Category Archives: Business

BUDGET STATEMENT 3RD MARCH 2021 – KEY POINTS


BUDGET STATEMENT 3RD MARCH 2021

With more shout outs than an Instagram Influencer, the Chancellor Rishi Sunak delivered his second and perhaps his most challenging Budget statement today.

Speculation and lobbying prior today’s statement were rife, so what did Rishi dish up?

Here is a summary of the key points: –

CRISIS: Coronavirus support

  • Furlough to be extended until the end of September
  • Government to continue paying 80% of employees’ wages for hours they cannot work
  • Employers to be asked to contribute 10% in July and 20% in August and September
  • Support for the self-employed also to be extended until September
  • 600,000 more self-employed people will be eligible for help as access to grants is widened to include some new businesses
  • £20 uplift in Universal Credit worth £1,000 a year to be extended for another six months
  • Working Tax Credit claimants will get £500 one-off payment
  • Minimum wage to increase to £8.91 an hour from April

THE COST: State of the economy and public finances

  • UK economy shrank by 10% in 2020
  • Economy forecast to rebound in 2021, with projected annual growth of 4% this year
  • Economy forecast to return to pre-Covid levels by middle of 2022, with growth of 7.3% next year
  • A whopping 700,000 people have lost their jobs since pandemic began
  • Unemployment expected to peak at 6.5% next year, lower than 11.9% previously predicted
  • UK to borrow a peacetime record of £355bn this year.
  • Borrowing to total £234bn in 2021-22

STEALTH: Taxation

  • No changes to rates of income tax, National Insurance or VAT
  • Personal income tax allowance to be frozen at £12,570 from April 2022 to 2026
  • Higher rate income tax threshold to be frozen at £50,270 from 2022 to 2026
  • Corporation tax on company profits to rise from 19% to 25% in April 2023
  • Rate to be kept at 19% for about 1.5 million smaller companies with profits of less than £50,000
  • Stamp duty holiday on house purchases in England and Northern Ireland extended to June, with no tax liability on sales of less than £500,000
  • No changes to inheritance tax or lifetime pension allowance or capital gains tax allowances

CARE: Health and education

  • £1.65bn to support the UK’s vaccination rollout
  • £19m for domestic violence programmes, funding network of respite rooms for homeless women
  • £40m of new funding for victims of 1960s Thalidomide scandal and lifetime support guarantee
  • £10m to support armed forces veterans with mental health needs

CULTURE: The arts and sport

  • £400m to help arts venues in England, including museums and galleries, re-open
  • £300m recovery package for professional sport and £25m for grassroots football

GROWTH: Business, digital and science

  • Tax breaks for firms to “unlock” £20bn worth of business investment
  • Firms will be able “deduct” investment costs from tax bills, reducing taxable profits by 130%
  • Incentive grants for apprenticeships to rise to £3,000 and £126m for traineeships
  • VAT rate for hospitality firms to be maintained at reduced 5% rate until September
  • Interim 12.5% rate to apply for the following six months
  • Business rates holiday for firms in England to continue until June with 75% discount after that
  • £5bn in Restart grants for shops and other businesses forced to close
  • £6,000 per premises for non-essential outlets due to re-open in April and £18,000 for gyms, personal care providers and other hospitality and leisure businesses
  • New visa scheme to help start-ups and rapidly growing tech firms source talent from overseas
  • Contactless payment limit will rise to £100 later this year

VICES: Alcohol, tobacco, and fuel

  • All alcohol duties to be frozen for second year running
  • No extra duties on spirits, wine, cider or beer
  • Fuel duty to be frozen for eleventh consecutive year

SERVICES: Environment, transport, infrastructure, and housing

  • New UK Infrastructure Bank to be set up in Leeds
  • It will have £12bn in capital, with aim of funding £40bn worth of public and private projects
  • £15bn in green bonds, including for retail investors, to help finance the transition to net zero by 2050

NATIONAL: Nations and regions

  • £1.2bn in funding for the Scottish government, £740m for the Welsh government and £410m for the Northern Ireland executive
  • 750 UK civil servants to be relocated to new Treasury campus in Darlington
  • £1bn Towns Fund to promote regeneration in 45 English towns
  • £150m for community groups to take over pubs at risk of closure
  • First eight sites for freeports in England announced

 



CHANCELLOR’S STATEMENT 24TH SEPTEMBER 2020 – COVID-19 SUPPORT FOR BUSINESS


CHANCELLOR’S STATEMENT 24TH SEPTEMBER 2020

COVID-19 SUPPORT FOR BUSINESS

As reported earlier the chancellor set out his much-awaited plans in the continuing struggle against the coronavirus pandemic and the effect that lockdown restrictions are having on businesses and individuals.

We await publication of full details of the latest proposals which are expected to be made available later today.

Check back on the KSK website for further information once the finer details have been revealed.

Meanwhile here is a summary of what Rishi Sunak had to say.

We are now entering a new phase of living with this current crisis, with a warning that lockdown restrictions are going to be with us for at least the next six months.

Rishi acknowledged that people are afraid and exhausted by the ebb and flow of the seemingly ever-changing government restrictions and rules that are having an impact on all our personal and working lives.

Despite this Rishi reassured us that there are reasons to be optimistic, for this I fear we may have some time to wait.

A whopping £12bn has been spent by the government on “Test and Trace” that has finally been launched today, I do hope that this proves to be money well spent.

Rishi then went on to outline what his plans were to protect jobs and the economy: –

COVID-19 SUPPORT FOR BUSINESS

A new Jobs Support Scheme will be launched for employees working and being paid for at least a third of their normal hours.  The government and employers will jointly increase their wages to cover two-thirds of their lost pay and the employee will keep their job.

Larger businesses must show that they have been adversely affected during the crisis.  Employers who have not previously used the furlough scheme will be eligible.

The new scheme will run for 6 months from November.

The existing grant for the self-employed will be similarly extended.

Bounce Back loan terms may be extended from six to ten years, reducing the outgoing payments to ease cashflow.

Payments can be made on an “interest only” payment and there will be options to suspend repayments for up to six months, credit ratings will be unaffected.

The government guarantee on Coronavirus Business Interruption Loans will be extended to 10 years and a new successor loan guarantee programme will be announced in January.

The temporary reduction of VAT from 20% to 5% on hospitality and tourism will now continue until 31st March 2021.

So has Rishi served a palatable dish of measures?  We will have to wait and see, meanwhile check back on www.ksk.co.uk for full details of the measures later.

Contact Paul Southward.


CORONAVIRUS (COVID-19) SUPPORT FOR BUSINESS UPDATE (29.05.2020)


CORONAVIRUS (COVID-19) SUPPORT FOR BUSINESS UPDATE (29.05.2020)

On Friday 29th May 2020 the Chancellor, Rishi Sunak, announced more details about the extension of the Coronavirus Job Retention Scheme (CJRS) and the Self-Employment Income Support Scheme, and we’ve outlined these below for you.

Coronavirus Job Retention Scheme

The Chancellor has announced three changes to the job retention scheme:

  1. From 1st July 2020, the scheme will be made more flexible to enable employers to bring previously furloughed employees back part time and still receive a grant for the time when they are not working.
  2. From 1st August 2020, employers will have to start contributing to the wage costs of paying their furloughed staff and this employer contribution will gradually increase in September and October.
  3. The scheme will close to new entrants from 30th June.
  1. Part time furloughing

From 1st July 2020, businesses using the scheme will have the flexibility to bring previously furloughed employees back to work part time – with the government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August. This flexibility comes a month earlier than previously announced to help people get back to work.

Employers will decide the hours and shift patterns their employees will work on their return, and will be responsible for paying their wages in full while working. This means that employees can work as much or as little as the business needs, with no minimum time that they can furlough staff for.

Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, they will need to report and claim for a minimum period of a week. They can choose to make claims for longer periods such as on monthly or two weekly cycles if preferred. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

If employees are unable to return to work, or employers do not have work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules.

  1. Employer contributions

From August, the government grant provided through the job retention scheme will be slowly tapered.

  • in June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work – employers will have to pay employees for the hours they work
  • in August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed
  • in September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500
  • in October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500
  • the cap on the furlough grant will be proportional to the hours not worked.

Many smaller employers have some or all of their employer NIC bills covered by the Employment Allowance so will not be significantly impacted by that part of the tapering of the government contribution.

Around a quarter of CJRS monthly claims relate to wages that are below the threshold where employer NICs and auto enrolment contributions are due, and so no employer contribution will be required for these furloughed employees in August.

  1. Important dates

It’s important to note that the scheme will close to new entrants from 30th June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30th June.

This means that the final date by which an employer can furlough an employee for the first time will be 10th June for the current three-week furlough period to be completed by 30th June. Employers will have until 31st July to make any claims in respect of the period to 30th June.

Guidance and support

Further support for employers and agents on how to calculate claims with this extra flexibility will be available by 12th June, including webinars and detailed online guidance. For information about how to claim, go to GOV.UK and search ‘Coronavirus Job Retention Scheme’. Please do not call us for more information, everything you need to know about this scheme will be published online on GOV.UK.

Self-Employment Income Support Scheme

The Chancellor also announced plans to extend the Self-Employment Income Support Scheme (SEISS) for those people whose trade continues to be, or is newly, adversely affected by COVID-19 (coronavirus). Eligible self-employed people will be able to claim a second and final SEISS grant in August; this will be a taxable grant worth 70% of their average monthly trading profits for three months, paid out in a single instalment and capped at £6,570 in total.

The eligibility criteria for the second grant will be the same as for the first grant. People do not need to have claimed the first grant to claim the second grant: for example, their business may have been adversely affected by COVID-19 (coronavirus) more recently.

Claims for the first SEISS grant, which opened on 13th May, must be made no later than 13th July. Eligible self-employed people must make a claim before that date to receive the first SEISS grant (a taxable grant of 80% of their average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £7,500 in total). So far, we’ve seen over 2.3 million claims worth £6.8 billion.

It’s really important to note that as with the first SEISS grant, the eligible individual must make the claim themselves. If you attempt to make a claim on behalf of your client, this will trigger a fraud alert and will result in significant delays to payment. However, you can help to prepare your clients by ensuring they have the relevant information ready. The claims process is simple: we will calculate the amount of self-employment support individuals will receive, they don’t need to do this themselves.

More information about the second SEISS grant will be available on GOV.UK on 12th June.

In the meantime, please help us reach those self-employed people who could benefit from a SEISS grant now, by encouraging anyone you think might be eligible for the first grant but hasn’t yet made a claim to do so before 13th July.

Protect yourself from scams

Stay vigilant about scams, which may mimic government messages as a way of appearing authentic and unthreatening. Search ‘scams’ on GOV.‌‌UK for information on how to recognise genuine HMRC contact. You can also forward suspicious emails claiming to be from HMRC to phishing@hmrc.gov.uk and texts to 60599.

Return to the KSK recent news pages to keep up to date with the latest developments.


GOVERNMENT SUPPORT LINKS


GOVERNMENT SUPPORT LINKS

CORONAVIRUS (COVID-19) GOVERNMENT SUPPORT

29th April 2020

Here are links to the government support links giving the latest guidance:

FUNDING AND SUPPORT FOR BUSINESSES

This links to the main finance support, covering:

  • Paying your employees
  • Paying sick pay
  • Paying tax
  • Business rates relief
  • Business support grants
  • Support for the self-employed
  • Support for small and medium-sized businesses
  • Support for large businesses

Here: financial-support-for-businesses-during-coronavirus-covid-19

GOVERNMENT SUPPORT LINKS

SELF-EMPLOYED PEOPLE AND SOLE TRADERS

  • Claim a grant:

claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

  • Universal credit:

self-employment-and-universal-credit

  • If you cannot pay your tax bill on time:

difficulties-paying-hmrc

  • Continuing working -safe social distancing:

social-distancing-in-the-workplace-during-coronavirus-covid-19-sector-guidance

  • Relaxation for Drivers’ hours:

covid-19-guidance-on-drivers-hours-relaxations

  • Negotiating a mortgage payment holiday:

mortgages-coronavirus-consumers

GOVERNMENT SUPPORT LINKS

EMPLOYER RESPONSIBILITIES

  • General guidance and safeguarding employees:

guidance-for-employers-and-businesses-on-coronavirus-covid-19

  • Claiming wages through the Job Retention Scheme

claim-for-wages-through-the-coronavirus-job-retention-scheme

  • Social distancing in the workplace:

social-distancing-in-the-workplace-during-coronavirus-covid-19-sector-guidance

  • Statutory Sick Pay (SSP) Guidance:

employers-sick-pay

  • Claim back SSP:

claim-back-statutory-sick-pay-paid-to-employees-due-to-coronavirus-covid-19

  • Guidance if employee needs time off:

what-to-do-if-an-employee-needs-time-off-work-to-look-after-someone

  • Working from home – employee expenses:

check-which-expenses-are-taxable-if-your-employee-works-from-home-due-to-coronavirus-covid-19

  • Apprenticeships during the coronavirus outbreak:

coronavirus-covid-19-apprenticeship-programme-response

  • Advice for Tier 2, 4 and 5 sponsors:

coronavirus-covid-19-advice-for-tier-2-4-and-5-sponsors

GOVERNMENT SUPPORT LINKS

MANAGING YOUR BUSINESS DURING CORONAVIRUS

  • Cleaning your workplace safely:

covid-19-decontamination-in-non-healthcare-settings

  • Hand hygiene posters:

hand-hygiene/resources/

  • Temporary relaxation of rules to help businesses:

rules-that-have-been-relaxed-to-help-businesses-during-the-coronavirus-pandemic

  • Construction sites and safe working:

remediation-and-covid-19-building-safety-update-27-march-2020

  • Farmers, landowners and rural businesses:

information-for-farmers-landowners-and-rural-businesses

  • Food businesses:

guidance-for-food-businesses

  • Freight transport industry:

covid-19-guidance-on-freight-transport

  • Medical and Healthcare industry:

mhra-guidance-on-coronavirus-covid-19

  • Shipping and seaports businesses:

shipping-and-sea-ports-guidance

  • Supported accommodation, residential care and home care:

residential-care-supported-living-and-home-care-guidance

  • Transport businesses:

guidance-for-staff-in-the-transport-sector

  • Avoiding and supporting scammers:

report-suspicious-emails-websites-phishing

BUSINESS CLOSURES

  • Businesses that must close:

further-businesses-and-premises-to-close-guidance

  • Staying safe and continuing in business:

guidance-for-employers-and-businesses-on-coronavirus-covid-19

  • Holiday accommodation:

covid-19-advice-for-accommodation-providers

  • Closed businesses and the Coronavirus Job Retention Scheme:

claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

CAN YOUR BUSINESS PROVIDE HELP?

  • Offer the help of your business:

coronavirus-support-from-business

All the links are correct at the time of publication, please reporting missing / broken links to Paul Southward.

If you need any further help or guidance on any of the matters above contact Paul Southward or your usual KSK contact.

Paul Southward's News Roundup

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HM Treasury confirms changes to business rates reliefs


HM Treasury confirms changes to business rates reliefs

Small music venues, pubs and cinemas are set to benefit from a cut to business rates.

On 27th January the Financial Secretary to the Treasury Jesse Norman has confirmed that the government will increase the retail discount from one-third to 50 per cent, extend that discount to cinemas and music venues, extend the duration of the local newspapers office space discount, and introduce an additional discount for pubs.

The announcement came in the form of a parliamentary written statement and further details are expected to be confirmed in next month’s Budget.

The full statement was made as follows: –

The Government will increase the retail discount from one-third to 50 per cent, extend that discount to cinemas and music venues, extend the duration of the local newspapers office space discount, and introduce an additional discount for pubs.

The increase in the level of the retail discount from one-third to 50 per cent will apply in 2020/21 for eligible retail businesses occupying a property with a rateable value less than £51,000.

The extension of the retail discount is to those eligible music venues and cinemas with a rateable value of less than £51,000.

The extension of the £1,500 business rates discount for office space occupied by local newspapers will apply for an additional 5 years until 31 March 2025.

The pubs discount will provide a £1,000 discount to eligible pubs with a rateable value of less than £100,000 in 2020/21. This is in addition to the retail discount and will apply after the retail discount.

All reliefs are subject to state aid rules and apply in England only.

The Government confirms that it will fully fund local authorities for awarding these reliefs and provide new burdens funding to local authorities for administrative and IT costs.

Local authorities should start preparations to include these changes now, and act promptly to ensure eligible business receive the increased support in their rates bills at the start of the financial year.

The Government expects local authorities to ensure these changes are applied for the start of the 2020/21 billing period. The Government will publish amended guidance for the retail discount reflecting these changes as well as refreshed pubs relief guidance for local authorities.

The Barnett formula will be applied in the usual way. Consequentials for the devolved administrations will be confirmed at the Budget.

Contact Paul Southward.

Paul Southward


UPDATED KEY GUIDES – JANUARY 2020


UPDATED KEY GUIDES – JANUARY 2020

KEY GUIDES

UPDATED KEY GUIDES – JANUARY 2020

Here are the latest Updated Key Guides; we have reviewed all of the Key Guides for relevant developments, some have not needed amending but here are the Nine Updated Key Guides for your information and guidance.  Contact us if you need any further guidance and/or assistance.

You can access the whole series of KEY GUIDES through the downloads in the Recent News section of our website here: –

https://ksk.co.uk/news/

The amended Key Guides are: –

Accessing your company profits

  • An updated introduction advises that the possibility of new, environment-related taxation may be on the horizon for businesses.
  • An example regarding national insurance contribution calculations has been revised for greater clarity.
  • Information is given about the forthcoming changes to personal service company (PSC) IR35 rules for private sector businesses.
  • Updated information about the taxation of company cars, in line with the government’s environmental policies, is given.
  • A warning is also given about the need to keep abreast of Brexit developments over the coming year and its potential impacts on business planning.

KG ACCESSCOMPANYPROFITS

Making tax digital

  • Information about the types of roll-out for different areas of tax has been made clearer.
  • MTD for VAT became compulsory in April 2019, with an agreed delay to October 2019 and early 2020 for certain types of business; the key guide has been updated to reflect this deferral, explaining its implications for public sector bodies who use the GIANT system of tax reporting.
  • Fuller details about the MTD VAT situation in general have been given.

KG MTD

Making the most of fringe benefits

  • An update to the introduction makes the point that the Conservative party re-election in December 2019 makes changes to the taxation of benefits in 2020/21 very unlikely.
  • The introduction also reiterates how the company car, traditionally a popular benefit, has become less tax efficient, with the introduction of the UK’s first zero-emissions street a good indicator of the future of motoring.
  • The guide explains one way to improve efficiency is for employees to contribute up to £5,000 for a new company car which may allow them to afford a car with much lower emissions.

KG FRINGEBENEFITS

Starting and selling a business

  • Updated introduction touches on implications of the UK general election and the consequences of an orderly or disorderly exit from the EU on the UK’s economic growth
  • Updated advice regarding tailoring business plans to take EU exit into account for 2020
  • The latest information on the expansion of the IR35 rules to the private sector set for April 2020.
  • A new mention of the proposed further discounts (to 50%) to retail business rates.
  • Update to regarding the annual 2% write-off for the construction costs of commercial property which is now set to increase to 3%.
  • New mention of an increase to employment allowance.
  • Inclusion of the government’s announcement to conduct a “review and reform” of entrepreneur’s relief.

KG STARTANDSELLBUSINESSf

Strategies for a high tax environment

  • Updated information from the Office for Budgetary Responsibility has been given
  • The latest situation based on the Conservative party manifesto regarding increasing the NICs threshold has been added.
  • An additional comment regarding Entrepreneurs’ relief and the potential ‘review and reform’ it may undergo has been inserted.
  • An update regarding the abandonment of the plan to cut Corporation tax to 17% has also been added.

KG STRATEGIESHIGHTAX

Tax allowances for business investment

  • An update regarding the upcoming increase in structures and business allowance (SBA) from 2% to 3%
  • Up-to-date example figures used to explain how to calculate the annual investment allowance (AIA)

KG BUSINESSINVESTMENT

Taxation of property

  • An updated introduction touches on the performance of the housing market in 2019, the projected rise in house prices and the implications of Brexit following the general election result.
  • A change to the information on corporation tax which is now remaining at 19%.

KG TAXONPROPERTY

Working through personal service companies

  • An updated introduction touches on the forthcoming expansion to the private sector of the IR35 rules for personal service companies (PSCs), including the government’s review of the implementation.
  • Further advice on the CEST tool which has been updated by HMRC with 30 new or updated questions, in addition to a contract review process.
  • An additional section on retaining your personal service company.

KG PSC

You and yours – estate planning

  • An update on the shelving of probate fee changes and delays in processing applications.
  • A comment on whether the Office of Tax Simplification proposals on inheritance tax will be integrated into the March 2020 Budget is added.

KG ESTATEPLANNING

Contact Paul Southward.

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