We were delighted to hear this week that one of our clients was ‘very grateful to have an excellent accountant’ as a result of a successful SEISS application. It is wonderful to be thanked as appreciation does leave that warm glow. It’s mental health week this week and the ‘thank you’ made me think how valuable positive human contact is. So, we all need to phone a friend or at least text them to check they’re okay. A poor substitute for the impact of that all-important hug, but the best we can probably do at the moment.
Many people will be finding this situation very hard but if we are going to support those who are struggling, now and in the future, we need to make sure we’re okay ourselves and so I’m not going to apologise for repeating Dr Richard Stevens’ 10 rules of happiness:
• Watch less television
• Take more exercise
• Plant something
• Talk to your partner
• Phone a friend
• Do something for someone else
• Spoil yourself
• Count your blessings
• Seize the day
With the bank holiday weekend coming up we can actually think perhaps how many of these we can achieve. The extra freedom to exercise means we can do just that; your takeaway that’s now open might enable us to spoil ourselves; the open garden centres can help us with the planting of something. My recipe to lift the spirits is to watch the original Mary Poppins – that’s the Julie Andrews and Dick Van Dyke version - as tea parties on the ceiling and those wonderful proper cartoon penguins and riding carousel horses across the countryside, and of course the happy ending, all just make me feel better!
Now onto the more technical stuff.
I’ve been accessing a number of Accountant’s forums and spent a lot of time looking at where we are economically. Apparently 65% of people who were asked think we are heading for a long recession. There is however optimism from those in the 20-something age range, historically our country’s highest consumers, who say they have never had so much disposable income. Large scale government assistance and nearly ten weeks with nothing much available to spend money on has given rise to some economic pundits forecasting that the second half of this year will be full of spending. Some predict that there will be too much money in the economy next year and so inflation will increase and we’ll see higher interest rates by 2021/22. However, the Treasury is quoted as being less than optimistic in a document leaked in the Times on 20th May with their advice for the Prime Minister: ‘we should be looking at policies that open up the economy – we will need fiscal stimulus. Taxes need to be lower rather than higher’. Depression or Inflation - who is right I wonder?
There will most likely be an increase in the number of holidays people take in the UK though rather than going abroad. Some tourist accommodations are going to be available to access from 4th July so get bookings in early as there might well be high demand.
Some £3.5 billion of Government support for businesses is still yet to be claimed. Do so now, if you haven’t already: https://www.gov.uk/coronavirus/business-support
Great news that the Self-Employment Income Support Scheme (SEISS) is up and running and that payments are coming through after the Government initially didn’t expect it to be ready until June. Well done HMRC. We have been in regular contact with clients eligible for this.
HMRC have announced a 3 month extension on tax appeals. Thank you HMRC!
To help you plan throughout the economic uncertainty, keep an eye on your business on a 3 month rolling basis which should help you manage the worst of the challenges thrown at us.
Some banks have a better reputation than others in the provision of coronavirus bounce back loans. It is certainly a very cheap way to borrow for businesses and you are able to apply if your business has been affected by Covid19 in any way. The loans are interest free for a year and if you don’t need it then you can pay it back at any time without penalty. If you do use it, the repayments are at 2.5% for 6 years which should hopefully mean your business is able to trade effectively post pandemic. Be aware that the loan has to be spent on or in the business.
A number of scams have been identified as doing the rounds. We have had two claiming to be from TV licencing but the email address was from a website in Japan ending .np.jp, and a client had one saying it was from HMRC with the subject ‘Precaution measure against Covid-19’ but the address it came from ended happybeautty.sg, not gov.uk. The clue on both of these is the email address in the from box being nothing to do with the company they say they are from. Please take care.
Here’s a general link for employers hoping to return their employees to work, specifically in relation to making work spaces safe for workers to return to: https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19
There are tax exemptions for equipment that you might have to purchase in order to do your work from home. Also, if you wear or pay for a uniform at work that you have to wash yourselves, you may be entitled to a tax rebate. Use an online uniform tax rebate calculator to work out roughly how much you might be due and then tell us so it can be put in your tax return.
The coronavirus large business interruption loan scheme backed by the treasury have put some restrictions on the payment of dividends. This is probably more relevant to the investors reading this than the businesses. If you are one of those investors it could be a question for the AGM or for your broker.
A tax payer won a tribunal case against HMRC in respect to the CEST tool (whether you’re employed or not). It was deemed that football referees are self-employed. I’d like HMRC to take the Lord’s advice and go back to the drawing board on this, but it may be unlikely with the introduction of new off payroll working rules, which were due to start in April 2021, being passed into law on 19th May 2020.
Remember that if you can’t pay your rent on a business or private property, then the coronavirus guidance protects you from being evicted.
There has been a lot of negativity in the media over the government not providing enough information. There is in fact rather a lot of instructions out there if the journalists would have taken the time to actually read what is available. Here’s some government guidance about ‘what you can or can’t do’ https://www.gov.uk/government/publications/coronavirus-outbreak-faqs-what-you-can-and-cant-do/coronavirus-outbreak-faqs-what-you-can-and-cant-do which is very detailed and informative.
One of my hobbies is doing crosswords. I particularly like to learn uncommon words, their meanings and usage. Such a word I noted this week is ‘segue’ (pronounced seg-way) whereby we move from one subject to another. I think that is rather apt with regard to the way my ‘Thoughts’ can be!
So, to segue back to the start. Maybe a way of keeping cheerful is to tick a few things off our to do lists, for example appointing a lasting power of attorney. I have these for my children as well as them having one for me. These are not just for the old - they are there in order to protect your wishes should one become incapacitated for any reason - and that incapacity can range from the sporting accident you are most likely to suffer when young (skiing, playing rugby and riding being the most dangerous in my experience), all the way through to dementia at the opposite end of the age scale. Solicitors are open for arranging these remotely. Sometimes something off the ‘to do list’ can give great solace.
Whatever you do - enjoy the bank holiday weekend. How many of us will risk the trip to the seaside I wonder?
Until next week