Lockdown 2 for Optometrists
Below is a brief of the measures that were announced over the weekend by the Chancellor to assist businesses and individuals during this time. We have tried to tailor this for the reading of our community of Optometrists and Dispensing Opticians. As this is fresh guidelines, we will keep you uodated as and when there are developments.
Furlough scheme extended (Job Support Scheme deferred)
A very last-minute announcement which meant that for us Accountants it was a flurry of changes as we were just getting ready for the Job Support Scheme. But alas, this news has been a welcome news for our clients and anyone who has had staff on furlough.
We are back to August, with 80% of wages covered by the Government and the employer bears pensions and secondary NICs. Businesses will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time. Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. Such calculations will broadly follow the same methodology as currently under the CJRS.
Although the lockdown comes into force from 5 November to 2 December 2020, the financial support for the furlough scheme is scheduled to run from 1 November as the furlough scheme operates on full calendar months.
If you missed out on the previous furlough schemes as you were not on the payroll in time then you can still be eligible for this furlough, given your accountant had you enrolled on the PAYE payroll by 30th October 2020 midnight. Note if your payroll is processed on the last day of the month, then you should have had a payslip in September to have been on PAYE by 30 October 2020. There are rumours that lockdown could be extended beyond 2 December; will this mean a further extension to the furlough scheme? Maybe and could be wise thinking about getting yourself on the payroll by end of November 2020 to be in a chance for any extended furlough schemes.
We have been informed that employees on any type of contract can qualify, including zero hours. There has been no clear indication on whether contractors or directors are included but we are hopeful directors will be eligible as they were for the previous furlough scheme.
We can now confirm that Limited company locum Optometrists and locum Dispensing Opticians can again furlough themselves (full or flexi furlough) for the PAYE element of their salary for the time not worked. As per before, whilst on furlough you can only carry out your statutory duties for the company. You can still take on another job, so if you are doing NHS Test & Trace then that is fine.
With the extension of the furlough scheme and the new cut-off date of 30/10/2020 a few more employees, locum directors have now become eligible for the scheme. We now have some further information on key elements that we feel you could find useful as locums, employers:
Payment reference & usual hours calculation:
If you were eligible for the former CJRS then your payment reference period remains the same as per the earlier calculations, irrespective of if you increased your salary since or never claimed earlier on.
Your usual hours calculation will remain unchanged - to review how to calculate this please click here
If this is the first time you are claiming and you were not eligible for the previous CJRS then your payment reference period is the last payslip prior to 30 October 2020 (most likely your September payslip). This is the case for most limited company locum Optometrists or locum Dispensing Opticians on fixed pay. In addition, your usual hours are calculated as per the hours you worked in your last pay period.
If you are one who is eligible and are applying for this then make sure you or your accountant is informed as any claims for the prior period have to be submitted by the 14th of the next month (i.e. November claims need to be submitted by 14th December). This is fourteen days but as Accountants and having for Locum Optometrists and Locum Dispensing Opticians as clients we know how if all of our clients come near the end of the deadline period, it can lead to a lot of calculation and work to do within a short time. So please be prepared in advance.
If you are an owner of an Optical practice and have recently made some redundancy then you can rehire them and place your staff on furlough, given that they were on your payroll on 23 September 2020.
Whether you are an Optical employer or a locum director, please ensure you have a furlough agreement in place as was required for the original CJRS schemes.
As further guidance and clarification is provided, we at Locumkit will keep you updated.
What about the self-employed sole trader?
A lot of our clients as locums’ sole traders have asked this question.
The latest news is that we are expecting an increase to the SEIS from the intended 40% but do not currently know exactly by how much and for how long. Further information is due later this week on this.
It is now confirmed that the SEIS has been extended from 1 November 2020 for another six months up to 30 April 2021. The grants will be paid in two lump sums, each covering for a period of 3 months (1 Nov to 31 Jan and then 1 Feb to 30 April 21). There is scope for locum optometrist and locum dispensing opticians who missed out on the earlier SEIS schemes to be in scope for SEIS 4. The claim period for the first lump sum (SEIS 3) will open from 30 November 2020. More information is due to come out shortly but what we do know is:
- To be eligible for SEIS 3 you must have been eligible for the earlier SEIS schemes
- You must declare that your trade is still 'adversely' affected and are still 'actively' trading
The grant, as per the first grant, shall be set at 80% of your trading profits (capped at £2,5k) for SEIS 3. The government will review the level of grant for SEIS 4 in due course.
The grants remain subject to taxes. Unfortunately, the excluded are still excluded, so if you were NOT eligible for the first two, you will not be eligible for this also. The window for application shall open at the end of November and not as first prescribed, in the middle of December.
HMRC have released further guidance on the third SEIS grant which will open for applications from the 30th November 2020. You can apply up to 29 January 2021 and are advised to carefully consider your eligibility before applying.
To make a claim for the third grant:
- your locuming must have had a new or continuing impact from coronavirus between 1 November 2020 and 29 January 2021
- be currently trading but are impacted by reduced demand due to coronavirus (note: this is a reduced demand from employers and not you choosing to not to work. HMRC can do an investigation into the Optical industry as a whole and make a judgement if there was reduced work or not, although we think this in highly unlikely – being a locum myself, I get emails from various recruiters and other agencies and have noticed demand to be back to pre Covid levels, albeit at reduced rates)
- have been trading but are temporarily unable to do so due to coronavirus (unlikely to apply to us as Opticians are open to trade)
You must also declare that:
- you intend to continue to trade as a locum
- you reasonably believe there will be a significant reduction in your trading profits (due to reduced business activity, capacity or demand or inability to trade due to coronavirus and not your own choosing)
HMRC will send invitation to all self-employed based on their historical filings of self-assessments. The duty and onus of applying is on us, hence on us to decide whether the reduction in trade is significant.
We advise all locums to ensure they have and keep all evidence to shows how your locuming has been impacted by coronavirus, resulting in less locum days/bookings. This can be in many forms, some of which are:
- Your financial and/or bank statement showing reduction in activity compared to previous year's corresponding period (so if you are earning roughly as much as you were previously, then you are likely not seeing a significant reduction to trading)
- Fewer invoices being issued (with our cloud software Locumkit, you can see your invoices and other reporting all online)
- NHS Test and Trace communications if you’ve been instructed to self-isolate
HMRC have provided some examples of what defines a reduction in demand. Below we have taken a few of them and added our own understanding of them and how it can be reflected on us locum Optometrists or locum Dispensing Opticians:
"A cafe owner has fewer customers due to government restrictions on households mixing, which initially reduces her takings. She increases her prices and believes her trading profits will not reduce significantly, so she is not eligible to claim the third grant."
"A plasterer cannot get materials due to supply chain issues due to coronavirus. This has reduced the amount of work he can complete and be paid for, but he manages to quickly find a new supplier. He does not believe that the reduced demand will cause a significant reduction in his trading profits. He is not eligible to claim the third grant."
If you were locuming for Scrivens Opticians historically but now are not locuming for them anymore due to lack of work and have substituted that for locuming for Specsavers - this change in company will not constitute as a reduction in trade.
"An electrician is still trading but has had increased costs due to buying masks, cleaning supplies and screens. She is not eligible for the third grant because increased costs were the only impact on her business, and she has not lost customers."
Previously an increase in costs was enough to be eligible to apply for the grant but this is no longer the case. Hence if you as a locum have had to or are having to purchase your own PPE, gloves etc, this will no longer be enough to meet the eligibility criteria for SEIS 3.
"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."
Isolations following a holiday (based on where you went) will mean that you locum less and hence will have a reduction in income. However, this reduction income is not considered as part of your analysis as significant reduction in trade, despite the isolation being a Government requirement.
"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 third grant because the reduced business activity was not caused by coronavirus."
We at Locumkit would like to highlight this point as I know many locums like me have not gone back to work since Lockdown 1, whether that is due to having alternative employment such as NHS Test and Trace or anything else. Choosing not to go to work and showing that you have had an impact to your trading is not accepted by HMRC and could lead to improper application.
Mortgage holiday extension
Mortgage holidays payments have also been extended.
- You may be entitled to a 6-month mortgage payment holiday if you have been impacted by coronavirus and have not yet had applied for a mortgage payment holiday
- If you have already applied for a mortgage payment holiday then you will be able to top up to six months without this being recorded on their credit file
Businesses that are required to close in England as a result of the local or national lockdowns are now eligible for grants depending on your properties rateable value:
- Rateable value of £15k or less - £1,334 per month or £667 per two weeks;
- Rateable value of between £15k-£51k - £2,000 per month or £1,000 per two weeks;
- Rateable value of £51k or more - £3,000 per month or £1,500 per two weeks.
It seems like the above would be applicable for us as Opticians do not come into the list of businesses that are required to closed.
If you have any questions in regard to any of the governments reliefs or any other accounting related queries, then feel free to drop me an email and I or someone from the Locumkit team shall get back to you - [email protected]
What is Locumkit?
Locumkit - Bespoke locum management platform for locum Optometrists and Dispensing Opticians (Locum Agency & Accountants); we help you get locum days, maintain your income/expenses, send invoices (all on the cloud), file your accounts - all from one place.
Specialist Accountants for locums - to find out more click here