Monthly Archives: September 2020

CBILS ends on 30th September 2020

The Coronavirus Business Interruption Loan Scheme (CBILS) has offered important financial support to thousands of businesses across the UK – but it is due to end this month.

Although the deadline for accredited lenders to review applications was recently extended until 30th November 2020, businesses wishing to receive funding via the CBILS must have submitted their applications by 30th September 2020.

This means that time is running out to benefit from this loan, which offers no interest for the first 12 months, no upfront fees and funding facilities of up to £5 million.

Click here to find out more about eligibility and the application process

If you have an existing Bounce Back Loan then you may still be eligible for a larger CBILS loan providing the new loan is used to consolidate the previous loan.

Please be aware that when using the CBILS, your business remains liable for the full loan amount – CBILS only provides a guarantee to the lender, not the business that receives funding.

To find out how we can help you take full advantage of the CBILS and support your application, please speak to our team.

Change to Companies House bank details

Companies House has changed its bank details with effect from 1 September 2020 following a technical change to the way it is funded.

Letters sent by Companies House from 1 September 2020 onwards include the new bank details, which businesses will need to use to pay any fees due.

The previous bank details will remain in operation until the end of February 2021.

More than £1 billion in tax reliefs for creative industry

According to the latest official figures from HM Revenue & Customs (HMRC), a total of £1.1 billion was paid out in tax reliefs for the creative sector during 2019/20.

The figure represents a rise of more than £30 million on the previous year.

Creative sector tax reliefs aim to increase the level of investment in cultural activity throughout the UK. The sector includes TV, film, animation, video games, theatre, orchestras and museums.

The data has revealed that film tax relief (FTR) accounted for just under half of the total amount paid out, with high-end TV (HETV) the next highest, accounting for 30 per cent.

A total of £522 million worth of FTR was paid in response to 785 claims, representing 740 films.

There were also 110 British programmes completed in 2019/20 which claimed HETV tax relief, with UK expenditure of £1.5 billion, and £324 million was paid in respect of 290 claims.

Each film, programme, animation or video game can make several claims during the production process. One claim can also be used to cover several productions.

The majority of claims made are for smaller amounts, with two-thirds of all claims being for £100,000 or less. However, despite only two per cent of the claims being for more than £5 million, they accounted for 66 per cent of the total amount paid.

The year also saw £71 million of theatre tax relief paid out relating to 1,115 claims, £18 million of orchestra tax relief, and £16 million of museum and galleries exhibition tax relief.

Experts believe that the film and television sector has a vital role to play in the recovery of the UK’s economy post-COVID-19 and are encouraging all companies and charities in these fields to consider claiming, or even revisiting existing claims, as there is often scope for significantly increasing original claims.

Link: Over £1 billion of tax reliefs for the creative sector

Advisory Fuel Rates for next quarter come into effect

A new set of Advisory Fuel Rates for the next financial quarter are now in effect as of 1 September 2020. These rates apply to any employee who uses a company car.

The rates can be used in circumstances where you are reimbursing employees for business travel in their company car or in requiring employees to repay the cost of fuel used for private journeys. If you use these rates, you will not need to seek a dispensation to cover the payments.

The new rates are:

Engine size Petrol – amount per mile LPG – amount per mile Diesel – amount per mile
1400cc or less 10 pence 7 pence 8 pence
1401cc to 2000cc 12 pence 8 pence 10 pence
Over 2000cc 17 pence 12 pence 12 pence

Please be aware that you can use the previous rates for up to one month from the date the new rates apply. Details of the previous fuel rates can be found by clicking here.

Hybrid cars are treated as either petrol or diesel cars for the purposes of Advisory Fuel Rates.

Meanwhile, the Advisory Electricity Rate for fully electric cars is four pence per mile, although electricity is not considered a fuel for car fuel benefit purposes.

Link: Advisory Fuel Rates

Key dates for the Coronavirus Job Retention Scheme

As the Coronavirus Job Retention Scheme (CJRS) is slowly wound down by the Government, businesses must adapt their PAYE reporting and payroll function to reflect the required funding contributions.

To help, we have provided a list of key dates for September and the following months to ensure you are prepared for the changes ahead:

  • 1 September 2020 – Grants from the Coronavirus Job Retention Scheme (CJRS) tapered down to 70 per cent of a furloughed employee’s usual wages, capped at £2,187.50 a month, with employers required to contribute another 10 per cent, so that furloughed employees continue to receive 80 per cent of their usual wages.
  • 1 October 2020 – Grants from the CJRS taper down to 60 per cent of a furloughed employee’s usual wages, capped at £1,875 a month, with employers required to contribute another 20 per cent, so that furloughed employees continue to receive 80 per cent of their usual wages.
  • 31 October 2020 – The CJRS closes. Employees can no longer be furloughed after this date.
  • 30 November 2020 – The last date for making claims for the CJRS.

The closure of the CJRS is likely to have a significant impact on the employment costs of businesses and so it is important to plan for this now.

Businesses should also remain aware of the Job Retention Bonus, which offers employers £1,000 for every furloughed employee who is brought back, continuously employed and paid at least £520 a month on average from the end of October 2020 to 31 January 2021.

Link: Coronavirus Job Retention Scheme and Claim for wages through the Coronavirus Job Retention Scheme

The first Child Trust Funds (CTFs) can now be claimed

The first Child Trust Funds (CTFs) are set to mature in September allowing those turning 18 to access their fund for the first time.

CTFs were tax-free children’s savings account set up by the Government, which were available to those born between 1 September 2002 and 2 January 2011.

Parents or guardians of a child who was eligible for CTF would have been sent a starting payment voucher by HMRC of £250, or £500 for those on a low income, which could be used to set up a CTF account.

Once an account was set up, further deposits could be added up to £9,000 (2020-21) each tax year.

However, it is believed that thousands of potential CTF holders do not know they have one or have forgotten that one was set up in their child’s name.

Each account is managed by a ‘registered contact’ who can tell the account provider how to invest the fund and run the account, change the address and other personal details, change the type of account and move the account to another provider. They cannot, however, access funds in the account themselves.

When a child turns 16, they are allowed to take control of the account, but cannot withdraw money from it until they turn 18, at which point they can withdraw funds or transfer it to a different savings account. They can also continue saving into their CTF account should they wish to.

When a CTF was set up, the parent or guardian should have received the child’s Unique Reference Number, which will also appear on annual CTF statements. This will also include details of the account type and the provider. These account statements should have been received regularly once the account was set up.

However, some CTF accounts were set up by HMRC on behalf of the child and as a result, many children turning 18 may not be aware that they have a CTF account.

Any child born between 1 September 2002 and 2 January 2011 who is turning 18 can check to see if they have an account by filling out a form on the website by clicking here.

The scheme was replaced by Junior ISAs when it came to an end in 2011. As with CTFs, a Junior ISA cannot be accessed until a child turns 18. Money in a Junior ISA is also tax-free and up to £9,000 can be deposited into an individual account during the 2020-21 tax year.

Link: Child Trust Fund

Four in five SMEs are confident over their Coronavirus recovery

Four in five UK small to medium-sized enterprises (SMEs) are confident that they will recover from the Coronavirus pandemic, according to research by Starling Bank and the Great British Entrepreneur Awards.

The data indicates that 75 per cent of business owners are feeling more confident than they did in July as lockdown measures ease.

While the COVID-19 pandemic has presented many challenges for SMEs, with one in five considering closure, many have changed their business model to adapt to the changing business landscape.

In total, 39 per cent of firms say that they’ve changed their line of business, with many either shifting to an online business model or prioritising digital products and services.

The research asked 314 SMEs in the UK several questions on their current business confidence and found that two-thirds of business owners believe that they will either return to or improve upon their pre-Coronavirus performance by the end of 2021.

Experts have praised the innovation, tenacity and determination of SMEs to adapt to the challenging circumstances to ensure that they can recover and rebuild their business.

Anne Boden, Founder and Chief Executive of Starling Bank, said: “Small businesses are essential to the nation’s efforts to build back the economy as we emerge from the Coronavirus crisis.

“Despite the challenging conditions they face, it’s heartening to see that many are proving so adaptable and resilient.”

Link: Bounce back Britain – 80 per cent of UK SMEs confident they will recover from Covid despite gloomy economic forecast

HM Revenue & Customs (HMRC) writes to 3,000 employers over furlough claims

HM Revenue & Customs (HMRC) is reportedly writing to 3,000 employers over claims they have made for grants from the Coronavirus Job Retention Scheme (CJRS).

The ICAEW Tax Faculty says that HMRC began issuing the letters at the end of August to businesses that are suspected of having claimed more than they were entitled to or grants for which they were not eligible.

The letters invite employers to contact HMRC following a review of their claims and provide an opportunity for repayments to be made without penalty.

It is thought that further employers will be contacted by HMRC in the future.

To date, 9.6 million jobs have been furloughed by 1.2 million employers at a cost of £35.4 billion.

Link: HMRC targets 3,000 employers over CJRS claims