2021 Budget

March 4, 2021

The Chancellor announced a range of measures in his 2021 Budget on 3 March 2021 with upcoming changes to corporation tax a key feature.

The Chancellor has pledged to do ‘whatever it takes’ during the pandemic to support business and key announcements in the 2021 Budget, delivered on 3 March 2021, were as follows:

An extension to the furlough scheme until the end of September 2021;

An extension to the SEISS scheme to support the self-employed;

The reduced 5% VAT rate for the hospitality sector will remain in place until September 2021 with a transition rate of 12.5% from then until March 2022;

Corporation Tax rates will rise to 25% from April 2023, though a Small Profits Rate of 19% will be retained for companies reporting smaller profits;

A super-deduction, available from 1 April 2021 to 31 March 2023, for tax purposes of 130% on qualifying capital expenditure;

The Personal Allowance threshold will be frozen for five years once it increases in April 2021.

For further details, please click below to read our 2021 Budget Summary:

2021 Budget Summary

Back

Furlough Scheme extended to March 2020, SEISS support increased

November 5, 2020

Government agrees to extend furlough to March

Key Points from the surprise announcement today:

  • The Job Retention Scheme has been extended to 31 March 2021
  • Employees made redundant after 23 September 2020 can be re-employed and furloughed.
  • Usual Wage calculated by reference to salary at 30 October 2020 but only for newly employed employees.
  • The Job Support Scheme is postponed.
  • The Job Retention Bonus (due to be paid in February 2021) has been cancelled.
  • Self Employed Income Support Scheme (SEISS) 3rd grant increased to 80% of trading profits for 3 months.

The furlough scheme (or Job Retention Scheme) has now been extended to the end of March 2021, it was announced at lunchtime today (5 November), and will apply throughout the UK.    The scheme will pay up to 80% of an employee’s wages up to a cap of £2,500 a month.  The extension of the scheme into November was confirmed last Friday,  but this extends the scheme for a further four months and at the same rates and conditions.  The Government will issue full guidance on 10 November.

https://www.gov.uk/government/publications/extension-to-the-coronavirus-job-retention-scheme/extension-of-the-coronavirus-job-retention-scheme

As noted when the extension into November was confirmed last week, the furlough scheme will operate in a similar way to the JRS in August 2020 (ie, employer can claim for 80% of usual wages for hours not worked but must contribute fully towards employer’s national insurance and employer’s pension contributions).

The Government has also confirmed that anyone made  redundant after 23 September 2020 (when the replacement Job Support Scheme was first announced) could be re-hired, at the employer’s discretion, and be furloughed.  This was a similar situation to what happened when the JRS was originally announced back in March.

The guidance states that the basis of the claim (the ‘usual wages’) for employees that were employed on or before 19 March 2020 remains their pay at that date.   For new employees hired between 20 March and 30 October , the calculations of their furlough rate will be based on thei pay period immediately prior to 30 October or, for staff on variable hours, average earnings from start of employment to start date of furlough.

The government has also confirmed that the Job Support Scheme has been further postponed and that the Job Retention Bonus (JRB) will now not be paid in February 2021 and has been cancelled.

The Self-Employed Income Support Scheme (SEISS) will also be increased and the claim for November 2020 to January 2021 will now cover 80% of prior average trading profits.  This level of support is similar to the first grant claim that was claimable in June 2020.  This had been increased last Friday to cover the equivalent of 55% of three months trading profits but, in line with the extension of the furlough scheme, this has now increased to a full 80%.   This is expected to be claimable from early December.

 

 

Alexander Sloan

 

 

Back

Job Support Scheme – Expansion

October 10, 2020

The government’s replacement for furlough – Job Support Scheme – has been expanded

The Government announced today (9 October 2020) an expansion to the Job Support Scheme, which was itself only announced two weeks ago.

UPDATE – the Job Support Scheme has been postponed and is NOT available until at least April 2021

The Job Support Scheme, which will commence on 1 November, is open to employers who will be able to claim a grant from HMRC in respect of their employees who are working reduced hours, though a key condition is that the employee works at least 33% of their usual hours.   Following recent announcements in Scotland and parts of England and in anticipation of more businesses being forced to close due to government restrictions, the Chancellor today announced an expansion of the Job Support Scheme specifically for these businesses.   According to the initial information, this Expansion applies only to businesses legally required to close as a result of coronavirus restrictions.

The JSS Expansion will also start from 1 November and run for six months, though a review will take place in January.  This means that those businesses temporarily shutting from this evening will remain eligible only for the Job Retention Scheme (the ‘furlough’ scheme), and of course be bound by the rules specific to that scheme.  Namely, that eligible employees will have to be have been furloughed previously and that the employee had to have been on the payroll on or before 19 March 2020.

With the new JSS and JSS Expansion, eligibility will be based on the employee being on the payroll as at 23 September 2020 and that employee need not have been previously furlioughed.

Under the JSS Expansion – so for those businesses legally forced to close due to coronavirus restrictions –  employees may receive up to 2/3rd of their usual wages up to a maximum of £2,100 per month.    Employers are responsible for paying the employees but can then reclaim this via a grant from HMRC from early December.    There is no obligation on employers to make additional top-up payments, though all employer’s national insurance contributions and employer’s pension contributions must be covered by the employer and will not be reimbursed by HMRC.

There is currently no official Government web page giving specific details of the Expansion but this will be forthcoming in the next few days, but a search for ‘Job Support Scheme’ on HMRC’s website will show updates when they appear.

Back

Winter Economy Plan Support for Jobs and Businesses

September 24, 2020

Chancellor announces support for businesses during winter

The Chancellor, Rishi Sunak, announced his Winter Economy Plan to support businesses and jobs on 24 September 2020.

UPDATE: THE GOVERNMENT’S ANNOUCEMENTS ON 22 OCTOBER 2020 HAVE MADE CHANGES TO THIS SCHEME. PLEASE SEE OUR LATEST NEWS FOR MORE INFORMATION 

Job Support Scheme

The new Job Support Scheme will begin on 1 November and replace the “furlough” scheme.  To be eligible for the scheme employees must work a minimum of 33% of their hours. The government and the employer will then each pay a 1/3rd of the hours not worked. So an employee working 33% of their hours would receive 77% of their pay with the government contributing 22% of their pay and their employer the remaining 55%.

It should be noted that 22% is the maximum amount that the government will pay and the percentage will depend on the percentage of an employees hours that are worked.  For example if the employee works 50% of their hours then the level of government support is reduced to only 17%.  The level of Government contribution is capped at £697.92 a month.

It should also be noted that the Government contribution will also not cover class 1 employer’s national insurance or employer’s pension contribution but these amounts will continue to be payable by the employer.

Employees will be able to “cycle on and off” the scheme and they do not need to work the same pattern each month. Any short time working arrangement, however, must cover a period of at least 7 days.

The new scheme will run for 6 months but the government have said that they will review in 3 months time the threshold of 33% of hours. The grants like the “furlough” grants will be paid in arrears.

There are a number of criteria to the scheme. To be eligible for the scheme, employers must have a UK bank account and operate a UK PAYE scheme. Larger businesses will also need to meet a financial assessment test. The scheme is designed for viable jobs and therefore employees can not be made redundant or put on redundancy notice during the period within which the employer is claiming the grant for that employee.

Similar to the furlough scheme, employers using this scheme should agree short-time working arrangements with staff, make any contract changes by agreement and notify the employee in writing. HMRC have said that they will carry out checks on claims and agreements with staff will require to be available to HMRC on request.

 

Self Employed

To assist the self employed, the Self Employment Income Support Scheme Grant (SEISS) will also be extended for 6 months. A grant will be payable, in arrears, for the period 1 November 2020 to 31 January 2021 for those currently eligible for SEISS and who are continuing to trade but face reduced demand due to Covid-19.

This grant will cover 20% of the average monthly profits of the individual but will be capped at £1,875. There will be a second grant for the period February to April but the level of this grant still has to be announced. As with the previous scheme, the grants will be subject to tax and national insurance.

Self assessed taxpayers will also be given more time to pay, with deferred payments from July 2020 and those due in January 2021, not now being due until January 2022.

Loans

The Chancellor announced that he will be extending applications for the Government’s Coronavirus Business Interruption Loan scheme, the Coronavirus Large Business Interruption Loan scheme, the Bounce Back Loan scheme and the Future Fund.

Sunak also announced a “pay as you grow” scheme for business which will allow them to extend their bounce back loans from 6 to 10 years. The extension should significantly cut loan repayments and help cashflow. There will also be interest only periods of up to 6 months and payment holiday measures available for these loans.

The Government guarantee on Coronavirus Business Interruption Loans will also be extended to 10 years. There will also be a new successor loan guarantee programme to be announced in January 2021.

VAT

The temporary cut in VAT to 5% for the tourism and hospitality sectors will now remain in place until 31 March 2021. There will also be  a new scheme to allow businesses who deferred their VAT bills until March 2021 to make 11 smaller interest free payments during 2021/22 instead of having to make the full payment in March.

Further Information

More details can be found at https://www.gov.uk/government/news/chancellor-outlines-winter-economy-plan but it should be noted that there are still further details to be announced.

Back

Data Security Threats during Lockdown

April 7, 2020

Lockdown is creating opportunities for fraudsters – make sure you are alert to such threats

At the current time everyone is struggling to cope with the Covid-19 pandemic.  There are limited goods, greater anxiety, restrictions on movement and an increase in home working.  Unfortunately, these conditions also present opportunities to criminals and there has been an increase in cyber attacks and frauds.

Cyber Attacks

Many organisations have had to move to home working very quickly and that means there will be instances where usual security protocols may not have been followed. In addition, with more remote working, there are opportunities for more phishing attacks. Common schemes include receiving bogus emails claiming to include important links to more information on Coronavirus. The National Cyber Security Centre has reported an increase in the number of websites registered relating to the Coronavirus suggesting that criminals are likely to be taking advantage of the pandemic.

There are a number of resources available which are worth considering to help against cyber attacks which include:

The National Cyber Security Centre guide to home working can be found by clicking here

The Centre for Protection of National Infrastructure has produced high level guidance on security practices during pandemics which can be found by clicking here.

The National Cyber Security Centre have a guide on spotting and dealing with phishing emails which can be found by clicking here.

Frauds

There are a large number of frauds taking place which are taking advantage of the current schemes. One example is that Europol are currently investigating a €6.6 million transfer to a company in Singapore in order to purchase alcohol gels and face masks where the goods were never received. There have been a number of cases where criminals have been impersonating government officials, police or medical/health professionals to gain access to properties.

Unfortunately, it is even more important to stay vigilant in an already testing time.

Stay safe

Alexander Sloan

Back