Strategic Framework Business Fund – Covid-19 help for your business

Strategic Framework Business Fund – Covid-19 help for your business

If your business has been adversely affected by the latest lockdown restrictions, you may be able to apply for help from the Strategic Framework Business Fund.

Key points:

  • Up to £3,000 per month if your business is forced to close
  • Up to £2,100 per month if your business has been legally required to modify its operations
  • Administered by local authorities
  • Based on rateable value – only businesses with premises are eligible
  • Business must have active since March 2020

Businesses which have had to close

If you had to close your business due to lockdown rules, then you can apply to your local authority for support via the Business Temporary Closure Fund. Similar to the support provided earlier in the year, this will be based on the rateable value of your premises: 

Rateable value up to £51,000 £2,000 grant
Rateable value £51,001 or more £3,000 grant

Businesses which have had to modify operations

If there has been a legal requirement placed upon your business, ie, to reduce hours, then an application can be made to the Business Restrictions Fund for support. Again, this us based on the RV of your premises:

Rateable value up to £51,000 £1,400 grant
Rateable value £51,001 or more £2,100 grant

Eligibility criteria

  • The business must have a dedicated business bank account (you will be required to provide the account details as part of the application process and this is the account your grant will be paid into if successful).
  • The business was trading on 02 November 2020 (including businesses who were required to close due to coronavirus (COVID-19) restrictions).
  • Your business must have been actively operating before the 17th March 2020, where necessary local authorities may request additional evidence to determine eligibility
  • Business premises are registered for Non-Domestic rates (if you pay rates through your landlord rather than directly to a Council, you are still eligible to apply but must provide evidence of this arrangement through a copy of your lease agreement).
  • The business has not breached wider coronavirus (COVID-19) regulations/requirements prior to the Strategic Framework restrictions being implemented on 02 November 2020.
  • The business is not connected to a tax haven, as set out in the Coronavirus (Scotland) (No. 2) Act 2020.
  • Businesses operating from a single location, must be based within the local authority area that they submit an application to.
  • Businesses with multiple premises must be headquartered within the local authority that they submit an application to.
  • If your business is headquartered outwith Scotland you can select which Local Authority you can submit your application to. Please note you can only apply to one Local Authority.

Multiple premises

If your business operates multiple premises you can apply for grants for each premise. All premises can be included in one application to the Local Authority area in which your business is headquartered.

Please note you can only apply to one Local Authority for all your businesses premises.

  • Business Temporary Closure Fund – An upper limit of £15,000 in total will apply to any eligible business operating multiple premises.
  • Business Restrictions Fund – An upper limit of £10,500 in total will apply to any eligible business operating multiple premises.

In all cases, you need to ensure that your business qualifies for relief. This will depend on the protection level your business is operating in. You can check here

If you’ve any questions at all, or would like us to check out your calculations, please contact us straight away. We’re here to help you, even if you aren’t yet an Acumenica client.

Job Retention Scheme Extended Until March 2021

Job Retention Scheme Extended Until March 2021

For business owners who employ staff, the news that the Job Retention Scheme – more commonly known as Furlough – has been extended to March 2021 will come as welcome news, especially if business has been slow due to Covid-19.

Key points:

  • Furlough extended until March 2021

  • Up to 80% of wages funded – capped at £2,500 per month

  • Calculations for variable pay calculated slightly differently

  • Employee must have been on payroll before 31st October 2020

  • Employers need to report for seven consecutive days, minimum

Under the scheme. The government will pay 80% of any wages for any hours an employee is unable to work, or having reduce hours, due to the downturn until March 2021. The rate has gone back up to 80% of the wages, similar to when the scheme was first introduced in March 2020. However, NICs and pension contributions will not be taken into account and will not be paid, similar to how things were over the summer.

To make a claim, the HMRC portal will be used as before, but the calculations will be done slightly differently, depending on whether the employee has a fixed or variable pay. The guidance is fairly complicated but boils down to this:

Fixed pay

The usual hours for an employee who is contracted for a fixed number of hours and whose pay does not vary according to the number of hours they work, will be the contracted hours worked in the last pay period ending on or before 30 October 2020. 80% of those hours not worked will be covered by the scheme

Variable pay

If an employee does not have fixed hours and was not previously eligible for furlough (because they were not employed by you on 19 March 2020), then the average hours worked since the start of their employment or 6 April 2020, whichever is the later.

If the employee was previously eligible for furlough (ie, was in employment with you on 19 March, then the furlough pay is 80% of the wages earned in the corresponding period last year, or the average wages paid in 2019/20, whichever is the higher.

Remember, part time, full time, and flexible employment is all funded.

It’s a bit more complicated than in the past but still pretty straightforward. If you’ve got any questions at all, or would like us to check out your calculations, please contact us straight away. We’re here to help you, even if you aren’t yet an Acumenica client.

Self Employed Income Support Scheme INCREASED

Self Employed Income Support Scheme INCREASED

Rishi Sunak the chancellor of the exchequer yesterday announced an increase to the support for the self employed over the winter, to reflect the current health crisis.

For November, the grant aid will be 80% of profits rather than 40% as previously announced. December and January will remain at 40% which, as the SEISS grant is calculated quarterly basically means that the third instalment of the grant (to cover November and December 2020, and January 2021) will be calculated at 55% of a quarter’s profits.

Grants will also be paid faster with the claim window opening on 30th November rather than 14th December as originally planned.

The maximum grant will increase to £5,160.

To be eligible for the grant extension, self employed individuals, including members of partnerships, must have been previously eligible for the SEISS first and second grant (although they do not have to have claimed the previous grants).

They must declare that they intend to continue to trade, but have either been actively trading but  impacted by reduced demand due to coronavirus, or were previously trading but are temporarily unable to do so due to coronavirus.

Sadly, there are still no provisions for businesses operating as a limited company or those who started in self-employment after 5th April 2019

Who can apply? (a reminder of the original conditions)

You can apply for the grant if  you run your business as a sole trader or a partnership and you:

  • Submitted a tax return for the 2018-19 tax year

  • Were trading in 2019-20

  • Continuing to trade now (or would be if not for the covid outbreak)

  • Have suffered financially because of the outbreak

You must also satisfy ONE of the following conditions:

  • Trading profits of less than £50,000 in 2018-19, or

  • Average trading profits of less than £50,000 over the three years above

In all cases, your self-employed income must make up more than 50% of your total taxable income.

Who cannot apply?

You are ineligible for the grant if you:

  • Operate your business as a limited company

  • Your business is chiefly concerned with the letting of your own property

  • Annual trading profits (or average) exceeds £50,000

If you have any questions about the scheme, please email info@acumenica.co.uk or call us on 03330 166559. Our advisers continue to be available during normal office hours to respond to any queries.

Hospitality Industry Welcomes Reduced VAT Rate

Hospitality Industry Welcomes Reduced VAT Rate

The government made an announcement on 8 July 2020 allowing VAT registered businesses to apply a temporary 5% reduced rate of VAT to certain supplies relating to:

  • hospitality
  • hotel and holiday accommodation
  • admissions to certain attractions

The temporary reduced rate will apply to supplies that are made between 15 July 2020 and 12 January 2021.

 

Hospitality

 

If you supply food and non-alcoholic beverages for consumption on your premises, for example, a restaurant, café or pub, you’re currently required to charge VAT at the standard rate of 20%. However, when you make these supplies between 15 July 2020 and 12 January 2021 you will only need to charge 5%.

You will also be able to charge the reduced rate of VAT on your supplies of hot takeaway food and hot takeaway non-alcoholic drinks.

Hotel and holiday accommodation

 

You will also benefit from the temporary reduced rate if you:

  • supply sleeping accommodation in a hotel or similar establishment
  • make certain supplies of holiday accommodation
  • charge fees for caravan pitches and associated facilities
  • charge fees for tent pitches or camping facilities

VAT on admission charges to attractions

 

If you charge a fee for admission to certain attractions where the supplies are currently standard rated, you will only need to charge the reduced rate of VAT between 15 July 2020 and 12 January 2021.

However, if the fee you charge for admission is currently exempt that will take precedence and your supplies will not qualify for the reduced rate.

This applies to:

  • shows
  • theatres
  • circuses
  • fairs
  • amusement parks
  • concerts
  • museums
  • zoos
  • cinemas
  • exhibitions
  • similar cultural events and facilities

Examples of where the reduced rate may apply could be attractions such as:

  • a planetarium
  • botanical gardens
  • studio tours
  • factory tours

Got questions? Email info@acumenica.co.uk or call 03330 166559. Our experts are waiting to help you out.

Agreeing a VAT Time To Pay Proposal

Agreeing a VAT Time To Pay Proposal

If you can’t pay your VAT on time or in full, you should contact HMRC’s Payment Support Service on 0300 200 3835 immediately to make them aware of the situation.

By contacting HMRC, you may be able to avoid late payment penalties, which will only make your financial situation worse, and be able to arrange a payment plan that gives you:

  • More time to pay
  • Allows you to pay your bill in instalments by direct debit.

What is a Time to Pay Agreement?

If your company can’t pay VAT, you should contact HMRC to ask for a ‘Time to Pay Arrangement’ (TTP).

HMRC provides a ‘Business Payment Support Service’ that businesses can use if they are struggling to make a payment.

SMEs that are experiencing cash flow problems but which have a good compliance record should be able to make a Time to Pay arrangement with HMRC to pay their VAT bill over a longer term and in instalments.   

Why is the Business Unable to pay VAT?

Being unable or late to pay your VAT is a serious issue and HMRC will understandably want to know why this problem has occurred. One of the of the most important things HMRC will want to know is whether the business is genuinely unable to pay its VAT bill or if the company directors are simply unwilling to make the payment.

It is not uncommon for directors to have invested their working capital in growing the business rather than paying their tax liabilities, and in this case, it will be difficult to reach a Time to Pay arrangement.   

What are the Criteria for an HMRC Time to Pay Arrangement for VAT?

When discussing your circumstances with HMRC, the Business Payments Unit will want to know:

  • Why the company is unable to pay its VAT in full and on time
  • Whether you filed your VAT return on time
  • What you have done to try and raise the money to pay the debt
  • How much you can pay immediately
  • How long you think you will need to pay the rest

Depending on the reasons why the company can’t pay, what your payment history has been and how long you need to pay the bill, HMRC will assess your ability to make the future payments and decide whether to agree to a VAT payment plan.

Deciding how much you can Afford to pay in Instalments

It’s essential you are realistic about how much of your VAT bill you will be able to repay each month. If you are unable to keep to the arrangement then the payment plan could be cancelled and penalties could apply. It will also be much more difficult to arrange another VAT payment plan if you have already defaulted on one. However, you also need to offer to repay an amount HMRC considers to be reasonable enough or it may refuse your proposal.

Got questions? Email info@acumenica.co.uk or call 03330 166559. Our experts are waiting to help you out.