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COVID-19 Update – 24th September 2020

Today we share with you our 36th Covid-19 digest in relation to the Scottish Dental Sector.
As you may well have been aware, the Chancellor made some financial support announcements in the Commons today, with his lunchtime statement, and whilst the ‘devil will be in the detail’ and we await the full scheme rules, we felt it may be of value to digest the highlights on your behalf. 

POLITICAL UPDATE

This week’s announcements further restricting the nation’s social gatherings have made it clear that the current Phase 3 recovery stage may be with us for some time. In that respect we have been told to expect a 6 month minimum period of ongoing restrictions. The economic impact of this has not been lost on the government and today the Autumn Budget has been cancelled and replaced by a short term ‘Winter Economy Plan’. Some key announcements were made which I shall try to summarise later in this digest.

CLINICAL & GENERAL UPDATE
As AGP’s move (in an NHS environ) out to practice, the access to emergency dental care is easing marginally. That said there is still a very real feeling of pent up demand. With this we are seeing the natural migration to private dentistry for those in the position to afford this. 
The eagerly awaited update from SDCEP of their rapid review of AGP’s in dentistry is felt to be imminent. Their request for feedback remains open though and if you have yet to participate please do so at this link.
The Scottish Dental Practice Committee has established a working group to look at how an NHS funding model (post Covid-19) might be constructed. There is wide spread acceptance that the current SDR will be no longer fit for purpose which will be amplified as AGP’s return with fallow time for NHS services. This working group will convene for the first time in October, but the CDO has indicated that wider consultation will take place in Spring 2021 and with this in mind it seems probable that we will see a series of evolving ’emergency SDR’s’ and support in the meantime with any longer term change being some time away.
With the access to general NHS services across the board diminished the government has suggested that the Scottish Dental Profession may be able to help deliver the flu vaccination program. A financial payment is offered at £250 per contractor and £8.27 per vaccine (mirroring the community pharmacy package.) The interaction of indemnity and SOP’s is, as yet, unclear.
I am sharing today the latest update from GGC’s Chief of Dentistry 
Chief of Dentistry 16-9-20

FUNDING UPDATE

WINTER ECONOMY PLAN
‘Hot off the press’, the Chancellor’s announcements today, in overview, are shared in the policy document below.
Winter Economy Plan 24 September 2020

Winter_Economy_Plan_print.pdf

The key highlights are as follows; 

Employment Support
The existing furlough support payments via the Coronavirus Job Retention Scheme were confirmed to cease, as planned, at the end of October. However a new scheme designed to support viable job positions has been launched, which will run for a 6 month period from November 2020 to April 2021. This scheme will be available to all small and medium sized employers regardless of whether an employee has been furloughed in the past, and will be payable in addition to the £1,000 job retention bonus due to be paid for retained furloughed employees in January 2021. The scheme will be titled ‘Job Support Scheme’. (JSS)
The scheme will pay for employees unable to work their full hours, as long as they are working for a minimum of 1/3rd of their normal contracted hours. The 1/3rd worked will be paid by the employer in full. The employee will be paid a minimum of 77% of their full pay under this scheme. For every hour not worked HMRC will pay 1/3rd of their normal wage (capped at £697.92 per month) with the difference between paid by the employer. The employee effectively ‘loses’ 1/3rd pay for every hour not worked. An example of this calculation is provided for you as follows; 
Example= Employee works 50% of their contracted hours
Practice pays 1/3rd of their full wage plus 1/3rd of the unworked hours = 66.66% cost (for 50% input of hours)Government pays 1/3rd of unworked hours = 16.67%Employee ‘loses’ 1/3rd of unworked hours = 16.67%
This in essence protects the employee’s income, allows you to retain their skills and input while receiving a contribution towards their full wage cost from HMRC (and to an extent the employee.) Clearly as there is an ongoing cost to the employer over and above the hours worked this scheme may not be enough to prevent wide scale redundancies but for Scottish Practices unable to retain their full team due to restrictive treatment options it may be a valuable additional support. Once the full detail is released I will of course digest and advise where it may be of any value. 

SEISS Grant Extension
For those eligible for the first two phases of the SEISS scheme today the Chancellor has announced a further tranche of funding. It will require demonstration of ongoing active trading and impact from Covid-19 and will last for 6 months from November to April in the same way as the JSS. At this stage the level of final funding is not confirmed but the initial 3 month period from November to January will be payable at a level equivalent to 20% of normal profits and capped at £1,875. A review of the level of grant payable for February to April will be undertaken at a later stage. Our estimation is that it is likely to be at a similar level to provide a degree of symmetry with the JSS.

Loan Schemes
It was announced that the application deadline for the Bounceback and CBILS Loans will now be extended to 30th November for new applicants, and those who have not availed themselves of the BBL already as a contingency fund should take note of this looming deadline. A new loan scheme of an as yet unconfirmed nature will be rolled out early in 2021 to support ongoing businesses. 
Usefully it was also announced that the currently short periods of repayment can be varied for businesses who may benefit and scheme entitled ‘Pay as you Grow’ was announced allowing up to ten years, rather than six, to repay BBL finance. Banks are also given the flexibility to allow this duration of 10 years repayment for CBILs loans and the government shall extend their guarantee to underwrite the loans to the lenders. The Pay as you Grow deal will allow borrowers the control over their repayment structure and give three opportunities in the loan term to revert to interest only for 6 months or to take payment holidays altogether. This may well be a very helpful measure for those practices with genuine need for the low costs funding involved.

Tax Payments
With the cancellation of the Autumn budget we have been afforded a deferral of any tax rate increases which seem likely to be required to repair the finances of the country after the support packages are spent. We will hold our breath a little until that time emerges, but in the meantime the Treasury appear focused on the short term support and economic survival for as many as possible which is to be commended. Unfortunately they cannot support 100%.
Today’s announcements have indicated that further grace will be extended to taxpayers in the year ahead. Many taxpayers took the opportunity to defer their tax payments on account due in July until January 2021. As that date approaches the funding required to ‘catch up’ while also paying against the 2021/22 tax year too seemed to be challenging for many and likely to cause cashflow difficulties.
HMRC will now allow taxpayers (with less than £30,000 of tax due) to spread the payment over twelve months, with the requirement to pay in full by January 2022. It seems likely that a bespoke payment plan may be agreeable and will not necessarily require a fixed monthly value to be made. The guidance on this is yet to be launched but at this stage it is implied that the payment plan will be agreed verbally using the Time to Pay Helpline. We would not be surprised if an automatic deferral is extended to everyone to avoid the ‘log-jam’ on their phone systems at the peak point of January. We will keep you up to date as any confirmations are released.

NHS Funding
The current emergency SDR and Phase 3 funding package are largely unchanged at this point. We are lobbying for an enhancement as AGP’s increase going forward.
In the meantime I share the latest FAQ document for your reference below; 
PSD FAQ’s version 9.0

Other News

Business Interruption Insurance
As I have previously covered, the High Court was sitting to run a test case against a sample of insurers. This case was taken forward on behalf of a number of Business Interruption Insurance policy holders by the Financial Conduct Authority (FCA). 

The FCA brought the test case against 8 insurance companies representing 21 different insurance policies. The good news is that the court held in favour of the policy holders. The bad news is that it is likely that the insurers will seek means to delay or deny pay outs where they can and the legal battle may rumble on for some time we fear.
Each policy should be considered against the detailed judgment to work out what it means for policyholders. Whilst those policies with “Disease” wordings are likely to benefit from the decision, the High Court has taken a more restrictive approach to “Prevention of Access” clauses and the BDA have confirmed that the impact of that approach is now being worked through.
You should hear directly from your insurer if your policy is impacted, and we hope this may bring some much needed income at this time.
The full judgement is complex and lengthy (150+ pages!) and if you really have no better focus of your time you are welcome to read it below, however we hope that your insurers will discharge their duty of care now and cease any further ongoing attempts to obfusticate matters.
Test Case Judgement

Dentally
In case you missed it, Henry Schein announced the acquisition of cloud based Practice Management software Dentally. Joining the same stable as Exact within the SOE group it will be interesting to see if this aides the transition of all platforms to the cloud or whether both packages will remain autonomous. As Exact remains a dominant force in the marketplace (for good reason) it will be interesting to see how their roadmap evolves as a result of the acquisition.

And Finally
Our offices will be fully closed tomorrow for a training event, but your support team will be available from Monday and happy to help in any way.
Once again love and best wishes to you at this time from myself and the full Dental Accountants Scotland team. I hope you manage to stay safe and well. Have a restful and enjoyable weekend whatever you have planned.
As a recurring reminder – our full team are now working remotely but ready and willing to continue to do all we can to support you in any way possible. Please feel free to continue to call my mobile 07375 700468 (day or night) or book a zoom online consultation here and I will be glad to support you in anyway. Our no fee advice is available to you at this time and we will do all we can as part of your team.
I invite you to keep up to date with information on our blog and to like our Facebook page to stay in touch. 

Stay safe and look after yourself and all around you at this difficult time and have lovely weekend.

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