Everyone is in their own, unique position at the moment, but some of the questions that we’re being asked are more common. I thought I’d cover those here for you.
Watch the video for answers around:
– The Self Employed Income Support scheme, announced last night.
– Directors and the Coronavirus Job Retention Scheme. (Link to the updated information)
– VAT Deferral
– Corporation Tax Deferral
– Coronavirus Business Interruption Loans
UPDATE – the guidance around the Job Retention Scheme was announced after this video was recorded and further clarification affected the position around Directors and whether they could be furloughed. This article clarifies the position.
Hi and welcome to another episode of BaranovTV, designed to demystify the world of accounts and tax and to help your business grow.
I do feel as though I ought to be amending that to include Coronavirus somewhere as it seems to be all pervading! In today’s video, I wanted to talk a little bit more about the Self Employed Income Support Scheme that was announced last night by Rishi Sunak.
The majority of the information is already on the website and we did send it out to all of our clients so, please do go and have a look at that. We have also added the link this morning, to that official HMRC guidance. So the majority of the information is there, however, we have had a huge flurry of emails and questions around the scheme and other areas of the support that’s available so we wanted to just address those and we thought the easiest place to do that is actually in a video.
So I have notes of the questions that we’ve had and I’m just going to run through those. Obviously if these prompt any questions for you, please do get in touch.
Everybody’s situation is very different and we’re just trying to answer as many questions as we can. This is not supposed to be a reason for you not to call us so please do get in touch.
But anyway, onto the Self Employed Income Support Scheme.
If somebody started self employment after the 6th of April 2019, do they qualify?
Sadly, the answer is no and the reason that Rishi Sunak gave last night for that, is that there is no record of the fact that they have been trading as self employed in that time. So consequently it is open to abuse and obviously open to fraud. You would need to have your self employment having been included in a tax return that has been submitted in order to qualify for the scheme.
My year ends don’t fall on the 5th of April, and were prior to the 5th of April 2019. Do I qualify?
They were concerned that because their year ends didn’t match up, they wouldn’t necessarily qualify for the scheme, although they had been self employed for lots more than the full three years that Rishi Sunak is going to average the income over.
If your year ends do not match, do not worry!
If you’ve submitted tax returns for those three years that Rishi Sunak is mentioning, and they all show self employment, you will qualify, it’s fine.
When will these funds be available?
The timeline that was given was that this will be in place for June and that at that point you will get a lump sum backdating this support through back to March. We believe this is optimistic.
We’re just seeing guidance coming out now on the Coronavirus Job Retention Scheme and that’s supposed to be paying out in April. We think, there is just so much for HMRC and the government to put into place, this is going to slide. Please bear that in mind as you’re making your plans and looking at your finances at the moment.
Does the Self Employed Income Support Scheme relate to directors of limited companies?
I’m afraid it doesn’t.
The Revenue does not class a director as self employed so you cannot qualify under the Self Employed Income Support Scheme. There is the opportunity potentially that you can qualify as a director under the Coronavirus Job Retention Scheme, which is essentially the furlough scheme, however, again, that is only likely to prove relevant if you have more than one director within the business.
The Coronavirus Job Retention Scheme
See the guidance here – updated 4th April 2020.
Can I train my team while they are furloughed?
Yes! One thing that came out of the guidance that has now come out around the Job Retention Scheme and furloughing is that if you have staff that are furloughed they can do training. So if you want to up-skill your team whilst they are on furlough, that is absolutely allowed.
It could be that you’ve made a plan already or started to plan for the future and what you want to do within the business and somebody have go through a training scheme, whilst they’re on furlough, would be required, that is absolutely fine.
When can I submit my claim for the Job Retention Scheme?
The portal for reclaiming furloughed salaries is not yet up and running. This is the part that we think is going to take a lot of time. Obviously the Revenue are quite able to accept payments but they’re not actually able to make payments back yet. So that portal needs to be got up and running to be able to pay the reclaim.
The guidance is, as I say, only just out so it’s going to take time to get things up and running.
Coronavirus Business Interruption Loans.
Yesterday, Barclays did a big U-turn on personal guarantees, they are now saying that they will not ask for a personal guarantee for any loan under £250,000 and Lloyds and HSBC have also said the same.
The bank that seemed to be coming out of this really well at the moment is RBS, Royal Bank of Scotland. One client in particular has said that their RBS guy is being really, really helpful. So it may be that they are looking for redemption, who knows but you must, if you’re looking for a loan under the Business Interruption Scheme, then you do need to speak to your own bank first.
We do think that there will be changes in the offers that are being made at the moment because right now, they’re not reflecting the announcements that government made.
We’re hoping that the government will make sure and bring pressure on the banks that make sure that they do revise their plans to make sure that they are a closer reflection of what they announced but obviously at this stage, we’re not entirely sure.
Please do keep us up to date on what you’re getting in terms of response on that.
We know that the banks are trying to push people towards their normal packages, rather than the Interruption Loans. Please do keep us posted because we would like to keep an overview on that. We’re not getting as much guidance and as much information as we would have liked, so if you’re speaking to your local lenders and your normal contacts, please do feed us back the information because that’s really helpful.
Something that came back from a client overnight was that they have successfully managed to defer their council tax. It was a two minute form on their local authority’s website, so if you are interested in doing that, do have a look at whatever your local council is doing.
We’ve already talked about deferring your VAT and the need to cancel your direct debit mandate with your bank to make sure that the Revenue can’t inadvertently collect your payment.
Any deferred VAT must be paid by the 31st March 2021.
Corporation Tax Deferral
We have had a notification from a client this morning that they spoke to the Corporation Tax people and they were able to defer Corporation Tax for three months. Now this wasn’t a Time to Pay agreement, it was a straight deferment.
We cannot find anything, anywhere in any of the guidance to that effect so it may just be that one client was very lucky. I would be tempted to see if I could be as lucky if I were you. Again, do let us know whether you have any success with that.
That, I think, is pretty much all I have for you this morning!
As I say, if you have any questions that I haven’t covered, please do get in touch. We’re more than happy to give you any answers that we can or to suggest where you may be able to find them. Things are still moving really, really quickly, particularly, obviously around the Self Employed Income Support scheme that was announced last night but lots of other things as well so do get in touch if you need to.
Otherwise, please stay safe and we’ll see you all very soon.