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HMRC rejects calls to relax tax return deadline

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HMRC will not waive late filing penalties or extend the 31 January deadline, but it will accept pandemic related disruptions and agent delays as a reasonable excuse and will also extend the period to appeal a penalty.

Social distancing in the workplace

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For the current, official guidance on social distancing practice within specific work sectors, the Government have posted detailed advice.
Sector Guidance

Budget 2020 Rates and Allowances

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Remember the budget? It was only three weeks ago but feels like a lifetime! We’ll be updating the rates and allowances on the website as soon as possible with adjustments for Coronavirus provisions.

Job Retention Scheme Update

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Guidance has just been published with answers to many of the questions surrounding this scheme. There will not be a portal open for claims until late April so you can’t access it yet.
The Government website has been updated and provides answers to questions raised such as what constitutes wages. This is particularly important for those paid irregular amounts and commissions.
https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19
 

Deferral of VAT payments as a result of COVID-19

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The Chancellor announced a VAT payments deferral on 20 March to support businesses with cash flow during the COVID-19 pandemic.
This means that all businesses with a UK VAT registration have the option to defer VAT payments due between 20 March and 3‌0‌‌ June.
You therefore have until 3‌1‌‌ March 2021 to pay any VAT deferred as a result of this announcement.
You do not need to inform HMRC if you wish to defer payment. You can opt in to the deferral simply by not making VAT payments due in this period. If you pay by Direct Debit you should cancel this with your bank. You should do so in sufficient time so that HMRC does not attempt to automatically collect on receipt of their VAT return.
Should you wish, you can continue to make payments as normal during the deferral period. HMRC will also continue to pay repayment claims as normal. You must continue to submit VAT returns as normal.

Self-employment Income Support Scheme

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Below are extracts from HMRC’s website. Please be particularly aware of the warnings regarding scams. HMRC never contact you directly by phone or email.
https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme
This scheme will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months. This may be extended if needed.

Who can apply

You can apply if you’re a self-employed individual or a member of a partnership and you:

  • have submitted your Income Tax Self Assessment tax return for the tax year 2018-19
  • traded in the tax year 2019-20
  • are trading when you apply, or would be except for COVID-19
  • intend to continue to trade in the tax year 2020-21
  • have lost trading/partnership trading profits due to COVID-19

Your self-employed trading profits must also be less than £50,000 and more than half of your income come from self-employment. This is determined by at least one of the following conditions being true:

  • having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of your total taxable income
  • having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of your average taxable income in the same period

If you started trading between 2016-19, HMRC will only use those years for which you filed a Self-Assessment tax return.

If you have not submitted your Income Tax Self-Assessment tax return for the tax year 2018-19, you must do this by 23 April 2020.

HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way.

How much you’ll get

You’ll get a taxable grant which will be 80% of the average profits from the tax years (where applicable):

  • 2016 to 2017
  • 2017 to 2018
  • 2018 to 2019

To work out the average HMRC will add together the total trading profit for the 3 tax years (where applicable) then divide by 3 (where applicable), and use this to calculate a monthly amount.
It will be up to a maximum of £2,500 per month for 3 months.
We’ll pay the grant directly into your bank account, in one instalment.

How to apply

You cannot apply for this scheme yet.
HMRC will contact you if you are eligible for the scheme and invite you to apply online.
Individuals do not need to contact HMRC now and doing so will only delay the urgent work being undertaken to introduce the scheme.

You will access this scheme only through GOV.UK. If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, it is a scam.

After you’ve applied

Once HMRC has received your claim and you are eligible for the grant, we will contact you to tell you how much you will get and the payment details.
If you claim tax credits you’ll need to include the grant in your claim as income.

Other help you can get

The government is also providing the following additional help for the self-employed:

If you’re a director of your own company and paid through PAYE you may be able to get support using the Job Retention Scheme.

Help for Self Employed

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There will be more questions than answers and we’ll do our best to keep abreast of them to be up to speed on what is available and how to claim.
Welfare benefits of up to £1,800 per month. 80% of average earnings as declared over the last 3 years – up to £2,500 per month. Open to businesses with business profits up to £50K.
This scheme looks like it is to be adminstered by HMRC and will be up and running by the beginning of June – hopefully!
 
 

Furloughed Workers – HMRC Portal

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It seems that the portal for reclaiming employee wages and salaries will not be up and running until the end of April. Businesses can top up salaries but only need to pay 80% of gross salaries up to a maximum of £2,500 per month. That means businesses will need to find these payments until they can claim and receive the grant monies being made available through the scheme.

What isn’t clear yet is what happens about Employer’s secondary class 1 NI Contributions but hopefully we’ll get clarity on that soon along with zero hours and commission based remuneration.

Furloughed Workers for Employers

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Details are yet to be published as to how the portal will work and what it will mean for zero hours contracts or those who do not get a regular wage or salary due to commissions. Below is the current Government employers information.

Support for businesses through the Coronavirus Job Retention Scheme

Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.

Eligibility

All UK businesses are eligible.

How to access the scheme

You will need to:

  • designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.