Government SME support scheme open for registrations
- The scheme is expected to provide digital and management training for small businesses
- Eligible businesses will also be able to get a discount of up to 50% on the costs of approved software
Small businesses in the UK can now register their interest in joining ‘Help to Grow’, the government’s new scheme to help SMEs prosper post-pandemic.
The scheme is expected to provide digital and management training for small businesses to help boost productivity after the coronavirus pandemic.
Starting in June, the government says the programme will help 30,000 businesses over the next three years to:
- Develop a growth plan
- Improve resilience
- Learn how to innovate
- Inspire employee engagement
- Build marketing and financial strategies
- Adopt digital technologies
Help to Grow will enable small businesses to access a 12-week-programme delivered by leading business schools across the UK. The programme, which is 90% subsidised by the government, will combine:
- A practical curriculum,
- One-to-one support from a business mentor,
- Peer-learning sessions
- An alumni network
In addition to being able to access advice through an online platform, eligible businesses will also be able to get a discount of up to 50% on the costs of approved software, worth up to £5,000. Vouchers are initially expected to be available for software that helps businesses:
- Build customer relationships and increase sales
- Make the most of selling online
- Manage their accounts and finances digitally
Furlough and TUPE – claims from May
- The employer can claim for employees transferred on or after January 1, 2021.
- The transferred employees must have been employed by the old employer on or before March 2, 2021
If you’re an employer claiming for a period beginning after May 1, 2021 and you employ someone who was transferred from another business, you can claim under the normal rules if they were included on a PAYE Real Time Information (RTI) submission to HMRC on or before March 2, 2021.
You do not need to have previously claimed for an employee before March 2, 2021 to claim for periods from starting on or after May 1, 2021.
Otherwise, you may still be eligible to claim in respect of the employees if the TUPE or PAYE business succession rules apply to the change in ownership.
The employer can claim for employees transferred on or after January 1, 2021. The transferred employees must have been:
- Employed by the old employer on or before March 2, 2021
- Transferred from their old employer to their new employer on or after January 1, 2021
- Included on a PAYE Real Time Information (RTI) submission to HMRC, by their old employer, between March 20, 2020 and March 2, 2021
If you are part of a change in ownership where the TUPE or PAYE business succession rules apply, then you should make sure that the information needed for future claims under the Coronavirus Job Retention Scheme is passed on. Such information may relate to working out the employee’s reference date and 80% of the employee’s usual wage.
For the purposes of this guidance – “employee” covers full-time employees, part-time employees, employees on agency contracts, employees on fixed-term contracts and employees on flexible or zero-hour contracts.
Apprentices can be furloughed but must be paid at least the Apprenticeship Minimum Wage, National Minimum Wage or National Living Wage (as applicable) and so the employer must make up any shortfall.
Foreign nationals are also eligible to be furloughed. Grants under the scheme are not counted as ‘access to public funds’, and you can furlough employees on all categories of visa.
The CJRS will remain in its current form until the end of June 2021, with employees receiving 80% of their current salary for hours not worked. Employers will not be required to make contributions beyond National Insurance contributions (NICs) and pension payments in April, May and June 2021.
Covid support grants – taxable income
- Covid support grants are treated as taxable income in the same way as other taxable receipts
- Businesses can claim tax relief on the expenditure supported by the grant
Covid support grants are treated as taxable income in the same way as other taxable receipts. The grants are treated as income where the business is within the scope of either Income Tax or Corporation Tax.
Businesses can then claim tax relief on the expenditure supported by the grant.
This treatment extends to the Self-Employment Income Support Scheme (SEISS), the Coronavirus Job Retention Scheme (CJRS), the Coronavirus Statutory Sick Pay Rebate Scheme, any coronavirus business support grant scheme and any other support scheme payments.
HMRC’s guidance is clear that whether any tax is paid will depend on the business profits of the grant recipient (taking into consideration the grant and other business income and expenditure under normal tax rules), any other taxable income and personal and other allowances to which they are entitled.
HMRC also has the power to recover payments and charge penalties where claimants have made support grant claims to which they were not entitled.
What are the VAT implications?
HMRC has not provided any guidance as to whether the grants will be subject to VAT or count towards turnover for VAT registration limits. Normal principles are expected to apply meaning:
- The grants would be outside the scope of VAT and no output VAT should have to be accounted for.
- The grant income should be disregarded for VAT registration and deregistration limits.
What about state aid rules?
UK Government grants count towards state aid.
- Payments of £10,000 or less count towards the total de minimis state aid limit over a 3 year period of €200,000.
- If you have reached that threshold, you may still be eligible for funding under the COVID-19 Temporary Framework.
- Payments of £25,000 count as state aid under the COVID-19 Temporary Framework. The limit for the framework is €800,000.
Pension statements to simplify in Govt overhaul
- Two-page document will highlight the size of a saver’s current pension pot
- The focus will initially be on automatic enrolment schemes
The government is to introduce simpler, two-page pension statements to make it easier for savers to understand how their saving for retirement is progressing.
It is consulting on the exact plans this week, with the idea that people will engage more with pension saving if they can easily see the important information about the size of their pot in a simpler format.
The two-page document will highlight in clear terms the size of a saver’s current pension pot, and how much has been saved over the previous year. It will also make clear how much money the saver could have when they retire if they continue saving at that rate, and what they could do in order to boost the size of their eventual pot.
The focus will initially be on automatic enrolment schemes, with the intention of rolling out simple statements across all other pension schemes later on
Weekly HMRC, Gov’t and tax updates
More than half a million claim WFH tax relief for 2021/22
On May 13, HMRC confirmed that more than 550,000 people have already claimed the working from home tax relief for 2021/22 on top of the three million claims received for 2020/21.
HMRC has published an eligibility checker to help employees understand whether they are able to claim the relief. HMRC also confirmed that employees required to work from home last year and did not claim for the relief are still able to do so. Backdated claims can be made for up to four years.
Inflation jumps to pre-pandemic levels
The consumer prices index (CPI) measurement jumped to 1.5% in the 12 months to April, new data from the Office for National Statistics has revealed.
Meanwhile the consumer prices index including owner occupiers’ housing costs (CPIH) rose from 1% to 1.6% over the month.
According to the ONS, the big drivers in this jump were energy bills, off the back of the rise in the energy price cap, and transport costs which rose to their highest contribution level in two years.
Economy grew by 2.1% in March 2021
GDP is estimated to have grown by 2.1% in March 2021 with the reopening of schools in parts of the UK, the fastest growth seen since August 2020, figures show.
According to the report by the Office for National Statistics (ONS), the service sector grew by 1.9% in March, the production sector by 1.8%, while manufacturing grew for a second consecutive month by 2.1%.
The construction sector grew by 5.8%, driven by growth in new work, repair and maintenance.
GDP remains 5.9% below the levels seen in February 2020 and 1.1% below the initial recovery level in October 2020, however
Surge in 95% loan-to-value mortgage availability
The last two months have seen a surge in new products available to borrowers with just a five per cent deposit.
Accord Mortgages (part of Yorkshire Building Society) and Loughborough Building Society have announced new 95% mortgages for those borrowers with just a five per cent deposit.
Both are accessible to borrowers through a mortgage broker only, not directly from the lenders.
Accord Mortgages has strengthened it’s 95% mortgage range by introducing two new two-year fixed rate products and reducing the rate of its five-year fixed rate.
Products available are a two-year fixed rate of 3.79%, which comes with a £995 product fee, free standard valuation and £250 cashback. Or borrowers can choose a fee-free rate of 3.98%, which also comes with free standard valuation. Both of these mortgages are available to house purchase customers only.
Accord has also reduced the rate on its five-year fixed rate mortgage to 3.89% (was 3.99%), available with a £995 product fee and free standard valuation.
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