Accounting and Taxation advice in Hexham, Northumberland

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Thoughts for the week commencing 6th April

 
 

Thoughts 6th April

Isn’t the Queen fantastic? I hope I look as good at 94 years old?! I am actually 30 years minus 1 day younger than Her Majesty?. My mother unfortunately failed to produce me on her exact birthday but rather that of Adolf Hitler - the day before. This was quite a trial during my school years as you may imagine?!

Some progress on Business Grants

Our first clients are getting their Small Business Grants through. The Government and Local Authorities (LAs) have done a super job in delivering this support quickly. Check directly with your LA as to whether you need to fill in a form to apply, or whether you’ll be automatically contacted. Northumberland County Council’s can be found here: https://form.northumberland.gov.uk/form/auto/covid19_emergency_grant

Deferring VAT

Have you deferred your VAT by cancelling your Direct Debit? Please be aware that you will need to think ahead to next quarter and whether you can pay the full amount of VAT due then for the 6 months. If this is not affordable, then you’ll need to apply to HMRC for a ‘time to pay’ agreement. The number to ring when the time comes is 0800 0159 559, which gets you through to HMRC’s Coronavirus Helpline.


Business Interruption Loans

Does anyone have any news on their Business interruption Loan applications? My bank is saying the paperwork now needs to be security checked and will take up to 2 weeks for a decision!

SSP Support

SSP support for small businesses became available on 13th March – remember it can only be claimed for a minimum of 4 days and for no more than 2 weeks per staff member. It applies from the date an employee is off sick with Covid-19, or has to self-isolate due to a family member they live with having Covid-19.  SSP does not cover those self-isolating due to vulnerability.

Furlough

Directors and furlough – if you are furloughed, any work you do must be ON the business and not IN the business. You can fulfil your statutory obligations, such as keeping your PAYE scheme up to date, but must not take a call from a client to arrange paid work.

Financial

Banks appear to be cancelling personal overdraft interest for April, and credit cards seem to be cancelling late payment and cash advance fees for 2 months. The contactless limit has increased to £45 to help keep us safe by not having to use cash or touch a payment machine.


Finally today – some useful links:


Business Support Site: https://www.businesssupport.gov.uk
Statutory Sick Pay (SSP): employers guide: https://www.gov.uk/employers-sick-pay
Coronavirus (COVID-19): advice for employers and employees: https://www.acas.org.uk/coronavirus
Covid-19 Employer guidance UPDATE: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
Covid-19 Employee guidance UPDATE: https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme
Coronavirus (COVID-19): what you need to do: https://www.gov.uk/coronavirus


Thanks and keep well,
Tricia

 
 
 

Thoughts 7th April

I’m sure I echo everyone today in sending all good wishes to Boris Johnson for a speedy recovery.

Summary of where we are at post lockdown in terms of financial assistance on offer:

Employers

  • Coronavirus Job Retention Scheme

All Businesses

  • VAT deferral for payments due up to 30 June 2020
  • Time to pay
  • Changes to insolvency rules to help companies trade

Self-Employed

  • Self-employed Income Support Scheme (if profits are over £50,000 you won’t qualify). ** see below
  • Deferral of Self-assessment payment (the self-assessment payment on account that is ordinarily due to be paid to HMRC by 31 July 2020)

Small Businesses

  • Small Business Grant Funding

Small and Medium Businesses

  • Coronavirus Business Interruption Loan Scheme
  • Statutory Sick Pay Rebate

Large Businesses

  • Covid-19 Corporate Financing Facility

Retail, Hospitality & Leisure Businesses

  • Business Rates holiday for Retail, Hospitality and Leisure sectors
  • Up to £25,000 per property Cash Grant for Retail, Hospitality and Leisure in England

Nursery Businesses

  • Business rates holiday for nurseries


** The self-employed grant is excellent news and will enable the self-employed to continue working during this crisis if they are able to. It appears that HMRC are saying they will contact people to establish the tax payer’s average earnings. It is not clear as to how they will determine who deserves the grant and who does not. Watch this space for clearer information once available.


Wonderful to hear that the small business grant funding is already coming through, as are some Business Interruption loans apparently, although most businesses are still waiting. If you are concerned that you may not have enough funds whilst you wait, consider contacting suppliers for a payment holiday – many suppliers are sympathetic at this unprecedented time, although it is important to still recognise that they are trying to keep their businesses going too.

Please keep well,

Tricia

 

Thoughts 8th April

 Well this already feels like a very long week as we try and manage the office on 5 staff rather than the usual 20. Resources are therefore pretty stretched!


Update on furlough
Some employment lawyers are suggesting that an employee can be furloughed if shielding and unable to work from home and/or is looking after someone in the home and so can’t work from home


The jury is still out on holidays. ACAS have indeed stated that the holiday situation, including bank holidays, is ‘appallingly unclear’. Current thinking is that any holiday claim during a furlough period could jeopardise the furlough claim. Options could be to claim lieu time rather than holiday, or agree to take bank holiday entitlements later in the year


Employees who get a variable monthly income including wages, past overtime, and compulsory commission payments will find being furloughed a challenge given that they cannot earn anything extra. Guidance appears to suggest that furloughed employees on a variable income use either the monthly average of the year 19/20 or the same as the same month the previous year.

The Corporate Finance Network group of accountants fear that 800,000 to 1,000,000 Companies will go bankrupt as a result of Covid-19. Despite the Government’s aid package, it seems that banks are not going to be able to deliver funding quick enough.

Deferring your July 2020 tax payment on account? This is not only for the self-employed – anyone who would normally make an income tax payment in July is eligible to defer.

Companies are able to request a 3 month extension on filing with Companies House. They may also wish to extend their year ends to combine with this but it would be sensible to check the rules here.

Useful guidance from HMRC on the Coronavirus Job Retention Scheme can be found here:
https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme


There is some good news in that those on furlough are able to do voluntary work or even take a paid second job. Furloughed staff may also begin or continue to study provided the study material relates to the persons’ main employment.

Bye for now, and keep well,
Tricia

 

Thougths 9th April

 
 I would like to start by wishing you all a very Happy Easter. Under these restricted circumstances there won’t be any egg rolling allowed this year, I fear!
 
Charities
Great news for charities who are now able to access Government help as well as businesses. Charities make up a large part of our economy so I applaud Rishi Sunak for the initiative.
 
Tax Matters
I thought it prudent on the eve of Easter to give you a smattering of tax changes taking place for this 2020/21 tax year despite the Coronavirus. As always, it is essential that we tax plan for life as we would normally:

If you sell a residential property where CGT is due, this will need to be paid within 30 days of completion. So if you sell a property on 30th April 2020, CGT would normally be reported on your tax return and paid by 31st January 2022, but now it will need reporting and paying by 31st May 2020. This is a big advance in payment timeframe. You will therefore need to take this into consideration if you’re selling in the near future.

The Entrepreneurs’ relief lifetime limit has been reduced to £1 million from £10 million.

Research and Development tax credits have increased to 13%.

The Pensions Annual Allowance threshold has increased to £150,000 from £110,000 and similarly the adjusted income to £240,000 from £200,000. The minimum annual allowance has been reduced to £4,000 from £10,000.

You may be able to claim a tax deduction for up to £6 a week for the additional expense of heating and electricity as a result of working from home during Covid-19. I would imagine there’ll be a lot more applications this year!

Corporation tax will stay at 19%, not reduce to 17%.

MTD links are deferred a year to April 2021.
 
 
Hot off the press is this snippet of ICAEW news – ‘Just 2,022 loans have been made to the UK’s small and medium-sized firms through the government’s coronavirus business lending scheme. Figures compiled by industry body UK Finance, obtained by City A.M, found that of around 300,000 applications, only 0.65% ended in coronavirus business loans, totalling £291.9m.’ Is this what the Chancellor intended I wonder?
There will no doubt be more information next week on furlough with the portal set to open on 20th April.
 
Keep well and all good wishes for the bank holiday weekend.
Tricia

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