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Business As Usual During Covid 19

New R&D Tax Credit Partnership

R&D-tax-credit

We are pleased to announce a new partnership with one of the leading R&D tax credit Companies. There are no upfront costs for clients and the work is carried out for a fee in proportion to the tax rebate received.

Click here for more details of our service: https://www.sutherlandblack.co.uk/r-and-d-service/

You would be surprised at what qualifies for the R&D tax credit. It’s not just about people in white lab coats. R&D tax relief is the government’s way of rewarding companies that are developing new, or improving existing products, processes, services, devices and materials or advancing the state of knowledge in their sector. It’s well worth investigating, in some cases the tax relief itself could represent as much as 33% return on investment for the R&D project. R&D tax legislation is complicated, but our partner team are experts and will do all the hard work for you. Our partners will look at every aspect of your business and identify all qualifying activity.

More information on R&D tax relief can be found here: https://www.gov.uk/guidance/corporation-tax-research-and-development-rd-relief

We have surveyed all the specialist firms and partnered with the best. Get in contact to see how we can help.

“Furlough” Scheme Extended At 80% of Normal Pay

On 22 October the Chancellor announced that the CJRS “furlough” scheme would end on 31 October 2020 to be replaced by a new Job Support Scheme (JSS). However, at 6.45 pm on 31 October 2020 when the Prime Minister announced a month long lockdown for England he announced that the CJRS furlough scheme would be extended for one further month with employers able to claim a grant of 80% of employees’ usual pay for hours that they are unable to work. Employers will be responsible for paying NICs and pension costs.

The replacement JSS will start when the extended CJRS ends.

Further information here: https://www.gov.uk/government/news/furlough-scheme-extended-and-further-economic-support-announced

If you would like any assistance navigating the ever changing Corona schemes please don’t hesitate to contact us.

Job Support Scheme – Latest Updates

Further to our last blog post here is some more detailed information about the job support scheme that will start on November 1st.

The JSS scheme originally announced in September has been made more generous to support businesses legally forced to close their premises as a direct result of Coronavirus restrictions imposed by one of the four UK governments. This is referred to as JSS Closed. For those employers that can operate safely but continue to face reduced demand such that they may need extra support over the winter to help keep their employees attached to their workforce there is JSS Open. The scheme for those employers has been made more generous to encourage them to keep their employees in a job on shorter hours rather than making them redundant. JSS Open and JSS Closed will commence on 1 November 2020 and will last for 6 months. Claims will be made monthly starting on 8 December.

JSS OPEN

Grants under JSS Open will be available to support the wages of employees working part time who were on the payroll on 23 September 2020 and subject to an RTI submission on or before that date.

The original proposal was that they would need to work at least 33% of their usual hours to be eligible but this has now been reduced to 20%.

For the hours not worked the employee must be paid 2/3 of their normal pay with the employer being responsible for 5% (previously 1/3) of this amount with the government providing a grant for the remaining 61.67%.

The employer will be responsible for national insurance costs and pension costs on the full amount paid to the employee.

The maximum government contribution will be £1,541.75 per month. This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.

JSS CLOSED

Grants under JSS Closed will be available to support the wages of employees of businesses required to close who like JSS Open are on the payroll on 23 September 2020.

Claims can be made for employees who cannot work as a result of the Tier 3 or similar restrictions. Employers must be instructed to cease work for at least 7 days to qualify. Employers must agree the new scheme with the relevant staff and make changes to their contract of employment.
JSS CLOSED GRANT IS 2/3RDS OF “NORMAL PAY”
Where employees are paid at least 2/3rds of their normal pay for hours not worked the Government will pay a grant of 2/3ds of their normal pay subject to a maximum of £2,083.33 a month. Further details of how “normal pay” is calculated are still awaited. The employer will be responsible for paying national insurance and pension costs in respect of the employee.

When the business premises reopen employers can claim the JSS Open grant towards the employee’s wages for hours not worked provided the employee works at least 20% of their usual hours. The employee cannot be made redundant or put on notice of redundancy during the period during which the employer is claiming the grant.

Please don’t hesitate to get in contact with us for further details.

Plan For Jobs: Latest Government Update

 

The government today announced it will increase the amounts and reach of its winter support schemes.

In recognition of the challenging times ahead, the Chancellor said he would be increasing support through the existing Job Support and self-employed schemes and expanding business grants to support companies in high-alert level areas.

H M Treasury states that open businesses which are experiencing difficulty will be given extra help to keep staff on as the Government will increase contributions to wage costs under the Job Support Scheme, and business contributions drop to 5%.

Business grants are expanded to cover businesses in particularly affected sectors in high-alert level areas.

Grants for the self-employed doubled to 40% of previous earnings

Job Support Scheme (JSS)

When originally announced, the JSS – which starts on 1 November, saw employers paying a third of their employees’ wages for hours not worked and required employees to be working 33% of their normal hours.

Today’s announcement reduces the employer contribution to those unworked hours to 5%, and reduces the minimum hours requirements to 20%, so those working just one day a week will be eligible. That means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer £44.

Self-employed grant

Today’s announcement increases the amount of profits covered by the two forthcoming self-employed grants from 20 per cent to 40 per cent, meaning the maximum grant will increase from £1,875 to £3,750.

Business Grants

The Chancellor has also announced approved additional funding to support cash grants of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert level areas. These grants will be available retrospectively for areas who have already been subject to restrictions and come on top of higher levels of additional business support for Local Authorities moving into Tier 3.

These grants could benefit around 150,000 businesses in England, including hotels, restaurants, B&Bs and many more who are not legally required to close but have been adversely affected by local restrictions.

See: https://www.gov.uk/government/news/plan-for-jobs-chancellor-increases-financial-support-for-businesses-and-workers?utm_source=923e5ab2-e10c-490d-ac93-4287f524ee0e&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

Please don’t hesitate to get in touch if you would like more details of any of this.

 

Corona Vat Deferral Update

Corona VAT

On 24 September 2020, the Chancellor announced that businesses who deferred VAT due from 20 March to 30 June 2020 will now have the option to pay in smaller payments over a longer period.

Instead of paying the full amount by the end of March 2021, HMRC have confirmed businesses can make smaller payments up to the end of March 2022, interest free.

You will need to opt-in to the scheme, and for those who do, this means that your VAT liabilities due between 20 March and 30 June 2020 do not need to be paid in full until the end of March 2022.

Those that can pay their deferred VAT can do so by 31 March 2021.

If you are still unable to pay the VAT due and need more time, you can contact HMRC by phoning: 0300 200 3835.

More information on the scheme will be available in the coming months and we will keep you up to date when changes occur.

See: https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19?utm_source=cad7c1fc-6225-4a8b-97b6-66507f6182c0&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

Please don’t hesitate to contact us if you would like more help with this.

Expansion of UK Government Job Support Scheme

In some good news for beleaguered hospitality businesses the Chancellor has announced extra support which will apply to businesses here in Scotland that are forced to close by local lockdowns.

The government news release states:

“The government’s Job Support Scheme (JSS) will be expanded to protect jobs and support businesses required to close their doors as a result of coronavirus restrictions, the Chancellor announced today, 9 October.

  • Job Support Scheme will be expanded to support businesses across the UK required to close their premises due to coronavirus restrictions
  • government will pay two thirds of employees’ salaries to protect jobs over the coming months
  • cash grants for businesses required to close in local lockdowns also increased to up to £3,000 per month

Under the expansion, firms whose premises are legally required to shut for some period over winter as part of local or national restrictions will receive grants to pay the wages of staff who cannot work – protecting jobs and enabling businesses to reopen quickly once restrictions are lifted.

The government will support eligible businesses by paying two thirds of each employees’ salary (or 67%), up to a maximum of £2,100 a month.”

Full details here: https://www.gov.uk/government/news/job-support-scheme-expanded-to-firms-required-to-close-due-to-covid-restrictions

If you need any help with your furlough claims don’t hesitate to get in touch.

 

Considering An Electric Company Car?

There is currently a zero P11d benefit for the drivers of electric cars in 2020/21. The legislation for this change is included in Finance Act 2020 which also states that the benefit will be 1% of list price in 2021/22 and then 2% in 2022/23.

The zero taxable benefit also applies to hybrid cars emitting no more than 50 grams of CO2 per kilometre with a range using its electric motor of at least 130 miles, but only for cars first registered on or after 6 April 2020. Unfortunately, the range of most plug in hybrids is considerably less than 130 miles. For example, the Mercedes A 250e costing £32,980 emits 26g CO2 but has a PEV range of only 45 miles.

An additional benefit for the business is that motor cars that emit no more than 50g CO2 per kilometre currently also qualify for a 100% first year allowance which means that the full cost can potentially be set off against business profits.

The Mercedes A 250e would currently qualify for a 100% first year allowance but the P11d benefit would be 6% for the employee in 2020/21.
Note however that the 50g CO2 threshold reduces to zero from April 2021 which means that hybrids will cease being eligible for the 100% write off. If the business can afford to do so it’s a good time to buy a plug in hybrid.

If you would like any advice on cars or vans in your business please get in touch.

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.

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