We are now seeing the Government’s reaction to the rise in coronavirus cases, with increased restrictions on us. So far, we are not seeing a full lockdown, but it does look as if more measures are likely. Yesterday the Chancellor outlined a package of measures aimed at aiding the economy through the oncoming Autumn and Winter.
In a lot of cases these measures look beneficial. Please be aware that, as always through this crisis, the Chancellor has delivered a lot of headline messages. There will be more details that emerge in the detailed scheme documentation. We will of course keep you updated as we find out more:
- Autumn Budget
- Yesterday’s announcement replaced the Autumn budget and therefore we are not anticipating any major tax changes until next year. There had been uncertainty over several areas, including Capital Gains Tax, Inheritance Tax, Pension Payments, but for the time being these seem to have been pushed back
- It is therefore our assumption that the tax allowances will stay the same for 2021/22
- Job Support Scheme
- This scheme will replace the current furlough scheme and will start from 1 November 2020 and run for 6 months
- To qualify employees will need to work 33% of their usual hours, and have been on the payroll on 23 September.
- For each hour not worked the Government will pay a third of the employee’s usual pay, capped at £697.92 per month. The employer will pay another third. Thus, the employee will receive pay for two thirds of the unworked hours
- Overall, in most circumstances the employee will receive a minimum of 77% of their normal pay
- The Government will not contribute towards employer national insurance or pension payments. These sums will have to be met by the employer
- The employee must not be on a redundancy notice i.e. the Government is trying to ensure the job is sustainable
- The scheme is only open to those employers with a PAYE scheme and a UK Bank account
- Self Employment Income Support Scheme (SEISS)
- This scheme will be extended and there will be two more tranches of grant (November to January and February to April)
- The Scheme will be limited to those currently eligible for the SEISS Grant and are actively continuing to trade
- The exact dates have not yet been made clear
- The first grant will cover only 20% (last grant was 70%) of average monthly profits and will be paid out in a single instalment, capped at £1,875
- The level of the second grant will be set in due course
- Extension of the Reduced Rate VAT for Hospitality and Tourism
- Has been extended to 31 March 2021
- Will continue to apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafes, and similar premises, supplies of accommodation and admission to attractions
- Please remember to update systems for this if required
- Bounce Back Loan (BBL) Scheme Pay as you Grow
- Businesses who took out a BBL will have the option to repay their loan over a period of up to 10 years
- There will also be an option to reduce their payments to interest only for a period of up to 6 months (an option that can be used up to 3 times)
- There will also be an option to pause repayments totally for up to 6 months, but this can only be done once a minimum of 6 payments have been made
- Coronavirus Business Interruption Loan Scheme (CBILS)
- The Government intends to allow CBILS lenders to extend the terms of the loan up to 10 years
- VAT Deferral Scheme
- Those businesses that deferred VAT due in March to June 2020 will have the option to spread these payments over the 2020/21 financial year, without interest or penalty
- Businesses will need to opt in and HMRC will put in place an opt in scheme in early 2021
- Self-Assessment Taxpayers Enhanced Time to Pay
- Taxpayers with a tax liability of up to £30,000 due in January 2021 will be able to use HMRC self service (phone system!) to secure a payment plan over 12 months
- We are currently unclear if such a plan will be interest free
As you can see, there is some useful help included within the announcement. We will continue to review the announcements and update you accordingly. Please contact us if you have any questions but remember we may not have full scheme details at this point.
The Teignmouth Office is moving next Wednesday (30 September). Please be aware that as a result our phone system for both offices will be down until 10.30 on that day. The Teignmouth Office will be uncontactable for the whole day, but will re-open on Thursday 1 October.
The Smarter Accounting Offices continue to be staffed, but not currently 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.
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