Grants, Support Schemes, CGT Reform & Other Business News – 13/11/2020

We hope everyone is well and coping with the current lockdown. In today’s blog we are giving updates on the various schemes and grants, introducing a couple of new bits of information, and giving our insights on the Capital Gains Tax reforms that seem likely:

  • Furlough Scheme
    • We have always stated that because furloughing staff is a change of employment contract, written agreements should be put in place. Guidance has just been issued that states that agreements should be place by 13 November (today!) to make full claims back to the beginning of November. This is very different from previous guidance and one that employers need to deal with. Please check that you have written agreements in place and signed by both the staff members and the employer. We have templates should you need them. Ensure that any new agreements are dated 13 November 2020 or before. This also applies to Directors and is also especially important to new staff being placed on furlough.
    • If you are a Company Director and are still performing some duties, a claim for part-time furlough can be made. If this is the case, we recommend that you keep a diary of hours / days worked
    • Over the coming weeks we will be contacting employers to agree the furlough arrangements prior to completing this month’s payroll
  • Self Employment Income Support Scheme (SEISS)
    • No update on this. We still understand that claims can be made from 30 November
  • Local Restrictions Support Grants (LRGS & ARG)
    • There are two separate grants available:
      • Local Restrictions Support Grant Scheme (LRGS)– This is the main grant and covers those businesses who are registered for business rates and have been forced to close or are unable to provide usual in-person services (e.g. restaurants who are still operating as a takeaway) and been closed for at least 28 days
      • Additional Restrictions Grant (ARG)– This is more generous than previously anticipated. Just be aware that the funding to Local Authorities for this grant is limited and therefore the following sums may be maximums. This grant is for the following businesses:
        • Forced to close but do not have a business rates account
        • Have remained open but suffered a severe loss of income (50%+)
        • Must have been actively trading the day before the new national lockdown started
      • The sums available are as follows (Per 28 Days)
        • Local Restrictions Support Grant
          • Rateable value £1 – £15,000 £1,334
          • Rateable value £15,001 – £50,999 £2,000
          • Rateable value £51,000+ £3,000
        • Additional Restrictions Grant
          • Rateable value £0 – £15,000 £934
          • Rateable value £15,001 – £50,999 £1,400
          • Rateable value £51,000+ £2,100
        • District Councils are responsible for the distribution of these funds and are currently showing very different situations:
          • Teignbridge – Saying that Government guidance has been received and they are putting in measures for grants to be claimed and paid
          • Mid Devon – Website is excellent, shows a helpful guide and applications for grants opened on 11 November. Gold star goes to Mid Devon! Click this link for Mid Devon webpage >
          • Exeter City Council – Similar to Teignbridge
          • Torbay – Similar to Teignbridge
          • East Devon – Similar to Teignbridge
        • If you want us to monitor any other Councils on this, please let us know and we will include in future updates – contact us!
        • If you have made an application, please let us know your experience (and the outcome!) so that we can update others – contact us!
  • Self Isolation Payment
    • This is a payment to individuals who must self isolate and came into effect from 28 September. Unlike a lot of the other help it is available to people who are self employed or employed. To qualify you must have been asked to self isolate by NHS (and got 8-digit number) and been unable to work from home and therefore lost income
    • £500 is available for the period of isolation, but this could be limited:
      • If you are on any one of various benefits, you will automatically qualify for the £500
      • If you are not on any one of the various benefits, you will fall into a discretionary fund and the payment could be less
    • The scheme is run by District Councils again therefore contact them or see their websites for details
  • Other News
    • The Government has announced an extension of the Annual Investment Allowance (AIA) initiative. This covers enhanced capital allowances for fixed asset purchases by businesses. The level per annum is £1,000,000 but was planned to reduce to £200,000 from 1 January 2021. This has now been extended to 1 January 2022
    • Capital Gains Tax Reforms – Some may have seen the news this week, the Chancellor has commissioned a report looking at Capital Gains Tax. As we know, the UK budget has a bit of a hole in it! The report that has come back suggests that Capital Gains Tax rates are too low and lower than income tax rates. The suggestion in the report is that Capital Gains Tax rates should be brought in line with income tax. No budget decisions have been made by the Chancellor, but this looks like an easy one to raise some more taxes. If you have assets that you are considering selling, then this may be worth consideration. Contact us if you wish to discuss!

We still think the situation is fluid and therefore we will keep an eye out for any further news and bring anything to you as and when needed.

As mentioned in previous blogs, the deadline for the filing of 2019/20 self-assessment tax returns is still 31 January 2021. Currently 2019/20 figures are not being used in any of the grant calculation methods, however, it is possible this could change. Therefore we recommend that if you have not yet brought in your records that you do so as a matter of urgency.

The Smarter Accounting Offices will continue to be staffed but will not be open for face to face meetings. We can always make other arrangements for video conferencing, telephone calls and at times garden meetings if required. If you are dropping off or collecting records via the office, please notify us in advance and wear a facemask.  Contact us here >

Please be aware that we are reviewing our policy regards COVID 19 on, at least, a weekly basis.

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Best wishes and stay safe