As the Government starts to wind down its support for businesses, we look at the help that's still available and steps that you can take now to futureproof your business.
If you have an accountant or independent financial advisor, it's worth reviewing your current situation and identifying any steps you need to take to safeguard the future of your business.
Coronavirus Job Retention Scheme (CJRS) closes
Under the Coronavirus Job Retention Scheme (CJRS), for the past month, employers have paid national insurance and pension contributions for furloughed employees.
Starting from August 1, the level of the grant will be reduced each month, with employers taking on an increasing proportion of pay for employees who are furloughed.
The CJRS will close at the end of October, and will be followed by the Job Retention Bonus, which will see employers receive a one-off payment of £1,000 for each furloughed employee who is still employed on January 31, 2021.
It is hoped the Job Retention Bonus will incentivise firms to retain furloughed workers rather than making redundancies, although only time will tell if the measure has helped significantly.
Final grant for the self-employed
If you're self-employed and not operating as a limited company, you could be eligible to claim a final grant from The Self-Employment Income Support Scheme (SEISS).
Under the scheme, the government pays self-employed individuals a taxable grant based on an average of their earnings over the past three years.
The grant covers up to 70% of earnings, up to a limit of £2,190 a month and claims must be made by October 19.
The eligibility criteria for the second grant are the same as for the first one. To be eligible, self-employed workers must have filed a tax return for the 2018/19 tax year and have average trading profits under £50,000 for the past three years.
The claimant's business must have been adversely affected by the coronavirus (COVID-19) at any time since 14 July.
Both those who claimed the first grant and those who did not are eligible for the second grant.
Remember that any Government grant you claim is liable for tax, just like any other income.
Making a loss in 2020
If your business has been adversely affected by COVID-19 and you think you may make a loss in 2020, one of the first steps you can take is to reduce the payments on account.
These are based on your business profits in the previous tax year and when you notify HMRC that your actual income is less than the amount calculated for payments on account, you can ask for a reduction in those payments. This may result in a refund or a reduction in your liabilities for payment on account.
As a small business, it's also worth checking if you have overpaid tax this year and are due a rebate.
If you have not paid the right amount, at the end of the tax year, HMRC will send you a P800 or a Simple Assessment tax calculation which will tell you how to get a refund or pay tax you owe. Find out more here https://bit.ly/3jfEILL
And if you think you may have overclaimed coronavirus government grants, you now have 90 days to notify HMRC https://bit.ly/2YAXOEu.
Why Giltinan and Kennedy?
We work in partnership with many businesses, charities and individuals across West Sussex and beyond. Please feel free to get in contact with one of us for an informal chat about your business finances on 01403 337490.
Working with me and my hand-picked team, you have access to my many years' experience as a financial accountant and small business owner.
- ensure you save on tax costs and pay competitive fees for your accounts
- provide a complete, objective, service, with the benefit of calling on our wide range of professional partners
- be proactive, ensuring we are up to date with the latest changes and legislation
- offer a fixed fee tax return service to help you budget.
Especially in these challenging times, I understand the pressures you face and I tailor my services to meet your changing needs.
As well as general accountancy and extensive tax skills, myself and another partner also have individual specialist skills which enable us to provide you with a comprehensive, first-class service.
This means that you can stop worrying about your finances and instead be reassured that your accounts and any tax work will be carried out by my qualified and experienced accountants. They will never be delegated to unqualified staff or subcontracted, as is increasingly the case with other practices.
I provide a high quality service at a reasonable price, within budget. There are no hidden extras and we agree all fees in advance.
Email me here, direct message or call me on 01403 337490 to see how we can support you.