Things are starting to become a little clearer now with the financial measures set out by the Government. Whilst there is still a large element of uncertainty, there are a few areas where you may need to take action.
If you are planning to take advantage of the VAT deferral scheme then please remember to cancel your direct debit if that is how you usually pay it. Under the scheme the VAT return still needs to be prepared and submitted in the usual way, so the only way that HMRC will know that you want to take advantage of the scheme is if you don’t pay.
This relates to all vat quarters up to and including 30/04/2020
Coronavirus Job Retention Scheme
This particular scheme has received the most interest from our clients. We don’t know the logistics of how it will work yet, but we do know the following:
- You must inform your staff that they are being ‘furloughed’ from a particular date (this can be any date from 01/03/2020). We have a standard letter if required.
- There is a cap of £2,500 per month.
- We understand that the employees pay includes standard pay + employers national insurance, + employers pension contribution.
- We understand it will be a reimbursement system so the employer must pay the wages as normal, then 80% will be reimbursed of the above 3 elements.
Business Loans (CBILS)
There is more to this scheme that meets the eye. As expected, most of the banks are asking for significant personal guarantees in order to raise finance, and in some cases they may actually look to move your current debt from an ‘unsecured’ to a ‘secured’ position.
There is an article on BBC news about this today but you will note we raised this point last week before it was announced.
Please do not agree to any CBILS funding without speaking to your accountant first. There may be other options that are far more suitable.
We are expecting a significant announcement today relating to the self-employed. There have been various rumours on what this may look like, but we will ensure to let you know more as soon as possible.
All of the other measures (Grants, time to pay arrangements, SSP etc) are all as previously advised.
If you need any guidance please call on 0114 266 4432 or email [email protected]