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Update on Covid-19 support for businesses

Written by admin on . Posted in Business Rates, COVID-19, Self-Employed, Tax. No Comments on Update on Covid-19 support for businesses

More support is available to help businesses in this latest lockdown, expected to last until at least 8 March. Keep up to date with, and claim, any support that your business is entitled to so you can plan cash flow and take remedial action as necessary.

Council grants

The Closed Businesses Lockdown Payment of up to £9,000 supports businesses required to close due to the latest national lockdown. It should be paid automatically if you have previously received a grant, but visit your local council’s website to check. Your business must:

  • be based in England;
  • pay business rates;
  • be required to close because of the national lockdown (closure for any other reason doesn’t count); and
  • be unable to provide the usual in-person customer service (even if a takeaway service is provided).

Fourth SEISS grant postponed

The fourth SEISS grant, promised by the Chancellor in October 2020, will not be paid until after the Budget on 3 March, with no details announced until then. Claims for the third grant opened on 30 November 2020, so the fourth grant will be later than expected. The delay of the payment into March has met with dismay, with some left with no income at all in February. However, it is likely that profits reported for 2019/20 will be taken into account, and this will help anyone who commenced trading after 5 April 2019.

Kickstart Scheme

The Kickstart Scheme, designed to create jobs for 16- to 24-year-olds, commenced last September. The scheme covers the minimum wage for six months, along with the associated employer NICs and pension contributions. The scheme has now been simplified with the removal of the 30-vacancy requirement where an employer applies directly.

Annually paid directors

Many small company directors have not been able to benefit from the furlough scheme if they pay themselves annually. Directors may qualify under the latest version of the scheme, and HMRC has recently published examples outlining how claims should be calculated.

Government support for businesses keeps evolving. Visit business support to find out what support is available.

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Update on new measures for Covid business support

Written by admin on . Posted in Business Rates, COVID-19. No Comments on Update on new measures for Covid business support

Admittedly, this is coming to you a little later than planned, but hopefully, this blog will provide some useful insight into the measures introduced following the announcement on January 5th of the current national lockdown in which the Treasury announced another round of one-off cash grants for retail, hospitality and leisure businesses to help them through to the spring. There is also further discretionary funding to support other impacted businesses.

The new grants are only for businesses situated in England, with the devolved administrations of Scotland, Wales and Northern Ireland providing their own support.

Grants will be paid on a per-property basis, with the amount dependent on the property’s rateable value:

Rateable value Amount of grant
£15,000 or under £4,000
Between £15,000 and £51,000 £6,000
Over £51,000 £9,000

 

To qualify, a business needs to be legally required to close and not able to operate effectively remotely. The new grants are in addition to any previous business support, such as the recent local restrictions support grant. Grants may well be paid automatically but keep an eye on your local authority’s website in case you need to register or apply.

Discretionary grants

Businesses not eligible for a cash grant can apply to their local authority for financial help if they are affected by the restrictions. Help is aimed at smaller businesses which do not pay business rates but have relatively high ongoing fixed property-related costs. This might include:

  • those in shared offices or other flexible work spaces;
  • market traders;
  • bed and breakfast businesses paying council tax instead of business rates.

 Other recent announcements

Just before Parliament broke for Christmas, the Chancellor extended the employee furlough scheme by another month to the end of April, with the government-backed bounce back loan scheme now available up to 31 March – it was due to end on 31 January. The business interruption loan schemes have been similarly extended.

You can find out what Covid-19 financial support is available for your business by working through the government’s business support finder.

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What Now, Autumn Budget?

Written by admin on . Posted in Budget, Business Rates, Capital Gains Tax, COVID-19, Tax. No Comments on What Now, Autumn Budget?

So, the Autumn Budget has been pushed into spring 2021, with tax rises on the cards. What should we expect in the Spring Budget?

With intense speculation around tax rises to pay for the raft of Covid-19 support measures, the first serious clue to a possible Autumn Budget delay emerged on 8 September, when the Office of Tax Simplification (OTS) slipped out a statement about its review of capital gains tax (CGT), which had been commissioned by the Chancellor in July. The statement announced the response deadline on the technical part of the OTS consultation would be deferred by four weeks, to 9 November. This was a surprising move as the OTS CGT report was expected to feed into the Autumn Budget.

Soon after, the Chancellor himself issued a brief written statement saying he had asked the Office for Budget Responsibility (OBR) to prepare an economic and fiscal forecast ‘to be published in mid-to-late November’. The vagueness surrounding the timing was evident, as the OBR report is produced alongside the Budget and incorporates costings for Budget measures.

What had started to look inevitable was confirmed on 24 September when the Treasury cancelled the Autumn Budget. The Chancellor will still have a set piece event towards the end of the year; not only is there the OBR report to present, but Mr Sunak must also publish a Spending Review. The latter was also a victim of the general election and ought to have been produced a year ago to cover the three years from April 2020. Instead, the then Chancellor published a one-year Spending Round. Given the pandemic uncertainties, it is likely that Mr Sunak will take a similar short-term view, rather than introduce a multi-year plan.

The postponement of the Autumn Budget does not mean the spectre of tax increases has also evaporated. The level of government borrowing (£174 billion in the first five months of 2020/21) makes tax rises virtually inevitable. However, the Chancellor has afforded you more time to plan and take action in areas such as CGT and pension contributions.

Any thoughts?

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Business rates review back on the table

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The government committed to undertake a fundamental review of business rates in England at the Spring Budget. It has now issued a call for evidence, with views on reliefs and the ‘multiplier sort’ by 18 September. Although fundamental reform is for the longer term, the intention is to have some improvements in place for April 2021.

High street retailers were already struggling against online competition prior to the Covid-19 crisis, but months of closure and reduced sales have exacerbated the impact of business rates, with online competitors having much lower bills. The review will look at these issues and concerns around complexity, rigidity and how the regime could be improved and made fairer.

The next revaluation of business property was scheduled for 1 April 2021. This was then put back by a year, but will now not take place until 1 April 2023. In the meantime, however, the government intends to introduce some intermediary changes.

Reliefs

Business rates reliefs can be complex and often poorly targeted. Small business rate relief, for example, is based on rateable value, taking no account of the actual size of a business or how profitable it might be.

  • There is significant regional variation in eligibility.
  • Landlords may negate any benefit by increasing the rent for eligible properties.

The government review will look at how reliefs can be targeted more effectively, made robust against abuse, and whether their administration can be simplified.

The multiplier

A business rates bill consists of a property’s rateable value calculated by a multiplier.

  • Businesses have raised concerns about the level of this multiplier and the rate at which it has been increased.
  • There is also criticism that business rates are unresponsive to changes in the property market.

One option being considered is the introduction of additional multipliers that vary by geography, property value, or property type.

Longer term

An online sales tax has been suggested as a possible replacement for business rates. Such a tax, however, would be unlikely to raise comparable revenue, so is more likely to run alongside business rates.

Details of the various business rates reliefs can be found here.

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