It's been a while since our last update...and that's OK because not much has changed AND this isn't a sales funnel thing to fill up your inbox just because Xavier from marketing tells me I need to get you all to follow #pointlesshashtag or something.
Three things on the list today:
- SEISS portal now open, for the self employed
- A reminder of the Furlough scheme changes, for employers
- And, the elephant in the room - what happens when time is up and you have to pay your deferred VAT, personal, payroll taxes etc?
SEISS - Part 2 portal now open
The portal to claim for the second SEISS grant is now open. As before, you claim through the gov.uk website and, if eligible, cash will be with you in 6 working days. The portal remains open until 19th October.
I've had a lot of questions surrounding eligibility for this second phase, as trading for many businesses get back towards 2019 levels. Indeed we have some clients who are BEATING their 2019 figures as they learn to adapt their offering.
The guidance is clear that to be eligible, your business must have been adversely affected on or after 14th July 2020.
Exactly what adversely affected means is open to interpretation, but if either your sales OR your profits are down, as a result of Covid, then this would count. If however your reduction is due to, say, a decision to semi-retire which was not covid-related, this would not be a valid reason.
HMRC have published a helpful guide on eligibility here:
But if you want to have a chat about your own business (the above being generic advice) then please let me know.
Furlough Scheme Changes
To recap, In AUGUST employers will be reimbursed for 80% of staff wages but NOT any additional Employer's NIC or pension costs
From SEPTEMBER, the reimbursement will fall to 70% of wages, although staff must still be paid the 80% (or greater). Employers will have to fund the difference.
We're hearing a few instances (luckily none of our clients) of staff being asked to repay costs which the employer is unable to reclaim from HMRC. This stinks!!
As employees are not in a strong position right now, I can see why they may feel forced to do this instead of being made redundant, but once the dust settles I think we will see a lot of employment tribunal cases being brought against this behaviour.
Time To Pay agreement (TTP)
The govt have, nationwide, kicked some of your tax liabilities into the long grass. I'm talking here about the March VAT return and your July payment on account. Plus it won't be long after that when the Bounce Back Loan repayments start.
Within the next 6-9 months, that tax will be become due, even if your business activity right now is miles behind where you'd expected - as the tax is in respect of the previous, prosperous tax year.
You should start thinking about this NOW and, where possible, start making small payments to chip away at the balance. But I know there are some businesses who just won't have the cash available when it comes to January 2021.
If this is you - don't put your head in the sand. Speak to me. And then speak to HMRC to arrange a Time To Pay agreement. In short, if you can show you don't have the cash AND you've tried other funding avenues.
I know this all sounds doom and gloom but the TTP arm of HMRC is actually quite pragmatic - provided they know you aren't pulling the wool and genuinely want to make good your tax bill, they will come to an agreement over what you pay, and when, and provided you stick to that then you will avoid any late payment penalties.
Give me a call if you want to help plan for this.