Government financial support for UK businesses affected by the COVID pandemic have been extended in the past week. Thankfully, relief for employees of affected companies and the self-employed have been announced in tandem. A short summary of the main changes follows:

Coronavirus Job Retention Scheme (CJRS)

This furlough scheme will now be extended until the end of March 2021. Details released 5th November 2020 are:

• Government will cover 80% of hours not worked up to a maximum of £2,500 per person per month. This percentage support may be flexed for February and March 2021 when employers may be asked to contribute.
• Any grants paid must be passed on to the relevant employee in full.
• The previous flexibility to allow employees back part-time will continue until December.
• Employers will only be asked to cover National Insurance and pension costs and wages for time worked. Importantly, they will NOT be required to contribute to hours not worked but they are free to make top-up payments at their discretion.

Which employers/employees can claim or be eligible for this extended support?

• All employers with a UK bank account and a UK PAYE scheme can make a claim.
• There is no requirement that employers or employees have made previous claims for CJRS support.
• Employees must be on employer’s payroll before midnight 30 October 2020.

Previously announced Job Support Scheme (JSS)

As the furlough scheme is now extended to the end of March 2021, This new scheme will be deferred until the extended furlough scheme ends, presumably 31 March 2021.

The Job Retention Bonus

This bonus of £1,000 per employee retained January 2021 will no longer be paid as the furlough scheme now extends to 31 March 2021. However, the Chancellor has hinted that this bonus may be reintroduced when the extended furlough scheme ends.

The Self Employed Income Support Scheme (SEISS)

The Chancellor has announced a corresponding increase in financial support for the self-employed to mirror the benefits of the extended furlough scheme.

For the period November 2020 to 31 January 2021, SEISS support will be 80% of average trading profits capped at £7,500.

The previous eligibility criteria will still apply.

Additionally, SEISS grants will be paid faster. The claims window will open at the end of November rather than the middle of December. This will provide much needed funds for the self-employed before Christmas.

There will be a further SEISS grant for the period 1 February 2021 to 30 April 2021. The amount for this period should be announced January 2021.

Government backed loan schemes

The deadline for submitting applications for government backed loans has been extended to 31 January 2021.

Government have recently promoted their online webinars that aim to support businesses who will be affected by the end of the EU exit transition period, 31 December 2020.

Here’s what the Department for Business, Energy and Industrial activity have to say:

Over 3,000 people have attended government webinars to help them get ready for the end of the transition period, with 86% of those polled saying they would take action to prepare their business as a direct result of the sessions.

With just 63 days to go till the UK begins its new start outside of the EU single market and customs union, the Business Secretary Alok Sharma is encouraging businesses across the UK to sign themselves up for a webinar to help them prepare for the changes and opportunities ahead.

This second phase of webinars – which will run throughout November – will cover key issues that could affect businesses in multiple sectors, including personal data, and regulations on manufactured goods.

To register for the webinars go to https://www.workcast.com/ControlUsher.aspx?pak=2807339524439725

You can also obtain targeted advice on what you may need to do before the end of the year by completing the online questionnaire at https://www.gov.uk/transition.

A final word from government:

When the transition period ends on 31 December 2020, there will be a guaranteed set of changes and opportunities for which businesses need to prepare as the UK leaves the customs union and single market, including changes to the way businesses import and export goods, and the process for hiring people from the EU.

Use the links in the above post to ensure you are fully informed.

Many of us have taken the step from manual to digital accounting systems. But are you making the most of features provided?

Without a doubt, accounts software offers a wealth of reports many of which will likely be of limited use to businesses, however, many will be of use.

There is a temptation to stick with the basics; am I making a profit (the profit and loss statement) and am I solvent (a balance sheet). Job done…

Coronavirus has extended these basic needs to include cashflow reports; when are we going to run out of cash?

What else is available?

Most software will allow you to create a budget, plug these forecasts into the software and produce reports that compare what has actually happened with what you expected to happen. In this way you can see when unexpected changes in your finances occur and take steps to minimise any downside risks.

Another useful feature is to fully utilise reports that flag up when your customers have exceeded their agreed payment terms. This information can be used to generate statements and copy invoices to chase up monies outstanding. As your accounts software usually stores your customer contact details, especially email addresses, these reminders can be sent out at the click of your mouse button.

Other features that may be available:

• Stock management reports
• Departmental reporting
• Key Indicator Reports
• Online links to submit VAT returns
• Automated integration of payroll data

Many accounts software developers offer a range of bolt-on products for specialist businesses and integrations. And last but not least, it is possible to build bespoke reports to highlight specific reporting concerns. As long as data is being collected it can usually be reported on.

Time to review your data forecasting needs.

Using data wisely and with a clear intent to forward your business development during these unprecedented times has to be a winner. Please call so we can discuss your needs and help you maximise the benefits of your investment in data management for your business.

1 November 2020 – Due date for Corporation Tax due for the year ended 31 January 2020.

19 November 2020 – PAYE and NIC deductions due for month ended 5 November 2020. (If you pay your tax electronically the due date is 22 November 2020.)

19 November 2020 – Filing deadline for the CIS300 monthly return for the month ended 5 November 2020.

19 November 2020 – CIS tax deducted for the month ended 5 November 2020 is payable by today.

1 December 2020 – Due date for Corporation Tax payable for the year ended 28 February 2020.

19 December 2020 – PAYE and NIC deductions due for month ended 5 December 2020. (If you pay your tax electronically the due date is 22 December 2020)

19 December 2020 – Filing deadline for the CIS300 monthly return for the month ended 5 December 2020.

19 December 2020 – CIS tax deducted for the month ended 5 December 2020 is payable by today.

30 December 2020 – Deadline for filing 2019-20 self-assessment tax returns online to include a claim for under payments to be collected via tax code in 2021-22.

For many years Chancellors have threatened to reduce the Income Tax relief that can be claimed for payments into a private pension scheme.

There have been reductions in the amount of contributions that can be made and the size of the pension fund that can be accumulated, but thus far, allowable contributions may still attract Income Tax relief at your highest rate (20%, 40% or 45%) subject to regional differences.

It is this higher rate tax relief that may now be subject to change.

Our present Chancellor, Rishi Sunak, has publicly declared that he wants to recoup some of the recent government COVID expenditure by increasing the Treasury’s tax take. As we have already suggested, one of the proposed weapons in his tax-increase arsenal is to remove or reduce the higher rate Income Tax relief on pension contributions.

For example, he could restrict tax relief to basic rate (20% subject to regional differences) or cap at a hybrid rate of say 33%.

As the next budget is just around the corner, likely to be February or March 2021, now may be a good time to consult with your pensions adviser and maximise your contributions for this year.