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Our office is open to visitors to drop off or collect items and begin to arrange face-to-face appointments. If you have any queries, please email your usual contact or call the office on 01603 666132. As always, we are here to support you and your business, please do contact us with any questions.
There are 10 guides covering a range of different types of work. Many businesses operate more than one type of workplace, such as an office, factory and fleet of vehicles. You may need to use more than one of these guides as you think through what you need to do to keep people safe.
The Recovery Loan Scheme will ensure businesses continue to benefit from Government-guaranteed finance throughout 2021. Loans will include 80% government guarantee and interest rate cap.
With non-essential retail and outdoor hospitality reopening this week, Ministers have ensured that appropriate support is still available to businesses to protect jobs. Businesses – ranging from coffee shops and restaurants to hairdressers and gyms – can access loans varying in size from £25,000, up to a maximum of £10 million. Invoice and asset finance is available from £1,000. Visit their website for further information.
Full details of the fifth Self-Employed Income Support Scheme (SEISS) grant, including a new turnover test which determines the level of the grant, were published by HMRC on 6th July.
Unlike the CJRS Furlough Grants to support employees’ wages, Tax Agents are not allowed to make SEISS grant claims on their client’s behalf. This seems unreasonable as most self-employed traders will find the HMRC guidance inexplicable and will need their accountant/ tax agent’s assistance in determining how much they are entitled to!
Although the eligibility for the fifth grant is the same as the fourth grant, the amount of the fifth grant will be determined by how much the turnover of the business(es) have reduced compared to the turnover in the reference year.
The fifth grant is 80% of three months’ average trading profits capped at £7,500 for those whose turnover has reduced by 30% or more. Those with a turnover reduction of less than 30% will receive a grant based on 30% of three months’ average trading profits, capped at £2,850.
The turnover figure required is for a 12-month period starting on any date between 1 and 6 April 2020. Those who prepare accounts on a tax year basis will be able to use the same figure that will appear on the 2020/21 tax return.
That turnover figure is then compared to the turnover in the “reference period” which for most individuals will be the turnover figure from their 2019/20 tax return and there is an option to use 2018/19 if 2019/20 was not a normal year for the business. e.g. If 2019/20 was not a normal year, for example they were on carers leave, long term sick leave or had a new child then it is possible to use 2018/19 turnover.
The turnover figure will be the sum of all of the taxpayer’s businesses but should exclude coronavirus support payments (for example previous SEISS grants, eat out to help out payments and local authority grants).
For members of a partnership or LLP the turnover comparison is based on the turnover of the partnership. However, where the partner also has another business a proportion of partnership turnover is used.
For the fifth grant you will need to tell HM Revenue & Customs (HMRC) about your turnover if you traded in 2019 to 2020 as well as any of the following tax years:
Turnover includes the takings, fees, sales or money earned or received by your business.
Before you claim you must:
You will need to have both figures ready when you make your claim.
How to work out your April 2020 to April 2021 turnover
You need to work out your turnover for a 12-month period, starting on any date from 1 to 6 April 2020.
You can use one of the following periods:
You should check that your figure is accurate. HMRC will be able to check your figures after you submit your tax return for this period. Your figure must include the turnover from all of your businesses. Please contact us if you need assistance in making the claim.
The eligibility criteria remain broadly the same as the fourth grant. Self-employed profits in 2019/20 must not exceed £50,000 and must be more than 50% of your total income. If that test is not met, then the same £50,000 and 50% tests are applied to average profits and total income over the four fiscal years to 2019/20.
If you are eligible based on your tax returns, HMRC will contact you in mid-July 2021 to give you a date that you can make your claim from.
Please contact us although we cannot make the claim on your behalf, we can assist you with your claim if required.
As you are probably aware tax agents were not able to claim SEISS grants on their client’s behalf, and we do not currently have access to the amounts you have claimed.
If you are self-employed and have received any SEISS grants in 2020/21 can you please let us have details of the amounts received so that we can include the correct amounts in your return. The amounts received are taxable but should not be included in your turnover as that would mean double counting.
Find out what to do if you need to pay back some or all of a SEISS grant.
You must tell HMRC if, when you made the claim, you were not eligible for the grant. For example:
You must also tell HMRC if you:
Below is a roundup of the latest information on the CJRS which is extracted from HMRC updates provided to us. Please contact us if you need any help in making your claims. The Coronavirus Job Retention Scheme will be ending on 30 September 2021.
In August and September, CJRD grants will cover 60% of employees' usual wages for the hours not worked, up to a cap of £1,875.
You will need to pay the 20% difference in August and September so that you continue to pay your furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month.
For the hours not worked you can continue to choose to top up your employees' wages above the 80% level or cap for each month, at your own expense.
Here’s a future claim dates reminder:
You can claim before, during or after you process your payroll. If you can, it is best to make a claim once you are sure of the exact number of hours your employees worked, so you do not have to amend your claim later.
You must pay the associated employee tax and National Insurance contributions to HMRC. This is a condition of claiming the grant, and not doing so will mean you will need to repay the whole of the CJRS grant and you may not be able to claim future CJRS grants.
If your business continues to be affected by coronavirus, you do not need to place all your employees on full furlough. You can also use the CJRS flexibly if you bring your employees back to work for some of their usual hours. You can claim a portion of your employee’s usual wage costs for the hours spent on furlough only.
As a reminder, you must not claim under the CJRS for any hours that your employees work. HMRC are carrying out compliance checks to identify error and fraud in claims.
If you need help in planning ahead for future claim periods, please contact us.
The table below shows the level of government contribution available, the required employer contribution and the amount that the employee receives per month where the employee is furloughed 100% of the time.
Wage caps are proportional to the hours not worked.
The numerous changes in the method of calculating CJRS furlough grants will no doubt have resulted in errors by some employers.
Remember that you are required to tell HMRC about overclaimed CJRS grants as part of your next claim. You will be asked when making your claim whether you need to adjust the amount down to take account of a previous overclaim. Your new claim amount will be reduced to reflect this. You should keep a record of this adjustment for 6 years.
You should also be aware that HMRC may levy a penalty even if the error is careless or due to a misinterpretation of the rules.
You might therefore like us to check any previous claims that you have made.
If you have made an error that has resulted in an underclaimed amount, you should contact HMRC to amend your claim. As you are increasing the amount of your claim HMRC will need to conduct additional checks.
The guidance has been updated to show we can, as your agent, request CJRS claim details are not published. If publishing your claim details could leave individuals at risk of violence or intimidation, then you can request that HMRC does not publish details about the scheme claim, if you can show evidence that it would result in serious risk of violence or intimidation to:
Examples of individuals associated with your business include:
HMRC will not publish any of your details until a decision has been made and you have been informed.
Please contact us if you would like us to submit a request on your behalf.
The Additional Restrictions Grant (ARG) supports businesses that are not covered by other grant schemes or where additional funding is needed.
The Additional Restrictions Grant (ARG) provides local councils with grant funding to support closed businesses that do not directly pay business rates as well as businesses that do not have to close but which are impacted. In addition, larger grants can be given than those made through LRSG (Closed).
Local councils can determine which businesses to target and determine the amount of funding from the ARG. Local councils have the freedom to determine the eligibility criteria for these grants. However, government expects the funding to help those businesses which – while not legally forced to close – are nonetheless severely impacted by the restrictions.
Find your local council here: https://www.gov.uk/find-local-council
This could include:
Businesses excluded from the fund
You cannot get funding if:
The VAT deferral new payment scheme has now closed.
Any deferred VAT outstanding after 30 June 2021 will be treated as debt and may be subject to a penalty. Find out what to do to pay your VAT bill.
Businesses forced to close due to the Coronavirus lockdown will be eligible to apply for grants of up to £18,000 depending upon the rateable value of their business premises. Pubs, restaurants, hotels, gyms and hairdressers will be eligible for a grant of up to £18,000 per premises whilst non-essential retail businesses will be eligible to apply for a grant up to a maximum of £6,000.
The grants are intended to be a contribution towards the fixed costs of the business during the period that they have been unable to trade normally. Staff costs continue to be covered by the CJRS furlough scheme.
The government will also continue to provide eligible retail, hospitality and leisure properties in England with 100% business rates relief from 1 April 2021 to 30 June 2021. This will be followed by 66% business rates relief for the period from 1 July 2021 to 31 March 2022, capped at £2 million per business for properties that were required to be closed on 5 January 2021.
Unfortunately, the “Eat out to Help Out” scheme will not be reintroduced this Summer.
The temporary 5% VAT rate that has applied to supplies made in the tourism and hospitality sector since the start of the pandemic comes to an end at the end of September. The rate then increases to 12.5% from 1 October until 31 March 2022 when it reverts to the standard rate of 20%.
For those businesses operating in this sector this will mean an amendment to their accounting software and possibly prices. Note that the 20% rate continues to apply to the sales of alcohol.
Where deposits and other payments are taken before 30 September 2021 the 5% rate would apply to that supply as that would be the tax point for the supply.
Last March in order to stimulate the housing market the Chancellor announced a temporary cut in Stamp Duty Land Tax for home buyers across England and Northern Ireland which was scheduled to last until 31 March 2021.
This has now been further extended until 1 October 2021 so that transactions in progress will continue to benefit from the reduced rates.
As a transitional measure from 1 July 2021 the Nil Rate Band of Residential SDLT in England and Northern Ireland will then decrease to £250,000 for 3 months until 1 October 2021 when it will revert to £125,000 for purchases completed on or after that date. There has been no change to the SDLT rates above the Nil Rate Band. The 3% supplementary charge for second and subsequent homes in England and Northern Ireland will continue to apply.
Note that there are different rates of tax on property transactions in Scotland and Wales as such taxes have been devolved in those countries.
5% Mortgage Schemes Extended
Another measure announced to stimulate the housing sector is a new 95% mortgage scheme guaranteed by the government that will mean that people buying a house will only need a 5% deposit where the purchase price is no more than £600,000.
If you have any questions, we are here to help.
Unfortunately, it is inevitable that some companies as a result of Covid-19 may struggle to survive. There are also important knock on effects to be aware of, concerning dividends becoming unlawful payments made by your company and this is an issue that all small company director/shareholders need to be aware of where their company does not have significant cash reserves.
It is normal practice for SME business Director/Shareholders to receive a small salary via PAYE, and the rest of company withdrawals as dividend payments. In normal circumstances where companies are generating regular income and profits this is not an issue. However Covid-19 impacting companies’ capability to continue as going concerns may mean that income and profits dry up and the amount of reserves the company has from which dividends can be legally paid diminishes too.
If there is no company profit or very little left during this pandemic, you should be very cautious regarding making dividends payments unless you know historically from its latest accounts the company has large realised reserves and/or there is a decent amount of funds still in the company’s bank account when the dividend is paid. When considering dividends the legal points are these:-
What you want to avoid is the situation whereby when the next set of accounts are prepared, it turns out there were not sufficient profits after tax or reserves from which dividends could legally be paid. In that situation you will end up with a Director’s loan which has tax consequences for the company and needs to be paid back to the company. The ultimate “worst case scenario” is where a company goes under with an amount owed by the Director to it by way of loan. Any administrator, receiver or liquidator who gets involved at that stage will look to the Director/Shareholders to physically pay the money back to the company before any winding up goes ahead and that can be a painful process.
Please speak to us ahead of paying large dividends in the current environment, or of course if there are cashflow issues in the company at present and long term viability is becoming an issue.
The Financial Secretary to the Treasury announced that organisations reimbursing staff for equipment purchases enabling them to work from home during the coronavirus pandemic will not have to pay tax. This could include internet access, computer equipment, office furniture etc. Under the normal procedure, employers had to account for tax and NIC on reimbursed expenses of this type via a PAYE settlement agreement.
The government introduced a year-long exemption that meant employers would not have to pay tax or national insurance contributions (NIC) on reimbursement of employees' personal expenditure on home office equipment purchased to enable them to work from home during COVID-19. The Regulations had effect from 16 March 2020 until 5 April 2021.
To be eligible qualify for the exemption, the expenditure must meet both the following conditions:
With incomes likely to be significantly lower for many in the current tax year, the impact of the High Income Child Benefit tax charge will be reduced proportionately as earnings drop below £60,000. (For every £100 earned above £50,000, 1% of the child benefit received is effectively withdrawn through the charge.) If the higher paid parent's earnings drop below £50,000 full entitlement for the 20/21 tax year equates to £21.05 a week for the 1st child and £13.95 a week per child for all subsequent children under 16.
If you believe that your income is likely to be affected, then you can contact the Child Benefit helpline on 0300 200 3100 (8am-4pm) to ask them to reinstate your claim (Have your National Insurance ready). Alternatively visit https://www.gov.uk/child-benefit-tax-charge/restart-child-benefit. The claim can be backdated for up to 3 months, and so you should act as soon as possible, to avoid missing out for part of the tax year.
Please get in touch with your usual Argents contact if you would like to discuss your entitlement and the tax charge any further.
If you are notifying HMRC of a decision to opt to tax land and buildings, you are normally required to notify HMRC within 30 days. The 30 day deadline was temporarily extended to 90 days to help businesses and agents during the pandemic, but that temporary extension has now ended for decisions made from 1 August 2021 onwards.
Supplies of land and buildings, such leasing or renting out a property, are normally exempt from VAT. This means that no VAT is payable, but the person making the supply cannot normally recover any of the VAT incurred on property expenses.
However it is possible to waive the exemption, or “opt to tax” the land. For the purposes of VAT, the term ‘land’ includes any buildings or structures permanently affixed to it.
Once you have opted to tax all the supplies you make of your interest in the land or buildings will normally be standard-rated, and this will normally enable you to recover any VAT you incur in making those supplies.
As always, please let us know if you wish to discuss any of the above with us.