1. As a company director who takes a small salary and the rest through dividends can I get the self employed support grant?

1. No, company directors do not qualify for the self employed support package. There have been some sources saying company directors will have 80% of their salary (not tbe dividends) covered by the Coronavirus Job Retention Scheme if operating through PAYE. However this has not yet been confirmed by the government. As soon as we have more information we will repost.

1. I am employed to work somewhere 3 times a week for 10 hours and am on PAYE. Due to the outbreak, they have cut my hours to only 23 hours. Can I get those 7 hours wages covered under any scheme?

1. As you are on PAYE you can only qualify for the Employee Job Retention Scheme if you are furloughed. That means you can not work at all. It may be in your interest to talk to your employer about furloughing you so that you retain 80% of your original salary.

1. If we take advantage of the mortgage holiday option, will it have a negative impact on our credit score?

1. There has been some confusion on this but Martin Lewis last night stated explicitly that this will not be the case. It’s worth checking with your mortgage provider first, and please note that you mustn’t just stop making payments, you have to apply through your lender. Also, it’s worth noting that interest will still accrue for the period of the mortgage holiday.

Self-employed Government support

1. I am not an employee nor a company director; I am self-employed. Can you explain what the government isoffering?

1. The scheme offered to those who are self-employed is similar to the one being offered to employees, namely, 80% of regular income up to £2,500 per month. There are a few caveats:
2. Total profits per year can be no more than £50,000
3. Your self-employed income must be more than 50% of your total income
4. You have been self-employed for more than one year

For more information, see here: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

1. I am a self employed teacher and my main job is working in the local School. Currently there is no work (could be until next school year), therefore I have no salary. Is a free loan a possibility/a good idea? Or is there any help from the government bearing in mind that I have a low profit figure and government are only offering help with 80% of profits?

1. Borrowing money should always be the absolute last option. Even if it is interest free, it still needs to be paid back at some point.

Besides for the government covering 80% of your salary, there is no other direct help for self-employed. Depending on your circumstances you may qualify for Universal Credit or ‘New Style ESA’.

You may want to try enhancing your income for example using your skillset in a different manner such as private lessons online.

In addition you may want to consider streamlining your expenses at least until your situation returns to normal. Please reach out to Mesila for personal assistance relevant to your individual circumstances.

Email: [email protected]

Phone: 0333 344 1711

1. I am on maternity leave and the 9 months leave is finishing this month. Will I be able to go back on the company books and be eligible for the 80%?

1. Yes, you can still be furloughed.

The same applies to anyone made redundant after February 28th. You can ask your employer to add you back on to PAYE and can then be furloughed to receive 80% of your original wage.

1. I have a Ltd company which does sales for 1 main client which I charge them a monthly fee, however due to the current situation they have containers abroad that didn’t arrive in time for Pesach meaning that this year I came home with much less money.

Is there anything that I can claim towards my loss?

1. The job retention scheme for PAYE covers 80% of salary, and for self-employed scheme covers 80% of the average salary over the last 3 years. Neither of them take fluctuating profits into consideration.

With Pesach round the corner and general expenses being much higher than usual, it is crucial to avoid taking loans (even if they are interest free) or falling into credit card or other forms of debt.

Look at other forms of income enhancement and consider streamlining your expenses at least until your situation returns to normal.

Please reach out to Mesila for personal assistance relevant to your individual circumstances.

Email: [email protected]

Phone: 0333 344 1711

MESILA TOP TIP 

Emergency Budget

An Emergency Budget is an extreme budget to be used generally in times of urgency.

Do you know how when you open a tube of toothpaste, you manage to use 80% of the tube in 3 weeks and then the remaining 20% somehow lasts a further 3 months?

For some an Emergency Budget can involve managing without things you may consider ‘necessities’ for a short while. For others it may mean eating pasta for supper for a week. And for some it may mean making do with what you have and not spending any money for a couple of weeks (the average household has enough food to last 2 weeks without needing to replenish supplies).

Whilst this approach should only be used short term, it can provide tremendous relief in an overwhelming situation. Often it is used simultaneously whilst getting your income and/or expenses back to where they need to be or to clear debt.

As an Emergency Budget can be stressful, be sure to only use it when absolutely necessary and for as short a time as possible. Make sure other members of the household understand why it is necessary and what you are hoping to achieve.

Please reach out to Mesila for personalised guidance relevant to your individual circumstances.

Email: [email protected]

Phone: 0333 344 1711

Tennant unable to pay rent

1. If a tenant cannot pay rent due to having lost his job – is it best advice to ask the mortgage lender for a 3 month payment holiday?

1. The mortgage payment holiday is a stop gap measure, not financial help as such and will cost more in the long run as interest will continue to accrue. This means it will take you a little longer and cost you a little more to clear your mortgage.

But if it is the difference between going into foreclosure or paying extra in a few months time, it may be wise to take the mortgage lender up on their offer.

It is possible the tenant may not be able to pay the rent for longer than three months and legally it would be difficult to evict.

You may need to ask yourself if you could carry the mortgage for 6 months + and if the answer in no, you may be best off to make use of the mortgage holiday offer now.

Please reach out to Mesila for personalised guidance relevant to your individual circumstances.

Email: [email protected]

Phone: 0333 344 1711

Paying for a cleaner who currently can’t come and work

1. I am unsure what to do about paying my cleaning help. I’ve been paying her the full amount for the past two weeks although I’ve now asked her not to come. Do I need to do keep paying her long term if I plan on asking her to stay away until the lockdown advice changes?

Is there any government relief that I can advise her to access?

1. There’s no government support available to your cleaner unless she’s self-employed and has tax returns for previous years. There’s also no contractual obligation to pay her. The question really boils down to your relationship with her and whether you think this would end her term with you even after the lockdown, if you cease paying her now.

If you’re concerned that you may not find someone as good or as reliable, and you are in a position where you are able to continue paying her perhaps with the intention of her continuing to work for you in the future, then that’s great. However if your income has been affected by the current crisis, then it might well be that you have to find areas to streamline, and an obvious place to start is cutting back expenditure on a service you’re not getting.

For one-to-one guidance on working on a streamlined budget at this time, be in touch.

Email: [email protected]

Phone: 0333 344 1711

1. I have savings put away for my son’s bar mitzva. As with many others, my income has taken a hit recently so should I use the savings now for essentials and to pay off debt or maybe should I rather seek community help?

1. Neither! Now is the time to immediately implement an Emergency Budget (see today’s Mesila’s Top Tip).

Sit down with your spouse and work out all your income and expenses (Mesila have a great workbook to help calculate this). Then look at ways you can enhance your income. It may be finding a different job entirely for now. Maybe you can manage your time better allowing you to be more productive. Perhaps you can use your skillset in a different manner. Think creatively, perhaps you have other talents you haven’t explored. Maybe there is something you always wanted to do but never had the opportunity.

Meanwhile see where you can act to cut back on your outgoings. Perhaps you can look again at your mobile phone contact or consider switching your gas and electric provider. Maybe you can find a way to lower your weekly grocery bill for the next few months.

If while you are working on these steps you haven’t got enough for your essentials or for an urgent debt, then you can consider “borrowing” money from your son’s bar mitzva fund until your situation stabilises after which you can pay back the “loan”, but as with all loans, you can only do this if you’re confident your future income will allow it. In these uncertain times, perhaps it’s not a great idea.

Although some of these measure may sound extreme, we are currently living through extreme times. It is important to remember you are not alone in this. Tens of thousands of people have already lost their jobs and livelihoods in the UK and unfortunately before this is all over there will be many thousands more.

But we will get through this. Iy”H within a few months things will return to normal and we must act now to ensure we are fully prepared and as debt free as possible when that day arrives.

Please reach out to Mesila for personalised guidance relevant to your individual circumstances.

Email: [email protected]

Phone: 0333 344 1711

1. What loans are available for small businesses? How does one apply, what are the rates and repayment terms?

1. The government is backing bank lending and overdrafts up to £5

million. The government will provide lenders with a guarantee of 80% on each loan to give lenders further confidence. 

Talk to your bank or finance provider asap to discuss your business plan with them and once the scheme has launched they will be able

to act quickly.

Facebook are also offering $100 million in cash grants to small businesses across 30 countries though some of this may only be redeemable through facebook ads.

Making Pesach for the first time

1. It our first year making Pesach and we didn’t expect to be making it this year. Are there any common tips on what to be budgeting for?

1. When planning your first Pesach, it’s important to be organised, realistic and make lists! It’s a big project and can be overwhelming. Set a budget of what you can afford to spend on Yom Tov and allocate it to the categories below.

Food

You’ve got to plan what you’re going to cook, how you’re going to cook it and how you’re going to serve it. Meal plans are a great way to ensure efficiency. If you are on a tight budget, stick to the basic foods and cook simple meals. Whilst the shops stock a huge variety of products, you can manage with just a few ingredients.

Utensils

The same with utensils. Purchase a couple of pots, sharp knives and a peeler. Use disposables for the rest. Don’t expect to have a fully kitted-out set of Pesach utensils – your collection will grow over the years. Ask your Rav if it’s possible to kasher and use your oven and gas stove before you proceed to buy new appliances.

Be creative

Remember all the things you’ll need for your Seder table and Yom Tov, such as Seder plate, matzah cover and hot plate. But if buying those items is out of your budget, improvise. Use a serviette to cover the matza and fashion your own Seder plate out of a disposable platter and cups.

Furloughed Workers

1. I currently have little or no work for my employees to do. What support has the government put in place?

1. It seems confusing but it’s a straightforward process. You need to do the following steps:

– Firstly, this scheme is only available for employees on payroll on PAYE

– Write a letter to your employees informing them that they’ve been furloughed (i.e. been put on paid leave)

– During this time they must not do any work for the company/organisation

– You will run the payroll at 80% of the employee’s normal monthly pay (you can pay your employee the extra 20% at your own expense if you so choose)

– Note that employers can only claim a maximum of £2,500 per employee, regardless of how much the employee is paid

– The employer will need to make employer NI contributions

– The employer should then pay the employee

– The employer can then claim back the employer NI and the salary from the government portal (open end of April) – these can be backdated from 01/03

Make sure your employee is aware they will still have to pay income tax and NI contributions.

For more details, see the government website; www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme#claim

Financial challenges close to retirement

1. I am a teacher and my husband works in the travel industry – in the last few weeks our income has dropped to 0. Whilst we were getting by ok until now, my husbands business has been going downhill for a while. We still have 2 years left on our mortgage and were hoping to retire then. We do have a little bit in savings that can help but we will then be left with nothing. What is the Mesila approach on what we should do?

1. Regarding what to do in the here and now, firstly have a look at what government grants or programmes would benefit you. Whether you are self-employed or on PAYE you and your husband may qualify for 80% of your wage paid by the government as a furloughed worker.

Next consider the mortgage payment holiday scheme. In your situation it seems like that would be beneficial especially since you are likely paying back mainly the capital at this stage meaning the additional interest for the payment extension would be fairly minimal.

Now would also be a good time to look at cutting back on unnecessary expenses.  

As a last resort and only if absolutely necessary dip into your savings.

It’s worth noting that as you are almost finished paying your mortgage, your property is a tremendous asset. Although it may seem like an extreme option, knowing that you can downsize and be financially ‘comfortable’ can be reassuring.

Please reach out to Mesila for personalised guidance relevant to your individual circumstances.

Email: [email protected]

Phone: 0333 344 1711

MESILA TOP TIP 

Smart Shopping 1/3

Did you know that 30% of food brought into the average home, ends up in the bin?

Not only is it a shame to throw away the food but it is also a waste of money. Here are some tips to help you shop smarter:

1. Plan all your meals for the next week. This way you can limit the number of times you go to the shops.

2. Make a list of what you need for the next week and take it with you.

3. Only buy what is on the list. No matter how enticing an offer seems, if it wasnt on your list, don’t buy it!

4. Shop alone; don’t take kids with. Kids tend to nag and ‘encourage’ parents to buy things they had no intention of buying.

5. Don’t go to the shops when you are hungry. People tend to order bigger portions and buy more than necessary when they are hungry.

Please reach out to Mesila for personalised guidance relevant to your individual circumstances.

Email: [email protected]

Phone: 0333 344 1711

Overdraft fees

1. My husband and I just got a message today that we’re about to go into our arranged overdraft and may be charged if we don’t pay in cleared funds. Can the bank still charge us given the situation that we are isolating at this time and that we have more expenses with the kids at home?

1. Many banks are waiving interest on overdrafts to help those struggling financially. Generally this will be waived automatically so customers do not need to take action to get the benefit.

Barclays have waived all interest fees whilst Lloyd’s, Halifax and RBS announced they will give all customers a £300 interest-free buffer. This change will come into effect from 6th April until 6th July. HSBC have also waived their interest on the first £300 starting from 26th March.

If your bank is not listed above or if you need more assistance than what is being offered, it is worth speaking directly to your bank and explaining your situation.

1. We booked tickets to Israel for end of April. If the carrier go out of business, are we covered by the credit card we used?

1. The first thing to do if you hear that your airline has gone bust is to contact your travel agent if you booked with one to see if your booking is still in place. If it is, then your travel arrangements should be relatively unaffected. You may have to change flight times, but your holiday or trip should proceed as before. If not, you’ll need to check your documents to see if you’re ATOL-protected.

There are certain rules as to whether you’re ATOL-protected if you have booked your flight, hotel and car hire separately. If you booked your flights and accommodation on the same day, or within a day either side, and if the company you booked with is ATOL-registered, then you’re protected and can apply to the Civil Aviation Authority to reclaim your money. This also applies if you booked your flights and car hire together. However, if you booked flights and accommodation directly with the bankrupt airline then you won’t be covered.

There are two routes open to you if you’re not ATOL protected and your airline goes bankrupt: travel insurance and credit or debit card protection.

1. Check your travel insurance. Uncertainties like your airline going bust are one of the most important reasons to take out travel insurance the second you have booked your trip. Depending on the type of insurance you may sign up for, you can protect yourself against flight companies going out of business, as well as the cancellation of your flight. Add the peace of mind that comes with going away knowing that you’re covered for any loss or emergency and you can relax before your holiday has even begun.

2. Protection from your credit card. If your travel insurance policy doesn’t cover your airline going bust, you may be able to claim back your money through your credit card company. To be eligible, you need to have paid more than £100 for your flights and booked directly with the airline. If you paid by debit card, you may be able to claim through the Mastercard and Visa Chargeback scheme, which most high street banks have signed up to. This allows you to ask your card provider to reverse a transaction on your debit card, giving you your money back.

Council Tax Relief

1. I’m the director of a ltd company and take a small salary as an employee. My company is struggling now due to the situation, our income is quite low. I’ve read from others that they got let off a few months of council tax when they called the council. As my council tax band is quite high (even with council tax support) it would greatly help me now if I don’t have this added expense. Am I entitled to get this by just calling the council or will I need to provide detailed proof of income loss?

1. Local councils have been given £500 million to use at their discretion to help the vulnerable in their areas. Many councils are using this fund to grant a few months relief to those struggling to pay.

As this is being decided by individual councils on a case by case basis, you will need to get in touch with you local coucil and let them know your situation.

Barnet council also released the following statement:

“We are aware that many of our residents are affected financially by the Coronavirus outbreak. Additionally, there are residents who are self-isolating and unable to leave their home to make payments for things like Council Tax in their usual way, even if their income is unaffected.

To help our residents, we are offering those who pay their Council Tax or other council services monthly, the option to defer payment until June 2020.

If you wish to defer payments, then please contact the relevant team below via email: [email protected]“

Please reach out to Mesila for personalised guidance relevant to your individual circumstances.

Email: [email protected]

Phone: 0333 344 1711

Ending maternity pay early

1. My baby was born 5 weeks ago but I was planning on going back to work next week as I can’t afford to live off maternity pay. I have officially been furloughed however I want to make sure I get 80% of my wage (as I would have chosen to go back to work) and not just maternity pay. Is that possible?

1. You must give your employer at least 8 weeks notice if you want to come back to work early and not take your full maternity leave. If you have done so, speak to your employer ASAP to ensure they will put you back on your full wage when your leave is finished. Then when you are registered as furloughed you will receive 80% of your usual salary.

Although it isn’t clear, it is possible you would need to provide proof to show you were planning on returning to work so soon.

MESILA TOP TIP 

Smart Shopping 2/3

6. Supermarket or local grocery? There are many factors to take into consideration such as convenience, cost, products, customer service, loyalty etc. Be aware that some shops may be cheaper for certain items.

7. Take the correct sized shopping trolley or basket relevant to your shopping list. The bigger the trolley the more likely you will fill it up!

8. Hoarding is unnecessary and generally just gets used up quicker costing you more in the long run.

9. £9.99 is closer to £10 than £9! Be conscious of price changes especially in the current economic climate.

10. Shops generally place what is termed as ‘impulse buys’ next to checkout counters. Remember, if it wasnt on your list you do not need it.

Please reach out to Mesila for personalised guidance relevant to your individual circumstances.

Email: [email protected]

Phone: 0333 344 1711

Subletting my offices

1. If I sublet my offices so I don’t pay rates directly can I access the small business rates grant?

1. The business rates holiday as well as the business rates grants are both automatically applied, so if you are eligible you will receive both.

If your tenant is paying rates then they would benefit from the relief. Even if the rates bill is in your name and your tenant has agreed to pay your rates, the relief should still be passed on to the tenant.

Husband & Wife Directors

1. I’m a director of a small company along with my wife. Are we both allowed to furlough?

1. Whilst HMRC are yet to deliver clear guidance on this, it seems that individuals who are directors of their own family companies and who are themselves paid via PAYE should be eligible for the coronavirus job retention scheme, although the same rules will apply as to other businesses and their employees.

Under the scheme, businesses are able to apply for government grants for employees’ salaries up to the lower of 80% of an employee’s regular wage and £2,500 per month for three months from 1 March. The scheme could run for longer if the restrictions in movements to halt the COVID-19 pandemic remain in place.

As with other businesses, such directors would need to have been on the payroll on 28 February 2020 and they cannot work while they are on furlough leave. We do not yet know the extent to which minor directorial duties would be disregarded, or whether the requirement that a furloughed employee should do ‘no work’ would prohibit this.

Company director & Self-employed

1. I am a company director with a second part time business. Can I be furloughed from my company as well as access the 80% grant the government has offered the self-employed?

1. Yes, you can be on furlough from one company and be eligible for the Job Retention Scheme as well as benefit from the Self Emplyed Income Support Scheme (SEISS).

The grants are worth up to 80% of your profits and capped at £2,500 per month.

However it’s important to note, to be eligible for the SEISS you must earn more than half your total income from self-employment. This must have been the case for either your 2018/19 tax return – or if not, the average of your 2016/17, 2017/18 and 2018/19 tax returns.

In addition your average trading profit must be less than £50,000/year. 

A crucial difference is that unlike the employee scheme, the SEISS scheme allows you to continue working.

Those who are eligible for the Self-Employment Income Support Scheme will be contacted by HMRC directly – the Government hasn’t said when this’ll be, only that it will happen “once the scheme is operational”. At that point you’ll be asked to fill in an online form, and the grant will then be paid directly into your bank account.

MESILA TOP TIP 

Smart Shopping 3/3

Is buying items on sale a good or bad idea? Most of us tend to think sales are great, however that is not always the case. Whilst of course it is possible to find a genuine deal, often the shop running the sale has other intentions that will help maximise their profits. In fact some shops are always on ‘sale’!

Here are 4 reasons why buying items that are on sale are probably not a good idea:

1. Often you will end up spending more than you intended. The sale item may be a branded product you wouldn’t ordinarily purchase but as it is now on sale you are tempted to buy it. However it may still be more expensive than the unbranded product you usually buy!

2. Sales can raise your standard of living. Sticking with the same example, even if the branded item you purchased on sale is cheaper than the unbranded product you usually purchase, in future you may now prefer to use only the branded product for which the regular price can be much higher.

3. It can effect your budget. By spending more then intended, you may be taking money away from elsewhere in your budget.

4. Excessive consumption. There are many products that you use more of because you have more. Once you get used to using more you then end up buying more in future even when it is no longer on sale.

Please reach out to Mesila for personalised guidance relevant to your individual circumstances.

Email: [email protected]

Phone: 0333 344 1711