SELF-EMPLOYED INCOME SUPPORT SCHEME (SEISS)
This section of the briefing is specifically focused at out Self-Employed or Partnership member clients.
For clarity, you are not self-employed if you own shares and are a Director of a Limited company business you control.
In May, those self-employed that were eligible, were able to make a grant claim through the Self-Employed Income Support Scheme. From 17 August, a second and final grant will become available for those self-employed taxpayers who continue to be affected by Coronavirus.
Anyone who was eligible for the first grant and confirms to HMRC that their business has been adversely affected on or after 14 July 2020 by Coronavirus is able to claim for this second grant.
Please note that you can still make a claim for this second grant even if you were eligible for the first grant, but did not make a claim. As long as your business has been adversely affected on or after 14 July for any period of time, you are entitled to the full 3 month grant.
Your business could be adversely affected by Coronavirus if, for example:
You are unable to work because you:
- are shielding
- are self-isolating
- are on sick leave because of Coronavirus
- have caring responsibilities because of Coronavirus
You have had to scale down or temporarily stop trading because:
- your supply chain has been interrupted
- you have fewer or no customers or clients
- your staff are unable to come into work
If you receive the grant, you can continue to work, start a new trade or take on other employment, including voluntary work, or duties as an Armed Forces reservist.
For this second grant, you will receive 70% of your average monthly trading profits for the years 2016/17, 2017/18 and 2018/19, paid to you as a single payment covering 3 months’ worth of profits (it was 80% for the first grant). There is a cap on the total claimable per individual which is £6,570. For those of you who received the first grant in May, the second grant will be 7/8ths of that amount.
Once again, as your tax agents, we will not and have not been allowed to make any claims on your behalf.
The money should be with you within 6 working days. If you have not received anything after 10 working days you will need to contact HMRC. Again, unfortunately, we are not allowed to do this on your behalf.
When making the claim you will need to have to hand:-
– Self-Assessment UTR
– National Insurance number
– Government Gateway user ID and password
– bank account number and sort code you want the grant to be paid into (only provide bank account details where a BACS payment can be accepted)
Eligible clients have until 19 October 2020, when the Scheme closes, to make this claim. Unlike the first claim, HMRC do not appear to be allocating time slots for each taxpayer to make a claim. Therefore, we expect a high demand on the morning of 17 August when the claims system goes live, so there may be a delay in being able to submit your claim.
If you have any challenges when making the claim, or would simply rather a friendly voice on the end of the phone to help you, as you proceed through the claim, please do call the office – 01202 880384. One of our team will call you back as soon as they are able to help.
After you have claimed
Once you have submitted your claim, you will be told straight away if your grant is approved.
You must keep a copy of all records in line with normal self-employment record keeping requirements, including:-
· the amount claimed
· the claim reference number for your records
· evidence that your business has been adversely affected by Coronavirus
You will need to report the grant:
· on your Self-Assessment Tax Return
· as self-employed income for any Universal Credit claims
· as self-employed income and that you’re working 16 hours a week for any tax credits claims
If you receive either the first or second grants and;
· you were not eligible for the grant, or
· received more than HMRC said you were entitled to
You must tell HMRC before the following dates to minimise the potential for penalties;
· if you received a grant before 22 July 2020 you must tell HMRC on or before 20 October 2020
· if you received a grant on or after 22 July 2020 you must tell HMRC within 90 days of receiving the grant
If you think this applies to you, please do call the office (01202 880384) and speak to your client manager who will be able to advise whether any remedial action will be necessary.
If you receive texts, calls or emails claiming to be from HMRC at this time, offering financial help or a Tax refund and asking you to click on a link or to give personal information, it is a scam
JOB RETENTION BONUS
Further details have now been announced for this one off amount payable in February 2021.
Employers will be able to claim for employees who:
· were furloughed and had a Coronavirus Job Retention Scheme claim submitted for them that meets all relevant eligibility criteria for the Scheme;
· have been continuously employed by the relevant employer from the time of the employer’s most recent furlough claim for that employee until at least 31 January 2021;
· have been paid an average of at least £520 a month between 1 November 2020 and 31 January 2021 (a total of at least £1,560 across the 3 months). The employee does not have to be paid £520 in each month, but must have received some earnings in each of the three calendar months that have been paid and reported to HMRC via RTI;
· have up-to-date PAYE submission records for the period to the end of January;
· are not serving a contractual or statutory notice period, that started before 1 February 2021, for the employer making a claim
For those employees transferred to a new employer under a TUPE, they must have been furloughed and successful claim made by their new employer in order to qualify.
A one off payment of £1,000 to the employer for each eligible employee will be claimable in February 2021. No announcement has yet been made as to how this will work (we would expect through PAYE online services) or whether we can make these claims on your behalf.
CORONAVIRUS JOB RETENTION SCHEME- FLEXI FURLOUGH
Anyone no longer furloughed for their whole pay period is now required to be treated as working under flexi-furlough. Our Outsourcing team have now completed nearly all of our clients’ flexi-furlough Payroll claims for July. However, this has been a significant challenge due to the changes in the way the Government requires these claims to be calculated and it has proven to be particularly time consuming to deal with.
With this in mind, we would also like to remind you that Monday 31 August is a Bank Holiday. Therefore, any clients requiring completed Payrolls by that date will need to treat our final working day in August as Friday 28.Please might we request you help us by ensuring you get monthly Payrolls to us as early as possible in August please, so we have time to work out the Flexi Furloughs. We are trying to avoid delays wherever possible and the early arrival of data will help that. Thank you.
As a reminder, from 1 July you are:
· only able to claim for employees who have previously been furloughed for at least 3 consecutive weeks any time between 1 March 2020 and 30 June 2020;
· able to flexibly furlough employees – this means you can bring your employees back to work for any amount of time, and on any work pattern
· still able to claim the furlough grant for the hours your flexibly furloughed employees do not work, compared to the hours they would normally have worked in that period
The details of the sliding scale of Government contributions to the Furlough scheme from August are as follows:
- in August, the Government will continue to pay 80% of wages up to a cap of £2,500 but Employers will have to pay the ER NICs and Pension contributions – for the average claim, this represents 5% of the gross employment costs that would have incurred if the employee had not been furloughed
- in September, the Government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – Employers will pay ER NICs, Pension contributions and the 10% of wages to make up 80% of the total up to a cap of £2,500
- in October, the Government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – Employers will pay ER NICs, Pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500
- the cap on the Furlough grant will be proportional to the hours not worked.
EAT OUT TO HELP OUT SCHEME
The Eat out to help out scheme launched on 3 August and offers discounts to diners every Monday to Wednesday until 31 August.
For those clients eligible for the scheme, details of how to register and make claims can be found here:
REDUCED RATE OF VAT
The rate of VAT applied on most tourism and hospitality-related activities was reduced from 20% to 5%(this will include temporary VAT cut for food and non-alcoholic drinks) from 15 July 2020 running to 12 January 2021.
A link to further guidance from the Government is below:
We would remind businesses that the reduction in the VAT rate is not all encompassing, as previous reductions have been. For example, a restaurant or café business will need to have a system to record sales of alcoholic drinks (still VAT at 20%) separately from food and non-alcoholic drink sales (VAT at 5%). Please do contact us if you have any questions on applying this VAT cut in your business.
REMINDERS OF PREVIOUS TOPICS
From 1 August 2020 to 31 January 2021, employers can claim a new payment of £2,000 for each new apprentice they hire aged under 25, and a £1,500 payment for each new apprentice they hire aged 25 and over. These payments will be in addition to the existing £1,000 payment the Government already provides for new 16-18 year-old apprentices, and those aged under 25 with an Education, Health and Care Plan – where that applies. Claims can start to be made by employers in relation to these apprentices from 1 September 2020. Those claims must be made through the Apprenticeship Service.
A temporary increase to the Nil Rate Band of Residential SDLT (Stamp Duty) from £125,000 to £500,000 in England and Northern Ireland has been introduced and will run until 31 March 2021. Second homes continue to attract a 3% additional charge to SDLT on top of the published rates. The bandings from £925,000 remain unchanged.
GREEN HOMES GRANT
This grant provides up to 2/3rds of the cost homeowners and landlords spend to make their homes more energy efficient, up to a maximum contribution of £5,000 by the household. For those on the lowest incomes, the Scheme will fully fund energy efficiency measures of up to £10,000 per household.
As we mentioned on our last briefing, on 13 July the UK Government launched a new public information campaign called “The UK’s new start: let’s get going”. It aims to give all the facts that they will need, to be ready for change, on 1 January 2021. A checker tool at gov.uk/transition will quickly identify the specific steps any business or individual needs to take, and will allow companies to sign up for bespoke updates. Taking the advised steps should equip businesses, for when we exit the transition period.
If you would like further help or to discuss any area of this briefing contact us on 01202 880384 or firstname.lastname@example.org
Chartered Accountants & Business Advisors