Category: SME

key points of winter statement - vat, self employed grants, job support scheme, 10 yrs on bbl loans, delays to paying taxes

9/25/2020

The Chancellor yesterday announced a raft of new measures to support businesses in the UK. Below are the key points to help you and your business:

Job Support Scheme - to replace the Furlough scheme

Government will subsidise the pay of employees who are working fewer than normal hours due to lower demand
Employees must do at least a third (33.3%) of their normal hours
Employers will pay staff for the hours they have work
The government and the employer will pay a third (33.3%) each for the hours they can't work
This means someone working a third of their hours would receive 77% of their pay
The government part of the grant is capped at £697.92 per month per employee
All small & medium sized businesses are eligible for the scheme
It is open to employers even if they have not previously used the furlough scheme
The Job Support scheme will run for six (6) months starting in November 2020 and replaces the "furlough" scheme
Basically means the government will pay a maximum of 22% of someone's wages, down from 80% at the start of the furlough policy

Example:

If an employee (e.g. Mr Bob Smith) works reduced hours the employer pays for that. And in addition the employer and government pay one third of the lost pay each (up to the cap £697.92).

So if Mr Bob Smith normally worked for an employer at £2,000 a month, and then worked 50% hours, he would get £1,000 normal pay plus £333 extra from their employer and £333 from the government.

Self Employed Support - SEISS Grants

A grant will be available to those eligible for the Self Employment Income Support Scheme Grant (SEISS) previously ie basically a 3rd SEISS grant payout and possibly a 4th
The grant will cover three months' worth of profits for the period from November 2020 to the end of January 2021
It will cover 20% of average monthly profits up to a total of £1,875 (previously £6750 and £7500)
A further grant may be available to the self-employed to cover February 2021 to the end of April 2021, depending on circumstances

Bounce Back (BBL) Loans and Covid (CBILS) Loans - time extended from 6 to 10 years to repay + chance to pay interest only

Bounce Back Loans will be extended from 6 to 10 years, cutting down monthly repayments by nearly a half per month after the 12 month interest free period - may need to apply to your bank for this
Coronavirus Business Interruption Loan Scheme lenders will also be able to extend the length of loans from the current maximum of 6 to 10 years - may need to apply to your bank for this
Extension of deadline for the government's coronavirus loan schemes to the end of November 2020
Businesses that are struggling can choose to make interest only payments for six months and those "in real trouble" can apply to suspend repayments altogether for six months - will need to apply to bank to get this - businesses will not see their credit rating fall as a result, the Chancellor said.

Tax - 5% VAT to remain longer, VAT deferred interest free payments, more time to pay HMRC

The 15% emergency VAT cut for the tourism and hospitality industries will be extended from January 2021 to 31 March 2021
Businesses who deferred their VAT bills will be able to pay back their taxes in 11 smaller interest-free instalments - this will need to be requested to HMRC VAT dept
Self-assessment income taxpayers who need help will be given more time to pay tax bills - again need to request from HMRC prior to deadline

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts in Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for small and medium sized businesses (SME's). Helping and supporting limited company owners and self employed people throughout the UK, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

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Coronavirus and its impact on small and medium sized businesses

3/3/2020

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Tax Affinity Accountants have several branches in London

The spread of (Covid-19) Coronavirus from Mainland China throughout the world is having massive effects upon small and medium sized businesses. A lot of small business owners are so busy with running their busy everyday that they have not had time to try to figure out a plan to safeguard their employees, customers and profit lines.

The British economy is reliant upon finance, tourism and to a lesser extent manufacturing. Data presented earlier this month showed British economic growth slowed to a stand still at the end of 2019. Supply chains from China have dropped off and many travel operators are slowing down or closing services. This means limited supply and increases in costs. And because small to medium sized (SME) businesses often do not have the cash flow and financial resources to absorb sudden increases in costs this can mean a serious problem, not to mention the health and well being of their staff.

Unlike the press, we don’t just present the problem but provide an answer - So here is what SME business owners need do to manage the coronavirus problem:

Increase suppliers and look for different origin source countries - often SME's have one supplier and a cannot order in bulk. So shop around and look for similar products and suppliers importing from other countries other than China. Think about pooling together with other buyers into a self made buying group and ordering in bulk. Sharing purchase and storage costs can make it affordable.
Ensure your staff well fare - keep them safe from infection, and provide hand sanitizers and anti-bacterial wipes etc for surfaces where customers may touch and pass on infection. Ensure all staff are told to clean their hands with soap and water for at least 20 seconds several times a day. Ask them to minimise physical contact with customers and minimise usage of public transport if possible, even working from home if possible.
Speak to your bank - ensure you have access to cheap loan and overdraft facilities to get a cash injections in case you need it. Think old school, borrow at 0% interest from friends and family or trade in goods and services without money if needed.
There is always an opportunity - sell different products or services, think about selling face masks, hand sanitizers and anti-bacterial wipes etc. Think of changing the way you do business and your market even.
If imports from China are falling then home produced suppliers and exports are an opportunity for many businesses to fill in the gaps. Look for current gaps in your industry supply chain and see how you could fill them. eg if you find a great supplier that no-one knows about, think about becoming a wholesaler and reseller not just a retailer ot the public.
Raise prices - SME businesses often fear raising prices and losing customers. They often absorb increased costs without touching the price. This means they are earning less net profit as time goes by and take home less pay each month. Don't be afraid to lose some customers if you raise prices due to rising costs, your not running a charity.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts in Tax and Accountancy. Based in Worcester Park and Kingston upon Thames and Epsom they are considered in the Industry to be expert business accountants and tax advisors for small and medium sized businesses (SME's). Helping and supporting limited company owners and self employed people throughout the UK, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

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key points of winter statement - vat, self employed grants, job support scheme, 10 yrs on bbl loans, delays to paying taxes

Coronavirus and its impact on small and medium sized businesses

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