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The Positive Accountant - Vol 2 Ed 48

Updated: Aug 5

Day One of Lockdown version it's time to dust off the Positive Accountant hat...

There's also some positive news that's been coming out over the past few days about Government support, so with that in mind pop your facemasks on for a socially distant ramble through the changes.

Note that edition 47 on Sunday, which dealt with some of the changes on a breaking news basis is now completely wrong. Not because it was wrong at the time, just that things have moved on that quickly.

So, what's positive....

Furlough is back to life - it was due to die on Hallowe'en, but sprung back to life. We thought it would stumble around Zombie-like for a month, but no, as of today it's been extended to the end of March. There are some interesting points here:-

(a) It will be at 80% of wages up to the £2,500 cap, but won't include employers NIC or pension (they remain an employers' cost)

(b) The 80% level will stay with us until end January, and the levels for February and March will be reviewed then

(c) Any employee on the payroll by 30th October can be furloughed. Even if they haven't been furloughed before, or indeed are new employees since furlough first started

(d) The new extended scheme covers the whole of the UK (at the weekend the stance was England only unless other devolved nations followed suit into lockdown)

(e) It remains flexible furlough so the furloughed employee can work part of their normal committed working time

(f) Directors are included

Here's a sobering thought - by the time it finishes - assuming it does at the end March - it will be perfectly possible - and indeed likely - for some employees to have been paid by the Government for a full year...

How this fits with the bonus payable to employers for keeping furloughed workers on is unclear, I'm guessing that those plans (due to have been announced in November) have been shelved.

The New Job Retention Scheme has been postponed - Personally I wasn't a fan of this scheme, although the revisions made it better than the first announcement. It has been shelved until at least April, and ominously (for the scheme at least) the words equivalent to 'a new fit for purpose scheme will be announced nearer the time' have been used.

I just wish I had a crystal ball as I'd have not bothered wasting a chunk of my life trying to understand and advise on what now looks like a dead scheme.

Self Employed Income Support Scheme Grants (SEISS) have been extended.

On Sunday I mentioned the disparity between the 40% of income grants that then existed (which had been doubled only a couple of weeks before) compared with 80% furlough and mused whether the level would be revisited.

Clearly the Chancellor must be an avid reader of this blog, because on Monday it was announced that the rate would be 80% for November, then dropping back to for December and January (remember the grant covers quarterly income).

Today we find that the 80% rate has been applied across the board for those three months. As before, the grant is based on past profits and needs to be applied for by the taxpayer, not the agent.

Bounceback and CBILS loans have been extended- again, applications for these were due to have a cut off date of the end of the month. The schemes are now extended to 31st January.

I'm just hoping that all these extensions to end January aren't pointers that Michael Gove on Sunday TV (lockdown extensions) might have been right...

Quantitative Easing is back - I know it sounds like a laxative, but if true, its an expensive one at £150 billion. I think it's a good thing, I know I have a couple of economists who read these articles, if one of them would like to volunteer a simple explanation that a simple accountant can understand I'd be grateful !

Are there any non-tax issues that are positive today ? The answer is yes !

It's bonfire night. I know this is a peculiarly English ceremony, and that the UK doesn't lead the world like it once did. So I thought I'd retell the story with a contemporary twist....

Once upon a time there was an evil man who, on the 5th November, wanted to subvert the world's most populous democracy. The FBI found out about the plot by stumbling into a meeting in the basement of the White House between the man and his lawyers. Ever since then, each year on the 5th November fireworks have been let off and an effigy of a politician or lawyer (according to your preference) has been thrown on the bonfire.

Before that happened children walked around with the effigy asking strangers 'Dollar for the Trump'. If they got 750 people to pay they paid Federal Taxes, above that they keep the rest.

Stay safe, stay positive.


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