Good morning all,
With Christmas fast approaching, I firstly wanted to let you know of my opening times.
The office will close at 3pm on Wednesday 23rd December 2020 and will reopen on Monday 4th January 2021. I will not be taking calls or responding to emails through this period; I am taking a complete break. I need it!
Before the 23rd, I plan to complete all month end payroll and furlough applications as necessary - it is then up to you if you pay your staff before Christmas.
In the meantime, I wanted to give you an update on a few things that I feel will be of use to you.
Brexit
The Brexit transition period ends in 1ays. If your business trades goods with Europe or you represent businesses who do, you’ll need to be prepared for changes that will come into effect from 1 January 2021.
We understand these are challenging times, but it is important to make sure that your business is ready for these new rules. At the time of writing, talks are ongoing about our future trading arrangements with Europe. These rules will not change or go away, and the steps that you need to take to prepare, are needed in any scenario before you can trade from 1 January.
If you’re new to customs processes it will help you to watch HMRC's series of short videos on their YouTube channel which introduce importing and exporting:
What you need to know to send goods out of the UK
We also have a Trader checklist to help you prepare for the end of the Brexit transition period.
UK Export Finance (UKEF) has launched a new guarantee scheme that will free up funds for UK SMEs to cover the costs of international trade, supporting thousands of jobs and livelihoods across the country.
UKEF is a ministerial department of the UK Government, with aims to ensure that no viable UK export fails for lack of finance or insurance, while operating at no net cost to the taxpayer.
Exporters will be able to apply for finance from the UK’s five largest banks backed by a UKEF guarantee to free up working capital that can be used for everyday costs linked to exports and to scale up their business operations. This will help thousands of businesses, particularly SMEs, to fulfil multiple export contracts, pay for labour costs, build their inventory and ease cash flow constraints.
The new General Export Facility will make a huge difference for entrepreneurs who need the financial backing to go global and benefit from free trade agreements.
Financial support can be directly accessed from HSBC, Lloyds Bank, Natwest, Santander and Barclays, the major providers of trade finance in the country, which can put in place UKEF’s guarantee automatically.
Other lenders will be added to the facility in due course to ensure that it is available for as many businesses as possible.
Commenting on the scheme, Managing Director of UK Finance, Stephen Pegge, said: "Supporting British exporters at this time is vital, which is why UK Finance and five of the main export lenders have been working closely with UKEF on the development of this new guarantee scheme.
"We expect business to apply from the new year as the General Export Facility enables lenders to support an even wider range of small and medium-sized firms, giving businesses the confidence to win new contracts by having an agreed revolving facility in place."
Tier 2 Restriction Grants
In Tier 2, a business running a public house, bar or other business involving the sale of alcohol for consumption on the premises is unable to open, unless alcohol is only served as part of a table meal, and the meal is such as might be expected to be served as the main midday or main evening meal.
If your business is unable to open you may be eligible for funding payable every 14 days during the period that you must remain closed.
Businesses occupying hereditaments appearing on the local rating list with a rateable value of exactly £15,000 or under on the date of the commencement of the local restrictions will receive a payment of £667 per 14-day qualifying period.
Businesses occupying hereditaments appearing on the local rating list with a rateable value over £15,000 and less than £51,000 on the date of the commencement of the local restrictions will receive a payment of £1,000 per 14-day qualifying period.
Businesses occupying hereditaments appearing on the local rating list with a rateable value of exactly £51,000 or above on the commencement date of the local restrictions, will receive £1,500 per 14-day qualifying period.
Further information regarding these grants can found at:-
To make your application for the Tier 2 Local Restriction Support Grant Closed visit
There will also be a Christmas Support payment grant for wet-led pubs which you may also qualify to apply for; details for this will be available when full guidance is received so please check the North Devon Council website regularly for details on this also at https://www.northdevon.gov.uk/coronavirus/business-support/business-grants/
Please also see your own local authority website, if you fall outside of the scope of North Devon.
SEISS Criteria
Self-employed individuals claiming the third Coronavirus grant under the Self-Employment Income Support Scheme (SEISS) may be unaware of important changes made to the qualifying criteria for the grant.
To make a claim for the third SEISS grant your business must have had a new or a continuing impact from Coronavirus between 1 November 2020 and 29 January 2021 and one which you reasonably believe will have a significant reduction in your profits.
You may only claim if your business is adversely affected by Coronavirus and you are currently trading. Either of the following must also apply:
You are impacted by reduced demand due to the Coronavirus.
Reduced demand means less work is available despite you actively looking for new work.
You are temporarily unable to trade due to the Coronavirus. Being unable to trade includes:
Being forced to close due to restrictions, illness or shielding or having to look after family.
Broadly, no third grant should be claimed if the business is unaffected or if the business is only affected by the owner’s actions. HMRC gives a range of examples of situations where conditions to claim the third SEISS grant are met and where they are not.
Included in the examples is a case where a business was interrupted by its owner’s self-isolation as a result of returning from a holiday.
HMRC example: A dentist returns from a holiday abroad and has to self-isolate for 14 days due to quarantine rules. As this is the only impact on her business, she is not eligible to claim the third grant. This is because reduced demand due to self-isolation after foreign travel is not included in the eligibility criteria.
An accountant also features.
HMRC example: An accountant reduces his business activity because he wants to partially retire. He reasonably believes this will have a significant reduction on his trading profits. He is not eligible for the third grant because the reduced business activity was not caused by Coronavirus.
CJRS Claims for Christmas Shutdowns
HMRC have issued a reminder as to what can be claimed under the Coronavirus Job Retention Scheme (CJRS) in light of the upcoming holiday season.
Claims to cover the wages of furloughed staff can only be made when the furlough is as a result of COVID-19 affecting the business.
Businesses which are normally less busy over the Christmas period or close for the holidays will not be able to furlough staff and make a claim. HMRC guidance specifically states that employees may not be furloughed simply because:
They will be taking paid leave.
The claimant usually does less business over the festive period.
The guidance also includes a reminder that staff on annual leave should be paid at their normal rate of pay under the Working Time Regulations (WTR). Where this is more than the amount claimed under CJRS, the employer must make up the difference.
Lower Age Threshold for the National Living Wage
From April 2021, the age threshold for the National Living Wage will drop to 23, from 25.
Those under 23 will still be entitled to National Minimum Wage. The amount you need to pay your employee will depend on which age range they fall into.
In addition to the lower age threshold, the National Living Wage will also increase by 2.2% from £8.72 per hour to £8.91 per hour.
For 23- and 24-year olds currently earning minimum wage, the new threshold will mean they take home 71p more per hour. That’s an 8.7% increase in pay.
The other minimum wage rates are also set to increase from April. Based on the recommendations by the Low Pay Commission (LPC), the new rates will be as followed:
National Living Wage: £8.91
21-22 Year Old Rate: £8.36
18-20 Year Old Rate: £6.56
16-17 Year Old Rate: £4.62
Apprentice Rate: £4.30
According to the LPC, the smaller pay increases for workers aged under 23 are due to “the risks to youth employment” posed by the current economic situation.
While many will welcome the Chancellor’s announcement, there’s no doubt that the changes will come at a challenging time for UK businesses.
The extended Job Retention Scheme is set to close at the end of March 2021. That means employers bringing back minimum wage staff from furlough will need to update their payrolls to make sure workers still receive the correct wage.
Thought of the Day
Agnes M Pahro said, “What is Christmas? It is the tenderness of the past, courage for the present, and hope for the future."
If I don't manage to speak to you before 23rd, may I take this opportunity to wish you all a very happy Christmas and a healthy, happy and prosperous 2021.
Stay safe.
Matthew Hayne