National lockdown and increased government support

The Prime Minister yesterday announced a new national lockdown for England, 4th January 2021, that is likely to apply until half-term February 2021. Similar restrictions are likely to apply in the other regions of the UK.

Today, the Chancellor, Rishi Sunak, stepped in and disclosed a raft of new financial support measures for businesses affected by the new lockdown regulations.

New grants for businesses required to close

Companies required to close in the retail, hospitality, and entertainment sectors will be eligible for a new one-off top-up grant based on their business property rateable value. The grants will be:

· £4,000 for businesses with a rateable value of £15,000 or under

· £6,000 for businesses with a rateable value between £15,000 and £51,000

· £9,000 for businesses with a rateable value of over £51,000

Please note, business support is a devolved policy and therefore the responsibility of the devolved administrations, which will receive additional funding as a result of these announcements in the usual manner:

· the Scottish Government will receive £375 million

· the Welsh Government will receive £227 million

· the Northern Ireland Executive will receive £127 million

Additional funding for other affected businesses

Businesses outside the retail, hospitality, and entertainment sectors may also be eligible for support from their local authority. The UK government is making a total of £594m available to local authorities for this purpose.

What will this mean for you? 

In both cases, you will need to approach your local authority to secure funding. These additional grants will be a welcome addition to the other support measures previously announced and will help affected businesses cover some of their recurring costs until, hopefully, Government can relax lockdown as the vaccines start to control the rate of infection.

If you have any questions about these newly announced grants, contact us today via email at contactus@accountinggem.co.uk or call us on 01473 744 700 or to find out more.

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Claim back when working from home

Countless people are working from home due to the Covid-19 pandemic, and now with new tiers being created, it looks like working from home may be here to stay in 2021 and beyond.

Working from home has its benefits, but also some negatives. With extra heating and extra lighting to pay for, do you know the rules that have been put in place which allow you to claim for these additional expenses?

Typically, HMRC allows employees who have to work from home to claim up to £26/month (£6/week) as a deductible expense against employment income, but only when there is a home working agreement as part of their contract, and they don’t receive the full homeworking allowance from their employer.

Until April 2021, because of Covid-19 restrictions, if you have been required to work from home, even if it’s just for a day, you’re able to claim for an entire year, whether you work full-time or part-time. After April 2021 home working expenses allowance will revert to the original rules.

HMRC has made a new portal and is pushing employees to claim homeworking costs there. HMRC estimate that 54,000 people have already claimed via this portal. The online claim will alter the employee’s PAYE code, so the relief is given at source for the rest of the tax year.

Please call us on 01473 744 700 or email us at contactus@accountinggem.co.uk to find out more.

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How Xero can help your business

If you’re an owner of a business, you will know that accounting and bookkeeping are essential, particularly for a company that wants to succeed long term. If you are not already utilising accounting software for your business, you’re missing out on the opportunity to run your company more efficiently.

We actively encourage our clients to use Xero. It’s simple to use, and it’s something you can get to grips with quickly. An Accounting Gem offers Xero training sessions, no matter your current skill level. Whether you are own a start-up or are an established business, a complete novice, or at an intermediate level, we can teach you everything you need to know.

WHY SHOULD I USE XERO TO HELP RUN MY COMPANY?


Work where and when you want to
Whether you want to use your PC, Mac, laptop, tablet, or smartphone, you can stay on top of your finances wherever you are with Xero. Xero also ensures you – and anyone else who needs to access your finances – are working off the correct data whenever you want and wherever you are.

Improve cash flow and get paid faster
Xero gives small businesses the power to get paid faster. It allows you to move away from paper and printed invoices and move your finances online. You’ll no longer need to send a PDF to clients via email or the post. The advantages? Not only is it faster, but you’ll be able to see whether it’s been opened, and your customers will have the ability to pay you online through the invoice. The quicker the process, the faster you get paid.

Let Xero do the heavy lifting while you sleep
Xero performs the tedious, repetitive tasks that typically take up your time. So with it in place, you’ll be able to focus on adding more value to your business by doing more important things.

Xero’s automated Invoice Reminders can chase for you. Suppose your customers sometimes take a while to pay you, or you are spending hours chasing overdue invoices. In that case, Invoice Reminders is a must-have. It will automatically send an email to your customers if an invoice is about to become due or it is already overdue.

And if you’re an advisor, then Find & Recode could save you hours. It’s easier than ever to find your way through a client’s records and then update those records en masse. Hundreds of records to update? Find & Recode will save you hundreds of minutes.

Collaborate with your advisors
Xero refers to this as the Single Ledger, but it is a single set of data that both you and your advisor can work from. As with any partnership or a good relationship, communication is vital. When you are both seeing the same set of data simultaneously, it means all parties are privy to the whole picture. It saves you the hassle of exporting data and sending it to your advisor, only for it to soon become out of date. It ensures that all parties are working off current information enabling you to highlight any problems immediately and deal with them efficiently.

Xero grows with you
Xero already works with over 500 products, so it doesn’t matter if you’re setting up a business or you already use various systems. Xero’s ecosystem can help you.

You could integrate it with your email (Gmail or Office 365), or you might want it to be linked to a specialised system – such as your CRM, inventory, or industry-specific solutions (such as Vend or Shopify). Xero’s add-on marketplace allows the flexibility to create a mix that meets your specific needs.

At An Accounting Gem, we’re ideally positioned to integrate the world’s leading cloud-based accountancy software into your business. Our extensive training and benefits as a Gold Partner reflect our commitment to Xero and our belief in its ability to transform your business processes. Contact us today on 01473 744 700 or via email at contactus@accountinggem.co.uk to find out more.

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Your top tax tips for Christmas 2020

It’s (nearly) Christmas! That means gifts and spreading seasonal good cheer. As we look to get into the festive spirit, we wanted to share how your generosity this Christmastime can be tax-deductible.

Christmas parties
You are able to spend up to £150 per head, including VAT per year, in providing annual social functions to entertain staff.

However, it is worth noting that £150 is per head and not per member of staff. Your cost per head is worked out by dividing the overall cost by the number of people you have attending (including any other guests attending). When your employees’ partners or spouses attend an event, your budget can be £300 per couple.

Please note if the cost per head works out over budget, even if it’s £151, the full £151 is liable for tax and not just the £1 you’ve gone over.

Gifts to your employees
Gifts that you hand out to your employees are generally exempt from National Insurance and tax. But, this only applies if the gift is classed as trivial.

A trivial benefit or gift, must not exceed £50 in cost, and cannot be a reward for performance or part of your employees’ contract. It cannot be cash as HMRC will tax this as earnings (payroll tax). Classical gifts, including a bottle of wine or a box of chocolates, would be exempt from tax.

Gifts to your clients
Gifts to your customers are only eligible as a tax deduction if the total spent on each customer per year is no more than £50. The gift cannot be a conspicuous advert for your business and must not be food, drink or tobacco (unless they’re samples of your products).

Vouchers
Giving your employees cash vouchers, would result in the amounts being put through the payroll and subject to National Insurance and tax.

Non-cash vouchers up to £50 may be exempt under the trivial benefit rules.

Plan ahead
If you think you’ve missed out on some tax-deductible Christmas expenses, the only way to ensure you make next year’s tax-deductible is to plan ahead. If you need help with this An Accounting Gem are more than happy to help. Contact us today on 01473 744 700.

Merry Christmas!

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Considering staff redundancies?

Even with the continuing support provided by the government furlough scheme – the current scheme will end 31st March 2021 – many business owners may be faced with making staff redundant. If you need to consider laying-off staff, we have listed below some of the steps you may need to take.

To stay on the right side of employment regulations, it is necessary to follow strict guidelines to avoid future challenges and disputes with affected employees.

The steps you may need to follow:

  1. How many staff do you need to make redundant?
  2. Have you considered alternatives, i.e., reorganisations?
  3. If making 20 or more staff redundant, you will need a formal consultation process.
  4. You will need to create a selection pool and selection criteria.
  5. Write to affected staff with the above details.
  6. You could consider calling for voluntary redundancies and set out terms of an enhanced offer.
  7. Hold consultations with staff.
  8. Score individuals based on selection criteria and send to staff for their comments.
  9. Hold second consultations with staff who fall below minimum selection scores.
  10. Finalise your selection, communicate with affected staff, and deal with remaining formalities.

We can help

If you need help with the initial number crunching, with an objective review of your current circumstances, or finding possible alternatives to avoid redundancies, please contact us at  contactus@accountinggem.co.uk, or call on 01473 744 700, and we will be more than happy to help you. 

Disclaimer: This blog is not to be taken as literal advice. This information is purely a guide. We would always recommend that you seek professional help from an HR specialist when making staff redundant.
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Making the most of extended retail hours

You have probably heard that retailers in England can extend opening hours in December and January to help you make the most of the festive shopping season. In the announcement, government sources said:

From Wednesday 2nd December, as England returns to a system of tiered restrictions, all non-essential retail across England will be able to reopen, and planning rules limiting opening hours will be eased to allow shops to be open for longer Monday to Saturday.

We suggest you call your local council to see what restrictions on opening hours will still apply in your area, if any.

What else will you need to consider?

We have created a short checklist of issues that you may like to consider. You will want to make the most of this opportunity to boost sales during this critical period. We suggest you consider:

  • Are you COVID secure? The government guidelines still apply.
  • Do you have a pavement sign indicating you are open?
  • Keep safe. Will you need to set up more hand sanitiser stations?
  • Will you need to employ more staff?
  • If you extend the hours of existing staff, make sure their contract(s) of employment do not set limits, amend if they do, but be wary of exceeding statutory limits.
  • Do you need to make security arrangements if carrying the day’s takings home late at night?
  • Is your check out area sneeze proof – have you set up screens to keep staff safe?
  • In smaller premises do you need to consider a limit to the number of customers in your shop? This will encourage customers to feel safe and relaxed shoppers are more likely to buy.
  • If a queue forms outside, make sure they have something interesting to view in your shop window.
  • Finally, re-think your check-out counter/desk. Make sure you display a range of impulse buys to maximise sales.

We can help

If you need to bounce your ideas for maximising this opportunity to an objective third party – and one that has your best interests at heart – we are happy to oblige. Please get in touch on 01473 744 700 or email us at contactus@accountinggem.co.uk for more information.

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Are you ready for 1st January 2021?

When we wake up in 2021, we will no longer be in transition; we will be out of the European Union and have to cope with a wide range of regulatory changes if you sell or buy services or goods to EU customers and suppliers.

“YOU NEED TO ACT NOW” was the circular recently sent to all UK businesses that may be affected by the upcoming changes by the Department for Business, Energy & Industrial Strategy.

However, many of these messages will have found their way to waste bins or will still be sitting in a post or letterbox awaiting the return of staff working from home or staying at home because of government guidance due to the lockdown.

The circular raises the following:

  1. Check the new rules on importing and exporting goods between the European Union and Great Britain from 1st January 2021 – different rules will apply in Northern Ireland.
  2. If you plan to recruit from overseas from 1st January 2021, you will need to register as a licensed VISA sponsor.
  3. Use GOV.UK to identify changes affecting manufactured goods, such as new marking requirements or approvals needed, to ensure your business is ready to sell them in the European Union and Great Britain.
  4. If you are moving goods out of or through Northern Ireland, check the latest guidance.

The circular is covered with a red typeface to underline the importance and urgency of the Department for Business, Energy and Industrial Strategy concerns. Presumably, they felt a reminder was necessary due to the expected number of businesses not prepared for the momentous changes that will be happening shortly.

We are leaving the European Union, and with complications due to COVID, we may well be leaving with no formal trade agreement.

If you need help considering your options to protect your business, send us an email at  contactus@accountinggem.co.uk, or contact us on 01473 744 700, and we will be more than happy to help.

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Furlough claims from 1st November 2020

If you are making claims under the extended furlough scheme from 1st November 2020, there have been changes in the claims process.

Perhaps the most significant is that claims need to be registered within 14 days of the relevant period’s end. In their revised guidance on this topic, HMRC says:

You can claim before, during, or after you process your payroll as long as your claim is submitted by the relevant claim deadline. You cannot submit your claim more than 14 days before your claim period end date.

When making your claim:

· You don’t have to wait until the end date of the claim period for a previous claim before making your next one

· You can make your claim more than 14 days in advance of the pay date (e.g., if you pay your employee in arrears)

If you do not finish your claim in one sitting, you can now save a draft. You must complete your claim within seven days of starting. The claims for periods from 1st July 2020 to 31st October 2020 must be submitted no later than 30th November 2020.

Your claims made from 1st November 2020, must be submitted by 11.59pm, 14 calendar days after the month you’re claiming for. If this time falls on the weekend or a bank holiday, then claims should be submitted on the next working day.

Claim for furlough days in Claim must be submitted by
November 2020 14th December 2020
December 2020 14th January 2021
January 2021 15th February 2021
February 2021 15th March 2021
March 2021 14th April 2021

But what happens if you cannot submit a claim by the deadline?

HMRC accept that there may be circumstances when a claim cannot be made within the set time limits. They confirm that you may have a reasonable excuse if:

· Your partner or another close relative died shortly before the claim deadline

· You had an unexpected stay in hospital that prevented you from submitting

· You had a severe or life-threatening illness, including Coronavirus related illnesses, which prevented you from making your claim (and no one else could claim for you)

· A period of self-isolation prevented you from making your claim (and no one else could make the claim for you)

· Your computer or software failed just before or while you were preparing your online claim

· Service issues with HMRC online services prevented you from making your claim

· A fire, flood, or theft prevented you from making your claim

· Postal delays that you could not have predicted prevented you from making your claim

· Delays related to a disability you have prevented you from making your claim

· An HMRC error prevented you from making your claim

HMRC will not consider reasonable excuses in advance of a claim deadline.

If you have any questions regarding the points raised in this article, please contact us on 01473 744 700 or email us at contactus@accountinggem.co.uk, and we will be more than happy to help.

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Start preparing for Post-Brexit VAT

2020 has been a year full of several challenges for small businesses. The coronavirus pandemic has left many small businesses vulnerable. With serval businesses looking to bounce back, there is now the impending Brexit to contend with.

The United Kingdom will leave the Single Market on 31st December 2020. When it does so, it will also leave the European Union’s VAT regime. It will no longer be bound to European Union principles.

If you are a business in the UK, and you are selling goods both in the United Kingdom and to a country within the European Union, you will have to be compliant with local rules.

Post-Brexit tax changes

From January 1st 2021 onwards, businesses will face a potential risk of paying VAT upfront for each cross-border transaction that occurs. VAT-registered companies in the United Kingdom will be able to account for import VAT on their standard VAT Return forms. According to the official guidance, the main ‘place of supply’ rules will remain unaffected. 

How much the current processes will change will be dependent on whether the United Kingdom gets a trade deal and what that might entail when agreed.

If you have any questions about how Brexit could potentially affect your business. Contact us by phone on 01473 744 700 or send us an email contactus@accountinggem.co.uk, and we will be more than happy to help.

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Coronavirus Bounce Back Loan – Top Up

The Bounce Back Loan Scheme (BBLS) enables you to borrow between £2,000 and up to 25% of your turnover. The maximum loan available is £50,000.

The scheme is open to applications until 31st January 2021. If you already have a Bounce Back Loan but borrowed less than you were entitled to, you can top up your existing loan to your maximum amount. You must request the top-up by 31st January 2021.

For example :

Business turnover                              £50,000                                          £200,000

Maximum loan available  (25%)     £12,500                                           £50,000

BB Loan all ready taken                    £8,000                                            £35,000

Top – up available                         £4,500                                        £15,000

You can apply for a loan if your business:

  • is based in the United Kingdom
  • was established before 1st March 2020
  • or has been adversely impacted by the coronavirus

If you have any questions, please contact us on 01473 744 700 or email us at contactus@accountinggem.co.uk, and we will be more than happy to help.

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