‘Shop Smarter Buy Local’ Update of Government Schemes Blog – 27/11/2020

This week’s blog comes after the news that our immediate locality (Devon) has been placed in Tier 2 from next Wednesday 2^nd Dec, after the National Lockdown has concluded. Many restrictions will be lifted, but the remaining restrictions will have some drastic effects on many, particularly those in the hospitality sector.

2020 has been such a difficult year for all of us, but the Christmas period is vitally important for many businesses. If ever there was a time to support local businesses, it is now, and whatever you can do to support them we’re sure will be appreciated. This Christmas…..‘Shop Smarter Buy Local’.

Now to the news, there are a few updates on the various Government Support Schemes, some of which are very important. We also bring other news that could be relevant to you.

• Furlough Scheme
  • No update at present. We are currently busy processing the November claims
• Self Employment Income Support Grant
  • HMRC have this week published guidance and conditions that are required to be met to claim the third tranche of this grant. It is massively different to the first two. Previously all that was required was be ‘adversely affected’. However, the new conditions require you to have been either impacted by reduced demand or temporarily unable to trade due to coronavirus
  • In addition, you must be intending to continue to trade and ‘reasonably believe there will be a significant reduction in your trading profits for the annual accounting period (as a whole) due to the reduced demand or your inability to trade’. This is much different to the previous conditions and there is no definition of what “significant” means. The wording states that ‘HMRC expects you to make an honest assessment about whether you reasonably believe your business will have a significant reduction in profits’
  • Temporarily unable to trade could be several things, including:
    • Your business has had to close due to Government restrictions
    • You have been instructed to shield or self-isolate inline with NHS guidelines and are unable to work from home (please note: if you have been abroad and have to self isolate this does not count)
    • You have tested positive for coronavirus and are unable to work
    • You cannot work due to parental caring responsibilities e.g. because of school or childcare facility closures
  • Claiming based on increased costs (e.g. PPE) is not a valid reason
  • The period for the claim is from 1 November to 29 January
  • These are very much tougher restrictions. For some e.g. those forced to close, the claim conditions will obviously be met. For others it is more of a judgement call. Not defining significant does not make this call any easier. In all cases, ensure that you keep a record of the reasons for making a claim
  • Claims can be made from 30 November
• Local Restrictions Support Grant
  • These grants were brought in to provide support during the National Lockdown. With the area moving into Tier 2 previous guidance from the Government indicated that Local Authorities would be provided with further funds under these schemes. There seems to be little publicity on this and none of the local Councils are showing any updates. We fully expect these schemes to be extended and will bring news as soon as we have anything to update you with
  • We published the details and sums available under the 2 different schemes (Local Restrictions Support Grant (LRSG) and Additional Restrictions Grant (ARG)) in our mid November blog here > and have been continuing to monitor the status of various District Councils as follows:
    • Teignbridge
      • Now accepting LRSG applications. Follow the Teignbridge link here >
      • For ARG, still showing that they are putting measures in place i.e. not yet accepting applications
    • Mid Devon – Site is excellent, shows a helpful guide, and applications for both grants opened on 11 November. Follow the Mid Devon link here >
    • Exeter City Council
      • Now accepting LRSG applications. Follow the Exeter link here >
      • For ARG, still showing that they are putting measures in place i.e. not yet accepting applications
    • Torbay – Now accepting applications for both. Follow the Torbay link here >
    • East Devon – Now accepting grant applications for both the LRSG and ARG. Follow the East Devon link here >
    • West Devon
      • Now accepting LRSG applications. Follow the link here > Please note that site says they have been experiencing problems with the application form due to high demand
      • Now accepting ARG applications. Follow the link here > 
    • Torridge
      • Now accepting LRSG applications. Follow the link here >
      • Now accepting ARG applications. Follow the link here >
    • If you want us to monitor any other Councils on this, please let us know and we will include in future updates
    • If you have made an application, please let us know your experience (and the outcome!) so that we can update others. We know some have made applications, but we are yet to hear if they have been successful and if money has been received. Let us know your experience
  • Other News
    • HMRC Enquiries – We are seeing HMRC enquire on several of the support measures, including Self Employment Support Grants, Furlough Claims and Claims made under the Eat Out to Help Out Scheme. At times these are targeted and other times random. We have recently written to clients about the Tax Investigation Fee Protection scheme and such enquiries are covered under this scheme.
    • Deferred VAT – Some of you may have deferred a VAT payment (20 March to 30 June period) and just a reminder that these must be paid by 31 March 2021. There is another option that HMRC is releasing in early 2021 whereby the payment can be spread over 12 months. We will bring you details of the new scheme and how to apply when we have them
    • Staff Christmas Parties and Gifts Rules – HMRC have now confirmed that costs linked to a virtual Christmas party will be covered under the annual function exemption. This rule is what we use to ensure that costs of staff parties are not caught by tax and national insurance on the employee. £150 for each staff attendee can be spent per year. Such payments are tax deductible in the business accounts. Any business planning a virtual Christmas party is strongly advised to keep a record of attendance to support any “annual function exemption” claim. You may also want to consider the trivial benefits rule where employers can provide a gift to staff with a value up to £50, including VAT, without tax being due. Such gifts cannot be cash or a voucher that can be exchanged for cash

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

Just a reminder, we provide more regular updates via Facebook. Therefore, if you want the latest news then like our Facebook page >

Best wishes and stay safe!