Business As Usual During Covid 19

The Winter Economy Plan. Explained.

The winter economy plan explained

Chancellor Rishi Sunak has outlined a series of measures to support jobs and the economy over the next six months. Here we provide an overview of the five new initiatives with a brief explanation. Please pass it on to your clients as you see fit.

1. New Job Support Scheme

With the current furlough scheme ending on the 31st October, the Chancellor has announced its replacement to start from the 1st November and will run for six months.

The scheme will target employees whose normal working hours have been reduced. The government will contribute a third of the normal hours not worked by the employees, and expect the employer to do the same. Meaning they will be paid two thirds of the hours that they were unable to work under the scheme.

For Example:

The employer pays the worked hours in full.

Usual Weekly Hours

40 @ £10 ph = £400.00

Reduced Worked Hours

25 @ £10 ph = £250.00

The remaining hours not worked are dealt with as follows:

Hours not worked

15 @ £10ph = £150.00

Government Contribution

5 @ £10ph = £50.00

Employer Contribution

5 @ £10ph = £50.00

Lost Hours

5 @ £10ph = £50.00

The following conditions apply:

  • Employees must be working at least 33% of their normal working hours.
  • The Government Contribution will be capped at £697.92 per month.
  • Employers do not need to have used the Furlough scheme to be eligible for the Job Support Scheme.

2. Self-Employment Income Support Scheme (SEISS) Extended

The Government has announced a continuation of the SEISS grants for the self-employed.

A third grant in the scheme will be paid covering the period of November to January; the contribution will be 20% of the average monthly profits. The grant will be capped at £1,875 and will be available to all those that were eligible for the earlier grants. An additional grant has been announced for the February to April period, but no details have been announced in regards to the amounts.

3. Flexible options on Government-backed loan repayments

For those businesses that accessed a Bounce Back Loan a new flexible system has been introduced to assist in repaying the loans. Measures include:

  • The ability to extend the length of the loan from six years to 10 years.
  • Interest-only periods of up to six months
  • Payment holidays

Coronavirus Business Interruption Loan scheme lenders are also being given the flexibility to increase the length of loans from six years to 10 years.

Loan scheme applications have been extended to the end of November, giving businesses more time to apply.

4. Extension of the temporary VAT cut for hospitality and tourism sectors

The current temporary VAT cut of 15% for the hospitality and tourism sectors is being extended up until the end of March 2021.

5. VAT and Income Tax Deferments

Businesses that took advantage of the ability to defer a VAT payment until March 2021, will now have the options to join a ‘New Payment Scheme’. This will give businesses the option to spread the amount over 11 interest-free payments during the 2021-22 financial year, instead of paying the full amount at the end of March.

Taxpayers were given the ability to defer the July 2020 Payment on Account until the 31st January 2021.

Taxpayers will now be able to access a self-service facility ‘Time to Pay’. The facility will grant taxpayers an extra 12 months to pay the amounts that would have been due on the 31st January 2021. The previously deferred payment on account and the final balancing payment for the year.

Useful resources

The full outline Winter Economy Plan can be found here.

Information on the Self-Employment Income Support Scheme grant extension.

How to check if you can claim a grant through the Self-Employment Income Support Scheme.

Information on the Job Support Scheme.

If you need any more help with any of these measures please do not hesitate to get in touch.

Xero Gold Partner Status

What it means to be a Xero Gold Partner…

Sutherland Black have been awarded Xero Gold Partner status.

Sutherland Black have been using Xero since 2007; connecting people with their numbers anytime, on any device, anywhere in the world. Have look at our service here.

And it’s no secret that although we are an accountancy practice we are technology addicts – constantly searching for new ways to improve our clients’ business.

Who Can Get Gold Partner Status?

Xero partner firms like Sutherland Black are classified under the partner program according to a points system – they reflect the number of customer files that a partner has access to through Xero.

Points are designed to reflect the complex nature of a file and are weighted accordingly. The Partner system is designed to recognise advisors who scale within Xero’s network, and it’s there to help small and medium sized businesses to better identify and connect with the advisor that suits their needs.

Xero Gold Status is an achievement that reflects our level of experience with our customers using Xero. It’s an achievement we are intensely proud of.

Xero Gold Partner Status benefits you!

As Gold Partners with Xero, we’re able to use our status to help more small and medium businesses, in a more in-depth way, as our Xero expertise deepens. You can be certain that we have the very best level of knowledge and experience to help you get the most from Xero and other Xero Partner software. We ensure you have the most up to date advice, add-ons and software updates.

It means that we can get your business setup on Xero easily and efficiently, provide you with training and ongoing support with a programme designed to both simplify and add value to your business.

Add On Apps

Xero has an incredible range of add-on software apps in the Partners network. They include a variety of Inventory, Data Extraction Software, Scheduling, Cash Flow Forecasting apps and many more. You can search for a relevant app here.

As your accountant, we understand your business and we have a solid understanding of your numbers for growth and success. Add value to your business by fast-tracking and simplifying your business processes. We can help by advising, implementing and integrating these apps with Xero to really take your business to the next level.

An entire team…not just one accountant

As a Xero Gold partner we have a team of Xero certified advisors, not just one.

Just to recap… as Xero Gold Partners we can;

  • help you get setup in Xero
  • assist you in migration of your data and setup of cloud applications
  • provide training in using the software
  • guide you in how to use the functions in Xero to better understand how your business is performing; and
  • advise you of the range of Xero add-ons that may benefit and add value to your business
  • As Xero Gold Partners we can help in all aspects of Xero implementation for your business.

Get in contact if you want to know how we can help.

New Court Ruling on Company Vans vs Company Cars

It is usually beneficial for tax purposes that a vehicle in a business is classified as a commercial vehicle rather than a car. A new court ruling is not good news for people who run dual purpose vehicles.

The Court of Appeal have now ruled on the tax status of certain vehicles provided to employees of Coca Cola. The court has upheld the HMRC view that vans with windows and a second row of seats behind the driver are not goods vehicles but motor cars for benefit in kind purposes. Consequently, the income tax and national insurance payable by employee and employer is significantly higher than if the vehicles had been classified as goods vehicles.

The income tax legislation defines a “goods vehicle” as “a vehicle of a construction primarily suited for the conveyance of goods or burden of any description…”

At the original Tax Tribunal it was decided that modified VW Kombi vans failed this test whereas modified Vauxhall Vivaro vans did fall within the definition of goods vehicles. However the Court of Appeal has now ruled that the Vauxhalls should also be taxed as motor cars for P11d benefit in kind purposes. This means that where the vehicle is available for private use the taxable benefit will be based on the original list price multiplied by a percentage based on the vehicle’s CO2 emissions.

The decision means that employers may need to reconsider providing such vehicles. They may also need to rectify the P11d reporting in respect of earlier years and we await further guidance from HMRC.

What is also particularly confusing, and thus difficult for businesses to deal with, is that the benefit in kind rules are not the same as the rules for recovery of input VAT.

If you would like advice on which vehicle will be most tax efficient for your business please don’t hesitate to get in touch.

September Changes To Furlough Scheme

The CJRS grant claim changes again on the 1st of September. Please talk to us if you would like us to help estimate your claim.

  • From 1 September CJRS will pay 70% of usual wages up to a cap of £2,187.50 per month for the hours furloughed employees do not work.
  • You will still need to pay your furloughed employees at least 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. You will need to fund the difference between this and the CJRS grant yourself.
  • The caps are proportional to the hours not worked. For example, if your employee is furloughed for half their usual hours in September, you are entitled to claim 70% of their usual wages for the hours they do not work up to £1,093.75 (50% of the £2,187.50 cap).
  • You will continue to have to pay furloughed employees’ National Insurance (NI) and pension contributions from your own funds.

You can find ourt which employees you can put on furlough and claim for through the Coronavirus Job Retention Scheme here.

Please leave us your details and we will contact you within 24 hours