Covid update

Since our last update things have moved on in the Coronavirus world we’re currently living in so here’s a quick round-up of some of the important changes coming over the next few months.

Self-employment Income Support (SEISS) grant

• The second and final SEISS grant will be on the same basis as the first but will be worth 70% of average monthly trading profits and capped at £6,570 in total;
• Claims for the second SEISS grant are due to open from 17 August 2020, most likely on a staggered basis again;
• To claim the second grant, your businesses must have been adversely affected by coronavirus after 13^th July but you don’t have to have claimed the first grant if your business has been affected more recently;
• Full guidance on the SEISS can be found here https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

Payments on account

• Payments on account due by 31^st July 2020 can be deferred without interest or penalties up until 31 January 2021. You do not need to tell HMRC, deferral will automatically apply if you do not pay. You will however need to cancel your Direct Debit if you set one up for July.

Coronavirus Job Retention Scheme (CJRS)

• The deadline for submitting claims to HMRC for periods up to 30^th June (CJRS V1) is 31^st July 2020;
• From 1^st July, major changes have been made to the scheme allowing flexible furlough (CJRS V2);
• Key points of the CJRS V2 include:
  • Employees can be flexibly furloughed, enabling part-time working. Employers will pay for the hours worked and furlough can be claimed for the remaining usual hours;
  • There is no minimum furlough period;
  • CJRS V2 is only available to employers that made claims for grants under CJRS V1;
  • It is only available for employees that were furloughed under CJRS V1 (some exceptions for employees returning to work after parental leave and military reservists);
  • Furlough claims must contain details of usual hours and actual hours worked; furloughed hours is the difference between these. Please note HMRC’s calculation of usual hours is not necessarily what you would expect so please ensure you read their guidance fully before submitting claims;
  • The maximum number of employees who can be included in a single claim is set at the maximum number ever claimed for in a single claim for that payroll in CJRS V1;
  • From August businesses will need to start contributing to the cost of the furlough payments, a brief summary is:
    • August – the business will have to pay any Employers national insurance (NIC) and the Employer’s element of the pension contribution (although the business may have Employment Allowance that covers the NIC anyway)
    • September – The business will have to pay the NIC and pension contribution (as above) and also 10% of the salary – the Government will pay 70%
    • October – Again the business will pay the NIC and pension contributions (as above) and will also have to pay 20% of the salary – the Government will pay 60%
  • HMRC’s full guidance on the CJRS can be found here https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme#how-to-claim

Other recent announcements

• Job Retention Bonus – UK employers will receive a one-off £1,000 bonus for each furloughed employee that is still employed (and paid over £520 on average between November & January) with the business as of 31^st January 2021
• Kickstart Scheme – Funding is available for businesses to provide six-month job placements for young People aged 16 to 24 claiming Universal Credit and will cover 100% of the National Minimum Wage for 25 hours a week – employers will be able to top this wage up.
• Temporary VAT  cut  for  food,  non-alcoholic  drinks,  accommodation  and  attractions  –  From  15  July  2020  to  12 January 2021, the reduced (5%) rate of VAT will apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises across the UK and to supplies of accommodation and admission to attractions across the UK.
• Eat Out to Help Out scheme – This will entitle every diner to a 50% discount of up to £10 per head on their meal, at any participating restaurant, café, pub or other eligible food service establishment. The discount can be used unlimited times and will be valid Monday to Wednesday on any eat-in meal (including on non-alcoholic drinks) for the entire month of August 2020 across the UK. Participating establishments will be fully reimbursed for the 50% discount by the Government.
• Land Transaction tax threshold increase (Wales only) – From 27 July 2020 until 31 March 2021, the starting threshold for land transaction tax will increase from £180,000 to £250,000. This tax reduction will not apply to purchases of additional properties including buy to let and second homes.
• Stamp Duty threshold increase (England and Northern Ireland only) – The threshold for stamp duty has increased from £125,000 to £500,000 temporarily, running until 31 March 2021
• Green Homes Grant (England only) – The government will introduce a £2 billion Green Homes Grant, providing at least £2 for every £1 homeowners and landlords spend to make their homes more energy efficient, up to £5,000 per household.

Other changes

• VAT deferral has now ended and any VAT payments due from 1^st July are payable as normal. Please note if you cancelled your Direct Debit for VAT this will need to be set back up at least 7 days before submitting your VAT return for the payment to be collect by Direct Debit.

Limited Company filing deadlines

• Companies House have introduced temporary extensions on the filing of accounts and confirmation statements as follows:
  • Company accounts – An automatic 3 month extension to filing deadlines falling between 27 June 2020 to 5 April 2021
  • Confirmation Statements – The current 14 day deadline is extended to 42 days.

We would recommend however that, as far as possible, accounts are still filed within 9 months of the accounting year end, as corporation tax payment deadlines remain the same. If you do have any issues with getting records to us to meet the 9 month deadline, please contact the relevant staff member as soon as possible to discuss.

Ellis Lloyd Jones – Our working practices

The majority of staff are still working from home but the office remains open for dropping off records. Wherever possible, please send records electronically but if this is not possible, please call the office before travelling to the office. Our phonelines are still open and calls will be forwarded to the relevant person.