Monthly Archives: February 2021

VAT Deferral Scheme

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All VAT registered businesses were able to take advantage of deferring their VAT payments for amounts that were due to be paid in the period between 20th March 2020 to 30th June 2020.  No interest or penalties were to be charged and businesses were free to pay the amount up at any time as long as it would be paid before 31st March 2021.

HMRC are now asking businesses to pay any outstanding amounts in full by 31st March 2021.  If there are cashflow issues that will cause businesses issues in making payment they can contact HMRC to arrange a payment plan to spread the payment over 11 month instalments ending in January 2022.  Interest will accrue on any unpaid VAT at a rate of 2.6% from 1st April 2021.

To arrange the payment plan HMRC are opening an online portal which will go live on the 23rd February 2021 and will remain open until 21st June 2021.  The business owner/director must access this portal themselves.  A requirement of the payment plan is to set up a Direct Debit to make the payments, therefore, as Direct Debits can only be authorised by the owner/director an Agent cannot do this on the businesses behalf.

Conditions for the scheme

Before you join the scheme

You must:

  • create your own Government Gateway account (if you do not already have one)
  • submit any outstanding VAT returns from the last 4 years – otherwise you will not be able to join the scheme
  • correct errors on your VAT returns as soon as possible
  • make sure you know how much you owe, including the amount you originally deferred and how much you may have already paid

 If you cannot use the online service

There may be circumstances where you cannot use the online service, for example if you:

  • do not have a UK bank account
  • cannot pay by Direct Debit
  • have dual signatories on your account

If you want to join the new payment scheme, but cannot use the online service, contact the COVID-19 helpline when the scheme opens on Telephone: 0800 024 1222. An adviser will help you join.

Newly Self-Employed Hardship Fund – now open!

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The scheme offers a one-off £4,000 payment for those whose status as being newly self-employed makes them ineligible for the UK Government’s Coronavirus (Covid-19) Self-employment Income Support Scheme.

The fund will remain open for a four-week period. The deadline for applications is 5pm on 16 March 2021.

Eligibility

To be eligible for the Newly Self-Employed Hardship Fund, you must be able to demonstrate that you:

(i)  Became self-employed on or after 6 April 2019 but before 17 March 2020 (and are therefore ineligible for the UK Government’s Self Employment Income Support Scheme because you did not submit a tax return including income from self-employment for 2018-19)

or

(ii)  Became self-employed between 1 October 2018 and 6 April 2019 but are ineligible for the Self Employment Income Support Scheme (SEISS) because you weren’t self-employed for a sufficient period of time in the 2018/19 Financial Year to demonstrate that you derived 50% of your income from self-employment

In addition, you must confirm when submitting your application that you:

  • are ordinarily resident in Scotland
  • are registered with HMRC as self-employed and have a valid Unique Taxpayer Reference (UTR) number
  • operate a business that is located in Scotland
  • trade as self-employed, not as a limited company
  • derive over 50% of your income from self-employment
  • reported trading profits below £50,000 in the financial year 2019-2020
  • started your business before 17 March 2020 and have continued to operate after 1 April 2020 (unless you are operating in a sector subject to ongoing Covid-19 restrictions which have forced the closure of your business)
  • have lost business income due to coronavirus restrictions and are experiencing personal financial hardship as a result
  • are ineligible for other Covid-19 related business grant support, including the Strategic Framework Business Fund, Covid-19 Temporary Restrictions Closure and Hardship Funds, Coronavirus Job Retention Scheme, Mobile and Home-Based Close Contact Services Fund, Wedding Sector Support Fund and Hardship Fund for Creative Freelancers
  • have taken steps to limit costs and expenditure, including through schemes such as VAT deferral and seeking a mortgage payment holiday
  • do not have access to sufficient savings or other sources of income to cover your basic living costs
  • have not breached Covid restrictions in place for businesses in Scotland

If you received funding through the first round of the Newly Self-Employed Hardship Fund launched in April 2020, you are still able to apply for support. This is a follow-on from that scheme and recognises the need for further help with living costs.

Information required

All supporting information must be submitted electronically (online).

HMRC Unique Taxpayer Reference (Your Unique Taxpayer Reference (UTR) will be required as part of the application process).

You will need to provide a recent screenshot or photo of your business tax account page from the HMRC portal clearly showing your full name and Unique Taxpayer Reference number, or another form of official communication from HMRC with your name and UTR shown.

Other information

In addition to core information on yourself and your business, such as name and address and name of business, you will also need to provide:

  • Your bank account details for this business including the sort code, account number and branch location.
  • A bank statement clearly showing evidence of business transactions. One month’s bank statement is required showing business activity from anytime during the period between 17 March 2019 and 17 March 2020. You will need to make sure your uploaded document or screenshot clearly shows the account name, bank name, account number and sort code.
  • Your National Insurance Number
  • Your business website address and/or social media web links such as Facebook or Instagram (if you have these)

Any information you give about your business (such as your registered name and address) MUST match the information held by official bodies such as HMRC.

A large number of applications for this fund are expected and they will be assessed in the order received. 

The fund will remain open for a four-week period. The deadline for applications is 5pm on 16 March 2021.

Applications can be made via this link https://www.bizsupport.scot/

 

 

Update – Bounce Back Loans

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Bounce Back Loans (BBL) were introduced by the Government last year in response to the COVID pandemic to help smaller sized businesses access finance more quickly.

The scheme allows small and medium sized businesses to borrow between £2k and up to 25% of their turnover. The maximum loan available is £50k.

The loan is guaranteed by the Government and is interest free for the first 12 months. Following this interest is charged at 2.5% per annum and the loan is for a 6 year period.

Full details of the eligibility criteria can be found at HERE

The scheme is open to applications until 31st March 2021.

It is important to note that if you have already borrowed money under the BBL but it was less than you were entitled to, you can top up your existing loan to your maximum amount. This must be done by the 31st March 2021.

Another important change to the scheme is the support being offered with regards to repaying your BBL.

You now have the following options:

  • Switch to temporary interest only payments up to 3 times, each lasting up to 6 months

  • Take a single payment holiday, pausing all repayments for 6 months

  • Extent the loan term from 6 to 10 years (at the same interest rate of 2.5%)

If you have any queries, please do not hesitate to contact your usual Drummond Laurie contact.

Discretionary Grant Fund Provided By the Scottish Government

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Update

This funding has been allocated to local authorities and they all seem to have different approaches and timescales for this grant.  Some close as early as next week and some may already be closed to new applications.

You can get the link to your own local authority website and find out more here Find Business Support

 

Are you one of the businesses that currently has been unable to access any financial support from the government? 

Perhaps this one-off discretionary grant will be applicable to your business….

The fund will support small or micro businesses (50 employees or lower) facing financial challenges and hardship as a direct result of restrictions put in place due to COVID19. Specifically, this will be aimed at businesses who have not been able to access any other Government funding support since October 2020.

A one-off grant of £2,000 per business will be available for eligible businesses.

The following categories of businesses can apply:

  • Limited Company (including Scottish Charitable Incorporated Organisations and social enterprises)
  • Sole Traders
  • Trusts
  • Partnerships
  • Community Interest Companies
  • Freelancers / subcontractors
  • Self-employed not benefiting from Self-employed Income Support Scheme (SEISS) or Newly Self-employed Hardship Fund (NSEHF)

To be eligible businesses must:

  • Have less than 50 employees
  • Be operating from premises but not registered for Non-Domestic Rates or are home based. For example, small and micro businesses in shared commercial space providing in-person services who do not have their own business rates assessment (e.g., yards, workshops, business centres)
  • Not be legally required to close but that have experienced restricted trading or demonstrable supply-chain challenges (over 50% trade affected by COVID-19 restrictions)

Businesses which are NOT eligible for the fund include

  • Any business which has received a grant through the Strategic Framework Business Fund (Closure/Restriction Fund).
  • Taxi, private hire and coach operators, Mobile Close Contact Services, Travel Agents, Tour Operators, Visitor Attractions, Wedding and Events venues and accommodation providers. Separate funding was announced for these businesses by the Scottish Government on 9th December 2020 and is expected to be made available in January and February 2021.
  • Self-employed individuals who have already received more than £750 per month as part of the SEISS scheme. Support for the self-employed continues to be available through the UK Government’s Self-employed Income Support Scheme.
  • Individuals who became self-employed after April 2020 – the Scottish Government has announced a second round of funding through the Newly Self-employed Hardship Fund in January 2021.

Closing dates for applications varies dependant on your local authority therefore we would advise you give this your immediate attention.

The application is straight forward to complete and we would encourage all businesses that meet the eligibility criteria above to apply.

Please refer to your local authority website for the application form.

If you have any queries, please do not hesitate to contact your usual Drummond Laurie contact.

 

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