:

• The refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19

• Employers with fewer than 250 employees (to be determined with reference to number employed as of 28 February 2020) will be eligible. Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19

• Employers should maintain records of staff absences, but employees will not need to provide a GP fit note

• Eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to self-isolators comes into force

• The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible (possibly via the RTI system). Existing systems are not designed to facilitate employer refunds for SSP

Coronavirus statutory sick pay is expected to be in the form of a refund. The Treasury says that it is “working with employers over the coming months to set up a repayment mechanism as soon as possible for employers reclaiming statutory sick pay”

COVID-19 Claiming SSP for a SME self-employed director

HM Treasury published guidance states:

Those who are not eligible for SSP, for example the self-employed or people earning below the Lower Earnings Limit of £118 per week, can now more easily make a claim for Universal Credit or Contributory Employment and Support Allowance:

• For the duration of the outbreak, the requirements of the Universal Credit Minimum Income Floor will be temporarily relaxed for those who have COVID-19 or are self-isolating according to government advice, ensuring self-employed claimants will receive support.
• People will be able to claim Universal Credit and access advance payments upfront without the current requirement to attend a jobcentre if they are advised to self-isolate.
• Contributory Employment and Support Allowance will be payable, at a rate of £73.10 a week if you are over 25, for eligible people affected by COVID-19 or self-isolating in line with advice from Day 1 of sickness, rather than Day 8.

The government would be refunding direct to the employers once their system is all in place in the next few weeks/months. Temporarily, the employers (company) can pay the SSP to the director/ directors from the day they have to go to into self-isolation.

HMRC knows if you’re cheating!

In a recent article by the Financial Times “Ten ways HMRC checks if you’re cheating” (link below) some of the key ways HMRC can check if you’re avoiding tax were highlighted.  Here are a few of the key points:

Computer Power

HMRC’s computer system allows them to detect fraud, evasion and avoidance by sifting through vast quantities of information, accessing other databases, such as the Land Registry, Companies House and the electoral roll for additional information about you. 

HMRC can identify and examine in detail: information on property transactions, company ownership, loans, bank accounts, employment history and self assessment records to spot where people might be under-declaring or avoiding tax.

Mystery Shoppers

HMRC inspectors can turn up at a business, undercover, in disguise, and in teams to root out suspicious behaviour, for example posing as a couple at a restaurant or visiting a hair salon to understand how that business operates.  This method is particularly popular where the business being investigated deals partly of largely in cash.

Informers

Tip-offs are still a vital source of information for HMRC and tend to generate the biggest returns, for example disgruntled former employees are among HMRC’s key sources. 

Local and online information

HMRC also uses less obvious sources, such as advertisements, Facebook, and Twitter.  These sources are most commonly used to identify where a persons lifestyle is different from what would be expected from that persons tax returns, for example where someone claims to not earn much but has pictures on Facebook or Twitter or lavish holidays or an expensive wedding.

For full information about this article please visit the Financial Timesonline:

http://www.ft.com/cms/s/0/0f98bbc0-2db6-11e2-9988-00144feabdc0.html#axzz2LLSEX6J1

For further details from HMRC please visit:

http://www.hmrc.gov.uk/budget-updates/march2012/tax-evasion-report.pdf